Eighteen states are in the process of implementing the Streamlined Sales Tax Project, which will entice online retailers to collect state and local sales taxes, according to a report on StartupJournal.com, The Wall Street Journalís guide for entrepreneurs.
ìDifficulty arises among states and online retailers because of the complexity of different tax rates and categories among states and localities,î says Tony Lee, publisher, StartupJournal.com. ìIn this new move, a computer program will track the tax rates of the 18 states and their localities, and will automatically add that rate to the bill of every online purchase.î
Besides offering tax-collection software, states have rewritten laws so that tax categories that previously differed from state to state are more uniform. In some states, for example, candy is taxed at a different rate than other food. The new effort seeks to erase those kinds of distinctions. States also will be enticing online retailers to collect state and local sales taxes by offering amnesty on taxes the retailers havenít collected in the years since the Internet retail boom began.
The states that have signed on are Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Nebraska, New Jersey, North Carolina, North Dakota, Oklahoma, South Dakota and West Virginia. Arkansas, Ohio, Tennessee, Utah and Wyoming are in the process of finalizing the requirements needed to join, while Washington, Texas and Nevada are in earlier stages.
Although states have reservations about the decision to tax online sales where the customer isóinstead of at the purchase pointóthe new agreement absolves retailers from paying penalties on any mistakes and miscalculations made if retailers donít collect the correct tax, so long as they use the tax projectís system.
Online sales tax becoming a reality in many states, says Startupjournal.com
Eighteen states are in the process of implementing the Streamlined Sales Tax Project, which will entice online retailers to collect state and local sales taxes
