House panel agrees to full hearing for Internet sales tax measure

A House committee voted narrowly to consider a bill that would let Idaho officials participate in talks with two dozen other states about collecting sales taxes on Internet purchases.

The House Revenue and Taxation Committee agreed on a 10-8 vote March 10 to schedule a full hearing for a bill that would allow an Idaho State Tax Commission representative to participate in the Streamlined Sales Tax Project, which is designed to make sales tax policies more uniform in participating states.

The Senate voted 34-0 on March 2 to approve a similar proposal, but House supporters of the legislation brought a new measure before the committee, which is where all tax legislation is supposed to be introduced.

Rep. Leon Smith, R-Twin Falls, said Idaho is losing out on $30 million annually from sales taxes that consumers should pay as part of Internet transactions but that goes uncollected.

Currently, out-of-state companies generally don’t collect sales taxes on the Internet unless they have a physical presence in a state. Consumers are still required to pay taxes on those purchases when they file their taxes, but few do.

Supporters say this puts small retail businesses at a disadvantage, compared to large national companies, such as Amazon.com, that operate on the Internet but don’t collect sales taxes in most states.

“Every merchant in the state of Idaho would like to see this passed or printed so we could at least have a discussion about it,” Smith said.

Under the bill, Idaho could only participate in crafting an agreement, which now includes 23 states. Officials would not be allowed to sign or approve anything without separate legislation in the future.

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One Response to “House panel agrees to full hearing for Internet sales tax measure”

1. House Democrats ban earmarks for private contractors – Washington Post : World online news Says:
   March 10th, 2010 at 12:04 pm

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