FITUG e.V.

Förderverein Informationstechnik und Gesellschaft

Florida Fights to Collect Cyber Taxes

http://www.lawnewsnetwork.com/practice/techlaw/news/A13931-2000Jan20.html


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."


Zurück