The states are on the verge of being granted the authority to collect sales tax from remote retailers, judging from a presentation from government and business stakeholders at the Federation of Tax Administrators annual meeting last week. Also, a poll on Bloomberg BNA's StateTax LinkedIn group shows unanimous agreement that Congress is likely to enact such legislation by the end of 2013.
But there has been a lack of action in Congress to support the notion that remote collection authority will be granted to the states in the near future.
In one session, panelist Joan Wagnon, executive vice president of FedTax and the former Secretary of Revenue for Kansas detailed what the states need to do to prepare for the resulting influx of remote retailers. The list includes contracting with certified service providers and adopting uniform standards for sharing data about rates and boundaries.
Panelist Rich Prem, vice president of indirect taxes and tax reporting at Amazon.com, encouraged administrators to adopt solutions that will "scale" to handle upwards of 20,000 new sales tax registrants and to implement education initiatives aimed at remote retailers.
But none of the bills has advanced since being introduced. Those bills are:
All three measures have provisions for a "small-seller exception" that would exempt a remote vendor from collecting tax if sales fell below a certain threshold.
On a more optimistic note, something seems to be different this time. Amazon seems to be anticipating remote collection authority-it brokered a deal with California last year, which hinges upon it. Plus, never has there been so many federal measures regarding sales tax collection pending at the same time. Also, while the bills have not moved, the Senate Finance Committee held an April 25 hearing that addressed the need to reform the state tax treatment of electronic commerce.
By Steven Roll
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