White House: Internet Sales Tax ‘Will Level The Playing Field’

[Xithras]

37. This particular bill is fairly well written.

First, it only applies to businesses that do more than a million dollars a year in online sales.

Second, it prohibits states from levying any special taxes for the Internet. They can only apply the same sales tax rates that are applied to brick and mortar stores in the same jurisdictions. It prohibits higher rates, and prohibits any additional taxes from being files.

Third, it requires the states to develop and offer, at no charge, automated online services that will allow retailers to calculate the amount of local tax owed. The website backend submits the buyers address and the total, and the state has to return the monetary value for the amount of tax to be collected. This eliminates the largest current hurdle with taxation, which is calculating the correct tax rates for the thousands of different taxing jurisdictions that exist in the country. If a state wants to collect sales taxes online, they have to straighten that out.

Finally, it removes the current requirement that many states have, which mandates that any business paying taxes submit complete a full tax return in that state. Instead, they will merely have to submit their collected taxes. Business owners won't have to deal with getting tax ID numbers and navigating the (often radically) different taxing systems used by various states.