The Athens County Commissioners plan to send a letter to Ohio’s U.S. senators asking them to support legislation that would authorize states to require sellers to collect sales taxes on Internet purchases.
There are two proposed laws that would accomplish that, the Marketplace Fairness Act and the Remote Transactions Parity Act. The acts would give states the authority to require Internet sales tax collection if the state has simplified its administration of sales taxes.
On Wednesday, the commissioners voted to send a letter that included support for the two pieces of federal legislation. The main purpose of the letter, however, was to oppose the Permanent Internet Tax Freedom Act, but after the commissioners voted it was learned that the act had been approved by the senate last week.
The already-approved legislation makes permanent the Internet Tax Freedom Act, which was first adopted in 1998 and has been extended several times. The act prohibited state and local taxes on Internet access, but Ohio was one of seven states not impacted because those states were grandfathered.
Commissioner Lenny Eliason said the prohibition has been interpreted as applying to sales tax, although Eliason said he believes that is debatable.
According to the the National Association of Counties, the legislation approved last week requires the grandfathered states to phase out their existing taxes on Internet access services by June 2020.
Eliason said sales taxes in Ohio are collected on Internet purchases two ways. If a company has a website but also has a store or building in Ohio, the company is required to collect sales tax on Internet purchases. In instances where a company does not have a store or building in Ohio, residents are supposed to voluntarily report on their state income tax form the amount of sales tax they owe from Internet purchases.
Sales taxes are the main source of revenue for Athens County government, although figures on how much the county actually receives from Internet sales were not available.
Eliason said payment of sales taxes on Internet purchases is a matter of fairness, since local businesses must collect sales tax.
“It’s a matter of fairness for mom and pop (businesses) and main street, that’s really the issue,” Eliason said.