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The State of Washington to Collect Sales Tax from Online Retailers
On March 16, 2007, a bill was passed in the State House of Representatives authorizing the State of Washington to join the Streamlined Sales Tax Project (SSTP). In order to become law, the bill merely needs to be signed by the state’s governor, Christine Gregoire, who requested the measure. By enacting this new legislation and becoming a full member of the SSTP, Washington would receive sales tax revenue from companies that have sales in multiple states that have been voluntarily collecting and distributing sales tax to SSTP member states; thus far, 21 states have passed legislation to become full members of SSTP.
The SSTP is a response to a 1992 U.S. Supreme Court ruling, which held that states are prohibited from forcing businesses to collect state sales taxes unless the business has a physical presence in that state. Under the new measure, the state where the product is delivered, as opposed to where the product originated, would receive the sales tax revenue.
Supporters of the measure say that it would help to “level the playing field” between retailers who have a physical presence in-state, and Internet and catalog retailers, many of which do not collect any sales tax. However, opponents to the measure argue that consumers would simply switch to Internet and catalog retailers who are not a part of the SSTP.
For additional information, visit:
http://seattletimes.nwsource.com/html/localnews/2003623801_nettax18m.html