Two states strike down “Amazon tax”

posted at 12:31 pm on April 29, 2012 by Jazz Shaw

Last winter we opened up a discussion on the Marketplace Fairness Act and the idea of the federal government forcing companies such as Amazon and eBay to collect a sales tax on internet sales. The response was almost uniformly negative here, with one of the most popular proposed alternatives being the idea of letting the states deal with the issue themselves. I have to admit that the idea carried some appeal for me as well, at least at first glance. And it turns out that several states had already begun exploring precisely such a solution.

As you would expect, the internet retailers immediately got together and began challenging these new state taxes in court. The first two to make it to the top of the docket were in Colorado and Illinois. The results were pretty much the same. First up, Colorado.

A federal court has thrown out a 2010 Colorado law, which had already been temporarily blocked in federal court last year, meant to spur online retailers like Amazon to collect state sales tax. ‘I conclude that the veil provided by the words of the act and the regulations is too thin to support the conclusion that the act and the regulations regulate in-state and out-of-state retailers even-handedly,’ U.S. District Judge Robert Blackburn wrote in his opinion. The law and the rules to carry it out ‘impose an undue burden on interstate commerce’ and are unconstitutional, the judge wrote.

The story played out pretty much the same way in Illinois.

A Cook County Circuit judge ruled against the state of Illinois in its attempt to tax online sales from out-of-state companies.

Judge Robert Lopez Cepero today ruled that the 2011 law doesn’t pass muster because simply having an affiliated company in the state that makes sales or refers customers to an online retailer doesn’t create enough of a presence, or nexus, for tax purposes.

He also ruled that the Illinois law is unenforceable because of a federal Internet tax moratorium that runs through 2014.

So where do we go from here? If there is no constitutional path to allowing the individual states to collect sales tax, then it would seem that only two possible solutions remain. First, we could simply never have taxes on interstate sales. This is obviously a very popular answer, since nobody likes paying taxes and we all enjoy getting a good deal shopping over the internet. But the states are seeking ways to address a couple of very real problems. They need the revenue in many cases, but they are also trying to respond to the needs of brick and mortar stores who feel that they are being forced to fight on an uneven playing field.

Is a federal solution like the Marketplace Fairness Act the answer? It’s going to be a hard sell convincing conservatives that “more taxes” is ever the answer to anything, even if the money is supposed to be channeled to the states. But this situation needs to be settled sooner or later.


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Would you quit with the myths .Sheesh.

CW on April 29, 2012 at 1:50 PM

Not a myth, saw it happen. Wal-Mart and Target were better competitors.

Fairbury Nebraska, Beatrice Nebraska, Commerce Texas, Quinlan Texas, Durant Oklahoma, Kingston Oklahoma among others.

cozmo on April 29, 2012 at 1:55 PM

Thank you for the straight answer, Rose. I must have missed it. So as long as the taxation authority lies with whatever state the shipping address is in, I can have things shipped off-shore, or at least to the state with the most advantageous tax structure, and we’re back to the same question we’re asking now: How to make it “fair” and “close loopholes.” This is why I fear a federal solution may be deemed necessary. If some states turn around say “if you get it shipped here, you pay sales taxes here,” not all states must necessarily follow suit. And those that don’t will be at an advantage over those that do.

gryphon202 on April 29, 2012 at 1:49 PM

No problem. Like I said, whenever I see this topic come up I realize that many people believe all internet sales are not taxes which is not true. Those in which the seller and buyer is in the same state is subject to those states laws, even if the purchase takes place on the internet. Or if the seller has any kind of physical presence in that state actually.

Well, yes, you could have a purchase shipping to another address outside your state to avoid the tax, or another country, but usually people buying on the internet is for convenience of being delivered to your door; having to retrieve the item from another location to save a little on taxes would not seem like a loophole many would by utilizing. But there are always exceptions, and depending on the impact of that sales tax more and more would in certain situations, I suppose.

rose-of-sharon on April 29, 2012 at 1:57 PM

When I accused him of calling Wal-mart the enemy, he denied it. Isn’t that just cute?

gryphon202 on April 29, 2012 at 1:51 PM

No, because you tried to make it into an attack on Wal-Mart instead of what it was.

cozmo on April 29, 2012 at 1:57 PM

Heh was that even on topic.You’re just another loser like Lester with an empty frustrating life who comes here to vent.

CW on April 29, 2012 at 1:50 PM

Actually i am quite okay with the current progress of the economy. Is the economy where i would like to be? Of course not. However i am happy we are slowly getting there.

This is contrary to 99.9% of the people that post here. They are joyful when the economy shows signs of receding. Makes them wet their pink panties.

Uppereastside on April 29, 2012 at 1:57 PM

That’s bass-ackwards, Butch. The states should be the taxing authority and kick money back to the federales. That’s how it was when America started, and that’s how I’d like to see it again.

gryphon202 on April 29, 2012 at 1:44 PM

I am spit balling here, so shove the acrimonious attitude up your a$$ Nancy.

Now, as to your point about being backwards that is why I would recommend a requirement that part of the federal sales tax be kicked back to the states condition free. Living in a world that does more and more business remotely does make it difficult for a single state to exercise its taxing authority. By scrapping our entire federal tax system and moving to a federal sales tax (which has the extra added bonus of being entirely transparent) we eliminate the cost of states trying to collect out of state sales taxes and relive businesses of cumbersome accounting requirements trying to keep up with 50 different states.

NotCoach on April 29, 2012 at 1:57 PM

It is not the job of gov’t to tax everything.

aniptofar on April 29, 2012 at 1:58 PM

No problem. Like I said, whenever I see this topic come up I realize that many people believe all internet sales are not taxes which is not true. Those in which the seller and buyer is in the same state is subject to those states laws, even if the purchase takes place on the internet. Or if the seller has any kind of physical presence in that state actually.

Well, yes, you could have a purchase shipping to another address outside your state to avoid the tax, or another country, but usually people buying on the internet is for convenience of being delivered to your door; having to retrieve the item from another location to save a little on taxes would not seem like a loophole many would by utilizing. But there are always exceptions, and depending on the impact of that sales tax more and more would in certain situations, I suppose.

rose-of-sharon on April 29, 2012 at 1:57 PM

It’s not always inconvenient to dodge sales taxes. Just ask anyone who’s crossed the river into Jersey from NYC for cigarettes. Ask anyone who’s “smuggled” cigarettes across state lines to sell for several dollars cheaper. If fairness it the goal, federal intervention is the only way I believe we can achieve it. But unlike libtards, I don’t believe fairness is a virtue, and hence I am NOT advocating for federal intervention.

gryphon202 on April 29, 2012 at 1:59 PM

gryphon202 on April 29, 2012 at 1:26 PM

Because the feds are so good at it.

cozmo on April 29, 2012 at 1:52 PM

I said I’d accept it as CONSTITUTIONAL. In case you hadn’t noticed, I also said my reflexive mistrust of the way DC manages to screw everything up leads me to hope that it doesn’t come to that. Constitutional =/= good idea. You can ask Mitt Romney about that.

gryphon202 on April 29, 2012 at 1:53 PM

Acceptance of big government is a milestone on your way to full on uppereastside…my condolences.

cozmo on April 29, 2012 at 2:00 PM

They need the revenue in many cases

Yes, to each according to their ability to tax, to each according to their need.

Nexus laws apply where there are physical locations, so that’s covered for many states. And for ones where they aren’t, so what?

It’s not as if the states don’t already have income taxes and property taxes and fines and fees for revenue to take from the citizen.

Hey, here’s a novel idea: SPEND LESS MONEY.

CPL 310 on April 29, 2012 at 2:02 PM

Now, as to your point about being backwards that is why I would recommend a requirement that part of the federal sales tax be kicked back to the states condition free. Living in a world that does more and more business remotely does make it difficult for a single state to exercise its taxing authority. By scrapping our entire federal tax system and moving to a federal sales tax (which has the extra added bonus of being entirely transparent) we eliminate the cost of states trying to collect out of state sales taxes and relive businesses of cumbersome accounting requirements trying to keep up with 50 different states.

NotCoach on April 29, 2012 at 1:57 PM

It’s never condition free. NEVER. They always say it is, and it never is. If state sovreignty means anything, we should go back to taxing the states based on apportionment-by-population. I’m not necessarily opposed to the FAIR tax, but I don’t think it goes far enough. The federales shouldn’t tax people AT ALL. They should tax states, and the states should have the sole authority to tax individuals within their respective borders. At least, that is, if we’re interested in the same kind of freedom that our republic was actually founded on.

gryphon202 on April 29, 2012 at 2:02 PM

Acceptance of big government is a milestone on your way to full on uppereastside…my condolences.

cozmo on April 29, 2012 at 2:00 PM

Whatevs. Try reading the plain language of the constitution sometime, douchebag. Then we’ll be able to debate on equal terms.

gryphon202 on April 29, 2012 at 2:03 PM

Uppereastside on April 29, 2012 at 1:57 PM

Actually I was talking about your pathetic frustrations outside the national economic picture. Your posts make it evident that like Lester you live alone cause nobody likes you or with a partner in a loveless relationship. The type of simplistic aggressive posts are evidence.

The fact that you don’t get it that this is the lamest recovery is simply baffling. Care to compare to Reagan. Nah you would rather not see that job growth. THAT is what WE want.

CW on April 29, 2012 at 2:04 PM

Uppereastside on April 29, 2012 at 1:57 PM

We are the 99.9%.

So you are happy with unemployment that refuses to go below 8%? You are happy with the incredibly anemic growth of the last quarter? You are happy that we are likely to be sinking into an even worse economy over the next six months?

NotCoach on April 29, 2012 at 2:04 PM

Not a myth, saw it happen. Wal-Mart and Target were better competitors.

Fairbury Nebraska, Beatrice Nebraska, Commerce Texas, Quinlan Texas, Durant Oklahoma, Kingston Oklahoma among others.

cozmo on April 29, 2012 at 1:55 PM

Blah blah blah. Just more liberal type tripe.

CW on April 29, 2012 at 2:05 PM

Whatevs. Try reading the plain language of the constitution sometime, douchebag. Then we’ll be able to debate on equal terms.

gryphon202 on April 29, 2012 at 2:03 PM

Sorry, if by equal you mean your way of distorting facts and the words of others, I’ll pass little lion.

cozmo on April 29, 2012 at 2:05 PM

Uppereastside on April 29, 2012 at 1:57 PM

We are the 99.9%.

So you are happy with unemployment that refuses to go below 8%? You are happy with the incredibly anemic growth of the last quarter? You are happy that we are likely to be sinking into an even worse economy over the next six months?

NotCoach on April 29, 2012 at 2:04 PM

Upper has its nose so far up Obama’s arse it cannot see reality.

CW on April 29, 2012 at 2:06 PM

Blah blah blah. Just more liberal type tripe.

CW on April 29, 2012 at 2:05 PM

More likely, ignorance of history, on your part.

cozmo on April 29, 2012 at 2:06 PM

It’s going to be a hard sell convincing conservatives that “more taxes” is ever the answer to anything, even if the money is supposed to be channeled to the states.

Yeah, “channeled”. Given the current administration, I’m sure they’ll be “fair” in their “channeling”.

Vexing problem? Why? Internet sales is just the most recent evolution of “sales”. The “brick and mortar” stores had no problem driving the street peddler out of business. The “big box” stores had no problem driving Mom and Pop stores out.

The only true “vexing problem” is that the damned politicians can’t get their hands on any money.

GarandFan on April 29, 2012 at 2:06 PM

It’s never condition free. NEVER. They always say it is, and it never is. If state sovreignty means anything, we should go back to taxing the states based on apportionment-by-population. I’m not necessarily opposed to the FAIR tax, but I don’t think it goes far enough. The federales shouldn’t tax people AT ALL. They should tax states, and the states should have the sole authority to tax individuals within their respective borders. At least, that is, if we’re interested in the same kind of freedom that our republic was actually founded on.

gryphon202 on April 29, 2012 at 2:02 PM

That is why I prefixed this idea with the requirement of a constitutional amendment. I wouldn’t even start to consider this idea without hard and fast rules that prevent the federal government from bullying the states.

NotCoach on April 29, 2012 at 2:06 PM

Sorry, if by equal you mean your way of distorting facts and the words of others, I’ll pass little lion.

cozmo on April 29, 2012 at 2:05 PM

Another liberal trait: Projection. Try again, Coz.

gryphon202 on April 29, 2012 at 2:07 PM

Show us you can spend existing money wisely and balance your budgets with spending cuts, including cutting the public employee union gangsters from the taxpayer pipeline….

then we can discuss tax increases.

rickyricardo on April 29, 2012 at 2:07 PM

While online retailers do not pay sales taxes they do pay shipping costs. Therefore, there already exists a level playing field for sales. It’s just not “fair” to the government.

Kaffa on April 29, 2012 at 2:08 PM

Show us you can spend existing money wisely and balance your budgets with spending cuts, including cutting the public employee union gangsters from the taxpayer pipeline….

then we can discuss tax increases.

rickyricardo on April 29, 2012 at 2:07 PM

Whining liberal: Then we won’t need the tax increa…SHUT UP!

NotCoach on April 29, 2012 at 2:09 PM

Another liberal trait: Projection. Try again, Coz.

gryphon202 on April 29, 2012 at 2:07 PM

Those that followed the thread know what you did. No need for me to try anything.

cozmo on April 29, 2012 at 2:10 PM

I’d say stop feeding the trolls, but their bellies are already full, and you guys keep shoveling raw meat into their cages.

Difficultas_Est_Imperium on April 29, 2012 at 2:11 PM

That is why I prefixed this idea with the requirement of a constitutional amendment. I wouldn’t even start to consider this idea without hard and fast rules that prevent the federal government from bullying the states.

NotCoach on April 29, 2012 at 2:06 PM

How about this: The only “hard and fast rule” we need is that the constitution doesn’t give the federales the power to blackmail the states!

Sorry if I come across as a little acrimonious, but I assure you it’s nothing personal, NC. I am disgusted with the overall state of movement conservatism in modern America, and that we’re even debating something like the subject of this post serves to fuel my ire.

The Magna Carta and many subsequent charters like it, including the one that established the British Parliament, I believe, laid out what the nobles could do under the kings, and what the kings were forbidden from doing. Our founders rejected that model, and that’s why the federales can only do what the constitution grants them the authority for, while the states may do anything except what they are explicitly forbidden from doing. Hence, the constitution spells out with great specificity how the government may levy taxes. The 16th amendment has no such specificity.

We’re probably screwed, but I’m just waiting until November to say that I know it for sure.

gryphon202 on April 29, 2012 at 2:12 PM

Those that followed the thread know what you did. No need for me to try anything.

cozmo on April 29, 2012 at 2:10 PM

What I did was assert the constitutionality of something I don’t ultimately think is a very good idea. Anyone else here want to disagree with me on that point?

gryphon202 on April 29, 2012 at 2:12 PM

While online retailers do not pay sales taxes they do pay shipping costs. Therefore, there already exists a level playing field for sales. It’s just not “fair” to the government.

Kaffa on April 29, 2012 at 2:08 PM

Touche! :D I like the cut of your jib!

gryphon202 on April 29, 2012 at 2:13 PM

If the buyer is in Texas? Or his residency is in Texas? You’re not answering the question here. I can be a resident of one state, be vacationing in another, and have a package sent to a third — all at the same time. So does my state of residency have taxing authority? Or the state where I am ordering from? Or the state where the business I order from has a presence? Or the state where I’m sending to? If it is the state I am ordering from, what about if I am out of the country? What if I am ordering from a business who does not have a presence inside the country? This can get awfully complicated awfully fast, and all I’m seeing is pat answers that don’t really answer the question proffered.

I believe you are making this extremley complicated.Yes i suppose a buyer could evade taxes by having things shipped to another locale, but i most cases the state to where the product is shipped it should be that states sales tax and thats state to where retailer sends the money. I would think a retailer from out of the country would not collect the sales tax nor send it to a state. you are basically trying to come up with exeptions to negate the principle altogether. Sheesh

gerrym51 on April 29, 2012 at 2:14 PM

I believe you are making this extremley complicated.Yes i suppose a buyer could evade taxes by having things shipped to another locale, but i most cases the state to where the product is shipped it should be that states sales tax and thats state to where retailer sends the money. I would think a retailer from out of the country would not collect the sales tax nor send it to a state. you are basically trying to come up with exeptions to negate the principle altogether. Sheesh

gerrym51 on April 29, 2012 at 2:14 PM

I believe the “fairness” crowd is over-simplifying. While I don’t believe that a majority of Americans would necessarily seek to actively evade these new taxation rules, neither do I think it would come out as “fair” as the “fairness” crowd wants us to believe. As long as states have different rules, folks will gravitate towards states that have rules favorable to them, as will busineeses. That’s another virtually immutable rule of tax policy.

gryphon202 on April 29, 2012 at 2:16 PM

I believe the “fairness” crowd is over-simplifying. While I don’t believe that a majority of Americans would necessarily seek to actively evade these new taxation rules, neither do I think it would come out as “fair” as the “fairness” crowd wants us to believe. As long as states have different rules, folks will gravitate towards states that have rules favorable to them, as will busineeses. That’s another virtually immutable rule of tax policy.

the only “fairness” i see is to the same group of retailers in x state. as for overall fairness between states-whats the point.

a state has taxes.a state wastes our tax money. those are seperate issues. we denounce government waste-then we keep electing the same individuals. it is what it is.

gerrym51 on April 29, 2012 at 2:23 PM

the only “fairness” i see is to the same group of retailers in x state. as for overall fairness between states-whats the point.

a state has taxes.a state wastes our tax money. those are seperate issues. we denounce government waste-then we keep electing the same individuals. it is what it is.

gerrym51 on April 29, 2012 at 2:23 PM

Indeed it is what it is. Thing is, it also is what it was, and with the ascendancy of the internet, there are some who are no longer happy with the old ways of collecting taxes. Sure, some states, particularly larger ones, are seeing tax revenues slide a little. So? (h/t Andrew Breitbart) They need to learn to be better stewards of the tax dollars they collect from their citizens. The thought of eventual federal intervention feels rather ominous and unnecessary to me, but it may end up inevitable and imminent at some point.

gryphon202 on April 29, 2012 at 2:29 PM

Uppereastside on April 29, 2012 at 1:57 PM

…you…as I suspected…are just nucking futs!

KOOLAID2 on April 29, 2012 at 2:40 PM

I hope this doesn’t pass.

Here is what I go through in Georgia. I have a tiny online store. I have to have a “sales & use tax” certificate. Anything I buy online and “use” for my business, I have to pay taxes on it as if I bought the item in the state of Georgia. Fair enough.

However, a little unknown fact to most individuals in the state of Georgia is that everyone should be paying a “use” tax for every item they buy on the internet and “use” for their own personal use; such as, clothing. That’s right, even if a person doesn’t own a business, everyone is suppose to file a form with the state of Georgia outlining what they bought online.

For many years, at least in regards to small businesses, this was unregulated. Now, Gov. Deal has made it mandatory for you to give the state your sales & use tax number and they will cross check with your county to see if you’ve been paying taxes. Even that is fair, but what about a private citizen. We haven’t heard how they’re going to enforce that part yet.

moonsbreath on April 29, 2012 at 2:50 PM

Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidise it.

Reagan.

RealMc on April 29, 2012 at 2:51 PM

…but what about a private citizen. We haven’t heard how they’re going to enforce that part yet.

moonsbreath on April 29, 2012 at 2:50 PM

Good luck with that.

gryphon202 on April 29, 2012 at 2:52 PM

While online retailers do not pay sales taxes they do pay shipping costs. Therefore, there already exists a level playing field for sales. It’s just not “fair” to the government.

Kaffa on April 29, 2012 at 2:08 PM

Touche! :D I like the cut of your jib!

gryphon202 on April 29, 2012 at 2:13 PM

The entire statement is ignorantly flawed. The point is for online retailers to collect sales taxes and distribute them to states – or not. You cannot charge a tax on the shipping unless you are the shipper – it would be double taxation for a single item on a single transaction. The statement does not come close to introducing a “therefore.” Now, about the online retailer paying shipping costs… do we really need to hash this one out?

ericdijon on April 29, 2012 at 3:09 PM

moonsbreath on April 29, 2012 at 2:50 PM

That’s a fact.

ericdijon on April 29, 2012 at 3:10 PM

Uppereastside on April 29, 2012 at 1:57 PM

We are the 99.9%.

So you are happy with unemployment that refuses to go below 8%? You are happy with the incredibly anemic growth of the last quarter? You are happy that we are likely to be sinking into an even worse economy over the next six months?

NotCoach on April 29, 2012 at 2:04 PM

Scratching my head over that one.
I am almost 43yo. I have never seen the economy this bad.
It’s absolutely horrible.
Uppa$$wipe has this notion that things are only getting better!
Better in relation to what? Which level of hell are we talking aobut here?

Badger40 on April 29, 2012 at 3:14 PM

Badger40 on April 29, 2012 at 3:14 PM

I am almost 13 years older and I have not seen it like this ever. What kills me is that we still numb ourselves with the percentage when the real meat of the problem is the number of unemployed.

PS. I was under the impression that Uppa$$wipe was like a Down’s commenter. They said stuff, but it didn’t really matter or merit comment. Am I wrong?

ericdijon on April 29, 2012 at 3:20 PM

Amazon is my addiction. With Amazon Prime, I can buy something knowing that it will definitely be here in two business days (and if it isn’t, I just contact customer service who will usually give a partial refund). I get most recently released items (new or used) from Amazon/amazon marketplace. eBay is a rip-off if you are selling or buying anything that Amazon carries, but it still has its place for those who are selling other items and aren’t comfortable with craigslist.

McDuck on April 29, 2012 at 3:21 PM

The entire statement is ignorantly flawed. The point is for online retailers to collect sales taxes and distribute them to states – or not. You cannot charge a tax on the shipping unless you are the shipper – it would be double taxation for a single item on a single transaction. The statement does not come close to introducing a “therefore.” Now, about the online retailer paying shipping costs… do we really need to hash this one out?

ericdijon on April 29, 2012 at 3:09 PM

That is an entirely different argument. The states are worried that ambiguity re: taxing authorities will eat into their respective governments’ abilities to do business. That is a wholly different question than whether the ability to forego collecting sales taxes puts internet retailers at an unfair advantage. The need to pay shipping costs does, in fact, suggest that it does NOT.

gryphon202 on April 29, 2012 at 3:30 PM

I make my purchasing decisions on $ only. That’s why I refuse to shop at any local store except for groceries. The mom-and-pop places that try to charge me an extra 9% can all die and close down, and I’ll do a dance on their “Going out of business” signs. They are antiquated and irrelevant to this today’s America.

AngusMc on April 29, 2012 at 3:34 PM

the answer to this is treat internet sales like you would every other sales, tax at the point of origin,e.g. you buy something in albany county new york, you pay the ny sales tax and albany county sales tax, if the online company is located there you do the samething, also ban use taxes.

RonK on April 29, 2012 at 3:37 PM

They need the revenue in many cases, but they are also trying to respond to the needs of brick and mortar stores who feel that they are being forced to fight on an uneven playing field.

The correct free market conservative solutions:

(1) States cut spending which solves their revenue problem
(2) brick and mortar stores, without their own online store are dinosaurs who deserve to go out of business

But this situation needs to be settled sooner or later.

See above…problem solved…

William Eaton on April 29, 2012 at 3:39 PM

gryphon202 on April 29, 2012 at 3:30 PM

OK. You just blew my doors off. My personal intelligence is embarrassing me now. I don’t understand what you wrote. Not a word of it.

ericdijon on April 29, 2012 at 3:39 PM

the answer to this is treat internet sales like you would every other sales, tax at the point of origin,e.g. you buy something in albany county new york, you pay the ny sales tax and albany county sales tax, if the online company is located there you do the samething, also ban use taxes.

RonK on April 29, 2012 at 3:37 PM

So what if there is no definite point of origin? Isn’t it still unfair if the package gets handed off at seven different points and only the point of origin determines that taxing authority? Besides that, current taxation authority isn’t determined by point of origin anyway. It’s determined by the physical location that the end-user purchases an item. IOW, the grocery store doesn’t pay sales tax on the items it buys to stock the shelves with.

gryphon202 on April 29, 2012 at 3:39 PM

OK. You just blew my doors off. My personal intelligence is embarrassing me now. I don’t understand what you wrote. Not a word of it.

ericdijon on April 29, 2012 at 3:39 PM

Follow:

The states see internet sales growing, and are fearful that they will eat into sales taxes, thus impacing their ability to do business (pass laws, administer police, Etc). They can’t sell the people on tax increases (which is really what this question is all about), so they whine about how it’s “unfair” to the mom-and-pop businesses that must collect sales taxes. The government doesn’t give a shit about mom-and-pop businesses. Government wants its money. The “fairness” argument is a distraction from the real issue, which is how government can raise more money without pissing off the people they are taking it from.

gryphon202 on April 29, 2012 at 3:42 PM

You’d think with all the push for sustainable lifestyles and a green economy, legislatures would embrace Internet shopping. Fewer cars on the road, less land paved for parking, less fuel burned driving around to all those stores to find out who has what you want. Instant information, combined buying power, and coordinated transport are more efficient, and price reflects that.

Brick-and-mortar stores pay sales taxes to compensate for the services they use — roads, police, courts, etc. What state services does Amazon use? Seems to me that the only thing the states are entitled to is maybe a tax against UPS and other in-state delivery services, and they probably already do that. On-line customers already pay extra for the shipping, that should be enough to “level the playing field”. Any more than that is motivated by protectionism, greed, and the acquisitive nature of government.

Socratease on April 29, 2012 at 3:44 PM

Brick-and-mortar stores pay sales taxes to compensate for the services they use — roads, police, courts, etc. What state services does Amazon use? Seems to me that the only thing the states are entitled to is maybe a tax against UPS and other in-state delivery services, and they probably already do that. On-line customers already pay extra for the shipping, that should be enough to “level the playing field”. Any more than that is motivated by protectionism, greed, and the acquisitive nature of government.

Socratease on April 29, 2012 at 3:44 PM

Brick-and-mortar stores do not pay sales taxes. They collect sales taxes. Individuals that buy from brick-and-mortar stores pay the taxes, which fund state government services that everyone uses. One could argue that brick-and-mortar stores collect sales taxes for the privilege of using that state-level infrastructure, but it is assumed by the states themselves that cost gets passed to the consumers.

gryphon202 on April 29, 2012 at 3:47 PM

gryphon202 on April 29, 2012 at 3:42 PM

I disagree with your assertion. Your assertion talks about things that don’t deal with where and when title to the goods passes. It discusses coincidences. States want to collect tax if the transactional exchange of title is in their state (and when the consumer brings the out of state item into the state if they purchased it tax-free.) FOB origin with freight service provided or Destination shoves the passing of title at the place of the end recipient.

ericdijon on April 29, 2012 at 3:49 PM

From the buyers point of view:

■ if I by online I pay shipping and no sales tax but I have to wait to get it

■ if I buy locally I pay sales tax but no shipping and I get it now

IMO that is a level-playing-field for the customer. The local stores problem is that they almost always charge more for the same product because of the large overhead they have in maintaining the physical location.

Kaffa on April 29, 2012 at 3:50 PM

I disagree with your assertion. Your assertion talks about things that don’t deal with where and when title to the goods passes. It discusses coincidences. States want to collect tax if the transactional exchange of title is in their state (and when the consumer brings the out of state item into the state if they purchased it tax-free.) FOB origin with freight service provided or Destination shoves the passing of title at the place of the end recipient.

ericdijon on April 29, 2012 at 3:49 PM

Uncertainty with such things is precisely why the constitution grants congress power over interstate commerce. I was called a leftist tool (though not in so many words) for pointing that out, even though I’m not sure a federal solution is advisable at this point. If you want “fair,” if you want a nationwide determination of how to treat sales tax issues, I would almost say that you’re necessarily going to have a federal solution. But talking about a “solution” posits that there is a problem, which I’m not so sure there is. If state sovereignty means anything, which it certainly did to our founding fathers, the states should be free to handle this as they see fit absent the possibility of an all-out trade war.

gryphon202 on April 29, 2012 at 3:53 PM

Now, Gov. Deal has made it mandatory for you to give the state your sales & use tax number and they will cross check with your county to see if you’ve been paying taxes. Even that is fair, but what about a private citizen. We haven’t heard how they’re going to enforce that part yet.

Federal law requiring taxpayer ID for every Internet sale, to be sent back to the state for individual tax auditing. I’m sure some bright Congressman or Senator has thought of it already. How they’ll deal with the inevitable fraud and identity theft is not their problem, as long as they get their money.

Socratease on April 29, 2012 at 3:53 PM

Federal law requiring taxpayer ID for every Internet sale, to be sent back to the state for individual tax auditing. I’m sure some bright Congressman or Senator has thought of it already. How they’ll deal with the inevitable fraud and identity theft is not their problem, as long as they get their money.

Socratease on April 29, 2012 at 3:53 PM

If the federal government proposes a “solution” that the states could put in place themselves but for lack of political viability, be very very afraid.

gryphon202 on April 29, 2012 at 3:56 PM

You ask what’s next?

Amazon Makes Deal with Texas

Why make a deal with Texas, becoming yet another corporation in bed with the government?

PattyJ on April 29, 2012 at 3:57 PM

Kaffa on April 29, 2012 at 3:50 PM

I don’t know that shipping costs are offset that much when buying locally. You have to remember that a brick and mortar store is paying for the goods to be shipped to their store as well. While they can buy in bulk and save some shipping costs on a per unit bases, they probably don’t save as much as online retailers who tend to warehouse items on a large scale. Furthermore an online purchase may be direct from the manufacturer. The manufacturer has most likely not spent any money on shipping the item before you purchased it.

NotCoach on April 29, 2012 at 3:58 PM

You ask what’s next?

Amazon Makes Deal with Texas

Why make a deal with Texas, becoming yet another corporation in bed with the government?

PattyJ on April 29, 2012 at 3:57 PM

I really couldn’t care less, as long as Amazon doesn’t strike a deal with the federal government to screw us all over. Business strike deals with state governments almost on a daily basis. It happened here in my homestate when Citibank moved its second-largest office complex to Sioux Falls some years ago. Get rid of government power, and lobbyist influence will dry up on its own.

gryphon202 on April 29, 2012 at 3:59 PM

I don’t know that shipping costs are offset that much when buying locally. You have to remember that a brick and mortar store is paying for the goods to be shipped to their store as well. While they can buy in bulk and save some shipping costs on a per unit bases, they probably don’t save as much as online retailers who tend to warehouse items on a large scale. Furthermore an online purchase may be direct from the manufacturer. The manufacturer has most likely not spent any money on shipping the item before you purchased it.

NotCoach on April 29, 2012 at 3:58 PM

It really is a complex issue, I’ll grant you that. Which is why whenever anybody looks at a post like this and says “It’s simple. Just [insert simple solution here],” I think they’re either full of horseshit, woefully ignorant, or both.

gryphon202 on April 29, 2012 at 4:01 PM

Individuals that buy from brick-and-mortar stores pay the taxes, which fund state government services that everyone uses. One could argue that brick-and-mortar stores collect sales taxes for the privilege of using that state-level infrastructure, but it is assumed by the states themselves that cost gets passed to the consumers.

Then what of the customer who lives near the state border, drives across the border to buy things in a tax-free state, then brings them home. How is that different from an Internet sale? And if you tax the item when it comes back across the border (“use tax”), what about the sales tax you spent in a state that isn’t tax-free? Are you taxed twice?

I don’t see too many good solutions here. You can outlaw cash, so that all transactions can be tracked and taxed. Or you can have federal oversight over all inter-state transactions, public and private, which would be incredibly oppressive and require a huge increase in bureaucracy and commercial overhead.

Sales taxes as presently constituted depended on a largely non-mobile populace with poor means of communication. The model needs to be changed, not imposed on newer, more efficient means of commerce and killing them off.

Socratease on April 29, 2012 at 4:07 PM

But the states are seeking ways to address a couple of very real problems. They need the revenue in many cases

Well, from each according to his ability, to each according to his need I guess.

If a state decides that it needs interstate sales revenue, then they are free (currently) to stop packages at their border and collect fees there (good luck with that), but they are not be free to make someone in another state act as their tax collector.

but they are also trying to respond to the needs of brick and mortar stores who feel that they are being forced to fight on an uneven playing field.

Brick and mortar stores are forced to stay open and not allowed to sell online? That is unfair! /s

Look, some products are better sold through the internet and some aren’t. Quit thinking like communists/progressives and let the market decide.

elfman on April 29, 2012 at 4:08 PM

Then what of the customer who lives near the state border, drives across the border to buy things in a tax-free state, then brings them home. How is that different from an Internet sale? And if you tax the item when it comes back across the border (“use tax”), what about the sales tax you spent in a state that isn’t tax-free? Are you taxed twice?

I don’t see too many good solutions here. You can outlaw cash, so that all transactions can be tracked and taxed. Or you can have federal oversight over all inter-state transactions, public and private, which would be incredibly oppressive and require a huge increase in bureaucracy and commercial overhead.

Sales taxes as presently constituted depended on a largely non-mobile populace with poor means of communication. The model needs to be changed, not imposed on newer, more efficient means of commerce and killing them off.

I am not in any way shape or form trying to argue with or contradict anything you said. I believe that at least for the time being, keeping the status quo is better than making a change that could end up hurting the states more than it helps, so please don’t misunderstand me.

gryphon202 on April 29, 2012 at 4:09 PM

The states should be the taxing authority and kick money back to the federales. That’s how it was when America started, and that’s how I’d like to see it again.

gryphon202 on April 29, 2012 at 1:44 PM

If state sovreignty means anything, we should go back to taxing the states based on apportionment-by-population. I’m not necessarily opposed to the FAIR tax, but I don’t think it goes far enough. The federales shouldn’t tax people AT ALL. They should tax states, and the states should have the sole authority to tax individuals within their respective borders. At least, that is, if we’re interested in the same kind of freedom that our republic was actually founded on.

gryphon202 on April 29, 2012 at 2:02 PM

This is how it should be, in my opinion, and the states should raise the revenue however they choose. Then people would vote with their feet. Under this system both the federal and state governments would have a harder time trying to increase their levels of taxation. Oh, and the blue states’ incentive to fudge their population numbers upward disappears too, which helps in obtaining fairer elections. But the obstacles in the way of returning to a system like this!

We’re probably screwed, but I’m just waiting until November to say that I know it for sure.

gryphon202 on April 29, 2012 at 2:12 PM

So true :(

Armorica on April 29, 2012 at 4:15 PM

Then what of the customer who lives near the state border, drives across the border to buy things in a tax-free state, then brings them home. How is that different from an Internet sale? And if you tax the item when it comes back across the border (“use tax”), what about the sales tax you spent in a state that isn’t tax-free? Are you taxed twice?

Socratease on April 29, 2012 at 4:07 PM

These questions have been long settled up in New Hampshire. We have so sales or income tax. There is a very small corporate tax.

People flood our borders every weekend to purchase booze, tobacco and just about anything else you can imagine. Hard liquor is sold by the state. In neighboring Mass they have a rather heft tax on liquor. For a while they had two.

Mass residents pay NO TAX on items purchased in NH and that drives the government of mass absolutely cRaZy.

If you pay sales tax on an item in one state that has a tax, you are not then required to pay a second tax in your home state. generally.

If Amazon was up here they would have a great deal. NH mail order stores do not collect tax for anybody.

dogsoldier on April 29, 2012 at 4:17 PM

I approve of anything that will starve the beast.

Machismo on April 29, 2012 at 4:24 PM

The states do NOT “need the revenue” – at least not for anything to do with the internet sales. With no actual presence, online sellers don’t get police and fire protection, they don’t use up the roads and bridges, they cost the state nothing and the state deserves nothing from their activities.

If the states can’t pay for the services they need to provide to those who do use them, they need to make cuts somewhere else, or raise the taxes on the people who are requiring the services.

Most states would be in surplus except for their parasitic populations of Democrats anyway.

Adjoran on April 29, 2012 at 4:44 PM

(2) brick and mortar stores, without their own online store are dinosaurs who deserve to go out of business

This. The day of the local, mom-and-pop store is blessedly over. Products purchased online are cheaper, and there is a wider selection. Shut down the local businesses and that solves the “fairness” issue.

AngusMc on April 29, 2012 at 4:45 PM

The states do NOT “need the revenue” – at least not for anything to do with the internet sales. With no actual presence, online sellers don’t get police and fire protection, they don’t use up the roads and bridges, they cost the state nothing and the state deserves nothing from their activities.

If the states can’t pay for the services they need to provide to those who do use them, they need to make cuts somewhere else, or raise the taxes on the people who are requiring the services.

Most states would be in surplus except for their parasitic populations of Democrats anyway.

Adjoran on April 29, 2012 at 4:44 PM

BINGO.

gryphon202 on April 29, 2012 at 4:46 PM

Admit it: you’re just whining because you don’t want to pay sales tax on Amazon. That’s perfectly justifiable, but dressing it up as a political philosophy is pretty shallow. Ev

HitNRun on April 29, 2012 at 12:50 PM

That’s a relief, because I don’t know anything about any fancy political arguments about it.

I just do not like paying sales tax anywhere, and not on Amazon either.

I don’t even like having to pay $2 – $4 for postage and handling on stuff I order from Amazon or other sites.

TigerPaw on April 29, 2012 at 4:53 PM

soulution is very simple. Get rid of the income tax and instead place a national sales tax. People will accept a change in the way we are taxed but no increase in the tax burden. the national sales tax is fair easily enforceable since the IRS will have a lot less enitites to aduit. The government saves money, the people and companies will migrate to low tax states to operate their business. There will be pressure to lower taxes in high tax states like NY and MA to compete with the new normal.

unseen on April 29, 2012 at 4:54 PM

We have no responsibility to protect brick and mortar stores. However,
states do have a right to collect sales tax even from internet stores.
Being a Texan where our economy lives and dies from revenue collected from sales tax, I believe my state has a right to collect tax from sales revenue derived from Texas by EBAY and Amazon.

paulsur on April 29, 2012 at 4:56 PM

The states should be the taxing authority and kick money back to the federales. That’s how it was when America started, and that’s how I’d like to see it again.

gryphon202 on April 29, 2012 at 1:44 PM

You might not say that if you lived in IL. No new taxes should even be considered until the government spending junkies here reign in their destructive and deviant proclivities to fritter, squander and drain the public treasury for their own amusement, benefit and power grabs.

stukinIL4now on April 29, 2012 at 5:03 PM

rose-of-sharon:

The seller who has the sellers permit and ends up with the money in their pocket is ultimately responsible to the state for the tax.

i was surprised to discover that this is not actually the case, assuming North Carolina is typical, something which has largely unappreciated ramifications with regard to the Texas deal.

In-state businesses can be required to collect sales taxes at the point of purchase, but the individual residing in North Carolina is ultimately liable for the sales tax on anything he buys which ends up in here, no matter where they come from. By law we should, in fact, be recording all our purchases in order to demonstrate that the required taxes have been paid. Enforcing such a provision successfully is obviously impossible, so individuals who are aware that they may have unpaid taxes are allowed to protect themselves from liability by paying a lump sum, per state mandated calculations, with their income taxes.

Requiring business to collect the tax is obviously the most efficient and effective method of collection, but state governments have no purview outside their own borders. States like NC, with no demonstrable in-state nexus of any kind have tried to get around this pivotal problem by suing Amazon for access to the purchasing records of their own residents, but to no avail — so far.

While the federal government can prohibit internet sales taxes as a matter of interstate commerce, I don’t believe it can constitutionally insert itself into the actual collection of state revenues. Even if it could, I believe it is unconstitutional for the feds to require the payment of any tax that is not calculated and imposed uniformly on all US citizens across all states. Unlike the progressive federal tax code which applies to all, sales tax percentages which differ between NC and Texas clearly do not meet that standard.

The Amazon/Texas agreement is thus extremely interesting. I suspect Amazon is ultimately most concerned with preserving the confidentiality of data which could potentially include far more than individual customer buying histories. They may not like their chances should accessibility ever reach the Supreme Court as a matter of interstate commerce, given the Court’s expansive view of that federal power. Even as a case predicated on constitutionally protected individual rights, the Court has a mixed record on the extent of citizens’ privacy protections.

JM Hanes on April 29, 2012 at 5:14 PM

You might not say that if you lived in IL. No new taxes should even be considered until the government spending junkies here reign in their destructive and deviant proclivities to fritter, squander and drain the public treasury for their own amusement, benefit and power grabs.

stukinIL4now on April 29, 2012 at 5:03 PM

I live in South Dakota, where taxation policy is something vaguely resembling sanity. That Illinois is a haven for wealthy politically connected liberals (including my own uncle) is no concern of mine. If you don’t like it, you can always move here. ;)

gryphon202 on April 29, 2012 at 5:23 PM

but they are also trying to respond to the needs of brick and mortar stores who feel that they are being forced to fight on an uneven playing field.

Let’s put this myth to bed. Yes, brick and mortar stores have a real presence in a state and must collect taxes while the interstate retailer does not. However [comma] the interstate business likewise is at a disadvantage because all of its goods must be packaged and shipped to the consumer. The shipping costs for a web-based retailer are much higher than for a brick and mortar store because each item must be individually packed and shipped and therefore does not get the economy of scale available from large-scale freight shipments. Therefore, I’d call this about a wash. Fact is, if those interstate shippers must collect sales taxes as well as shipping costs, it will place the web businesses at a significant disadvantage. Another advantage the brick and mortar store has: ability to immediately pick up a needed item vs. having to wait for a shipped item. That can often be a huge deciding factor in making a purchase.

AZfederalist on April 29, 2012 at 5:30 PM

Not a myth, saw it happen. Wal-Mart and Target were better competitors.

Fairbury Nebraska, Beatrice Nebraska, Commerce Texas, Quinlan Texas, Durant Oklahoma, Kingston Oklahoma among others.

cozmo on April 29, 2012 at 1:55 PM

Blah blah blah. Just more liberal type tripe.

CW on April 29, 2012 at 2:05 PM

‘Blame Walmart’ is to the retail world what ‘Blame Bush’ is to little Bammie.

slickwillie2001 on April 29, 2012 at 5:37 PM

They need the revenue in many cases, but they are also trying to respond to the needs of brick and mortar stores who feel that they are being forced to fight on an uneven playing field.

I missed the part where the brick-and-mortar stores are being prevented from selling online, thus leveling the playing field.

DarthBrooks on April 29, 2012 at 5:53 PM

The state gets it’s taxes in the form of income taxes. Sales taxes are nothing less than a second state tax. Of the two taxes, I would rather there be a consumption tax (sales). With that said, I am not going to burden myself with the work required to figure out what all I owe for buying something off the internet.

astonerii on April 29, 2012 at 6:40 PM

The state gets it’s taxes in the form of income taxes. Sales taxes are nothing less than a second state tax. Of the two taxes, I would rather there be a consumption tax (sales). With that said, I am not going to burden myself with the work required to figure out what all I owe for buying something off the internet.

astonerii on April 29, 2012 at 6:40 PM

If by “the state,” you mean federal government, yes, they do get income taxes. But not all states have an income tax. My home state of South Dakota does not. The vast majority of states do have some form of sales tax, generally in combination with income tax, property tax, or both. Nobody is asking you to burden yourself with figuring out what you owe for buying off the internet anyway. The debate is over whether businesses who sell over the internet should be forced to collect taxes for states when there are murky jurisdictional issues involved.

gryphon202 on April 29, 2012 at 6:43 PM

Here in VT I’m required to pay use tax on my out-of-state purchases. Wonder if that, too, imposes “an undue burden on interstate commerce”…

Alexis on April 29, 2012 at 6:52 PM

Judge Robert Lopez Copero to Pat Quinn: Siddown, Schmuck!
Heheheheheh.

annoyinglittletwerp on April 29, 2012 at 7:16 PM

Even that is fair, but what about a private citizen. We haven’t heard how they’re going to enforce that part yet.

moonsbreath on April 29, 2012 at 2:50 PM

They’re not. It’s easier to bully business owners and force them to do the state’s dirty work on their behalf… and make the business owners pay for the “privilege”.

Wendya on April 29, 2012 at 7:17 PM

In Illinois you’re required to pay tax on ALL out of state purchases that are disposed or kept in Illinois.

In other words, if you bought a soda in Indiana and drank it as you drove home and tossed the cup at home you are required to pay the Illinois sales tax.

This was just a way to force Amazon to collect the fee’s. Most tax advisers in the state are telling clients to include at least some small payment just to keep the state from pulling your return or tacking on a penalty in the event you made an inadvertent error elsewhere on your return.

LifeTrek on April 29, 2012 at 7:55 PM

LifeTrek on April 29, 2012 at 7:55 PM

we moved from Illinois last April-and your comment is the first I’ve heard of THAT law.

annoyinglittletwerp on April 29, 2012 at 8:00 PM

In Illinois you’re required to pay tax on ALL out of state purchases that are disposed or kept in Illinois.

In other words, if you bought a soda in Indiana and drank it as you drove home and tossed the cup at home you are required to pay the Illinois sales tax.

This was just a way to force Amazon to collect the fee’s. Most tax advisers in the state are telling clients to include at least some small payment just to keep the state from pulling your return or tacking on a penalty in the event you made an inadvertent error elsewhere on your return.

LifeTrek on April 29, 2012 at 7:55 PM

Tyranny can happen at the state level too. For sure. But your description of Illinois tax policy sounds like a problem for the voters of Illinois. Good luck.

gryphon202 on April 29, 2012 at 8:04 PM

gryphon:

Nobody is asking you to burden yourself with figuring out what you owe for buying off the internet anyway.

If you haven’t already done so, I recommend checking the relevant statutes in your home state, because the technicalities may surprise you. You might discover, as I did in NC, that you are, indeed, legally responsible for figuring out what you owe for those purchases and paying the appropriate/equivalent amount — no matter how unlikely it is that the state will demand an actual accounting.

JM Hanes on April 29, 2012 at 9:49 PM

If by “the state,” you mean federal government, yes, they do get income taxes. But not all states have an income tax. My home state of South Dakota does not. The vast majority of states do have some form of sales tax, generally in combination with income tax, property tax, or both. Nobody is asking you to burden yourself with figuring out what you owe for buying off the internet anyway. The debate is over whether businesses who sell over the internet should be forced to collect taxes for states when there are murky jurisdictional issues involved.

gryphon202 on April 29, 2012 at 6:43 PM

Actually the state does ask me. I do not do so. I think they call it a use tax or something. But the reason I stated I would not burden myself to do so is because I stated I prefer the consumption tax over an income tax. You are right, in Texas there was no state income tax either. But because I still had a residence in Utah, they taxed me anyways. Good times, good times.

astonerii on April 29, 2012 at 9:53 PM

If you haven’t already done so, I recommend checking the relevant statutes in your home state, because the technicalities may surprise you. You might discover, as I did in NC, that you are, indeed, legally responsible for figuring out what you owe for those purchases and paying the appropriate/equivalent amount — no matter how unlikely it is that the state will demand an actual accounting.

JM Hanes on April 29, 2012 at 9:49 PM

Oh I know that’s the case in a few states, but I really don’t think that’s the case in most states. I know it’s not in my home state. I dabbled with starting a business some years ago, and it was made very clear to me that businesses in South Dakota are explicitly held responsible for collecting and remitting sales tax. If that weren’t the case, I can just about guarantee you there would be a taxpayer revolt of the first order in this blood-red state.

gryphon202 on April 29, 2012 at 9:54 PM

Actually the state does ask me. I do not do so. I think they call it a use tax or something. But the reason I stated I would not burden myself to do so is because I stated I prefer the consumption tax over an income tax. You are right, in Texas there was no state income tax either. But because I still had a residence in Utah, they taxed me anyways. Good times, good times.

astonerii on April 29, 2012 at 9:53 PM

Apparently, I’m pretty spoiled by living here in South Dakota that way. I never really had an appreciation for the sort of clusterflukes that exist elsewhere until reading some of the stories in this thread today.

gryphon202 on April 29, 2012 at 9:56 PM

Apparently U.S. Customs already has an established, if slow jammed, relationship with state revenuers. I bought an antiquarian book, via internet connection, at an auction in London. More than two years after it was shipped to me, I got a North Carolina bill for the sales tax due, with attendant penalties which nearly exceeded the price of the book itself. It was enough to make me suspect that they deliberately delayed notification in order to double their take.

JM Hanes on April 29, 2012 at 10:01 PM

Apparently U.S. Customs already has an established, if slow jammed, relationship with state revenuers. I bought an antiquarian book, via internet connection, at an auction in London. More than two years after it was shipped to me, I got a North Carolina bill for the sales tax due, with attendant penalties which nearly exceeded the price of the book itself. It was enough to make me suspect that they deliberately delayed notification in order to double their take.

JM Hanes on April 29, 2012 at 10:01 PM

I’d just refuse to pay. If they pulled that shit on me, I’d make ‘em spend time and money until it was no longer worth it to pursue.

gryphon202 on April 29, 2012 at 10:04 PM

The notion that it is unfair to small local retailers to have to charge sales tax but internet sales do not is something that has to end. I do not understand why conservatives are sympathetic to this bugaboo.

(1) Is it fair that retailers in Portland do not pay sales tax but across the river in Washington state do?

(2) Do you feel the need to do something about that? Then why do something about e-commerce?

(3) Are local retailers struggling with online because of the sales tax issue? Or because of choice, convenience, service issues?

If you believe the former, then why are local merchants in Oregon struggling against online, which pay pay no sales tax?

(4) What about the reverse? With all the “subsidies” local merchants get from municipalities (in some areas, not all), such as free parking for merchant zones to allow customers to come in and pick up at no charge, while online shippers have to pay to ship … sounds “unfair” to me.

Listen, the nature of commerce is shifting. So what? Its not primarily the sales tax that is driving the shift.

(5) If states have to shift their revenue mix because of a shift in where the revenue is … why is that an issue? Is there some kind of law that state tax laws can’t evolve to reflect reality?

And if a shrinking revenue base forces local and state districts to get their overspending house in order sooner, or declare bankruptcy sooner … THAT IS A GOOD THING! Because most of them are bankrupt already with their pension obligations.

So why do we want to postpone that day of reckoning with false sales tax narratives?

Anytime progressives trot out “fairness” as an issue for a new tax, conservatives should be suspicious.

And I don’t see why anyone would agree with Jazz when he says this situation “needs to be settled sooner or later” … unless he means settled permanently that there is no online sales tax across states.

I want to throw up everytime I see a purported fiscal conservative remotely sympathetic to the interstate sales tax issues.

Aarf.

PrincetonAl on April 29, 2012 at 10:08 PM

I want to throw up everytime I see a purported fiscal conservative remotely sympathetic to the interstate sales tax issues.

Aarf.

PrincetonAl on April 29, 2012 at 10:08 PM

In Jazz’s defense, I don’t think he has ever called himself a conservative. He writes (or at least has written for) The Moderate Voice.

gryphon202 on April 29, 2012 at 10:12 PM

They need the revenue in many cases,

So what does that have to do with whether taxing this commerce is appropriate? Just because a state needs money doesn’t mean they should invent new taxes. I fail to see justification in that thought.

but they are also trying to respond to the needs of brick and mortar stores who feel that they are being forced to fight on an uneven playing field.

They have the same opportunity to sell online, so the field is not uneven.

goflyers on April 29, 2012 at 10:23 PM

gryphon202:

[I]t was made very clear to me that businesses in South Dakota are explicitly held responsible for collecting and remitting sales tax.

That requirement for doing business in SD in no way precludes assigning liability to individual residents for purchases made elsewhere or by other means. It’s just much harder to devise any similarly straightforward system for making the additional collections, and until the advent of massive internet commerce, the losses from individual non-compliance were too negligible to merit the attempt. If you haven’t actually examined your state sales tax statutes as a whole, you really have no way of knowing whether or not you might also have responsibilities as a citizen.

JM Hanes on April 29, 2012 at 10:40 PM

If you haven’t already done so, I recommend checking the relevant statutes in your home state, because the technicalities may surprise you. You might discover, as I did in NC, that you are, indeed, legally responsible for figuring out what you owe for those purchases and paying the appropriate/equivalent amount — no matter how unlikely it is that the state will demand an actual accounting.

JM Hanes on April 29, 2012 at 9:49 PM

Oh I know that’s the case in a few states, but I really don’t think that’s the case in most states. I know it’s not in my home state. I dabbled with starting a business some years ago, and it was made very clear to me that businesses in South Dakota are explicitly held responsible for collecting and remitting sales tax. If that weren’t the case, I can just about guarantee you there would be a taxpayer revolt of the first order in this blood-red state.

gryphon202 on April 29, 2012 at 9:54 PM

I believe what he is saying is that if you, as a resident of South Dakota, buy something from an e-retailer in another state, you are supposed to keep track of that as the buyer and pay state sales tax to South Dakota. It’s true in South Dakota as in many other states and little known or complied with and not very enforceable, but yet it is a law that is there.

http://www.state.sd.us/drr2/businesstax/st/usetax.htm

rose-of-sharon on April 29, 2012 at 10:42 PM

I believe what he is saying is that if you, as a resident of South Dakota, buy something from an e-retailer in another state, you are supposed to keep track of that as the buyer and pay state sales tax to South Dakota. It’s true in South Dakota as in many other states and little known or complied with and not very enforceable, but yet it is a law that is there.

http://www.state.sd.us/drr2/businesstax/st/usetax.htm

rose-of-sharon on April 29, 2012 at 10:42 PM

I’ll be damned…it’s true. I really didn’t think it was, but it is true. I cringe to think of what would happen if they did try to enforce that.

gryphon202 on April 29, 2012 at 10:47 PM

gryphon202:

I’d just refuse to pay. If they pulled that shit on me, I’d make ‘em spend time and money until it was no longer worth it to pursue

You’d surely get the short end of that stick! The longer you refuse, the larger the inevitable hit from penalties (plus interest, IIRC) gets — and the more incentive you give the state to use the many tools at their disposal to come after you. Nice license plate you got there….

JM Hanes on April 29, 2012 at 10:53 PM

Ah hah. I looked under the relevant “sales tax” statutes, which are in a different section than the “use tax” explanations.

THUMP

Should’ve had a V8…

gryphon202 on April 29, 2012 at 10:53 PM

You’d surely get the short end of that stick! The longer you refuse, the larger the inevitable hit from penalties (plus interest, IIRC) gets — and the more incentive you give the state to use the many tools at their disposal to come after you. Nice license plate you got there….

JM Hanes on April 29, 2012 at 10:53 PM

That depends. Did they send the bill via certified mail? If they didn’t, and it took two years to send in the first place, you can plead ignorance. And then when they pony up some kind of half-ass proof that they did send you the bill, you can question that it took them two years to do in the first place. My dad has this kind of mindfluke down to a mastercraft.

gryphon202 on April 29, 2012 at 10:56 PM

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