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Are You Reporting Your Internet Purchases?
theodp writes "Over the next week, taxpayers in 19 states will be confronting new sections on state returns that ask them to fork over unpaid sales taxes for items purchased out of state, including Internet transactions. A NY Daily News editorial characterized the addition of use tax to state returns as a rip-off and advised taxpayers to fill in a zero on the line, although an accountant suggests doing so may even be worse than just leaving it blank and put you on the line for tax fraud."
Where is there a list of states participating in this? TFA only mentions two, and a lightweight Googling didn't reveal much more. I'm a Mass/Taxachusetts resident (so I consider the chances high), but I certainly didn't see anything on my state return about grey-area sales taxes.
Speaking of which, good luck if they wanted to collect. As the article mentioned, the honor system doesn't work. Not only that, being the organized person that I am, clearly I have kept an accurate record of every internet transaction I made in 2003. In short, the only way I can see these folks having a prayer of getting my money is by making a national system of collecting these taxes that is compulsory for retailers to take part in. Otherwise, it's doomed.
Auto-reply to ACs: "Truly, you have a dizzying intellect."
Alabama is one of them, though it doesn't apply it to only internet purchases. It applies to any thing that you bought out of state and brought back home.
C:\>
Now if that wouldn't be a violation of the Commerce Clause, nothing would be.
That line has been on my tax return for as long as I can remember. Of course when I first started doing taxes we didn't have internet sales, and it was intended to only apply to mail order stuff. I don't know anyone who put anything in that line back then, and I don't see any reason to expect that to change now that internet sales should be added in as well.
Send me a check for the amount you owe and I'll include it with mine.
I'm curious, what part of Article 1 Section 8 of the U.S. Constitution don't these boneheads understand?
I know the states get around this by calling it a "use tax", but come on. Do you really expect me to keep track of everything I've bought across state lines just because you charge so much sales tax that the price of shipping makes up for the difference?
Mass is definitely one of the states. It's on the tax return under "use tax".
This is my sig. There are many like it, but this one is mine.
Your naivite needs to be addressed, while I am not even a paranoid person, I can think of 2 ways where they can go after you:
1. Get all your credit card info. When was the last time when you used cash (money order, etc) for your Internet purchases? Do not kid yourself, the banks would happily submit your finincial transactions to IRS for audit at the first request...
2. Carnivore. Nobody know what it is capable of. Would be trivial to monitor all e-commerce transactions if needed. SSL is not that secure...
Code poet, espresso fiend, starter upper.
Now, this galls me on several levels. One, they assume that every penny you earn is to be spent on sales-taxable goods in the Great State of North Carolina. Two, you definitely get the feeling that if you don't put some amount on the line, they'll be pulling your return for audit. It's almost a big brotherish attempt at coercing additional tax monies. Furthermore, if you buy something in say, SC, with a sales tax of 5%, they expect you to pay the difference between that rate and your rate.
Speaking of which, good luck if they wanted to collect. As the article mentioned, the honor system doesn't work.
That's exactly the problem they had with the income tax--once people realized how much they were expected to fork over, they refused. The solution in that case was to take their money before they ever got it. Now, states have some real control over employers and retailers within their jurisdiction, but they can't do a whole lot outside of it. I can't see this being very effective.
Of course, it's also convenient to have a system where everyone is a criminal, because you can use that against them on a selective basis.
One man's -1 Flamebait is another man's +5 Funny.
There are people out there who say that there is no legal requirement to pay income tax to the federal government. I read last night about a guy that used to work for the IRS who resigned after doing his own research and coming to the conclusion that these people actually have a case. He hasn't filed a return since 1999.
How these people propose to fund the building of the roads that they will march on in protest is unclear, but it's an interesting case they put forward from a legal point of view.
Drill baby drill - on Mars
Taxachusetts counts. There seems to be a big push to pay use taxes on items not purchased in-state. As I recall there is even a box this year on the income tax form to declare these unpaid taxes. Also remember that Mass. has invested heavily in a new system to catch tax cheats. From the Boston Globe Archives:" STATE'S NEW TECHNOLOGY GATHERS INFORMATION TO FIND TAX CHEATS Published on February 15, 2004 Author(s): Bruce Mohl, Globe Staff If you get the urge to fudge a bit on your taxes this year because you think, "Who's going to notice?" think again. The state Revenue Department is watching. The agency has launched a technology offensive with the goal of pulling together stray bits of information about every Massachusetts taxpayer, searching for clues that would indicate who isn't paying the taxes they owe." http://www.boston.com/business/taxes/articles/2004 /02/15/states_new_technology_gathers_information_t o_find_tax_cheats/
Here in N.H. there is no sales tax. I often forget that other states even have sales tax. It seems I am only reminded when I am on vacation, and the clerk wants me to pay $10.55 for the item that is clearly marked at $10.00. Then I get this dumb look from the poor person behind the register, "Uh, sales tax?"
It makes me wonder, how our state can run without sales tax, and without state income tax. I mean, it's a wonder we survive at all! Now, look at Mass, and California, loads of taxes! Boy, those people sure are better off with all those taxes and government programs! But, I digress.
Seriously, if you live in NH, and you buy goods over the Internet, no tax, case closed, Live Free or Die!
Modest doubt is called the beacon of the wise - William Shakespeare
Auto-reply to ACs: "Truly, you have a dizzying intellect."
I live in a city and don't own a car.
If I walk to a retailer and buy something, I pay sales tax -- but no shipping and handling. If I order something online, I pay no sales tax -- but I do pay shipping and handling.
Six of one, half a dozen of the other. The reality is that warehouses have a lower per unit cost structure due to effeciencies, but have to pay to ship. When one cost is lower than the other, blammo. I think you'll find that most people who purchase new items online don't do it to save a "few pennies." They either do it to save tens of dollars, because they can't purchase the item locally anyway, or as a convenience.
In short, compete to offer your customers the lowest price/best service combination, or just STFU. The community will be better off either way.
Support a few technologists in Washington.
Article I, Section Nine:
No Tax or Duty shall be laid on Articles exported from any State.
Additionally:
No Preference shall be given by any Regulation of Commerce or Revenue to the Ports of one State over those of another: nor shall Vessels bound to, or from, one State, be obliged to enter, clear, or pay Duties in another.
One state cannot tax a purchase made in another state. Taxes are too high as it is.
Business isn't willing to pay for products, innovation and careers, so we get brands, mortgage commercials and layoffs.
Do I have to pay a use tax on the cost of my Slashdot subscription?
Remember the days when Republicans were the party of fiscal responsibility?
As a brick & mortar retailer, I'm sick and tired of losing businesses to cheapskates who want to shave a few pennies off
Welcome to the free market. Thanks for playing.
People's desire to believe they are right is much stronger than their desire to be right.
A smarter way would be to have a smarter tax system, like a Value-Added Tax. Tacking sales tax on as an after-thought is stupid, and creates many more problems than it solves. With a fairly simple system (Person A hands a stack of bills to Entity B; B hands A a Widget; B makes an entry in a book) its worst flaws aren't really exposed. With side-spread digital transactions for digital goods it simply cannot be maintained.
This isn't as much "normalization" as it is "don't take so many drugs when you're designing tables."
States with sales tax lines on their tax forms include Alabama, California, Connecticut, Idaho, Indiana, Kentucky, Louisiana, Maine, Massachusetts, Michigan, New Jersey, New York, North Carolina, Ohio, Rhode Island, South Carolina, Utah, Vermont, Virginia and Wisconsin, according to the Federation of Tax Administrators.
Read more about it here.
The IRS has a pretty comprehensive PDF online debunking most of these schemes.
4 ,1,7068670.story?coll=la-home-business
[registration required, blah blah]
http://www.irs.gov/pub/irs-utl/friv_tax.pdf
While clearly the IRS is biased, they do cite many court cases that have legal precident covering many of these loopholes or misreadings of the tax code.
There was also a related article in the LA times last week which touched on the same topics
http://www.latimes.com/business/la-fi-taxman4apr0
That's why many people have moved to Vancouver, WA. Lower property tax, no sales tax in neighboring Portland, no income tax, and mooching off of Oregon tax dollars by traveling on I-205/I-5 everyday.
There are a huge number of yeast infections in this county. Probably because we're downriver from the bread factory.
Anyway, my question is simple - there's this line on my state taxes that asks me how much I paid in out-of-state goods over the past year so I can fork over sales tax on the items. My answer: I have no idea. Am I supposed to?
I was rather surprised to see this on my tax forms, since I don't recall being told any time that I should be saving receipts from out-of-state purchase. And while someone probably could look up my out-of-state purchases on my credit card, I don't have instant access to those records... Even if I did, I don't know what counts and what wouldn't. For example, some things aren't taxed in Massachusetts, like clothing.
I can't see how this will possibly work. I have no way of looking up this data - is it really my responsibility to keep track of my out-of-state purchases so the state can get their $5 or whatever? I don't make many purchases out of state anyway, and I definately don't bother keeping track of which purchases were made out of state and which were not.
You are in a maze of twisty little relative jumps, all alike.
since I run an on-line business in AZ, telling me to report any internet purchases I had made. I thought about it for a minute and then realized of the two known internet purchases one had been refunded entirely by the company (NewEgg, which resulted in me getting a server case for free after they jerked me around for several months) and the other was less than $100 and had just taken place a couple days prior. It's actually pretty rare that I buy things on-line and I don't keep records unless it's a purchase for the business since it's a tax write-off. The only purchase I could report was a business expense.
The tax only applies if you purchase tangible goods and import them into your state of residence. It falls under a "Use Tax."
If you're not running a business you most likely will not be bothered. I was probably sent a letter not only because I run a business but also because I don't pay any taxes on sales since they're all internet based and out of state. Every month I have sales to report but no tax. It also may have raised a flag.
Ben
Work Safe Porn
In the short-run, as the article says, there's essentially zero compliance for existing law, and the only way anyone is getting into trouble is if the state is out to get them for something else. In the long run, Liselle is entirely correct. This burden is going to be imposed on Internet vendors, the way investment firms and banks are required to do the revenuers' work for them.
What I'm listening to now on Pandora...
Article I, Section 8 of the US Constitution:
The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States.
Amendment 16 of the US Constitution:
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration.
Sorry, but I find it hard to argue with that...
Two words: Al Capone
C|N>K
States have no right to tax interstate commerce, buying something out of state is interstate commerce and constitution clearly states that states have no right to levy tariffs or taxes on interstate commerce.
Have you ever been to a turkish prison?
Liberty you never use is liberty you lose.
Hell, in 20 years, Amazon will control most of the book market in this country, and if they dont' have it, you're fucked.
LOL... sure, whatever.
Suppose Big-Chain-Store stops carrying X. That's when a small shop opens up and starts carrying X. The only way BCS can keep the little guys out of the market is to continue to sell everything they can.
Look at Netflix. They're taking over the rental market by storm. However, they won't shut out all the stores... because they don't carry porn. As long as they don't carry porn, there will be an independent that does. Sure, those indies might have to charge much more, but as long as there is a demand, as long as BCS doesn't carry the product, there will be room for independent retailers.
Yeah, there's no way to directly compete with BCS... that's what small mom-n-pop stores have slowly learned. You can't compete on price, but you can compete on service, convenience, and maybe even selection.
-- If god wanted me to have a sig, he'd have given me a sense of humor.
hey, try california here where the sales tax is 8.25% and they're talking about 9% :( My household pays ~40% income tax as well... it's quite a burdern.
Religion is a gateway psychosis. -- Dave Foley
For the typical consumer this is a non-issue. The government is not going to go to extraordinary lengths to figure of if I owe tax on the $50 worth of Amazon stuff I bought. It just isn't economically worth it. Now if they had all financial information in the country in one place, they could theoretically figure this out (although given the government's record of technology use this is extremely unlikely), but that would raise significant privacy concerns.
So who should worry? Well, if you are trying to buy expensive art (or any other pricey item) and trying to avoid the tax, then you are a target. If you figure that the cost of tracking down a non-payment is fixed, then you have to assume they will focus on big ticket items.
What the states are doing in this article is pretty reasonable if you think about it. They throw one line on a form and hope people will send them money. This is money they wouldn't otherwise have gotten and it cost them nothing. They won't get much but, hey, it's free money so why not.
You talk as if it's the end of the world. So what if all the brick-and-mortar businesses go out of business? If that what the market dictates so be it. In a few years people will yearn for brick-and-mortar again and we'll have a brick-and-mortar bubble.
But who cares? We'll get what we ask for as a whole. If what we get sucks and enough people agree that it sucks, we'll start asking for something different and it will be provided by the market.
If you think running a brick-and-mortar shop is bad take a look at the restaurant business. For decades restaurant closure/failure rates have been hideous. You've don't have much to complain about IMHO.
Be happy. Nothing else matters.
It's pretty common along the Washington(8+% sales tax) Oregon (no sales tax) border too. Incidentally if you live in a state that doesn't have a sales tax you are exempt from other state's sales taxes (probably true about all states, but they might come after you for the use tax if you live in a state with a salels tax). You were supposed to report the items purchased and pay the sales tax on them (mail order too). Companies are only required to collect if they have a physical presense in the state.
Degaussing scares the bad magnetism out of the monitor and fills it with good karma.
- Alabama,
California,
Connecticut,
Idaho,
Indiana,
Kentucky,
Louisiana,
Maine,
Massachusetts,
Michigan,
New Jersey,
New York,
North Carolina,
Ohio,
Oklahoma,
Rhode Island,
South Carolina,
Utah,
Vermont,
Virginia,
Wisconsin
However, even though all these states have places to report this tax, in almost every case my firm just puts in a zero. Granted this policy may change if states become more active with enforcement, but that is our current policy. Just don't blame me if you put 0 and get audited.It's tough to say how much you are supposed to pay, even if you *had* kept track of your Internet purchases.
I moved from a Maryland to Michigan in December 2003. If I were to count all of my Internet purchases for 2003 on my MI taxes (which requires the use tax) then, I would be paying for mostly MD purchases (which, to my knowledge, does not). So, just divide it up before and after, right?
Not that simple. Around the time I was moving, I was purchasing a lot of last minute things on the Internet. Many of which, I ordered in MD, but received in MI. Or, the transaction was initiated in MD, but by the time the money was transferred, I had already moved.
Don't taxes frustrate people enough without introducing state taxes like this?
Florida also has a use tax and used to run extremely obnoxious commercials telling people that they were required to pay it if they purchased items outside the state.
I would think that a "use tax" that is applied only to people who make purchases outside the state would be attackable as an unconstitutional attempt to regulate interstate trade. You're applying a special piece of state income tax code to a class of people that isn't everyone. Since that class of people is only people who have made out of state purcahses, how can it not be an attempt to regulate interstate trade. It will certainly have that effect.
I would think that a far more legally solid method of applying taxes would be to tax a business in a specific state for any sale it makes, whether the sale was in-state or not. Of course, no mail order shop would ever set up shop in a state that did that...
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
Put another way, many frequent online buyers shave a few hundred thousand pennies a year. The only thing a use tax will do for you is make people purchase fewer products (which hurts the economy, and, indirectly, your business). It certainly won't drive them to buy things locally. If anything, it will mean that they will have less money left over to spend locally, hurting the local economy even further.
As for the disappearance of local retailers, I'm all for it. Some things make sense to have available locally. Wal-Mart SuperCenters and Big K-Marts sell most of them (day-to-day needs, groceries, etc.). Home Depot and Lowes pretty much take care of the rest. Almost everything else can generally wait a couple of days. I guess cars and furniture are, to some extent, also exceptions, just for the ability to browse, though it's not -that- important....
That having been said, if you want to compete, start by forming buying groups with other companies to increase your buying power (thus lowering prices). Scale back your selection to include only things that you can sell at a reasonable price rather than wasting space with things that you'll get stuck with. When your prices are within 5% of the online prices, it will frequently be worth it to buy something locally for the convenience, even with sales tax. As long as someone can cut the price in half by buying online, though, you're pretty much screwed.
Check out my sci-fi/humor trilogy at PatriotsBooks.
Some online vendors charge local sales tax even if you are out of state. I believe that Apple is one such. Does this mean that I'm supposed to pay local AND remote sales tax?
plus-good, double-plus-good
I do give a damn. I gladly pay more in a store that has well paid, intelligent, and honest salespeople. As it is, usually I hate the shopping experience in many (but not all stores). You are lied to, or you cannot get served, or you can't find what you want, or things are stocked so that everyone trips over each other and the merch.
But there are stores that manage to keep me coming back and spending more. How? These stores are pleasant, well organized and well stocked, and the sales help and cashiers are helpful and fast. If you can't pull all this off, then don't be surprised that us "cheapskates" don't seen any reason to pay more at your store.
The tax issue is only one of a zillion factors why many of us have moved a lot of our purchasing online.
So if I eat dinner in a restaurant across the state line in a state that doesn't collect sales tax, and drive home, do I owe on the partially digested remains in my stomach? If so, how do I calculate the amount owed since evidently at least part of the food was used out of state?
A friend of mine who's done use tax stuff for banks says that putting a "0" on that line is better than leaving it blank. If you put a "0", you have made a declaration that you don't owe any use tax, which might very well be true. If you put nothing, you haven't filled the form out properly, which is a Bad Thing.
Then your friend has no idea what he is talking about. Non-applicable lines on tax return forms are usually left blank instead of being filled with zeroes. My frickin' tax software leaves such lines blank, so I fail to believe that it's a big audit trigger.
ZFS: because love is never having to say fsck
Then on this year's form I saw the Dreaded Line. I thought about it for a long time. I have always carefully avoided Web sites that charge taxes. But in the end I just paid the tax, for a combination of reasons:
Shamefully, I did contemplate lying. But how? I mean, it's nuts to write in "zero". When your auditor asks "why zero - haven't you ever bought anything from Amazon?" what am I gonna say? "No, I live in a cave and all my books are handwritten on vellum?"
I could claim that I didn't know what I had spent. Unfortunately, I save my credit card bills, since I want to have some evidence on my side after my identity gets stolen. Even more unfortunately, I own Quicken, which can print out all my interstate transactions for the year in, like, three minutes. Oops. So not only is ignorance not a legal defense, it isn't even a believeable defense.
I thought about only paying the tax on the big-ticket items. But the difference between that and just paying everything I knew about was, say, $15. It's worth $15 to be able to go before my auditors and NOT lie.
And there are karmic benefits. I no longer refuse to walk into my local stores because I know I can pay lower taxes on the Internet, even after shipping. Instead I refuse to walk into my local stores because they charge $25 for a book that Amazon is selling for $18. I mean, I know I am supposed to support my local stores, but $7 per book?
How many pennies is that a day? In any case, living in California is a choice and having 3 or 4 kids is also a choice. You'll probably disagree with me, but that's ok I'm used to it.
In case you aren't familiar with this tax-evasion technique, a corporation sets up a shell subsidiary (in name, an independent entity) is some place like the bahamas. The third part of the triangle is in the country that supplies the raw materials. Say I'm making shoes, and sell them for $100 a pair. Ordinarily that would mean a lot of profit for me, so to lower my apparent profit, I buy the raw materials for $90 from myself (the bahamas subsidiary). The bahamas subsidiary, however, bought the raw materials for $9, not $90, from somewhere in argentina. The US-registered corporation in fact makes a profit of $91 per pair of shoes (less labor and other expenses), but appears to have only made $10 profit per pair. The actual income is in the bahama shell, which has no obligation to pay US taxes.
How does this tie into income taxes? Well, ordinary people don't pay income taxes; they pay wage taxes, which are not the same. If I am allowed to deduct the cost of groceries, rent, gas, tuition, and healthcare, then I'll glad pay 30% tax on whatever's leftover.
Si la vida me da palo, yo la voy a soportar Si la vida me da palo, yo la voy a espabilar
Or: all your tax are belong to us.
If I understand this correctly, this is how it works. I go to Nevada and buy a TV. I pay Nevada sales tax (which is a lot lower than CA tax) at the time of purchase, and head back to LA.
Now I'm supposed to pay ANOTHER tax to California for...what? The priviledge of USING the item I paid for and have already paid sales tax on?
Sorry, I'm not quite that stupid. But it shows how determined the CA government is to separate us from our money. They tax us to death and then wonder why people move away. Greedy fuckers.
" Article I, Section 8 of the US Constitution:"
If Article I, Section 8 allowed Congress to pass the income tax as it exists today, and create the IRS as it exists today, then please explain the necessity for the 16th Amendment. If Article I, Section 8 authorized the system we have in place, the 16th Amendment would never have been proposed, let alone ratified. Ratification of the 16th Amendment was also conditional on its being a temporary measure, as opposed to a cash cow for a massive Federal Totalitarianocracy.
You're also forgetting Article I, Section 2, which states:
"Representatives and direct taxes shall be apportioned among the several states which may be included within this union, according to their respective numbers..."[Emph Mine]
You're also forgetting Article I, Section 9, which states:
"No capitation, or other direct, tax shall be laid, unless in proportion to the census or enumeration herein before directed to be taken."[Emph Mine]
The Founding Fathers specifically stated in two seperate places that the Congress may not lay direct tax, except in proportion to the census. They couldn't have been more clear if they'd carved it into Jefferson's skull and stuck his head on a pike in the middle of Philly.
You could always argue that the 16th Amendment repealed these parts of the Constitution, but it does no such thing. Thankfully, the Supreme Court has already taken care of settling any dispute you and I might have about this. They did so in 1916, Brushaber v. Union Pacific R.R. Co., 240 US [1916], in which they held that the 16th Amendment did not alter Article 1, Sections 2 and 9, and that its only result is that the Income Tax remains an indirect tax. (Stanton v. Baltic Mining Co. , 240 US 112 [1916])
"So what?", you're probably saying. "They can still collect an indirect income tax." You're absolutely correct that Congress may impose an indirect income tax. Unfortunately for the IRS and personal income tax fans, the Supreme Court clearly defined an indirect tax in Flint v. Stone Tracy Co. , 200 US 107 [1911], in which it held that:
"Excises are taxes laid upon the manufacture, sale or consumption of commodities within the country, upon licenses to pursue certain occupations and upon corporate privileges; the requirement to pay such taxes involves the exercise of the privilege and if business is not done in the manner described no tax is payable . . . it is the privilege which is the subject of the tax and not the mere buying, selling or handling of goods."[Emph Mine]
Whoops, there it goes. You may find it hard to argue with that, but the Supreme Court would respectfully disagree. If someone has the money to take such a case all the way to the Supreme Court, we might all get a huge (as in 100%) refund from Uncle Sam in the next few years. The US Federal government was never intended to be the behemoth it currently is. Once we stop sending it all our money, we'll find that many other problems go away as well. It's tough to drop a billion dollars on a police-state inducing program (TIA, CAPPS/II, MATRIX) when your discretionary budget is smaller than a billion dollars.
-- "Government is the great fiction through which everybody endeavors to live at the expense of everybody else."
That's how New York works. It's pretty interesting to. If you don't actually look at the instructions they provide you with a handy dandy little chart to compute the tax owed based on your income. This is supposed to cover all purchases less then a thousand dollars. But only at the end do they mention that you can put a zero in this line. I wonder how many people that skim through their taxes just paid it without even looking at what it was? Quite the cash cow for the state.
They do apply it to everything though. Quoted from the instructions for IT-201 (the New York State standard tax return):
So it's not just the Internet they are going after. I don't know what I'm going to do with mine (haven't filed yet). I don't think putting a zero down is a good idea -- it could be considered fraud. That said many tax professionals have told me in the past that they won't audit you unless the amount of cash they can get back is greater then the cost of the audit. It probably wouldn't be worth their time unless you buy tens of thousands of dollars worth of stuff off the 'net or in a catalog.
I'm impressed that it's 18 states doing this. I thought only New York and California pulled this sort of stuff. Guess all the budget crises probably have something to do with it?
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.
"income taxes are good ideas"
I fail to see how this is the case, unless you're a fan of big government and a socialist state. If you'd like to send all your money to the Federal government in the hopes that it'll provide for your every need, feel free. Personally, I see the Federal government as an out-of-control, digustingly large, billions-bleeding behemoth hell-bent on making itself as powerful and omnipresent as possible. The original intent of the Federal government was to act as a sort of UN for the several states. In cases where states might fight over an issue, the Federal government was given the authority (enumerated powers) to ensure relations between the states remained as civil as possible. Thanks to Lincoln, amoung others, we've obliterated any semblence of states' rights, fiscal discipline, personal responsibility, or adherence to the intent of the Constitution.
The Constitution is hardly a practical document. It rarely delves into details, and largely prefers to state a general idea or principle. It does this because it is a statement of principles. It describes an ideal state in which power is always balanced, poor leadership by a few is irrelevant, extremism can be nullified, and where the people truly are the ultimate authority. The system we have now shows that with 200 years, a fist-full of wars, and a willingness to bludgeon the masses with extreme and misleading concepts repeatedly, you can pervert even the most beautiful government.
-- "Government is the great fiction through which everybody endeavors to live at the expense of everybody else."
If you'll wipe the spittle off your face, you'll note I quoted the 16th Amendment right below my quoting of Article I.
Ratification of the 16th Amendment was also conditional on its being a temporary measure, as opposed to a cash cow for a massive Federal Totalitarianocracy.
Doesn't change the fact that they decided to keep it, eh? Like it or not, it's a constitutional amendment.
The Founding Fathers specifically stated in two seperate places that the Congress may not lay direct tax, except in proportion to the census. They couldn't have been more clear if they'd carved it into Jefferson's skull and stuck his head on a pike in the middle of Philly.
The Founding Fathers also established an amendment process in Article V, permitting an overwhelming majority of Congress and the States to change the Constitution.
You could always argue that the 16th Amendment repealed these parts of the Constitution, but it does no such thing. Thankfully, the Supreme Court has already taken care of settling any dispute you and I might have about this. They did so in 1916, Brushaber v. Union Pacific R.R. Co., 240 US
From that decision:
Whoops, there it goes. You may find it hard to argue with that, but the Supreme Court would respectfully disagree. If someone has the money to take such a case all the way to the Supreme Court, we might all get a huge (as in 100%) refund from Uncle Sam in the next few years.
Not only that, NYS has agents that check the plates in these out-of-state clothing outlets and they leave leaflets on the windshields pressuring citizens that they are evading sales tax. How's that for heavy handed tactics?
NYS has done a great job of taxing citizens and jobs out of the state and I am moving away once I am in a position too, because I have just become unemployed and there are no jobs here. Good riddance NYS, and to hell with your Gestapo tactics and your broken tax system!
Eternity: will that be smoking, or non-smoking? I Corinthians 6:9-10
>The same way roads were funded up until 1913
E.G. they weren't. Until that point, most roads in this country were unpaved disasters, generally two-land roads. Imagine driving from Boston to Washington DC on all local streets and country roads. It wasn't until the advent of federal taxation and the grants that went along with it that enough resources could be mustered to build large highways (starting with New York State in the 20's thanks to the work of everyone's favorite megalomaniac, Robert Moses).
And don't kid yourselves - parasite states like Delaware (my own) which have low/no income tax, or no sales tax, find ways of compensating for the lack of money. Delaware, for instance, poaches its section of I-95 mercilessly, charging outrageous tolls which cause miles-long backups on the interstate while doing virtually nothing to actually improve the quality of that road - all of the toll money goes to local road construction. Or, another Delaware invention, they attract huge corporations to the state so they can earn incorporation fees, thus earning several thousand dollars for themselves while depriving the original homes of those companies of millions of corporate tax dollars. If you're paying Paul, you've got to screw Peter somewhere.
So what if all the brick-and-mortar businesses go out of business?
So then all the local governments that have been earning their revenue from sales taxes will either have to switch to another (e.g. income or property) tax type, or they'll have to start enforcing these use taxes.
Either way, a huge disadvantage of brick-and-mortar businesses will have been eliminated, and so they will start to come back, putting some of the internet sellers out of business in turn. It may all work out alright in the end, but if we try to eliminate inequitable taxes in the first place perhaps we can make the process of approaching that end less unpleasant.
If what we get sucks and enough people agree that it sucks, we'll start asking for something different and it will be provided by the market.
Being able to dodge taxes isn't a market efficiency, it's an externalized cost. Governments which depend on sales tax aren't just going to close up shop when those revenues go down, they're going to get their money somewhere else instead.
IANAL either. However, I have read the Constitution in its entirety and contemplated the meanings within, something I'm convinced many of today's lawyers have not done. I have also studied and researched Constitutional issues for my personal development and university coursework.
I feel that you're overlooking a very big checks and balances system. The members of the federal Congress, though elected from states, are largely outside the sphere of influence of the state governments. I think the 2/3 vote to send an amendment to the states for ratification would likely not occur. Fortunately, there is no method in place for the Supreme Court to mandate an amendment be sent to the states.
Beyond the amendment issue, you are reasoning that because someone can get a better deal in another state on a purchase, the deprived state has a legitimate claim. That is not the case. If a state cannot attract profitable businesses or develop a solid revenue model, they have no business taking the revenue from states that encourage commerce and have taken steps to simplify their own tax systems. The "offended" states should study the open market's behavior and find out what they are doing wrong.
Also, you are assuming that every state that is drawing these sales has no sales tax. What if they merely have less of a sales tax? To paraphrase from the Constitution, "full faith and credit" should be applied to the acts of other states. So, if your citizens have already been taxed on a purchase in another state, they have fulfilled their obligation. If the state in which the purchase was made did not require sales taxes, they have also fulfilled their requirement. Therefore, their home state has no jurisdiction. Residents of states can claim states as their home, but states can not claim residents as their property (slavery by the state?) to control at whim.
References: Article IV, Section 1; Article 1, Section 10; and Article V of the Constitution of the United States