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Streamlining various state sales taxes

November 27, 2009

It's nearing 10 a.m. on Black Friday. That means that for the last six or so hours all across America, shoppers have piled into stores looking for bargains.

In a couple of states, South Carolina and West Virginia, shoppers will get even better deals as certain purchases — guns in S.C. and energy-efficient appliances in W.V. — are free from sales tax.

Many other folks are shopping online today, with a bigger Internet surge of buyers expected on Cyber Monday.

Sales tax receipt-texas (2) In some cases, those folks purchasing via their PCs also escape sales tax payments.
The New York Times says it's time for such tax-free sales to stop.

"Fairness demands sales tax collection by all online retailers — to level the competitive playing field, to ensure that tax law is administered consistently and to distribute the overall tax burden more progressively," argues today's Times editorial Yes, You Owe That Tax.

New York currently is fighting a court battle it hopes will validate once and for all the Empire State's 2008 law that requires Internet retailers to collect taxes on sales to New York customers. Amazon.com challenged the law and lost in a lower court. A state appeals court is expected to rule on the issue soon.

Awaiting federal tax imprimatur: Meanwhile, it looks as if federal legislation that would authorize states to collect taxes on remote sales could be introduced on Capitol Hill before the year is out.

Such legislation would give those states that have complied with the Streamlined Sales and Use Tax Agreement the authority to require out-of-state sellers to collect sales tax on remote sales. 

Essentially, the Streamlined Sales and Use Tax Agreement makes collection of
taxes from Internet vendors easier
by simplifying rates and
requiring businesses to collect taxes when selling goods in remote
locations.

To be fully effective, however, the agreement needs the enacting legislation from Uncle Sam. In supporting that final federal step, the National Conference of State Legislatures (NCSL) notes that 23 states have been certified as being compliant with the Streamlined Sales and Use Tax Agreement. The agreement includes participation of more than 1,100 volunteer sellers and accounts for over $360 million in new revenue for states.

According to Tax Analysts, during a meeting last week of the NCSL task force studying the Internet sales tax collection issue, the group's counsel told members that while the legislation is still being finalized, "supporters hope to see the bill introduced before the end of the calendar year."

A key component of the measure will be getting Republican support, but several GOP lawmakers reportedly are interested in the legislation.

States that have signed onto the Streamlined Sales and Use Tax Agreement hope the reports are correct and that soon they'll be able to add  few more dollars to their treasuries via online sales taxes.

You can read more about state support of the legislation in recent editorials in the Greenwood, Miss., Commonwealth and the Grand Rapids, Mich., Press.

States in Agreement: Is your state one of the 23 signed onto the streamlined sales tax collection agreement? 

They are Arkansas, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Nebraska, Nevada, New Jersey, North Carolina, North Dakota, Ohio, Oklahoma, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Washington, West Virginia, Wisconsin and Wyoming.

How much would nationwide sales tax collection change your online shopping habits?

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TAX-SAVVY WAYS 
TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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