PLATFORM/Taxing the Internet
Taxes on goods sold over the Internet and on Internet access services are an ongoing issue for cash-strapped state and local governments. Congress recently reinstated a ban on Internet access taxes for another three years. In addition, the question of state taxes on goods could be considered again as early as the next Congress. American City & County asked readers of its weekly e-newsletter if they believe the ban on Internet access taxes should be made permanent and if they support state taxes on goods sold over the Internet. Below are some of the responses:
“I don’t believe a ban on Internet taxes should be permanent. Local governments have only limited revenue sources, and sales tax currently represents one of the largest. If people can shop outside their own community, sales tax revenue is lost that was used to provide local service. Eventually no one will shop inside their own community, and 25 percent of critical funding for police and fire service will be lost. Today, three out of five cities do not have the revenues to maintain their current levels of service. We are on the verge of losing the ability to provide needed services if an Internet tax ban [is] passed. It would be different if there were other ways to fund local government, but those sources are drying up also. Congress needs to preserve and fund the health of local communities.”
— H. Dean Maxwell, Mayor, Anacortes, Wash.
“Without the taxes generated by Internet or conventional sales, cities, towns and counties fail to provide needed services for their populace. Those services could be as small as a street sign on a busy corner to a roadway system.”
— LuAnn Sanderlin, Councilwoman, Pryor Creek, Okla.
“With more and more pressure in New York State on property tax revenue, it leaves county governments with the only other source: sales tax revenue. I don’t believe that there should be any tax on access to the Internet — this is the future of the information exchange. I do, however, feel that retail sales on the Internet should be taxed at the same rate that would be charged if shopping locally. Sales tax collection and distribution is antiquated to say the least.”
— Ronald McEwen, Budget Officer/Deputy Treasurer, Owego, N.Y.
