WASHINGTON (FNS) -- A Congressionally appointed commission in a formal report issued last week sidestepped the issue of whether all Internet sales should be subject to state sales tax, but top retailers and politicians voiced their support of taxing e-commerce at a news conference held several days before the report's formal release.
Executives with Wal-Mart, Target, J.C. Penney, Radio Shack and Circuit City came to Capitol Hill in a show of force for the pro-sales-tax side. They were flanked at a news conference by a couple of dozen local and state officials, as well as three U.S. senators -- Bob Graham (D., Fla.), George Voinovich (R., Ohio) and Byron Dorgan (D., N.D.) -- who vowed to champion their cause.
Gathered in a Senate hearing room, the group of retailers and their allies contended that Internet businesses should be required to collect local and state sales taxes, just as bricks-and-mortar stores do. For retailers, it's a fairness issue: All businesses should be subject to the same costs of collecting sales taxes. For local governments, the issue is capturing lost revenue needed for schools, roads and other services.
According to those in the hearing room, including some dissenters on the commission, the report's conclusions are biased, crafted to favor software companies, media conglomerates and other high tech Web concerns that were the only businesses represented on the panel. The commission's public recommendations were approved by only 11 of its 19 members.
"All we're asking is that Congress create a level playing field," said Jim Hale, executive vice president of Target.
Thomas Grimm, president and chief executive officer of Sam's Club, said without a national sales tax policy, local governments would be forced to increase or create new taxes. "We share everyone's concern with the tax burden issue and in no way do we want any additional tax burdens placed on consumers," Grimm said.
Internet tax discussions by politicians, particularly in this election year, have typically centered on extending the moratorium on creating new e-taxes for the medium. The moratorium, which expires next year, excludes Internet sales taxes because the right of states to levy such tariffs isn't new.
"The real debate and real discussions may not be until next year, given the election-year politicking," David Bullington, vice president of taxes at Wal-Mart, told SN.
