IPI Publication Press Release - State Sales Tax May Not Survive a 21st Internet Century

This information taken from a recent IPI Center for Technology Freedom policy report, New.Economy@Old.Constitution by Lawrence Hunter and George Pieler. Copies are available upon request at 1-888-557-4IPI, or from www.ipi.org. The authors are also available for interviews.

	IPI Publication Press Release IPI Policy Report - # 153 Related Publication Title: New.Economy@Old.Constitution Released by Sonia Hoffman on 05/12/2000	Synopsis Full Text Quick Study Executive Summary Press Release (05/12/2000) Press Release (04/21/2000) Media Advisory (05/10/2000) Full Text PDF Quick Study PDF
	State Sales Tax May Not Survive a 21st Internet Century Dallas, TX: States’ appetite for tax revenues has them trying to impose new sales taxes on e-commerce. But when the systems proposed are at worst unconstitutional and at best impractical, it may be time for states to rethink traditional taxing methods, according to a new policy report by IPI’s Center for Technology Freedom. “The emergence of electronic retailing gives savvy states a unique opportunity to rethink their tax systems,” says author George Pieler, Adjunct Fellow at the Competitive Enterprise Institute. “This is especially important when most Internet tax remedies intrude upon the due process, commerce clause, or compact and confederation clause of the Constitution. For all these reasons the House of Representatives has shown excellent judgement in extending the Internet tax moratorium for another five years.” Lawmakers in the state of Virginia understand all to well that the sales tax may not deserve to survive the Internet age. In a state where over 50% of all cybertraffic crosses its borders, Virginia lawmakers are wisely looking at ways to scale back the state sales tax—on the ground that it works against traditional vendors who are competing against cyber-merchants. Most “rational administrators” at the state level, however, have been reluctant to embrace lower tax rates. They believe it is their duty to protect a seamless revenue system, with themselves as the arbiters of fairness. But they need not fear. State coffers are already overflowing with income tax revenues, largely driven by the Internet. States take in revenues worth more than 10.7 % of GDP today, a shy distance from the all time high of 11%, reached in 1995. And the federal government expects surpluses of $3.15 trillion over the next ten years. Applying an old sales tax system will become all the more difficult as the Internet continues to expand. Let’s let the Internet work its own magic in creating jobs, revenues, and new markets before we try to throttle it with obsolete theories of taxation. This information taken from a recent IPI Center for Technology Freedom policy report, New.Economy@Old.Constitution by Lawrence Hunter and George Pieler. Copies are available upon request at 1-888-557-4IPI, or from www.ipi.org. The authors are also available for interviews.