[Vision2020] Ringo's legislative report

[Tom Hansen]

Internet sales tax has always been a curiosity of mine, specificaly 
concerning how taxes would be applied.

Many states do impose tax on internet sales based on the customer's point 
of origin.

However, some federal legislative guidelines have provided a moratorium 
for such taxes.

I could go into great, boring detail about what I have found, but you can 
find out for yourselves at . . .
 

The ITFA (Internet Tax Freedom Act) Extension Act of 2007 (S 1453)
http://tinyurl.com/2zlvkn

The ITFA Extension Act of 2007 (Introduced in House (HR 3678 IH)
http://tinyurl.com/2e9tdg


It must be moted, however, that states will have to implace some sort of 
tax as internet sales have expanded exponentially over these past few 
years.

Tom Hansen
Moscow, Idaho



> A State sales tax is too parochial of a concept to put
> on the Internet.  Do you compute taxes on the State
> the brick-and-mortar store that is selling the item is
> located?  Do you compute them based on which State the
> corporation is incorporated in?  What if it's a single
> person selling something on e-bay, and not a
> corporation?  What if the business exists as an
> Internet-only store?  In some cases, the business not
> only won't have a home office, it won't even have a
> physical server - just data that can be hosted
> anywhere.  Do you compute taxes based on the State
> that the servers are located in?  What if you have
> servers in different states?  Do you compute taxes
> based on where the transaction servers are located? 
> This is often a completely different State than where
> the website server is located.  What if the web server
> is in one State and the database it connects to is in
> another?  Where do you draw the line?  Any given
> webpage could be directed either from the web server
> or the database server (through the web server).  Do
> you compute taxes based on where the person buying the
> item is located?  What if they are in an airport, or
> an Internet cafe on a trip?  What if they are in a
> plane?
> 
> This is why the concept has never gotten off of the
> ground.  Once an answer is chosen, then everyone will
> flock to State with the smallest sales tax, or host
> their site overseas.  The Internet is a mobile place.
> 
> Maybe they could throw some sort of Federal use tax on
> Internet sales that would be portioned out to the
> States somehow.  I don't know.  It's not an easy
> problem to solve.
> 
> One good question might be: does the State deserve the
> sales tax on the item sold?  What part do they play in
> the transaction?  That answer will vary based upon
> what choice is made about how to tax things, I guess.
> I can see some States getting no tax because no one
> has a store there, or some States getting the tax even
> though nothing other than a hosting company was in
> their State.
> 
> Also, am I the only person that diligently saves their
> packing slips and puts them down on their taxes every
> year?  I use TurboTax online, and it always prompts me
> for it.
> 
> Paul
> 
> --- Shirley Ringo <ringoshirl at moscow.com> wrote:
> 
> >  
> > 
> > This week in the Legislature
> > 
> > Representative Shirley Ringo
> > 
> > January 18, 2008
> > 
> >  
> > 
> > A major disappointing development out of the Revenue
> > and Taxation committee this week involves their
> > refusal to consider legislation regarding the
> > Streamlined Sales Tax.  This is a multi-state effort
> > to apply state sales tax to internet sales.  Passage
> > of this legislation would not commit us to specific
> > action, but would give us a seat at the table for
> > discussion.
> > 
> >  
> > 
> > As a result, we will continue the unfair practice of
> > requiring Main Street business to apply the 6% sales
> > tax, while their competitors who sell over the
> > internet are not required to do so.  Supposedly, we
> > are to pay the state a "use tax" of 6% when we are
> > not charged a sales tax.  This is rarely, if ever,
> > done.
> > 
> >  
> > 
> > Thus, out of state internet vendors get a 6%
> > discount; home town vendors get the shaft. 
> > 
> >  
> > 
> > I would like to discuss two additional issues with
> > regard to taxes.  There are a number of exemptions
> > and exceptions to the sales tax that have been on
> > the books for some time.  Each of them was added for
> > a reason, but they stay on the books without being
> > revisited.  A great deal of revenue is lost through
> > these exemptions.  If some of that revenue were
> > recovered, it would be possible to reduce taxation
> > in other areas and move toward greater fairness in
> > the system.  I have suggested a systematic review of
> > these exemptions - an investigation of which are
> > serving no purpose and should be dropped.  The
> > majority of members on the Revenue and Taxation
> > Committee continue to block such considerations. 
> > They have done so again this year, by refusing to
> > consider the recommendations of a committee studying
> > these issues.
> > 
> >  
> > 
> > My colleagues and I will bring legislation this
> > session to move towards phasing out the sales tax on
> > food.  We propose a plan to phase out the tax on
> > food at 1% per year.  This represents a substantial
> > loss in tax revenue, so it must be approached with
> > great care.  In the end, we must seek a system of
> > taxation that provides revenue for important needs,
> > but is fair to Idaho citizens. 
> > 
> >  
> > 
> > As long as we tax people 6% on food, the Governor's
> > plan to target the grocery tax to provide more help
> > to low income folks is intriguing.  Last year,
> > unfortunately, this plan failed to gain support in
> > the Revenue and Taxation Committee.
> > 
> >  
> > 
> > I have legislation drafted that would develop an
> > Idaho Earned Income Credit at 10% of the federal
> > level.  This is a very successful federal program
> > that provides tax relief to working families.  
> > 
> >  
> > 
> > I continue to oppose the plan State Superintendent
> > Tom Luna has proposed for compensating teachers.  It
> > is a politically motivated plan that is not sound
> > educationally and is unfair to teachers.  
> > Improvements in our method of compensating teachers
> > and administrators should definitely be
> > investigated, but we need to work together to
> > develop a better approach.  
> > 
> >  
> > 
> > If you have questions or suggestions, you may reach
> > me at 208-301-2272, ringoshirl at moscow.com, or
> > sringo at house.idaho.gov.
> > 
> >  
> > 
> > Shirley Ringo
> > 
> >  
> > 
> >  
> > 
> >  
> > 
> >  
> > 
> >  
> > 
> >  
> > 
> >  
> > >
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> >
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"People who ridicule others while hiding behind anonymous monikers in chat-
room forums are neither brave nor clever." 

- Latah County Sheriff Wayne Rausch (August 21,
2007)

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