States Increasingly Pursue Internet Sales Taxes

New York, NY, June 20, 2011 -- Cash strapped state governments are targeting Internet retailers as a potential source of funds through increased sales tax collections.

However, collecting those taxes from major online retailers is anything but easy.

Internet retailers are required to collect sales tax only when they sell to customers living in a state where they have a physical presence, such as a store or office.

However, states are attempting to broaden the definition of "presence" to include things like subsidiaries.

Last year, New York enacted a law that said Internet retailers' practice of paying commissions to marketing agents based within the state constituted a presence. Arkansas, Colorado, Illinois, Rhode Island and North Carolina quickly followed with similar laws.

Bills are pending in Arizona, California, Florida, Hawaii, Massachusetts, Minnesota and Pennsylvania.