CHARLESTON, W.Va.¬†—¬†State Deputy Revenue Secretary Mark Muchow told state lawmakers Tuesday the state is probably losing anywhere between $50-$100 million a year on internet sales that don’t produce a sales tax.

Sales tax revenues are down in almost every state and internet sales probably have something to do with it, Muchow said.

“I looked at some surveys of all 50 states and the sales tax is definitely the weakest performing component in recent years,” Muchow told members of the Joint Committee on Government and Finance.

There is a line on the state tax return that calls for taxpayers to submit a use tax for items purchased on the internet but few taxpayers submit a payment, Muchow said.

“I don’t have recent stats on it but most likely less than $100,000 a year comes from that line,” Muchow said.

There are states that are fighting for internet tax collections. There’s a case out of South Dakota that may make it to the U.S. Supreme Court. It’s a two-pronged approach, Muchow said.

“One is an attempt by some states to get a U.S. Supreme Court decision that overturns or at least modifies previous court decisions. The other prong is to get Congress to act on the subject. I think the U.S. Supreme Court would want Congress to act,” Muchow said. “It’s just a process that will play out over some time.”

Sales tax collections have missed estimates in West Virginia by $17 million through the first four months of this fiscal year. Muchow has cited a number of reasons for the shortfall.

Use a Facebook account to add a comment, subject to Facebook's Terms of Service and Privacy Policy.

bubble graphic

bubble graphic