Update: States eager for online sales tax action

February 7, 2013

In early December, we posted about states taking action on online sales tax collection.

As we noted then, states can’t do much without federal legislation, and support is growing in Congress for a bill that would give states full authority to require online retailers to collect sales tax.

But in the meantime, more states have started looking at what they can do.

Hawaii, Florida, and Michigan are all considering bills that would require an out-of-state retailer to collect sales tax if the retailer has an affiliate in the state.

Hawaii is also looking at adopting the Streamlined Sales and Use Tax Agreement, a set of guidelines that make collecting sales tax easy for retailers.

And while Virginia isn’t considering state action, it is counting on congressional action. The state’s proposed plan for transportation funding assumes that Congress will pass online sales tax legislation, allowing Virginia to collect hundreds of millions of dollars in uncollected sales tax.

States have already said that online purchases are subject to sales tax—but most of that sales tax goes uncollected. What they need now is federal legislation, and with each state-level bill or resolution, they’re sending Congress the clear message that the time to act is now. Let’s hope Congress is listening.

Hawaii House and Senate re-introduce Streamlined Sales Tax legislation!

January 26, 2011

As we reported to you yesterday, the Senate Majority Leader in Hawaii, Senator Brickwood Galuteria, recently introduced SB 568, a short-form bill, as a placeholder until the final draft legislation of the legislation was completed by the subject matter chair. Well, earlier today, Hawaii State Senator Carol Fukunaga, chair of the Economic Development and Technology Committee, filed SB 1355, an act to “adopt changes to Hawaii’s tax law that will allow Hawaii to participate in the national Streamlined Sales and Use Tax Agreement.”  The bill was cosponsored by Senators Chun Oakland, Baker, Ige, Kidani, Tokuda, Green, Ryan, and Shimabukuro.

The act would take effect upon passage of the bill, rather than on a future specified date. In other words, the intent is to act as quickly as possible. In fact, the bill states that ” Hawaii would benefit tremendously by adopting legislation that would enable the State to be in compliance with the Streamlined Sales and Use Tax Agreement at the same time that federal legislation is being reintroduced in 2011.”

At the same time, Representative John Mizuno of the Hawaii House of Representatives introduced HB 1265, with the same objective (to adopt changes to Hawaii’s tax law to allow Hawaii to participate in Streamlined). The act “shall take effect when the state becomes a party to the Streamlined Sales and Use Tax Agreement”—again, the intent is for Hawaii to act quickly to conform to Streamlined.

As you may recall, last year the Hawaii House and Senate both approved this legislation, but it was vetoed by then-governor Lingle. Although the Senate voted to override Governor Lingle’s veto, the House did not. Hopefully Governor Abercrombie will see the wisdom and necessity of collecting sales tax that is already due in order to offset Hawaii’s $840 million fiscal deficit.

Hawaii introduces Streamlined Sales Tax legislation

January 25, 2011

Yesterday, Hawaii Senate Bill 568 was introduced by Senator Brickwood Galuteria.

We are really looking forward to voluntary testimony in support of this bill!


HI there!

March 7, 2010

Last Wednesday (March 3rd, 2010) the Hawaii Senate approved SB 2405, and sent it to the Hawaii House of Representatives for consideration.

SB 2405 adopts changes to the Hawaii General Excise Tax system to allow Hawaii to participate in the national Streamlined Sales and Use Tax Agreement.

After the Hawaii congress had passed a similar measure last yer (SB 1678), Gov. Lingle Vetoed the bill, then the Hawaii Senate voted to override the veto, but the House of Reps. did not.

This year, hopefully Gov. Lingle will allow SB 2405 to become law – now that Hawaii anticipates a $500,000,000+ budget gap. SB 2405 could allow Hawaii to collect on at least $47,000,000 in sales tax currently due, but logistically un-collectable. Admittedly SB 2405 may only be able to recover about 10% of Hawaii’s anticipated budget shortfall. Fortunately however, SB2405 does not require any new taxes, or any further painful budget cuts.