Internet taxes

The (Spokane, Wash.) Spokesman-Review

The state of Washington is already pursuing residents who have eluded the state's sales and tobacco taxes by buying cartons of cigarettes online. The attorney general's office sought a list of customers from nearly 200 online cigarette purveyors. Most of them ignored the request, but a federal judge recently ruled that a Web site, dirtcheapcig.com, must turn over its list.

The federal Jenkins Act, adopted in 1995, requires mail-order businesses to file monthly reports on the names and addresses of its customers. Online merchants should not be considered a special category to be exempted from the requirement. ...

Congress is also targeting online cigarette purveyors. The Senate passed a bill on Tuesday that would mandate stricter reporting requirements. And a House bill would make it tougher for minors to purchase cigarettes online. ...

The National Association of Governors recognizes the problem and is working on model legislation that would require that state and local taxing authorities within each state charge the same rate for each product taxed. That would make online collection realistic.

A study commissioned by the governors group found that all 50 states could lose more than $45 billion in online sales tax revenue by 2006.

Such streamlining of taxes would be a boon to Washington state, which relies more heavily on the sales tax than other states.

Technology has dramatically altered the way people do business. Governments need to plug into that change to survive.