House Subcommittee Holds Off on Web Sales-Tax Bills

Washington—The House of Representatives Judiciary subcommittee on commercial and administrative law plans to consider two bills this week that would extend the current moratorium on Internet-specific taxes—but does not plan to look at bills that would make it easier for states to tax online merchandise sales.

According to wire reports, the two bills that the House subcommittee will look at are sponsored by Rep. Chris Cox (R-CA). One would extend the moratorium for five years, while the other would make it permanent. The existing moratorium is scheduled to run out in October. A coalition of states are simplifying their tax codes in hopes that Congress would then allow them to collect sales taxes on i.merchants and other remote sellers, including catalogers.

Several bills have been introduced that would make tax-code simplification a prerequisite to collecting sales tax on merchandise sold remotely—even though the 1992 Supreme Court decision “Quill Corp. v. North Dakota” said that states cannot force a business to collect local sales taxes unless the business have a physical presence in those states.