Governors Group: Marketplace Fairness Act not a violation of tax pledge

posted at 8:31 am on April 27, 2013 by Jazz Shaw

The Marketplace Fairness Act (which we’ve been talking about here since 2011) has passed another hurdle in Congress, but the debate continues. As we’ve covered at length, the idea involves the “T-word” so people immediately get up on their hind legs about it on the conservative side of the aisle. But does it violate the elected officials’ oath for “no new taxes” if they support it? The National Governors Association says no.

The National Governors Association has a message for Grover Norquist and Americans for Tax Reform: The online sales tax bill on the Senate floor does not violate ATR’s no-tax pledge.

The NGA, which backs the sales tax bill, noted in a Thursday statement that the Congressional Budget Office had ruled that the Marketplace Fairness Act had no impact on federal revenues.

The group also said that the anti-tax pledge that the ATR administers – and the vast majority of congressional Republicans have signed – calls on lawmakers to oppose marginal rate increases or the net reduction of tax credits and deductions.

“Marketplace Fairness does neither. It is not a new tax or a tax increase,” the NGA said in its statement. “It clearly does not violate the pledge. In fact, the American for Tax Reform themselves admitted to leadership of the National Governors Association that this was not a violation. To say anything else is disingenuous.

As I’ve said in the past, I’ve been on the fence on this one since the beginning, but I’ve never signed on with the knee-jerk reaction that simply because the proposal involves taxation it’s a bad thing by default. Nobody likes taxes… that’s a given. But this still strikes me as an adjustment of something that’s already part of the fabric of extant society. States have to raise money to accomplish the basic services which voters actually expect and are entitled to, right down to infrastructure demands. The entire idea of not taxing internet sales was always intended as a temporary shield which would allow the emerging (and widely distrusted) idea of online commerce to take hold.

That’s no longer a worry. E-commerce is now part of the essential fabric of American capitalism. But there are still plenty of local merchants in every location who are doing business, providing jobs and helping to structure communities. Giving the new kid on the block a perpetual thumb on the scale by not having to charge taxes which the state has agreed to collect anyway isn’t exactly “fair” if you think about it. We all love free stuff and saving money, but at the end of the day, somebody has to pay the bills. I’m just not sure this is an automatic no vote for conservatives.


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Giving the new kid on the block a perpetual thumb on the scale by not having to charge taxes which the state has agreed to collect anyway isn’t exactly “fair” if you think about it. We all love free stuff and saving money, but at the end of the day, somebody has to pay the bills. I’m just not sure this is an automatic no vote for conservatives.

It’s an automatic no vote for this conservative. If it’s so “fair” to the little guy, how come Walmart and Amazon.com are pushing for it? It’s because it’s going to turn the little guy into a tax collector for thousands of separate taxing jurisdictions. Every scenario I can come up with, in practice, blows the whole “fairness” question out of the water.

gryphon202 on April 27, 2013 at 8:38 AM

but I’ve never signed on with the knee-jerk reaction that simply because the proposal involves taxation it’s a bad thing by default.

There’s your first mistake.

States have to raise money to accomplish the basic services which voters actually expect and are entitled to

There’s your second mistake.

Bishop on April 27, 2013 at 8:39 AM

“Fairness” Act? How about “Taxation-Bureaucratization” Act?

mjbrooks3 on April 27, 2013 at 8:40 AM

Governors Group: Marketplace Fairness Act not a violation of tax pledge

In other news…

- Robbers: Robbery not a crime
- Dictators: Genocide of one’s opponents not evil

Steve Eggleston on April 27, 2013 at 8:42 AM

States have to raise money to accomplish the basic services which voters actually expect and are entitled to

They do so by taxing businesses with a physical presence in their respective taxing jurisdictions.

This may be the first time I’ve ever seen a “conservative” getting his rocks off on raising taxes in the name of “fairness.”

/facepalm

gryphon202 on April 27, 2013 at 8:43 AM

I’m sure there is an exemption for media pay-walls, but not for “donation” widgets.

mjbrooks3 on April 27, 2013 at 8:44 AM

Jazz Shaw: proponent of feeding the beast.

Maybe Mr Shaw can tell us why this tax is so sorely needed. Maybe he’ll actually explain to us how this tax is actually going to solve problems instead of just grown the government even farther.

Probably not. Mr Shaw sounds like another bug government liberal. And liberals love to feed the beast.

tphillip on April 27, 2013 at 8:44 AM

bug=big. The Mark 1 eyeballs need some preventative maintenance.

tphillip on April 27, 2013 at 8:45 AM

The Marketplace Fairness Act

They’re stealing Ayn Rand’s material.

Naturally Curly on April 27, 2013 at 8:45 AM

Anyone else remember a time when government arbitrating fairness made conservatives wince?

gryphon202 on April 27, 2013 at 8:47 AM

…Another Way to Bend Them Over Act…

KOOLAID2 on April 27, 2013 at 8:48 AM

Anyone else remember a time when “Government needs money to provide essential services” was a liberal argument for tax increases?

gryphon202 on April 27, 2013 at 8:48 AM

How many local businesses have to file sales taxes across state lines? Does your local Ben Franklin in Wooster, Mass., have to file in Wyoming in addition to sending off a check to Boston?

I have an online business…for sales in my own state, I file and pay.

With this new tax scheme…how many states and independent jurisdictions will I be required to keep records for, file with, pay taxes to under penalty of the feds stepping in?

How about if I just sell online overseas…only?

Most of my current crop of customers are in China, India and the former Soviet Union…they have cash to spend. Fewer and fewer Americans do.

If this goes into effect, I will join that crowd…fast.

coldwarrior on April 27, 2013 at 8:49 AM

Most of my current crop of customers are in China, India and the former Soviet Union…they have cash to spend. Fewer and fewer Americans do.

If this goes into effect, I will join that crowd…fast.

coldwarrior on April 27, 2013 at 8:49 AM

But fairness!!!!1!!!eleventy!!1

gryphon202 on April 27, 2013 at 8:50 AM

Marketplace Fairness Act

Remember, we live in the land of Orwell now. Something tells me there is nothing fair about this.

Odysseus on April 27, 2013 at 8:53 AM

if one makes it easy for the small business. T

PrettyD_Vicious on April 27, 2013 at 8:54 AM

So by this reasoning, every time a purchase is made, the seller should inquire of the buyer “Of what state are you a resident”?

Or will it be required of me to make a statement when I visit out-of-state friends, and make local purchases?

It’s been pointed out that such businesses as Amazon will have no problem filing tax returns in almost 50 states – but what about the small business that doesn’t have legions of accountants?

Talk about states “needing revenues”, how about local cities? Don’t they also HAVE A RIGHT to have their locals taxes collected as well?

GarandFan on April 27, 2013 at 8:55 AM

The only way I can see implementing the sales tax collection is to have the small business collect the amount of sales taxes that are in effect in their respective state and county. it would be like visiting that business at their physical location. Oregon would have the advantage of attracting lots of new businesses.

Since I’m retired military, Travis AFB gets more of my business for high cost items.

PrettyD_Vicious on April 27, 2013 at 9:01 AM

We all love free stuff and saving money, but at the end of the day, somebody has to pay the bills. I’m just not sure this is an automatic no vote for conservatives.

That’s funny, Jazz. I thought conservatives have long held the belief that if you want less of something, tax it. Well by that rationale(and it will apply to e-tailers), pass this bill and you’ll see a lot less e-commerce both on the part of the merchants and the customers. Which will hurt the economy and add no new revenue to the state government coffers.

Doughboy on April 27, 2013 at 9:05 AM

Marketplace Fairness Act??

Anybody ever ‘splain to these bozo’s that life is not fair?

I have to pay my bills with a dollar that has lost half of its value in the past several years…I cannot demand all my neighbors do their fair share and pay my bills, or I will make their lives a living hell. I’d end up in jail if I did that.

Why does the federal government, state and local governments, all believe that they can simply spend more and more and demand more and more…and then try to use the coercion of the state to force payments?

If I have to live within my means, shouldn’t “government” be held to the same standard?

coldwarrior on April 27, 2013 at 9:09 AM

Anything that -in 2013- expands the size, scope or cost of government is inherently bad for the nation.

BKeyser on April 27, 2013 at 9:09 AM

When you add “Fairness” to legislation you automatically become a savior.

The pols wanted to call it the “Marketplace Fairness Act for Children, Cops, and Teachers” but thought the term was too wordy.

Bishop on April 27, 2013 at 9:11 AM

The National Governors Association has a message for Grover Norquist and Americans for Tax Reform: The online sales tax bill on the Senate floor does not violate ATR’s no-tax pledge.

It just “violates”everyone else.What a crock.At least s#!t sandwiches are cheap.

docflash on April 27, 2013 at 9:11 AM

So since regular businesses are triple taxed ( sales, corporate income, property taxes ) we need to make sure the internet based businesses are too?

Brilliant.

YOu do know those internet businesses must have a building somewhere, and they pay taxes whereever that business is located?

You also realize any money saved by taxpayers on sales taxes is probably spent elsewhere, generating revenue there.

And this doesn’t even count the additional jobs ( and therefore income ) from internet businesses.

If you are going to tax commerce, then drop all the other taxes or at least make the shipping fees tax deductible( since that would be “fair” ).

DavidM on April 27, 2013 at 9:12 AM

Hmmm… so it’s ‘fair’ that as an e-biz owner that I can be audited, penalized, and fined by state and local governments who’s jurisdiction I’m not located in? State governments that I have no representation or the ability to vote in? States and municipalities that I’m not a citizen of?

I seem to recall that we had that once before in this country a while back… what was that called? Oh yeah – “Taxation Without Representation”. That worked out real well as I remember….

The sad fact is that most of these governments already have the laws on the books to collect ‘Use’ tax from their constituents (you know, those folks who actually do have representation and can vote in those jurisdictions). They just don’t enforce them.

Snorkdoodle Whizbang on April 27, 2013 at 9:13 AM

What if a go through a server located in Costa Rica?

mjbrooks3 on April 27, 2013 at 9:13 AM

Just cause you give it a cool name is meaningless…how is that AFFORDABLE health care act working out?….Fools.

hillsoftx on April 27, 2013 at 9:15 AM

What if a go through a server located in Costa Rica?

mjbrooks3 on April 27, 2013 at 9:13 AM

The “Costa Rican Internet Server Fairness Retail Act” will appear in Congress. Or Bark will simply invade the country.

Bishop on April 27, 2013 at 9:16 AM

Its not being opposed because its a tax. Its being opposed because the government cannot control itself and uses the labor of others to pay for its addiction to spending.

The government needs some tough love or an intervention, not more money.

BobMbx on April 27, 2013 at 9:16 AM

It’s never been “fair” that businesses are the unpaid tax-collectors of the State. This will make them the unpaid tax-collectors of FIFTY states. I think they ought to send an accounting bill.

And I wouldn’t be so sure that “E-commerce is now part of the essential fabric of American capitalism”. Speaking for myself, I’m NOT going to pay both tax AND shipping, and then wait a week for whatever I ordered. I can’t imagine why anyone would.

Murf76 on April 27, 2013 at 9:17 AM

I actually thing this is not good for a precarious economy or small business. Its not a good time to even bring the issue up. Id like to see congress working on ways to grow the economy and create jobs which is the best way to bring tax revenues up.

ldbgcoleman on April 27, 2013 at 9:17 AM

The entire idea of not taxing internet sales was always intended as a temporary shield which would allow the emerging (and widely distrusted) idea of online commerce to take hold.

That’s no longer a worry.

I agree Jazz. There will never be a new internet start up. Ever.

C’mon.

lorien1973 on April 27, 2013 at 9:20 AM

What about the States that have no sales tax? This stomps all over that.

HopeHeFails on April 27, 2013 at 9:20 AM

What about the States that have no sales tax? This stomps all over that.

HopeHeFails on April 27, 2013 at 9:20 AM

The only state I’m aware of that has no sales tax is Alaska. Or am I wrong about that?

gryphon202 on April 27, 2013 at 9:21 AM

HopeHeFails on April 27, 2013 at 9:20 AM

Of those (five) only Oregon and Montana appeal to me. Alaska is OK…but expensive as all get out. Delaware and New Hampshire? Why would I want to surround myself with liberals?

coldwarrior on April 27, 2013 at 9:23 AM

When you add “Fairness” to legislation you automatically become a savior.

The pols wanted to call it the “Marketplace Fairness Act for Children, Cops, and Teachers” but thought the term was too wordy.

Bishop on April 27, 2013 at 9:11 AM

Comprehensive Fairness Reform and Child, Cop, and Teacher Affordable Demagogy Act

BobMbx on April 27, 2013 at 9:24 AM

Oh… and here’s a thought… maybe if the federal government wasn’t bending us all over, there’d be a little something leftover for the States. Every U.S. citizen taxed by the federal government is also a citizen of one of 50 States. Maybe these governors should be a little more interested in protecting state citizens from tax abuse rather than piling on in order to squeeze a few more dollars from us.

It’s States who should be collecting the larger share and administering whatever social programs are needed instead of the other way around. That way, we wouldn’t have this enormous, centralized bureaucracy taking up all the money and then doling a pittance back with strings attached.

Murf76 on April 27, 2013 at 9:24 AM

It’s an automatic no vote for this conservative. If it’s so “fair” to the little guy, how come Walmart and Amazon.com are pushing for it? It’s because it’s going to turn the little guy into a tax collector for thousands of separate taxing jurisdictions. Every scenario I can come up with, in practice, blows the whole “fairness” question out of the water.

gryphon202 on April 27, 2013 at 8:38 AM

I agree with you. WalMart and Best Buy doesn’t have to charge you a shipping cost when you buy in their store either.

And all this whining about how people look over items on the floor of the store only to buy online is just that.. a bunch of whining. Variations of that have been going on since the beginning of time.

Is it any different than checking out an item not on display in one store and then ordering it from different retailer that promises a better price? It’s plain shopping. People have been shopping from store to store/shop to shop for centuries. And if some store thinks they are being cheated… deal with it. Come up with a solution. Work harder at making the sale!

I have bought tires online for years.. but now a local tire shop promises to match any tire price online. He was being undercut.. and now he’s dealing with it and people are buying there. It’s the name of the game. Government should not be in the business of propping up business. If a store fails because people are freely going somewhere else.. that is how it works!

JellyToast on April 27, 2013 at 9:25 AM

IRS form: Please list your email address and password on lines 6a and 6b…

mjbrooks3 on April 27, 2013 at 9:25 AM

It’s an automatic no vote for this conservative. If it’s so “fair” to the little guy, how come Walmart and Amazon.com are pushing for it? It’s because it’s going to turn the little guy into a tax collector for thousands of separate taxing jurisdictions. Every scenario I can come up with, in practice, blows the whole “fairness” question out of the water.

gryphon202 on April 27, 2013 at 8:38 AM

Point one excellently stated. This is not a fairness tax, it’s a progressive tax. This helps add to the burden of future Amazon’s and online Walmart’s flanking around these behemoths and taking market share. With a loss of competition to keep them honest they’re competition becomes only with each other. This will choke off real innovation.

I have an online business…for sales in my own state, I file and pay.

With this new tax scheme…how many states and independent jurisdictions will I be required to keep records for, file with, pay taxes to under penalty of the feds stepping in?

How about if I just sell online overseas…only?

Most of my current crop of customers are in China, India and the former Soviet Union…they have cash to spend. Fewer and fewer Americans do.

If this goes into effect, I will join that crowd…fast.

coldwarrior on April 27, 2013 at 8:49 AM

Point two. The myopic lens of the politician can’t understand that when you’re on the Internet, you’re everywhere. Entrepreneurs will flow to the markets of least resistance. Some will pull up their stakes and develop overseas businesses that don’t have to pay tax. Others will only sell to overseas interests.

We’re about to enter the story of opening up the goose that lays the golden eggs. And once these politicians and tax collectors take her apart to see how she works, they won’t have the sense to put her back together again.

itsspideyman on April 27, 2013 at 9:26 AM

It’s States who should be collecting the larger share and administering whatever social programs are needed instead of the other way around. That way, we wouldn’t have this enormous, centralized bureaucracy taking up all the money and then doling a pittance back with strings attached.

Murf76 on April 27, 2013 at 9:24 AM

Brilliant analysis, Murf. Unfortunately, there’s the world the way it should be, and the world we actually live in.

/sigh

gryphon202 on April 27, 2013 at 9:26 AM

Murf76 on April 27, 2013 at 9:24 AM

That’s crazy talk, Murf, just crazy. Can’t be making sense and actually base an argument on what the Founders intended. That’ll get you all monitored and stuff by the feds…make that terrorism list, too. Sure hope you are not Baptist or Assemblies of God…or a gun owner..that’s an additional whammy from DHS and DoJ. :-)

coldwarrior on April 27, 2013 at 9:27 AM

*sigh*

Cleombrotus on April 27, 2013 at 9:28 AM

I personally don’t have a problem with a sales tax on internet purchases because it’s a fair tax…the more you spend, the more tax you pay. Everyone pays the same rate and no loopholes.

It would, however be much simpler if the sales tax charged/collected would go to the state where the company that made the sale is located. IF you live in MA and buy something online from a company in ND, you’d pay the ND local sales tax and that tax would go to ND since the product originated in that state.

This would be incentive for states/cities to keep their local taxes lower to attract online retailers. It would also make the paperwork chore simple for the retailer.

JetBlast on April 27, 2013 at 9:29 AM

Reiterating: sales taxes should be scrapped altogether, and replaced by local income taxes.

Count to 10 on April 27, 2013 at 9:31 AM

I read this editorial and had to check my calendar to see if it was April 1st and not April 27th.

What on Earth is “fair” about taxing out-of-state businesses who don’t have a physical footprint in the state? That’s sheer nonsense. It’s like getting a bill for services not rendered.

Mr. Shaw, the next time you write an article with the word “fair” in the thesis, just drag the whole file over to the Recycle bin on your desktop and call it a day.

DarthBrooks on April 27, 2013 at 9:32 AM

When you order stuff on the internet you might not have to pay taxes but you probably will pay shipping and you have to factor in the possibility of things not being what you expected or in the case of clothing, not fitting. These are things that already depress those on line sales for some, now add taxes. Brilliant.

Cindy Munford on April 27, 2013 at 9:32 AM

I personally don’t have a problem with a sales tax on internet purchases because it’s a fair tax…the more you spend, the more tax you pay. Everyone pays the same rate and no loopholes.

It would, however be much simpler if the sales tax charged/collected would go to the state where the company that made the sale is located. IF you live in MA and buy something online from a company in ND, you’d pay the ND local sales tax and that tax would go to ND since the product originated in that state.

This would be incentive for states/cities to keep their local taxes lower to attract online retailers. It would also make the paperwork chore simple for the retailer.

JetBlast on April 27, 2013 at 9:29 AM

The problem with that is, it’s not fair.

To wit, if I bought something from Amazon.com and paid sales taxes where the item shipped from, which sounds reasonable on its face, Amazon doesn’t have distribution centers or offices in every state. Sales tax on Amazon purchases would go where they have a presence, and it would not go to where they don’t. Remind me again how that’s “fair?”

gryphon202 on April 27, 2013 at 9:32 AM

but I’ve never signed on with the knee-jerk reaction that simply because the proposal involves taxation it’s a bad thing by default.

There’s your first mistake.

States have to raise money to accomplish the basic services which voters actually expect and are entitled to

There’s your second mistake.

Bishop on April 27, 2013 at 8:39 AM

Third mistake:

Giving the new kid on the block a perpetual thumb on the scale by not having to charge taxes which the state has agreed to collect anyway isn’t exactly “fair” if you think about it.

If life were “fair” we would be sitting back drinking Crystal Pepsi while watching a United States Football League game we taped on Betamax and thinking of hopping in the Edsel at halftime to make a quick trip to McDonald’s for an Arch Deluxe.

whatcat on April 27, 2013 at 9:32 AM

JetBlast on April 27, 2013 at 9:29 AM

So, an online retailer, part-time, residing in New York would have to pull up stakes and re-locate to Fargo?

It is not where the server is located, it is where the individual retailer is located….and with this new scheme, it is wherever anybody buys anything from that same retailer that factors in heavily. Sure, locate to Fargo…but don’t sell anything to anyone outside of the state. That is the crux of this “fairness” scheme.

coldwarrior on April 27, 2013 at 9:33 AM

Count to 10 on April 27, 2013 at 9:31 AM

A consumption tax is far far more fair, if we want to use fairness as a gauge.

Income tax has never ever been fair. Ever.

coldwarrior on April 27, 2013 at 9:35 AM

It is not where the server is located, it is where the individual retailer is located….and with this new scheme, it is wherever anybody buys anything from that same retailer that factors in heavily. Sure, locate to Fargo…but don’t sell anything to anyone outside of the state. That is the crux of this “fairness” scheme.

coldwarrior on April 27, 2013 at 9:33 AM

NEWS FLASH:

If I go to Walmart in my hometown, I pay the city and state sales taxes in my hometown respectively. If I go to Walmart in Minnesota, I pay the city/state sales taxes as applicable for wherever that particular Walmart is. The internet turns this model on its ear.

gryphon202 on April 27, 2013 at 9:36 AM

What generally happens when you increase prices?

CW on April 27, 2013 at 9:39 AM

Fairness is another weasel word. There is nothing fair about the government stealing our money. Of course the the NGA is in favor of it. Our VA Gov is the pres. He just pasted us with the largest tax increase in the state’s history. That is the end for him. Political career is over.

BetseyRoss on April 27, 2013 at 9:39 AM

How can a state have the power to tax a business that is not located within its borders?

The Monster on April 27, 2013 at 9:39 AM

Looking forward to “locating” my business offshore and telecommuting to work…

mjbrooks3 on April 27, 2013 at 9:39 AM

That’s crazy talk, Murf, just crazy. Can’t be making sense and actually base an argument on what the Founders intended. That’ll get you all monitored and stuff by the feds…make that terrorism list, too. Sure hope you are not Baptist or Assemblies of God…or a gun owner..that’s an additional whammy from DHS and DoJ. :-)

coldwarrior on April 27, 2013 at 9:27 AM

I think I’d probably be alright though if I claimed I was a foreigner seeking political asylum and welfare benefits. lol

Murf76 on April 27, 2013 at 9:41 AM

gryphon202 on April 27, 2013 at 9:36 AM

If I sell a product at Walmart in my hometown, I pay the city and state sales taxes in my hometown respectively. If I go to have a customer come in to my Walmart who resides in Minnesota and he makes a purchase do I have to send a check to St. Paul? I pay the city/state sales taxes as applicable for wherever that particular Walmart is. The internet turns this model on its ear.

This proposed law does not really affect buyers…but it does affect sellers, retailers, small businesses.

coldwarrior on April 27, 2013 at 9:42 AM

Its not being opposed because its a tax. Its being opposed because the government cannot control itself and uses the labor of others to pay for its addiction to spending.

The government needs some tough love or an intervention, not more money.

BobMbx on April 27, 2013 at 9:16 AM

…B I G ditto!

KOOLAID2 on April 27, 2013 at 9:43 AM

The National Governors Association has a message for Grover Norquist and Americans for Tax Reform: The online sales tax bill on the Senate floor does not violate ATR’s no-tax pledge.

That’s nice.

I disagree with the governors. And I vote. And there are a lot of people like me.

My guess is about the only people who vote R who do not see this as a tax increase are Republicans and Independents who do not buy on-line from sellers who currently do not have a brick and mortar presence their state.

Since when are Republicans who support raising taxes in the claimed interest of “fairness” not breaking a no new taxes pledge?

Such Republicans are why the Dems so often get what they want without majorities in both legislative houses.

farsighted on April 27, 2013 at 9:43 AM

Most GOPers and almost all Dems are all for big fat juicy government….no surprises here. Screw the little people.

CW on April 27, 2013 at 9:43 AM

How can a state have the power to tax a business that is not located within its borders?

The Monster on April 27, 2013 at 9:39 AM

Like I said upthread, the internet kind of blasts the old assumptions away. It was assumed at one point that you generally had to have a physical presence in a state to do business. That wasn’t always the case, as with print catalogs, but it was true enough that governors didn’t get their panties in a bind over the relatively low percentage of catalog sales that dodged sales/use taxes.

Now? I can order something from halfway around the world and have it here within a few days time if I’m willing to fork out handsomely for the shipping costs, and all with just a mouse click. The ultimate in convenience. The “internet,” literally a network of connected computer networks, has practically redefined “interstate commerce.”

That is why I think that the Marketplace Fairness Act is a solution in search of a problem. There is no problem with people pursuing their best options in their own self-interest. Government can only get in the way of that. Isn’t that what conservatives used to believe before conservatism was diluted, redefined, and repackaged into what it is today?

gryphon202 on April 27, 2013 at 9:46 AM

We all love free stuff and saving money, but at the end of the day, somebody has to pay the bills.

A Democrat advocating tax increases would say exactly the same thing.

farsighted on April 27, 2013 at 9:46 AM

A consumption tax is far far more fair, if we want to use fairness as a gauge.

Income tax has never ever been fair. Ever.

coldwarrior on April 27, 2013 at 9:35 AM

How is it not “fair”? How is sales tax “fair”? It’s just a mater of where in the chain you apply the tax, and sales taxes distort the marketplace more than income taxes do.

Count to 10 on April 27, 2013 at 9:47 AM

This proposed law does not really affect buyers…but it does affect sellers, retailers, small businesses.

coldwarrior on April 27, 2013 at 9:42 AM

It affects buyers. It applies to sellers, retailers and small business, but they pass sales tax on to their customers. I will be paying online taxes where I didn’t before, and therefore it is de facto a tax increase to me.

Another rule of conservative thumb that seems to be lost in the shuffle here: All business/corporate taxes end up getting paid by the consumer one way or the other.

gryphon202 on April 27, 2013 at 9:48 AM

Y’know, I keep hearing people say that they’ll “punish” their elected reps at the polls for this or that.

The punishment consists of putting somebody else in there who does the same thing while the “punished” make a lateral move to another government gig or lobbying. Probably with a raise.

Time to go Galt.

ElectricPhase on April 27, 2013 at 9:51 AM

OT- but we are getting it from all ends.

Judicial Watch obtained the Spanish-language flyers through a Freedom of Information Act request and announced on Thursday that the “promotion of the food stamp program, now known as ‘SNAP’ (Supplemental Nutrition Assistance Program), includes a Spanish-language flyer provided to the Mexican Embassy by the USDA.
A statement on the flyer—emphasized in bold and underlined—reads, “You need not divulge information regarding your immigration status in seeking this benefit for your children.”-(emphasis mine)-Breitbart

Awesome.

CW on April 27, 2013 at 9:52 AM

It’s an automatic no vote for this conservative. If it’s so “fair” to the little guy, how come Walmart and Amazon.com are pushing for it? It’s because it’s going to turn the little guy into a tax collector for thousands of separate taxing jurisdictions. Every scenario I can come up with, in practice, blows the whole “fairness” question out of the water.

gryphon202 on April 27, 2013 at 8:38 AM

There is no way many smaller sellers will be able to accurately keep track of all of the taxes they are supposed to collect and pass on for every every sale for every state.

This is designed to aid big sellers and state governments to squash small sellers and drive them out of business.

It is crony capitalism.

Next step, driving this tax collection requirement down to the municipal level, where sellers must charge taxes to buyers based on where the buyer lives. That would drive a huge number of internet sellers out of business.

farsighted on April 27, 2013 at 9:53 AM

Count to 10 on April 27, 2013 at 9:47 AM

If every American paid income tax at the exact same rate, no exemptions, no deferments, no loopholes….then income tax would be fair.

But it is not structured to be fair.

It is designed to take more (in actual dollars and percentage of income) from those “with” and exempts those “without.”

No much of a step away from Marx, really.

If you purchase something…your choice, your decision, then you pay a consumption/sales tax on that item. Don’t want to pay the tax, then choose not to make that purchase.

coldwarrior on April 27, 2013 at 9:53 AM

Y’know, I keep hearing people say that they’ll “punish” their elected reps at the polls for this or that.

The punishment consists of putting somebody else in there who does the same thing while the “punished” make a lateral move to another government gig or lobbying. Probably with a raise.

Time to go Galt.

ElectricPhase on April 27, 2013 at 9:51 AM

There’s no fear up on capital hill. If there were, we wouldn’t be at this point. I cringe to think of what it will take to put the fear of God (literally and figuratively) back into our elected representatives at all levels of government…

gryphon202 on April 27, 2013 at 9:53 AM

When you order stuff on the internet you might not have to pay taxes but you probably will pay shipping and you have to factor in the possibility of things not being what you expected or in the case of clothing, not fitting. These are things that already depress those on line sales for some, now add taxes. Brilliant.

Cindy Munford on April 27, 2013 at 9:32 AM

You know, what’s stupid about this is that once again, politicians on both sides of the aisle are assisting the big corporations. Big outfits can absorb additional taxation, new regulations, extra administrative costs. Small ones can’t. And these days, a cushion of one million in sales isn’t really very much.

They consistently tell us that it’s all about “fairness”, and all the while, they’re adjusting the “playing field” for the benefit of their cronies. WHEN are people going to catch on to that?

Honestly, one of the biggest problems, if not THE biggest, when it comes to poverty is the lack of access people have to the sales end of the market. Taxes, Insurance, Inspections, Licensing, etc…. it all adds up. Poor people don’t have the start-up cash, and the more and more red tape that gets piled on, the less chance they have of starting something small and growing it.

Those “Big Box” stores aren’t an accident. They’re helped along at every level by politicians who do their dirty work of eliminating small and mid-sized competitors.

Murf76 on April 27, 2013 at 9:54 AM

You’ve got to be kidding me.

A law that now forces every retailer to be a tax expert.

Great.

And by the way, it affects me if I buy something on the internet.

Look, if the state end the income tax to make up for it, then OK.

But…..they won’t. Taxes will now go up to finance stuff like Illinois state union employee’s defined benefit pension plans.

This is HOTAIR FCOL!

NO F’IN NEW TAXES!

Jazz, you need to move on to a different website if you are having these confusing thoughts.

You are on mixed up guy.

KirknBurker on April 27, 2013 at 9:55 AM

Another rule of conservative thumb that seems to be lost in the shuffle here: All business/corporate taxes end up getting paid by the consumer one way or the other.
gryphon202 on April 27, 2013 at 9:48 AM

And we all we know the government will be thrifty and spend those tax dollars wisely. Afterall, the Department of Homeland Security only has 260 million rounds of hollow points in stock.

whatcat on April 27, 2013 at 9:56 AM

Those “Big Box” stores aren’t an accident. They’re helped along at every level by politicians who do their dirty work of eliminating small and mid-sized competitors.

Murf76 on April 27, 2013 at 9:54 AM

Meh. I don’t even get too worked up about that. The only grocery store that closed when Walmart went supercenter here had been hemorrhaging cash for years and was doing an all-around piss-poor job. The two smaller locally owned competitors put most of their competition, the ma-and-pa corner groceries, out of business years before Walmart ever came to town.

gryphon202 on April 27, 2013 at 9:57 AM

This proposed law does not really affect buyers…but it does affect sellers, retailers, small businesses.

coldwarrior on April 27, 2013 at 9:42 AM

Every buyer will be paying more for whatever they buy on the internet from non-brick-and-mortar sellers, and the additional money will go to state governments.

Businesses that have no physical presence in a state will be required to charge buyers their state’s sales tax. Buyers will now have to pay taxes based on where they live regardless of where the seller is located and the item is shipped from.

farsighted on April 27, 2013 at 9:59 AM

Murf76 on April 27, 2013 at 9:54 AM

You keep making sense and there’ll be heck to pay, I tell ya.

You make an excellent point. A number of years ago I sold a few things on eBay…made a nice chunk of change. That was my start-up money for my current avocation/online business. No need to lease a building, no need to get licenses approved, no need to to a lot of stuff that would kill any hope of profit for the first couple of years…

This tax scheme would hurt anyone, inner city or suburbs, farm or ranch or retired who would like to do the same sort of thing…make money to cover costs of living that are being sucked away fast already…stay independent, not be a burden.

But, kill small businesses, online businesses, and kill off opportunity to deal in a marketplace where not one damn soul knows your race, color, creed or national origin…

Seems the governors are anxious to impoverish more and more.

Almost as if they all read Marx and Hegel.

coldwarrior on April 27, 2013 at 10:00 AM

Buyers will now have to pay taxes based on where they live regardless of where the seller is located and the item is shipped from.

farsighted on April 27, 2013 at 9:59 AM

Okay. So if I go to Minnesota, I have to pay sales tax based on Minnesota rates. If I purchase over the internet from Minnesota, I have to pay South Dakota rates.

Tell me again, MpFA apologists, how that is even remotely fair?

gryphon202 on April 27, 2013 at 10:01 AM

If you purchase something…your choice, your decision, then you pay a consumption/sales tax on that item. Don’t want to pay the tax, then choose not to make that purchase.

coldwarrior on April 27, 2013 at 9:53 AM

Except that you eventually spend that money on something anyway, and the details of what is taxed, when it is taxed, and where it is taxed all contribute to rent seeking, compliance cost, and the false economic activity of optimizing with respect government. All of your complaints about the income tax apply double for sales taxes.

Count to 10 on April 27, 2013 at 10:01 AM

Sales tax on Amazon purchases would go where they have a presence, and it would not go to where they don’t. Remind me again how that’s “fair?”

gryphon202 on April 27, 2013 at 9:32 AM

How is it “fair” that an e-business is ‘taxed’ by complying with the requirements of a state in which they do not have a presence? And yes, they are ‘taxed’… they are taxed by the cost associated with compliance… they are ‘taxed’ by having to be unpaid tax collectors for governments they are not citizens of.

If I go to Walmart in my hometown, I pay the city and state sales taxes in my hometown respectively. If I go to Walmart in Minnesota, I pay the city/state sales taxes as applicable for wherever that particular Walmart is.

gryphon202 on April 27, 2013 at 9:36 AM

Well… aren’t you ‘going’ to the e-business’ location when you’re buying online from them? You ‘go’ to their website.

Granted, sales tax is based on point of delivery but assessed at point of sale. I think an argument could be made that sales tax should be based on point of sale (when the consumer becomes the ‘owner’ of the item) rather than where you physically take control of an item.

The states already have the means to collect the ‘Use’ tax (which is all that the sales tax is anyway) for out of state transactions directly from their citizens. Instead, the weasels want out of state e-business owners to do their dirty work for them. Your notion of ‘fairness’ seems to advocate shifting the heavy lifting to an unpaid and unrepresented minority instead of having the state and local governments doing their jobs.

Snorkdoodle Whizbang on April 27, 2013 at 10:02 AM

The states already have the means to collect the ‘Use’ tax (which is all that the sales tax is anyway) for out of state transactions directly from their citizens. Instead, the weasels want out of state e-business owners to do their dirty work for them. Your notion of ‘fairness’ seems to advocate shifting the heavy lifting to an unpaid and unrepresented minority instead of having the state and local governments doing their jobs.

Snorkdoodle Whizbang on April 27, 2013 at 10:02 AM

States and local governments aren’t doing shit under MpFA. Unless you count telling business to be tax collectors for the states as “doing their jobs.”

No matter how you determine a taxing jurisdiction for purposes of internet sales, someone is at an advantage, and someone is at a disadvantage. Meanwhile, this will be a tax increase. Maybe not statutorily, but goddamit I’m a voter. If I have to pay taxes where I didn’t before, it’s an effin tax increase.

gryphon202 on April 27, 2013 at 10:05 AM

Hey, dolts! We don’t do “fairness!” That’s what the socialists do!

PaddyORyan on April 27, 2013 at 10:05 AM

Seems the governors are anxious to impoverish more and more.

coldwarrior on April 27, 2013 at 10:00 AM

That was a given once they set minimum wage laws.
Heck, the minimum wage is probably responsible for a great deal of not only illegal immigration, but also for a substantial fraction of drug related crime.

Count to 10 on April 27, 2013 at 10:05 AM

Marketplace FAIRNESS Act

Just cause you give it a cool name is meaningless… how is that AFFORDABLE health care act working out?… Fools.

hillsoftx on April 27, 2013 at 9:15 AM

I’m waiting for the “Anti Dog-Eat-Dog Act” to be floated… Wait a minute.

Fallon on April 27, 2013 at 10:06 AM

Jazz, you need to move on to a different website if you are having these confusing thoughts.
You are on mixed up guy.
KirknBurker on April 27, 2013 at 9:55 AM

Be fair – Grandma should be happy that he doesn’t think that she should also have to file an EPA impact statement when she sells some knick-knacks on Ebay for twenty bucks. Granny’s gotten away without filing multiple tax forms in triplicate for far too long!

whatcat on April 27, 2013 at 10:10 AM

Giving the new kid on the block a perpetual thumb on the scale by not having to charge taxes which the state has agreed to collect anyway isn’t exactly “fair” if you think about it.

o_O

Use tax…

This isn’t about the lack of ability to tax goods and services, it’s about the transfer of responsibility to collect a tax from the state or subdivision thereof from the consumer and placing that burden upon the retailer.

National Bellas Hess v. Illinois


Quill Corp. v. North Dakota

elgeneralisimo on April 27, 2013 at 10:17 AM

Okay. So if I go to Minnesota, I have to pay sales tax based on Minnesota rates. If I purchase over the internet from Minnesota, I have to pay South Dakota rates.

Tell me again, MpFA apologists, how that is even remotely fair?

gryphon202 on April 27, 2013 at 10:01 AM

It is not even remotely fair.

If this was fair then when you drove from South Dakota to Minnesota and bought something in Minnesota the seller would be required to check the residency every buyer. Since you are from out-of-state, South Dakota, the Minnesota seller should charge you South Dakota’s sales tax and send it to South Dakota, since that is where you live. That’s nuts.

Internet sales are distinctly different from local sales. Most are interstate sales, and a large percentage of the sellers do not sell from locally stored inventory in the state.

The MpFA is state level protectionism.

farsighted on April 27, 2013 at 10:17 AM

This is a tax that does not exist now so it would be a new tax.

If I sell my Dad’s table saw on ebay, the buyer will have to pay a tax. Why? ‘Cause it’s fair?

At my local Walmart, when I buy something, I have to pay a 6+% sales tax and a 9.6+% tax to pay for the tax incentives that Walmart got to stay here and build a Superstore. Ok, I shop there and the low prices and the employment provided locally is a benefit, I get that.

Again, why would my Dad’s table saw be taxed or next week when I auction off the old farm tractor or anything else in my Dad’s estate, why would that be taxed? Why is any Mom and Pop business subject to taxes when they do it online from home? They don’t have a large parking lot that has water runoff that goes into the local sewer system. They already pay property tax and don’t get tax incentives from the local government.

It’s fair? To whom? Walmart? Macy’s? The local car dealer?

Vince on April 27, 2013 at 10:18 AM

As I’ve said in the past, I’ve been on the fence on this one since the beginning, but I’ve never signed on with the knee-jerk reaction that simply because the proposal involves taxation it’s a bad thing by default.

Everyone is on the fence until they get off it. Jazz just likes to subtly call those who gets down from the fence before him, “knee-jerks”.

I agree with the governors that it’s not a tax raising issue. This is clearly a tax compliance issue. That said, I don’t just knee-jerkedly take the Governors’ reason and the initial reason for exempting internet conducted business from sales taxes as the primary bases for judging this major piece of legislation. If this is to be considered, we must start this reconsideration this whole issue from the beginning so as to determine if this proposal is the best option. It just might be that the better option is to eliminate sales taxes countrywide, altogether.

Until such time as this is done, and done seriously, not in some staged, superficial, ‘knee-jerk’ manner, the wisest course and the better part of valor is to oppose this legislation. Vociferously.

Dusty on April 27, 2013 at 10:24 AM

It’s fair? To whom? Walmart? Macy’s? The local car dealer?

Vince on April 27, 2013 at 10:18 AM

Walmart and Amazon.com support online business transaction taxation. That’s all you really need to know.

gryphon202 on April 27, 2013 at 10:24 AM

Why are the vast majority of businesses incorporated in Delaware, yet don’t even have an office there? Is that fair to the other 49 states?

Why do credit card issuers seem to congregate in one state? Could it be because SCOTUS ruled that individual states can set their own interest rate limits, but the only limits that are applicable are the ones in effect where the issuer is located.

Gee….do we think businesses won’t be looking to relocate to those states where they have an advantage in interstate commerce?

Never happen, will it? So go ahead, start collecting those internet sales taxes. South Dakota can use the new business.

BobMbx on April 27, 2013 at 10:24 AM

Never happen, will it? So go ahead, start collecting those internet sales taxes. South Dakota can use the new business.

BobMbx on April 27, 2013 at 10:24 AM

Heh. You from South Dakota, Bob? We should have a beer sometime.

gryphon202 on April 27, 2013 at 10:26 AM

Well, you didn’t build that

Fallon on April 27, 2013 at 10:26 AM

Giving the new kid on the block a perpetual thumb on the scale by not having to charge taxes which the state has agreed to collect anyway isn’t exactly “fair” if you think about it.

“New”?!

Internet sales are nothing more than another form of mail order, which has been around at least since Montgomery Ward published a catalog.

Further, my local family owned brick-and-mortar electronics store is not required to check the residency of every customer who walks in the door and buys something there. They are not required then charge the customer standing if front of them sales tax based on where the customer lives. They are not required to then send out monthly checks to all of the other states in the Union.

farsighted on April 27, 2013 at 10:28 AM

I agree with the governors that it’s not a tax raising issue. This is clearly a tax compliance issue. That said, I don’t just knee-jerkedly take the Governors’ reason and the initial reason for exempting internet conducted business from sales taxes as the primary bases for judging this major piece of legislation. If this is to be considered, we must start this reconsideration this whole issue from the beginning so as to determine if this proposal is the best option. It just might be that the better option is to eliminate sales taxes countrywide, altogether.

Until such time as this is done, and done seriously, not in some staged, superficial, ‘knee-jerk’ manner, the wisest course and the better part of valor is to oppose this legislation. Vociferously.

Dusty on April 27, 2013 at 10:24 AM

Good luck getting the state legislatures on board with this plan. 45 of them, I believe.

In my home state of South Dakota, sales tax is the primary method of government funding. We have no state income tax here, and I think the populace of farmers and ranchers would fight it tooth-and-nail.

gryphon202 on April 27, 2013 at 10:28 AM

…my local family owned brick-and-mortar electronics store is not required to check the residency of every customer who walks in the door and buys something there. They are not required then charge the customer standing if front of them sales tax based on where the customer lives. They are not required to then send out monthly checks to all of the other states in the Union.

farsighted on April 27, 2013 at 10:28 AM

…yet.

gryphon202 on April 27, 2013 at 10:29 AM

I have an online business that employees about 30 people directly and many more indirectly. We manufacture and sell furniture direct to the public. We are over the $1 million threshold but are in no way a big business. Out of the 30 people, four are involved with administrative duties. I’ve been in business online since 1997 and we had double digit growth until 2009 and ever since then we’ve been holding on for life.

If we have to start collecting sales tax for the 9000 taxing jurisdictions it may just kill my business. We already collect and pay taxes for 100 counties in NC, which is a big enough chore. Collecting taxes throughout the country is hard but doable. It’s the administrative work in paying them that is the nightmare. Am I to hire a couple of more employees just to pay other people’s taxes? I don’t think the business can survive that now. Then I also worry about having to answer to other states. Am I constantly going to be under threat of audit? Will I be audited by California? The city of San Francisco? Maybe the state, county and city of NY? Truly frightening.

ReaganWasRight on April 27, 2013 at 10:30 AM

Stupid and ridiculous.

jimver on April 27, 2013 at 10:31 AM

Giving the new kid on the block a perpetual thumb on the scale by not having to charge taxes which the state has agreed to collect anyway isn’t exactly “fair” if you think about it. We all love free stuff and saving
, but at the end of the day, somebody has to pay the bills.

Call this the Walmart bill. Walmart broke the bank lobbying this bill. The internet is not the new kid. It is big guys and little guys. The internet is the last place where a twerp without the bucks to survive brick and mortar regulations and taxes can get into retail. It is the last stand of capitalism. They have banned lemonade stands, and are starting to regulate garage sales. WSJ The Internet Sales Tax Rush

Walmart, which has a huge, yet IMHO slow and crummy web sales presence is trying to do to what it did to the little guys on main street. The last free midget entrepreneurs will never have the buying power of Walmart. They will lose the one gain they had. The internet will become Main Street, the marvelous free market mix of little guys will shrivel, and the Big guys will suck the life out of the mix. It won’t happen overnight. But it will happen.

On Main Street, every mom and pop has the same lousy chinese knock off hammers, novelties and cheap tee shirts sold at Walmart. They compete with Walmart on Walmart’s turf, tax for tax, and it is impossible. Some twerps found success was still possible on the web, and the big boys want them down, pitting the little guys on Main street against the new little web peddlers. When the dust settles, the big boys expect to cleanup

They can’t leave it alone. The last place with serious choice and variety. The last marketplace that isn’t cr@p. Tax and Kill

entagor on April 27, 2013 at 10:31 AM

With all the local sales taxes. property taxes, user fees, utility taxes and fees etc. , it’s refreshing to be able to purchase something without the hand of the tax man in my pocket. Besides, quite often when I purchase something online I have to pay shipping costs. Conservatives are supposed to find ways to decrease or eliminate taxes, not new ways for government to get its’ hands in my wallet. By the way, since Amazon pushed for and got state sales tax collection in my home state of Arizona I have been buying less from Amazon and shopping from other online retailers.

paraff on April 27, 2013 at 10:34 AM

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