August 30, 2001, 12:00 AM

A new joint group looks at Internet tax compensation costs

A group of government and business advisers is developing a tax compensation study to look at the costs of collecting sales taxes before and after proposed sales tax simplifications are adopted by state governments.

A group of state government officials and members of the business community have formed a new project to study the compensation of retailers regarding the collection of sales tax for online purchases, Internet Retailer has learned.

Observers say some states compensate retailers for the cost of collecting tax while others don’t. The pending argument between state governments and retailers regarding the collection of sales tax on online transactions is prompting the two groups to look at how much it will cost retailers to collect taxes both before and after potential tax law simplification, says Diane Hardt, a co-chairperson for the Streamlined Sales Tax Project, that is seeking to develop a legislative model to simplify tax laws for retailers.

Hardt says the group is working on an RFP to commission the study, which is expected to be completed by October. Co-chairs for the tax compensation study are Wayne Zakrzewski, tax manager at J.C. Penney, and Dan Bucks, executive director of the Multi-state Tax Commission.

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