Delegation: Web tax plan unlikely in '09

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Delegation: Web tax plan unlikely in '09

By The Associated Press

The issue of Internet sales tax legislation will continue to be raised in Washington, according to Sen. John Thune, but neither he nor the other two members of South Dakota's congressional delegation offered much hope for action this year.

Gov. Mike Rounds, in his State of the State speech Tuesday, said state government would realize $40 million a year if the Sales Tax Fairness and Simplification Act becomes law.

It would authorize states to require sales tax remissions from companies that transact "remote" sales. The bill didn't get anywhere during the last session of Congress and so far has not been reintroduced in this session.

When asked, Thune said budget problems in states like South Dakota could spur Congress to action.

"I think it probably makes some sense to throw that into this discussion about the stimulus and getting some assistance and relief to some of the states," said Thune, R-S.D.

Sen. Tim Johnson, D-S.D., said it's unlikely the sales-tax issue will be addressed in President-elect Barack Obama's economic stimulus package.

"I would hope so," Johnson said. "I have long supported the sales tax provisions, but I would doubt that we see them in a stimulus bill. But who knows?"

Thune and Johnson were among four co-sponsors of the Senate version of the legislation. Rep. Stephanie Herseth Sandlin, D-S.D., was one of 10 co-sponsors of the House version.

A Herseth Sandlin spokeswoman said the congresswoman is "hopeful for progress on similar legislation in the 111th Congress."

A remote sale involves a consumer in one state buying something from a seller who is not in that state; for example, when a South Dakotan buys something on the Internet from a company in New York that has no stores in South Dakota.

A 1992 U.S. Supreme Court ruling bars states from requiring sales tax collections by remote sellers. The legislation offered last session would have changed that.

"There's a real reluctance, I think, by some members of the Congress to take on these issues that further regulate the Internet, whether that deals with user fees or transaction fees or anything like that," Thune said.

South Dakota and some other states belong to a Streamlined Sales Tax Governing Board designed to make it easier for companies to voluntarily collect and remit sales taxes on Internet and catalog transactions. The aim is to encourage retailer participation by making state tax regulations more uniform, and many retailers already have joined the effort.