North Carolina Secretary of Revenue Ken Lay last week addressed members of South Carolina’s Tax Realignment Commission(also known as TRAC), to describe how successful his department has been in a new campaign to obtain more tax revenue from Internet sales to North Carolinians.
Lay says their “digital clickthrough“ program draws revenue from a tremendous number of internet purchases in North Carolina.
Lay says up to $4 billion in Internet sales in his state annually could produce up to $500 million in tax revenue.
Lay pointed out that the cost of enforcing Internet sales tax collections declines considerably within the first few years after collection begins, as businesses understand that a state’s officials are serious.
South Carolina tax officials mentioned during Lay’s presentation that several states, including New York and Georgia have reduced tax penalties, some interest, or both, in order to encourage tax payment by Internet retailers.
Lay says his challenge in collecting from some out-of-state operations, which don’t have retailers or internet facilities in the state. Lay calls these in-state connections “nexuses.”
But Lay says the trick is to have clear laws defining “nexus.”
Lay said his department has developed “veins,” areas of tax focus with the greatest revenue potential.
Listen to Ken Lay’s interview: Ken Lay