10 = THE UNIVERSITY DAILY KANSAN
NEWS
WEDNESDAY,JULY23,2003
BUSINESS
Internet sales tax off to bumpy start
Businesses perplexed as state tries new ways to increase tax revenue
By Richard Gintowt
rgintowt@kansan.com
kansas staff writer
A new state sales tax law created to collect money on Internet sales won't be affecting buyers yet. But one local retailer says the rules are impractical and burdensome.
The Streamlined Sales Tax Project, which went into effect July 1, aims to make catalog and Internet sales subject to state and local taxes.
Under the new law, sales taxes must be assessed at the place where goods change hands.
For businesses that ship to locations throughout the state, that means charging different tax rates for each of the 751 tax jurisdictions in Kansas. Before July 1, businesses charged one rate—the one of
Sharon Reynolds, owner of Broers Flower Shop, 714 Main St., and Owens Flower Shop, 846 Indiana St., said it would be impossible to keep track of every separate tax jurisdiction.
the jurisdiction they were based in.
"I could see if you were a contractor and you had five jobs a month you could figure the taxes separately," she said. "But we sometimes do hundreds of orders a day just think what Mother's Day would be like."
The Kansas Department of Revenue does not yet have a database to match addresses with tax jurisdictions, complicating the situation further. Through its Web site, retailers can match ZIP codes to jurisdictions, but that system breaks down in ZIP codes with multiple tax jurisdictions.
Richard Cram, director of policy and research for the Kansas Department of Revenue, said the current database was "not entirely adequate" and the department of revenue was working on a better one.
Luckily for confused retailers like Reynolds, Governor Kathleen Sebelius sent a letter to merchants informing them that they would not be penalized so long as they were making efforts to comply with the new system.
Ed Mullins, city finance director, said he didn't know whether the new law would raise or lower Lawrence tax revenue.
"We're a long way from gathering tax on every Internet sale," Mullins said. "In the meantime, we certainly have complicated things for retailers in Kansas."
Internet buyers won't have to pay sales tax for out-of-state purchases until Congress passes legislation overturning the case of Quill Corp. v. North Dakota, Cram said.
In that case, the U.S. Supreme Court decided that states could not require out-of-state retailers to pay the taxes unless the retailer had a "physical presence" in the state.
— Edited by Ehren Meditz
NATION
Texas comptroller finds $700 million without a home
AUSTIN, Texas - University of Texas Comptroller Carole Keeton Strayhorn announced Friday that there were more than $700 million in unallocated state funds of which her office was previously unaware.
Strayhorn urged the Legislature to allocate the funds during its special session and emphasized putting the money toward funding health-care services cut during the regular session.
The $702.6 million should be used to help restore more than a billion dollars in cuts made to health care during the regular session, Strayhorn said at a symposium on health care legislation.
Strayhorn said 200,000 people would lose eligibility for Medicaid, and 122,000 would lose eligibility for the Children's Health Insurance Program as a result of the cuts.
"We can partially restore these cuts before critical services are eliminated for needy Texans," she said.
Robert Inks, Daily Texan via U-WIRE, The University of Texas-Austin