Legislators are considering a plan to start collecting sales taxes on Internet purchases. House Speaker Christopher Rants of Sioux City says by 2006, the state could be collecting 100-million dollars in Internet sales taxes, and it could be used to bankroll a huge new state economic development fund. But Ed Failor of Iowans for Tax Relief says that’s not such a good idea. Failor says it’s too risky to use the Internet sales tax to back state borrowing for the economic development fund. He says not all 50 states are ready to start collecting sales taxes from Internet sales, and the U-S Chambers of Commerce estimates Iowa would get much less than 100-million in 2006. Failor says there’s been little time to review the 143-page bill to make sure the Internet sales tax idea would actually work.Failor’s group also opposes the idea of raising the cigarette tax to raise the funds to finance the new state economic development effort. Failor says if cigarette taxes are raised too much, more smokers will quit or buy their smokes on the black market so state cigarette tax revenue decreases. Attorney General Tom Miller has advocated a quarter a pack increase in the cigarette tax. The Iowa Chapter of the American Cancer Society and other groups, including the A-A-R-P, have advocated a buck a pack increase.
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