Proposal in Congress could mean $20M for Vt.

US proposal to require state sales tax on Internet sales could mean $20M for Vermont

Associated Press

MONTPELIER, Vt. (AP) -- Proposals being considered by Congress to require Internet retailers to charge state sales taxes could mean at least $20 million a year in revenue for the state of Vermont.

Currently, Internet retailers don't have to impose a state sales tax unless the company has a physical presence in Vermont.

Many small retailers have complained that this gives the Internet retailers an unfair price advantage and state officials are upset because they lose sales tax revenue.

The U.S. Senate is set to vote on the proposal this week.

Vermont's lone U.S. Rep. Peter Welch, a Democrat, co-sponsor of a bill being considered in the House, said he's hopeful Congress is ready to move on the issue.

"If we get a successful vote in the Senate, this is going to put a lot of wind at our back," said Welch. "The bottom line here is that Republicans and Democrats all represent downtown areas where their local retailers, the bookstores, the sporting good folks the people who really anchor downtown business are at this immense competitive disadvantage with the e-retailers."

Vermont Tax Commissioner Mary Peterson told Vermont Public Radio (http://bit.ly/11yoYXL) people who purchase items from e-retailers are supposed to pay the state sales tax, but they rarely do.

"It's really important to note that it's not a new tax, it's just a tax that's owed but is generally not being remitted when it's done as a use tax as opposed to the vendor collecting it as a sales tax," she said. "It's both a matter of revenue fairness, fairness between taxpayers and fairness for our Main Street businesses."

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