States Push to Collect Online Sales Tax

Carl Bialik from the WSJ writes "On Saturday, 18 states will implement the Streamlined Sales Tax Project, which will make it easier to collect local and state sales taxes on purchases made over the Internet while offering amnesty on uncollected taxes. In their longstanding opposition to collect sales tax, many online retailers 'have cited a 1992 Supreme Court ruling that said that it would be too onerous for e-tailers to calculate all the permutations of differing state and local tax rates,' the Wall Street Journal reports. 'One goal of the project was to remove the ruling as a key defense for online merchants.' Is your state involved? 'The states that have signed on are Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Nebraska, New Jersey, North Carolina, North Dakota, Oklahoma, South Dakota and West Virginia. Five more -- Arkansas, Ohio, Tennessee, Utah and Wyoming -- are in the process of finalizing the requirements needed to join, while Washington, Texas and Nevada are in earlier stages.'"

Comments

Wait just a darned minute

[$RANDOMLUSER]

Mail order (catalog or phone) items which cross state lines have never been subject to sales tax; only if the shipper and reveiver were in the same state was sales tax charged.

How is ordering over the Internet different?

Re:It is only a matter of time

[EmagGeek]

I don't see how any of this gets around the fact that no State has the right to tax interstate commerce. Call it whatever kind of tax you want to; Sales, Use, Excise, whatever, it is still a tax on interstate commerce and a State has no right to collect it.

Re:It is only a matter of time

[zippthorne]

Yet, many states have already been doing exactly this. My home state of RI argues that sales tax is a tax on its citizens (and visitors i guess). therefore, they have a right to tax (last I was there 7%) your purchases regardless of where you bought them.

Since the state is so small, anyone in the state could (and often did) drive an hour and a half to Massachusetts and buy things like cars, appliances, etc. for only 5% sales tax. (ah the boon of living in small state country) You're supposed to declare what you've purchased and pay the difference to RI. Of course, nobody did, so the clever legislature monkeys (who had recently voted themselves a salary increase from $300 to $10k) made "deals" with large-ticket businesses just across the border to report you even if you don't.

This has been challenged many times and upheld on the grounds that the tax is applied equally to both in-state and out-of-state purchases. and so isn't an interstate tax at all.

Tricky lawyering no doubt, but then if they can argue about the definition of the word 'is' they can argue pretty much anything.