Iowa could profit by being Internet tax-free

Iowa tax officials are working with other states to coerce more out-of-state Internet retailers to collect Iowa sales tax on purchases made by Iowa customers. I believe this is a mistake. Instead of working with other states to coordinate tax collections, we should declare Iowa an Internet tax-free state.

Iowa could attract retailers in high-tax states by passing laws that would prohibit Iowa from collecting sale taxes for other states. Iowa would create additional jobs as retailers move their headquarters and distribution centers to the state. The companies relocating here would still have to pay the Iowa sales tax, but since the Iowa population is only 1 percent of the total U.S. population, their cost would be insignificant while making an extra 7 percent to 11 percent on all orders shipped to high-tax states.

At the same time, the large states can't afford to reciprocate because they would have much more revenue to lose. Iowa currently collects $12 million annually on Internet sales. If this plan is implemented, then Iowa stands to collect hundreds of millions in additional fees and taxes from the companies relocating here.

Jim Leverington

Fayette