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Hawaii Considers Web Retail Tax

4 Mar, 2009 By: Chris Tribbey

Hawaii is the latest state to consider taxing online purchases to close a state budget deficit.

State lawmakers are considering a 4% tax on purchases made through retailers such as Amazon.com to raise an estimated $166 million for Hawaii.

“If we were ever looking for a time to collect taxes that aren't being paid, this would be the year,” Sen. Carol Fukunaga, D-Lower Makiki-Punchbowl, told The Associated Press. “We are much more vulnerable to people buying out-of-state when economic times get tough.”

Current law only requires sales tax from purchases made by online retailers with a physical presence in the state. However, Hawaii is considering joining a coalition of states that are streamlining their tax codes in an effort to close that loophole.

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