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Md. Comptroller Weighs In On National Internet Sales Tax Debate

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Peter Franchot
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Pat Warren joined the Eyewitness News team in 1992. Pat came to WJZ...
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WASHINGTON (WJZ)—Congress gets closer to bringing sales tax to the Internet, and that could bring millions to the state of Maryland. How many millions?

Political reporter Pat Warren has the answer.

According to the comptroller, there’s $175 million a year in taxes out there that the state is missing out on.

Nicki Fiffe and Luther Taylor turn to the Internet for shopping convenience, bargains and no sales tax.

“No sales tax,” said Fiffe. “Absolutely. I hope they don’t come up with that law ’cause they’re talking about it.”

“And of course now that’s the new buzz,” Taylor said. “Let all us citizens pay more of our money that we earn into taxes because we found a way to be convenient.”

But Maryland Comptroller Peter Franchot says it’s only fair.

“The sales tax is owed. It’s not as if this is a new tax. That tax is owed. It’s just that it’s not collected,” he said.

It is an interstate commerce issue that’s going to take an act of Congress to resolve.

The Senate is debating a bill to require online retailers to collect state and local sales tax.

Right now retailers only have to charge the tax if they have a physical presence in the state, and that puts local retailers at a disadvantage.

“People come in. They check them out. They feel the quality of them. Sometimes they’ll actually tell me they will go online and buy them because they don’t have to pay sales tax,” said Leah Daniels, a small business owner.

Supporters of the bill say Internet companies have an unfair advantage.

“Their products are cheaper than what the main street retailers in Maryland have, so it is just unfair,” Franchot said.

Internet sellers making less than a million in out-of-state sales would be exempt from collecting the tax.

eBay, where individuals and businesses sell goods, opposes the bill. It could have a harder time passing the House than the Senate.

States claim they are losing $23 billion a year in uncollected sales taxes.

If the Internet tax passes, Marylanders will be paying a slightly lower gas tax hike in the next few years.

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