JACKSON – The Mississippi Senate will not consider a proposal to tax Internet sales because the measure violates the U.S Constitution, Senate leadership said today.
House Bill 480, which mandates a tax on Internet sales, is in the Senate Finance Committee where Chairman Joey Fillingane, R-Sumrall, and Lt. Gov. Tate Reeves each said the bill will not survive Tuesday’s deadline for committee action.
“Because the Supreme Court made it clear 25 years ago that states do not have the authority to tax Internet sales, this bill is unconstitutional and any promised new revenue is simply fake money,” Lt. Gov. Reeves said.
The U.S. Supreme Court decided in 1992 that only sales from companies with a physical presence in a state can be subject to state sales or use taxes. Ultimately, Congress must act to allow states to collects sales taxes from online purchases.
“While this bill is well intentioned, it does not accomplish what it sets out to fix,” Sen. Fillingane said. “Also, the Senate Finance Committee generally looks for ways to lower taxes and grow our economy, not raise taxes.”
According to the Department of Revenue, about $40 million is paid by Mississippians as a use tax for online purchases under current law. House Bill 480 could reduce General Fund collections by as much as $40 million in Fiscal 2018.
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