December 6, 2007
States are Losing Money This Holiday Season with On-Line sales
Streamlined system makes it easier for retailers to collect sales taxes
WASHINGTON, DC - Today, Steven Rauschenberger, past president of the National Conference of State Legislatures and the former assistant Republican leader of the Illinois Senate, will testify before the House Subcommittee on Administrative and Commercial Law in support of "The Sales Tax Fairness and Simplification Act" or H.R. 3396.
Sponsored in the House by Massachusetts Congressman William Delahunt and Illinois Congressman Ray LaHood, the bill responds to the eight-year effort by state legislators, governors and the private sector to streamline state sales taxes. There are now 22 states and more than 1,100 retailers voluntarily participating in the simplification effort, designed in part to allow states to collect sales taxes on Internet and other remote sales. The Delahunt-LaHood legislation would sanction the multistate agreement and would require sellers to collect sales taxes for states that conform to terms of the agreement.
"This effort to streamline sales tax collection is unprecedented in our nation's history. In less than six years, the states working together with the support of the private sector, developed a new sales tax system that is fairer, simpler, more uniform and is technologically applicable," Rauschenberger said. "However, our work to establish a truly seamless system is only half done. It is now Congress' turn to act."
In two separate decisions, the U.S. Supreme Court ruled that taxpayers owe taxes on purchases they make from retailers in other states. However, the court also said that sales tax systems were complicated and burdensome and, therefore, sellers are not legally obligated to collect the tax. The state streamlined movement and the Delahunt-LaHood bill are in direct response to the court’s decisions.
In his testimony, Senator Rauschenberger will tell members of Congress: "You have the opportunity to not only ensure the future vitality of our states' major consumption tax, but you also will establish a level playing field for all retailers and help to provide $6.8 billion a year in relief to American retailers. Instead of spending this money to collect state and local sales taxes, these businesses can re-invest these funds into our states' and nation's economy."
NCSL is the bipartisan organization that serves the legislators and staff of the states, commonwealths and territories. It provides research, technical assistance and opportunities for policymakers to exchange ideas on the most pressing state issues and is an effective and respected advocate for the interests of the states in the American federal system.
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