Statement on New Internet Sales Tax Legislation S. 1452

August 1, 2011

WASHINGTON - ITIF Senior Analyst Daniel Castro made the following statement on Internet sales tax legislation introduced in the U.S. Senate last week.

"Congress should create a system for collecting sales taxes that is fair as well as simple for businesses and consumers. However, Congress should keep in mind that many existing laws and regulation in various states favor local businesses at the expense of online businesses. As Congress seeks to level the playing field between online businesses and brick-and-mortar stores with respect to sales tax, it should look across the board at ways to create national policies that are non-discriminatory and technology-neutral."

Background:

On July 29, 2011 Sen. Richard Durbin (D-IL) introduced S. 1452. The legislation, the "Main Street Fairness Act," would allow states to collect sales taxes from retailers for online purchases. It is similar to legislation introduced in the previous Congress.
  
For more details and history on the background of Internet sales tax issue, please see ITIF's publication Closing the E-Commerce Sales Tax Loophole.

In this report ITIF explains how Congress could effectively level the playing field for businesses and recommends, "Congress should grant states the authority to require Internet retailers to collect sales tax on e-commerce under a simplified tax system provided that states also agree to eliminate restrictive regulations hurting e-commerce."

 

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The Information Technology and Innovation Foundation (ITIF) is a Washington, D.C.-based think tank at the cutting edge of designing innovation strategies and technology policies to create economic opportunities and improve quality of life in the United States and around the world. Founded in 2006, ITIF is a 501(c) 3 nonprofit, non-partisan organization that documents the beneficial role technology plays in our lives and provides fact-based analysis and pragmatic ideas for improving technology-driven productivity, boosting competitiveness, and meeting today's global challenges through innovation. For additional information, visit ITIF at www.itif.org or contact Steve Norton at (202) 626-5758 or snorton@itif.org.