About a year ago as the economy began it slow decent to levels we never thought would be reached, I predicted that the perfect storm of economic events would converge to push Congress to modify federal statutes so that states could begin taxing remote retailers who don't have a physical presence in that state. Over the weekend, there was news that such an event could actually happen.
Apparently this week some brave Congressmen will introduce (again) legislation that could give states more latitude in forcing non-resident retailers to collect the destination state's sales tax if certain conditions are met. From the press releases I read, it sounded like it was focused on Internet sales, but in reality it would have to apply to catalog sales as well. It would also likely apply to companies who may have some type of physical connection with a state but, for whatever reason, the company has concluded that nexus would not be created.
Now, just because Congress passes a law and the states adopt it, that does not mean the every Internet retailer is going to automatically register and begin collecting sales tax on day one. There will be plenty of companies, despite what the law may say, that will ignore the rules and operate on the fringe.
On the opposing side of the states, is the Direct Marketing Association (DMA) which has put up a great fight for the past 30 years. Over that time, the DMA has stopped many attempts by Congress to do this very thing. The entire Streamlines Sales Tax Project was designed to accomplish this also. Depending on what Congress does, it could renew the SSTP efforts or just put it out of its misery once and for good. This effort has been underway for 10 years or more and seems to have stalled out.
I'll keep updating the blog with informaiton as it becomes available. Let me inow if you hear something or have any questions.
