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Ban on Internet Taxes to Expire

Posted by ryuzaki0 on from the pound-of-flesh dept.

slacknet writes: "Well, it looks like the government could be lifting the ban on taxes related to the Internet, CNN reports here. While the House of Representatives has already passed a two-year extension on the ban, the Senate has not. Newsbytes.com also has an article on this matter here. I'm sure I'm not the only one who thinks this probably isn't the best time economically to be discussing any sort of additional taxes." I think Newsbytes has it right - the federal ban is likely to be reinstated soon, they just didn't get around to it this week.

4 of 106 comments (clear)

  1. Ohio by zarathustra93 · · Score: 2, Interesting

    Ohio has already passed a taxation law based on what you purchase over the internet. I don't remember the name of the law exactly, but essentially you are required to put down on your taxes the amount of goods you purchased over the internet. Last year I entered in about $100. They take you on your word, but I have a feeling if a person was ever audited about this 'voluntary' tax, that they could possibly find themselves in state tax hell.

    I could see many other states following Ohio's example, simply because this sort of thing would be very difficult to track on the state level- that is unless carnivore is a *lot* better than I suspect it really is :-)

  2. Telephone sales by Therlin · · Score: 4, Interesting

    I can call a catalog, say PC Connection, and buy something without being charged any taxes.

    I wonder if this could be used to get around Internet sales taxes. I could add things to my shopping cart, receive a "pin code", call a toll-free number, punch in my credit card number and my sale is now a telephone sale and not an Internet sale.

  3. Internet will be taxed in the future by jenn9903 · · Score: 2, Interesting

    I think it's important to be realistic with respect to taxing the Internet. Internet businesses are no different than stores in the mall in that they can be regulated and taxed by the government. Congress chose to ban taxes on the Internet out of a desire to help support net commerce. Because the economy is currently on a downturn, Congress and the states are unlikely to enstate any sort of new tax structure on the Internet in the near future. (It would be political suicide to do so.) But, it's only a matter of time until the Internet is taxed because that's how our economy works...You buy something and then pay a tax on that item to the government. If you don't have a problem paying a tax on an item in a store why should it be any different online? The only way to get out of taxes forever is to buy everything on the black market.

  4. but there already are Internet taxes by pruss · · Score: 2, Interesting

    For instance, in MD and PA, you need to periodically (quarterly in MD, monthly in PA) send in use taxes (equal in percentage to sales tax) for any out-of-state purchases, whether the purchases are over the phone, by mail catalog, Internet or I think even when physically visiting another state and bringing the goods back (but in this last case, one can subtract the sales tax one paid in the other state from what is owing, and presumably, one can seek a refund from the other state if one paid a higher rate there; so, if a MD resident buys goods in VA, then since the VA sales tax is 0.5% lower than the MD one, the MD resident owes his state 0.5% of the purchase price).

    The "ban" on Internet taxes only meant that the states couldn't ENFORCE this in the case of Internet sales, so that this was an honor-system tax: i.e., a tax on the honest.

    ARP