The Tax Reptile

By eweek  |  Posted 2001-07-02 Print this article Print

The future crept up on me, slithering with purpose and stealth through the tall grasses as I scanned the horizon.

The future crept up on me, slithering with purpose and stealth through the tall grasses as I scanned the horizon. I hunted for fat news stories to bag, but I overlooked the horrible fanged fiend in the weeds at my ankle.

It sprang. Im stung. Ive had nightmares ever since.

The sinister future that pumped poison into my veins has a name: "e-commerce taxation." The issue isnt going anywhere.

I knew it was out there. Id visited the beast from time to time, wild-eyed policy wonks and politicians gathered around, tossing mice into its den. I believed the e-commerce taxation snake lived under a death sentence.

A deadline banning the imposition of new Internet taxes expires in October 2001. The issue of online sales taxes is separate from the issue of the moratorium — taxes, technically, are owed during most online sales, and the onus for tax reporting and remittance is on consumers — but the two have been yoked together. Last year, the states that want Congress to allow them to compel out-of-state merchants to collect taxes for them began saying, "If you dont deal with the sales tax issue, we wont endorse your precious moratorium." I figured Congress would cobble together a way of dealing with the sales tax issue.

But then Neal Osten, director for commerce and communications at the National Conference of State Legislatures, stepped in. The asp struck. Osten said the NCSL would be OK with a two-, three- or four-year extension of the moratorium.

Federal lawmakers want simpler state sales taxes before they give states power over remote retailers. States are trying. In a few years, Osten said, tax-simplification triumphs will persuade lawmakers to give in to states.

This makes it easy for lawmakers to shrug off the e-commerce tax debate for another Congress. And that means they will, which means the serpent is no longer locked away. Ill be writing about tax policy forever. Ive seen the future, and it is e-commerce taxation. Permit me a shudder.


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