Officials at the Iowa Department of Revenue say Iowa should once again try to collect sales taxes from online retailers, now that Republicans have retained control of the U.S. House and it’s unlikely to happen at the federal level. Iowa and other states lose millions of dollars in sales taxes from purchases made on the internet.
Victoria Daniels at the Iowa Department of Revenue says late last year it looked like Congress was going to force the retailers to collect the state taxes nationwide.
“Probably the best shot to get something done at the federal level was during that lame duck session last year and it didn’t happen,” Daniels says. Republicans in the U.S. House are backing a new bill that would exempt many sales from the tax. Daniels says that’s why Iowa needs to pass a bill in the Iowa House that allows the state to collect the taxes.
“It definitely makes federal legislation less of a save all, and we need to take matters into our own hands,” according to Daniels. Retailers from Walmart to small main street businesses support the effort, because, they say, internet sales have an unfair advantage over their brick and mortar stores.
But some state representatives like Greg Forristal, a Republican from Macedonia, view it as a tax hike, so their bill would have any newly collected taxes go right back to taxpayers. “In other words if we’re going to raise taxes let’s make sure it benefits the taxpayers,” Forristal says.
The lone Democrat on the House panel objected, saying any new tax revenue should go for education and mental health and other priorities.