In a 26-0 vote last week, members of the Streamlined Sales Tax Project — which is a group consisting of representatives from a majority of states — approved a plan to simplify their states' sales tax codes that could allow them to collect revenues from Internet and catalog sales.
The plan is to be sent to state legislatures for possible passage next year. It also will be sent to the National Governors Association and the National Association for State Legislatures for review. The plan calls for third-party companies to determine and administer the sales tax on each transaction similar to credit card companies. But in order for the plan to be effective, it has to be passed by several states basically in the same form. The plan allows flexibility for states to decide the items that should be taxed.
States are not allowed to collect taxes from businesses outside their jurisdiction because of a 1992 Supreme Court ruling as well as Congress' three-year moratorium on new Internet taxes, which is due to expire in October 2001.
