xxsn0blindxx
07-17-2007, 04:46 PM
I hadn't even heard anything about this until now. I'm getting sick and tired of this bullshit. It really takes a lot of balls to come out and want to change a budget proposal to include MORE taxes.
http://www.jsonline.com/story/index.aspx?id=633358
Online sales tax is budget issue
Talks could resolve whether to join other states in tax on computer, catalog purchases
By AVRUM D. LANK
alank@journalsentinel.com
Posted: July 16, 2007
Whether Wisconsin's sales tax is automatically extended to many more online and catalog purchases will be decided in negotiations over the next state budget.
Gov. Jim Doyle and the Democrat-controlled Senate favor joining a multistate effort to collect the taxes and have included legislation to do so in their version of the budget. The proposal would increase state revenue by about $4.8 million during the two-year budget term, although some estimates say it would bring much more revenue in later years.
The budget passed by the Republican-controlled Assembly left out the proposal, however, concerned that it is a tax increase and would put some decisions on policy in Wisconsin in the hands of a multistate body.
The differences must be resolved in a conference committee, which may start talking this week.
Today, taxes must be paid on items purchased by Wisconsin residents unless the items are specifically exempt. However, out-of-state sellers, including many catalog and online retailers, cannot be compelled to collect the tax. Wisconsin residents are supposed to pay them when they file their income tax returns, although few do.
Local retailers have complained that this puts them at a disadvantage, while online merchants say that sales tax rates, rules and regulations vary too much across the country for them to effectively collect the taxes voluntarily everywhere.
To meet those complaints, several states have negotiated with business groups on common definitions of items that could be subject to tax and common ways to administer sales tax law. In exchange for states adopting those definitions, businesses have agreed to voluntarily collect the taxes. So far 15 states have joined the program.
The legislation backed by Doyle and passed by the Senate would add Wisconsin to the list either later this year or at the start of 2008.
Under the plan, states can decide whether to apply sales tax to all the items within each definition.
State Revenue Secretary Roger Ervin said the matter is important because the state needs "to modernize our sales tax system and to be as coordinated with other states as possible."
Complicating the situation is a Wisconsin Supreme Court case on whether computer software that is customized for business use is subject to the state's sales tax.
Now state law says that "off-the-shelf" software is taxable while "modified" software is not. But under the multistate agreement, Wisconsin would have to tax modified software if it taxes any software at all.
Wisconsin Manufacturers & Commerce, the state's largest business lobby, opposes the multistate sales tax legislation because it would tax the business software, said Jeff Schoepke, director of tax and corporate policy for the organization.
WMC backed a lawsuit against the state Department of Revenue in which Menasha Corp. is seeking a refund of sales tax it paid on a software package it installed in the 1990s. Menasha, a manufacturer of packaging and point-of-purchase displays based in Neenah, bought existing software but spent millions of dollars to modify it for its own use.
The case has bounced through the courts, with the Department of Revenue losing the last round at the Court of Appeals in January. Since then, the Supreme Court has agreed to hear the matter, with a decision not expected until next year.
Other companies have filed similar claims and, should the state lose, it might have to pay more than $350 million in refunds and interest, according to an estimate from the Legislative Fiscal Bureau. Those refunds would be paid no matter the outcome of the budget debate because the sales tax was imposed under existing law.
"We understand the benefit of having uniform definitions, but the Menasha case has to be figured out before the state goes down the path of joining this agreement," Schoepke said.
He rejected as too cumbersome proposals to have the state join the program, tax all software and then give rebates to businesses that had modified it.
"We would need to figure out ahead of time what is covered," Schoepke said, adding that there have been talks on the matter between WMC and the Department of Revenue. "Nobody can figure out how to define custom software in a way that makes sense."
Revenue Secretary Ervin said the definition of software in the multistate agreement is "very reasonable," adding that "it is a well accepted definition for taxing this type of software" in other states.
Ervin said he is confident the multistate measure will pass this year because there are other, more important tax matters for the conference committee to consider.
http://www.jsonline.com/story/index.aspx?id=633358
Online sales tax is budget issue
Talks could resolve whether to join other states in tax on computer, catalog purchases
By AVRUM D. LANK
alank@journalsentinel.com
Posted: July 16, 2007
Whether Wisconsin's sales tax is automatically extended to many more online and catalog purchases will be decided in negotiations over the next state budget.
Gov. Jim Doyle and the Democrat-controlled Senate favor joining a multistate effort to collect the taxes and have included legislation to do so in their version of the budget. The proposal would increase state revenue by about $4.8 million during the two-year budget term, although some estimates say it would bring much more revenue in later years.
The budget passed by the Republican-controlled Assembly left out the proposal, however, concerned that it is a tax increase and would put some decisions on policy in Wisconsin in the hands of a multistate body.
The differences must be resolved in a conference committee, which may start talking this week.
Today, taxes must be paid on items purchased by Wisconsin residents unless the items are specifically exempt. However, out-of-state sellers, including many catalog and online retailers, cannot be compelled to collect the tax. Wisconsin residents are supposed to pay them when they file their income tax returns, although few do.
Local retailers have complained that this puts them at a disadvantage, while online merchants say that sales tax rates, rules and regulations vary too much across the country for them to effectively collect the taxes voluntarily everywhere.
To meet those complaints, several states have negotiated with business groups on common definitions of items that could be subject to tax and common ways to administer sales tax law. In exchange for states adopting those definitions, businesses have agreed to voluntarily collect the taxes. So far 15 states have joined the program.
The legislation backed by Doyle and passed by the Senate would add Wisconsin to the list either later this year or at the start of 2008.
Under the plan, states can decide whether to apply sales tax to all the items within each definition.
State Revenue Secretary Roger Ervin said the matter is important because the state needs "to modernize our sales tax system and to be as coordinated with other states as possible."
Complicating the situation is a Wisconsin Supreme Court case on whether computer software that is customized for business use is subject to the state's sales tax.
Now state law says that "off-the-shelf" software is taxable while "modified" software is not. But under the multistate agreement, Wisconsin would have to tax modified software if it taxes any software at all.
Wisconsin Manufacturers & Commerce, the state's largest business lobby, opposes the multistate sales tax legislation because it would tax the business software, said Jeff Schoepke, director of tax and corporate policy for the organization.
WMC backed a lawsuit against the state Department of Revenue in which Menasha Corp. is seeking a refund of sales tax it paid on a software package it installed in the 1990s. Menasha, a manufacturer of packaging and point-of-purchase displays based in Neenah, bought existing software but spent millions of dollars to modify it for its own use.
The case has bounced through the courts, with the Department of Revenue losing the last round at the Court of Appeals in January. Since then, the Supreme Court has agreed to hear the matter, with a decision not expected until next year.
Other companies have filed similar claims and, should the state lose, it might have to pay more than $350 million in refunds and interest, according to an estimate from the Legislative Fiscal Bureau. Those refunds would be paid no matter the outcome of the budget debate because the sales tax was imposed under existing law.
"We understand the benefit of having uniform definitions, but the Menasha case has to be figured out before the state goes down the path of joining this agreement," Schoepke said.
He rejected as too cumbersome proposals to have the state join the program, tax all software and then give rebates to businesses that had modified it.
"We would need to figure out ahead of time what is covered," Schoepke said, adding that there have been talks on the matter between WMC and the Department of Revenue. "Nobody can figure out how to define custom software in a way that makes sense."
Revenue Secretary Ervin said the definition of software in the multistate agreement is "very reasonable," adding that "it is a well accepted definition for taxing this type of software" in other states.
Ervin said he is confident the multistate measure will pass this year because there are other, more important tax matters for the conference committee to consider.