Wednesday, June 8, 2011

Dick Durbin Getting Closer To Taxing The Internet

Don’t think of it as an Internet sales tax — just think of Senator Dick Durbin’s (D-Ill.) Main Street Fairness Act as an attempt to collect the back taxes he says you already owe.
“Durbin is expected to step into the escalating Internet sales tax battle as soon as this week with a bill that would allow the 44 states — plus Washington, D.C. — that collect sales taxes to require out-of-state online retailers to pay up,” read an article on POLITICO. “Faced with state budget shortfalls, some large states like Texas, California and Illinois are looking to online retailers for additional tax revenues.”
In a press release accompanying his introduction of the Main Street Fairness Act on April 27, Durbin claims the Act is not a new tax.
“The Main Street Fairness Act doesn’t ask anyone to pay a single penny more in taxes. Instead, it would help governors and mayors collect taxes that are already owed,” Durbin said in the press release. “Between 2009 and 2012, states across the country, including Illinois, are expected to lose as much as $37 billion in uncollected state and local taxes on Internet and catalogue sales.”
Durbin also claims the Act will relieve a burden that currently falls on consumers.
“Currently, retailers are only required to collect sales tax in states where they also have brick-and-mortar stores. The burden falls to consumers who are required to report to state tax departments any sales taxes they owe for online purchases,” the press release read.
“Amazon, and other online retailers, have said that some state actions requiring sales tax collection by sellers that lack physical presence in the state are unconstitutional,” POLITICO reported. “Opponents of state efforts have argued that the bills would kill jobs if online retailers such as Amazon followed through with threats to pull up stakes in the state.”

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