Governor Terry Branstad says Iowans who buy merchandise on-line and do not pay the state sales tax on those purchases should start to pay the tax. Branstad has written Iowa’s congressional delegation, urging them to support a federal law which would undo a court case that has prevented states from actively collecting sales taxes on internet sales.
The so-called “U.S. Marketplace Fairness Act” has cleared the U.S. Senate and awaits action in the U.S. House. Key conservative groups like the National Taxpayers Union oppose the proposed law, saying it amounts to a tax hike, particularly on younger Americans who do much of their shopping online. Branstad disagrees.
According to an analysis by the National Conference of State Legislatures, U.S. states would have collected more than 23-billion dollars from Internet sales last year if states had been able to charge state sales taxes on online purchases.