Ban On Internet Sales Tax Ends Saturday

donnyspi writes "As reported in the Rocky Mountain News, among other places, the 5 year ban on collecting sales tax on purchases over the internet is scheduled to end Saturday. 'The original moratorium was established in 1998, renewed in 2001 and is set to expire Saturday. The U.S. House of Representatives passed a bill in September that would expand the ban and make it permanent. Similar legislation hasn't yet been voted on in the Senate.'

Comments

RTFA - It's not a sales tax ban!

[kaleth]

The ban that is about to expire is the one on taxing online services (such as ISP access). The "ban" on collecting sales tax over the internet is because of a law, but is the result of a court decision (which originally concerned catalog sales).

There is NO ban on sales tax collection

[siskbc]

No one really ever has understood the law passed in 1998, evidently including the person who submitted the article. The tax ban was on internet *access*, not on internet sales tax collection. Ever notice that you DO pay sales tax if you buy something in the state you live? There's no ban, obviously - the problem is a jurisdictional one (interstate commerce, namely). In short - there has NEVER been a Congressional ban on collecting sales tax over the internet.

If Congress wants to allow taxing of internet access by the states, they will now have the ability, though they probably won't. If they want to allow taxing of internet sales, they'll have to get around Supreme Court decisions that say states can't collect taxes on residents in other states. But the issues are NOT related, despite the frequency with which people screw this up.

Re:I bought a laptop last monday from Dell...

[Mantorp]

From The electronic commerce associationThe Supreme Court blocked the states in Quill Corp. v. North Dakota, 504 U.S. 298 (1992). In Quill, the Supreme Court held that, because state sales and use taxes are so complicated, a state cannot require a remote seller to collect sales or use taxes unless the seller has a physical presence, or "nexus," in the state.

Re:I bought a laptop last monday from Dell...

[ennuiner]

I had the [mis]fortune of working for Dell's consumer sales phonebank this summer. This was a constant source of annoyance for customers who wanted to buy at advertised prices. They understood shipping, but did not quite understand why we had to charge sales tax in states where we had a business presence. Unfortunately, Dell has sites in some big states like Texas and Florida, too. Anyway, the states where Dell has to charge the full sales tax are Texas, Tennessee, Florida, Ohio, Pennsylvania, Kentucky, Nevada, North Carolina, and Oregon. If the machine has an on-site service contract, like desktop and some notebook systems, Dell charges tax on the value of the service contract in all states with sales tax. The contracts are handled by a third-party contractor, Banctec, so Dell isn't the company with the business presence in that case.