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[FYI] Florida Fights to Collect Cyber Taxes
- To: debate@fitug.de
- Subject: [FYI] Florida Fights to Collect Cyber Taxes
- From: "Axel H Horns" <horns@t-online.de>
- Date: Fri, 21 Jan 2000 22:15:36 +0200
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http://www.lawnewsnetwork.com/practice/techlaw/news/A13931-
2000Jan20.html
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Florida Fights to Collect Cyber Taxes
State faces the loss of $1 billion a year in revenue as Web shopping
explodes
By Alina Matas
Miami Daily Business Review January 21, 2000
A month ago, Florida Sen. Jim Horne requested a presentation to his
Fiscal Resource Committee from the state Revenue Department. He
recalls how, across the screen, the presenter flashed current
forecasts of the growth of sales via the Internet.
One number in particular got the legislator's attention: Florida
stands to lose $1 billion a year in sales-tax revenues by 2002
because of transactions over the Internet that, under existing rules,
are exempt from taxation.
"It's an issue that we need to come to grips with," says Horne, a
Republican from Jacksonville. "Our state revenues are solely
dependent on transaction tax. If that base erodes, it would cause
more problems in the state of Florida than in other states."
Horne's solution: "You need to have a system for (Internet)
transactional-tax collection and remittance. And ultimately it takes
the federal government to police the system."
Such proposals have sparked a national debate about taxation and how
to deal with the Internet's increasing role in retail sales, with
Florida among the states that stand to be most affected. In part
because of Florida's lack of a state income tax, the bulk of the
state's budget -- 72 percent of its roughly $18 billion general
revenue fund -- comes from the 6 percent tax consumers pay on most
items they buy for personal use.
[...]
Midway through the fiscal year that ends June 30, the state is on
track to collect its projected $14.8 billion in annual sales taxes.
(Last year, it collected $14.5 billion.) Further, opponents of a
centralized sales-tax system point out that telecommunications, the
backbone of the Internet, already is heavily taxed. And they fear
that creating a centralized sales-tax system to derive revenue from
Internet transactions would thwart its power as an economic engine.
"America does not have a competitive advantage with other countries
when it comes to things such as stitching Beanie Babies," Nehring
says. "But America does have a competitive advantage when it comes to
information technology. Why would we want to handicap that?"
But, says Rustin, of the Florida Retail Federation, "I don't think
over time Congress will be able to withstand the pressure from the
states to tax Internet sales."
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