Sales Tax

Internet Tax Freedom Act (ITFA).

To be clear, the Internet Tax Freedom Act (ITFA), which was signed into law on October 21, 1998, does not, as some have asserted, preclude sales and use taxes on any and all commerce conducted over the Internet. State and local governments are allowed to impose sales and use taxes on all such electronic sales, provided that the tax (and its rate) are the same as that which would be imposed on the transactions if they were conducted in a more traditional manner, such as over the phone or through mail order.

The IFTA is intended to prevent any jurisdiction from imposing special taxes on Internet transactions, other than such taxes that a jurisdiction already has the ability to impose (e.g., sales tax; see below). The ITFA was able to prevent the imposition of any such taxes through October 21, 2001. At this time the fate of sales tax on the Internet is unknown and could change at any time which could affect your order.

Taxation rules used by mail-order companies.

Currently, most e-commerce companies use the same taxation rules used by mail-order companies, which are based on constitutional guidelines for interstate commerce. Generally this means that states can only require companies to collect sales tax in states where they have business operations, and as a result, a company will not collect sales tax in states where they have no business operations. If someone were to order something from one of our catalogs, that person would only be charged sales tax if he or she lived in a state where our company has physical operations. Example: If a person in Wyoming ordered something, our company would not be required to collect sales tax because it has no business operations in Wyoming.

State and local government sales tax rules.

The ITFA also prohibits state and local governments from imposing taxes on Internet access charges, protects against the imposition of new tax liability for consumers and vendors involved in commercial transactions over the Internet, and creates a temporary commission to study taxation of Internet commerce and to report back to Congress in 18 months on whether the Internet ought to be taxed and, if so, how taxes can be applied without subjecting the Internet and electronic commerce to special, discriminatory, or multiple taxation. Although the 18 months have already passed, this commission has still not reached any conclusions for Congress to act on.