Headline of the day: Online sales "rob" state of taxes

[Declan McCullagh <declan () well com>]

http://www.dmregister.com/business/stories/c4789010/22630343.html

Online sales rob state of taxes
Iowa Values Fund success hinges on proposed legislation
By DONNELLE ELLER
Assistant Business Editor
10/30/2003
Rich Bartlett figures he's lost 5 percent of his tobacco sales to 
businesses that sell cigarettes online or through catalogs.

"What it means in state tax dollars is probably millions," once all Iowa 
tobacco sales are figured in, said Bartlett, owner of South Side Tobacco at 
2432 S.W. Ninth St.

Iowans' online and mail-order purchases of everything from TVs to 
computers, books and clothing will cost the state about $180 million in 
lost sales taxes by 2007, state officials estimate.

As state and local governments sink further into financial red ink, a lot 
is riding on an initiative to collect remote sales taxes, including the 
future of the Iowa Values Fund created this year to spur new high-wage jobs.

The fund is expected to have $503 million to spend over the next seven 
years. The first $100 million will be federal money, but after that the 
fund will rely on sales-tax growth expected to come in part from taxes 
collected on Internet sales.

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