November 30, 2006
Tax Free Christmas
Though not a done deal, this might be your last Christmas to stick it to the man.
- Last year, Sen. Michael Enzi, R-Wyo., and Sen. Byron Dorgan, D-N.D., introduced similar bills that would require online and catalog merchants (or at least bigger ones) to collect sales taxes for any states that met standards set by the Streamlined Sales and Use Tax Agreement (SSUTA). The Enzi-Dorgan proposal stood no chance with taxophobic Republicans in control of the House.
Next year, with Democrats in charge? "The stars are lined up better," says Harley Duncan, executive director of the Federation of Tax Administrators, which represents state tax officials.
It's not just the change in partisan control that has raised the states' hopes. They also believe they can make a stronger case for new collection authority now that the SSUTA, which is designed to harmonize and simplify sales tax laws, is finally operating. As of Jan. 1, 15 states will be full participants in SSUTA, meaning they've adopted the required changes to their own laws. State officials spent years haggling over such issues as whether bakery bagels should be considered groceries, which few states tax, or prepared food, which is widely taxed. (The conclusion: If a bakery provides a utensil with your bagel or heats it for you, it counts as prepared food.)