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NEWS
| October 10, 2003
Nation
E-shopping could face state taxes
A bill under discussion now could
aid states seeing budget slumps via sales tax adjustments.
By Andy
Branca
Contributor to The Shorthorn
Students who buy everything from textbooks to compact discs on the
Internet may have to pay more if Congress passes a bill currently
in debate.
The Simplified Sales and Use Tax Act of 2003 would create a sales
tax on certain items purchased online. The U.S. House Judiciary
Committee is studying the issue.
Online shopping has been tax-free since 1992, when the Supreme Court
ruled that states couldn’t force sales taxes on businesses
unless they have a physical location in the state.
That decision has kept students like physics freshman Jay Murphree
from paying taxes on Internet purchases. He said he doesn’t
like the bill under discussion.
“I shop online for some of the books that I need for class
to avoid spending extra money,” Murphree said.
However, states are losing revenue as more people shop online. According
to the National Governors Association, sales taxes make up one-third
of a state’s income. The Direct Marketing Association published
a study in June estimating that uncollected taxes on Internet sales
would total $3.2 billion by 2006.
The bill, introduced Sept. 25, establishes an interstate contract,
signed by 32 states, to have a single-tax rate for each type of
product effective by 2006. Companies that earn less than $5 million
in annual Internet sales would be exempt.
For students, that could mean higher prices.
“If this bill is made into law it can affect students here.
Students who buy books on the Internet are not subject to taxes
now but could be in the future,” said Michael Moore, assistant
vice president for academic affairs .
Computer science sophomore Cory Peters said he realizes the bill
could be beneficial to the state “because of the hard times
that the country economically is going through.” It could
generate more tax revenue.
What he doesn’t like is that it comes at a time when students
are already going to be paying more to the state since tuition was
deregulated.
“Speaking as a student, I am generally not in favor of this
bill,” he said.
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| Michael
Moore,
assistant vice president for academic affairs, says
the bill will affect students here.
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