Kansas is one step closer to taxing online sales after the state Senate's Assessment and Taxation Committee approved a bill that would allow Kansas to participate in the Streamlined Sales Tax Project, an effort by 21 states to collect sales taxes on Internet and catalog sales.
The bill, SB-540, goes to the full Senate for approval. The measure also directs the state Department of Revenue to develop changes to existing laws that would allow the state and local governments to tax sales made over the Internet by out-of-state sellers when the federal ban on Internet taxes expires Nov. 1, 2003.
Missouri lawmakers also are trying to revive a bill that would allow taxes on Internet sales.
Currently, companies with a physical presence in Kansas or Missouri have to charge sales tax on Internet purchases by state residents, but companies outside the two states do not. In those cases, buyers are asked to pay the sales tax, but they rarely do.
Though the Kansas Senate is expected to approve the measure, the Kansas House of Representatives reportedly is less firmly behind the proposal.
Republican State Sen. Les Donovan told the Kansas City Star he estimates the state is losing $100 million a year in taxes on Internet sales. But Republican Tony Powell, who chairs the House Taxation Committee, told the newspaper he wasn't “convinced that the state is losing that much revenue.”