To go along with our earlier posting, MSNBC.com is also carrying an article this morning about another one of the plights confronting states these days: Internet retail taxes.
"Internet retailers are required to collect sales tax only when they sell to customers living in a state where they have a physical presence, such as a store or office," MSNBC’s article says. "When consumers order from out-of-state retailers, they are required under state law to pay the tax. But it's difficult to enforce and rarely happens. That means under the current system the seller is absolved of responsibility, buyers save 3 to 9 percent because they rarely volunteer to pay the sales tax, and the state loses revenue."
Internet retailers cite a 1992 U.S. Supreme Court decision involving catalog sales, Quill Corp. v. North Dakota," the article continued, "which ruled that states could require only companies that had a physical presence within the state to act as tax collector. To get around the ruling, some states are expanding what it means to be physically present.
"Last year, New York enacted a law that said Internet retailers' practice of paying commissions to marketing agents based within the state constituted a presence. Arkansas, Colorado, Illinois, Rhode Island and North Carolina quickly followed with similar laws. Bills are pending in Arizona, California, Florida, Hawaii, Massachusetts, Minnesota and Pennsylvania."