Last month, the U.S. Treasury Department announced the end of the ancient federal excise tax (FET) on long-distance telephone bills. Consumers should be wary of this seemingly positive development, as cash-strapped bureaucrats now press forward with plans for new technology taxes, threatening innovation.
One of the most ambitious schemes is the Streamlined Sales Tax Project (SSTP), a national effort by state legislators and local tax officials to cash in on the billion-dollar Internet economy. SSTP seeks to bypass a 1992 U.S. Supreme Court decision that ruled that states cannot require out-of-state companies to collect taxes without an in-state “nexus” or physical presence. By promoting uniform tax standards across states, SSTP officials are hoping Congress will step in and disband the nexus requirement for tax collection, a move that would be disastrous for both businesses and consumers.
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