A Policymaker’s Guide to Internet Tax
Within the first two months of 2013, identical bills in the U.S. House and Senate have been introduced that would provide a federal framework in which states could opt to require remote sellers to collect state sales taxes. A bill has been introduced in the U.S. Senate to permanently extend the moratorium on taxation of Internet access, the Florida legislature passed a law to tax Internet sales from out-of-state sellers, and the online retail giant, Amazon, has agreed to collect a 6.35 percent sales tax from consumers in Connecticut.1 Are these decisions inconsistent or unrelated to one another? Why should Amazon pay taxes in Connecticut and not in, say, Oklahoma? There is no shortage of interest among states and localities in new or better-enforced sources of revenue from the Internet, yet in the current legal environment of Internet taxes, there is confusion over the most appropriate policy options moving forward.