Legislation paving the way for local Kansas governments to tax sales over the Internet was approved Tuesday by the State Senate’s Assessment and Taxation committee.
In a voice vote, the panel led by Republican State Sen. David Corbin approved and sent to the full Senate for consideration SB-540, authorizing state participation in the Streamlined Sales Tax Project.
The project is a joint effort by the National Governors Association, National Conference of State Legislatures and the Multistate Tax Commission to establish uniform standards among the states so they could tax remote sales made by mail, over the Internet or by telephone.
The measure also directs the state Department of Revenue to develop a list of changes in existing laws that would allow the state and local governments to tax sales made over the Internet by out-of-state sellers when the federal ban on Internet taxes expires on Nov. 1, 2003.
Similar legislation has been signed into law by the governors of 20 other states and is pending in at least a dozen others, according to tax project officials.
The federal ban or moratorium on taxing Internet sales went into effect in 1998 and was extended last year.
While the full Kansas Senate is expected to approve the measure, it faces tough sledding through the state House of Representatives where many members are reportedly concerned about the effect it would have on state and local treasuries.
Although Republican State Sen. Les Donovan estimates the state is losing $100 million a year in taxes on Internet sales, Republican Tony Powell, who chairs the House Taxation Committee, told the Kansas City Star that he wasn’t “convinced that the state is losing that much revenue.”
