Taxing the Internet: Questions for Governors and Legislators

Governors and legislators across the country are being asked to endorse a multistate compact to facilitate sales tax collection on Internet‐​based transactions. Many state and local officials are concerned about what they perceive as an unfair advantage that Internet vendors possess over traditional retailers, or the potential revenues that could be generated by taxing e‐​commerce. As a result, many have endorsed the Simplified Sales Tax Project as a method of collecting sales taxes through a multistate compact. </p><p>But what are the costs associated with such an agreement? How will such a system impact the fledgling Internet sector, American taxpayers, and tax competition among the states? Gov. Bill Owens (R‐​Colo.), who received the highest grade on the Cato Institute’s recent Fiscal Policy Report Card, will offer a unique perspective on these matters and will release a major new study critical of the SSTP.