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Internet sales tax poses threat of court tie up

The state House has passed house bill 480, which would, in short, require that online retailers collect sales tax when doing business in Mississippi.

Mississippi is the second state in the nation to take up a bill such as this. Alabama passed a similar bill last year, and it has since been tied up in court.

“Every bill could be challenged,” said Rep. Trey Lamar. “Alabama passed this bill last year and it’s tied up in court, and Mississippi passing this bill would get us a seat at the table.”

The bill is tied up because of a Supreme Court ruling in 1992 that prohibited the collection of sales tax for online retailers that do not currently have a brick-and-mortar location within the state. Should HB 480 become law, the same could happen here.

“States have begged federal Congress to take up this issue,” said Rep. Jason White. “And whether it is partisan gridlock or refusal to do the right thing, they keep kicking the can down the road.. the states have finally said we have to do something.”

In November, Attorney General Jim Hood sent an amicus brief to the Supreme Court asking for the Supreme Court decision to be overturned.

“More and more, the marketplace is moving from Main Street to the Information Superhighway, and our local merchants are at an unfortunate disadvantage,” Attorney General Hood said. “If local stores are unable to compete with out-of-state online retailers, we lose jobs, an important tax base and a critical investment in our communities. We’re asking the Supreme Court to even the playing field for merchants and to allow the states to gain the revenue that should be due to them.”

News Mississippi will continue to follow HB 480 as it progresses through the session.

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