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August 8, 2011

Congress eyes taxing online sales

By Mainebiz News Staff

Maine's congressional delegation is divided on a proposal to require online retailers to collect state sales taxes, a move that would boost Maine revenues by $65 million next year.

A University of Tennessee study estimates that states will lose $23.3 billion in uncollected taxes on Internet sales next year, with Maine projected to lose $65.4 million, Capitol News Service reported.

The legislation would allow Maine and 23 other states that belong to the Streamline Sales Tax Governing Board to require all online retailers to collect sales taxes. The board formed following a 1992 U.S. Supreme Court ruling that freed retailers from charging and collecting state sales taxes if they lack a physical presence in that state, with a mission to simplify and modernize sales and use tax administration.

Consumers are already required to pay sales taxes on items they buy online and use in their home states, but compliance is difficult to enforce. Rep. Chellie Pingree supports the new legislation, saying it will make the tax system fairer, while Sen. Olympia Snowe said she opposes what would amount to a new tax in the midst of a fragile economy, the news service reported. Rep. Mike Michaud said he is reviewing the bill, and Sen. Susan Collins expressed doubt that Congress should get involved in the issue.

 

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