Gov's Panel Recommends Taxing Web Sales

Dec 14, 2012

A gubernatorial panel on Thursday recommended changes in state law that eventually could mean Arizonans paying sales taxes on everything they buy on the World Wide Web.

The U.S. Supreme Court ruled two decades ago that states can impose their sales tax on online sales only when a firm also has a physical presence there. So has to collect Arizona's tax because Apple has stores here. By contrast, Dell, without Arizona stores, does not add on the levy. Michael Hunter, an adviser to Gov. Jan Brewer, noted there are several bills working their way through Congress to specifically allow states to tax internet sales.

"Every version we've ever seen, and the version we understand to be out there now, that may or may not be up for consideration in a lame-duck session requires a pretty high degree of simplification of the tax code," Hunter said.

The proposal advanced Thursday would do that. Hunter said committee members concluded that the tax code for both online and brick-and-mortar retailers is more complex than it needs to be.

"If you look at other states and you look at business people who actually have sales tax obligations in other states, it's really simple," he said. "You can do it on one form. In Arizona it takes reams of forms if you're in multiple jurisdictions."

Brewer, who formed the panel, said she wants to study the report before deciding whether to support any of the recommended changes.