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Maryland Launches Study On Internet Sales Tax

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Maryland Governor Martin O'Malley wants to know just how much sales tax Maryland residents aren't paying when they buy online.
Maryland Governor Martin O'Malley wants to know just how much sales tax Maryland residents aren't paying when they buy online.

Back in April, Gov. Martin O'Malley asked State Comptroller Peter Franchot to study the issue. Last month, the comptroller directed the Maryland Bureau of Revenue Estimates to prepare the study, which is expected to be done by the end of summer.

Internet retailers are required to collect sales tax only when they sell to customers living in a state where they have a store or office.

The study is designed to figure the volume of Internet sales that take place annually in Maryland as well as their estimated percentage of total retail sales.

It will also try to estimate how much tax revenue loss is due to sales by online retailers like Amazon, which Franchot says could add up to tens of millions of dollars. Amazon would have to charge customers Maryland sales tax if the company had a brick-and-mortar store in the state.

Recent developments in the Internet sales market also will be explored, including the expanding market for digital goods.

Lawmakers are expected to take up the issue within the next session.

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