Internet Sales Tax Gets a New Champion

Archness1 writes with an excerpt from Declan McCullagh's piece at CNET about the recently renewed push for a sales tax on Internet purchases, led by Massachusetts Representative Bill Delahunt. "At the moment, Americans who shop over the Internet from out-of-state vendors usually aren't required to pay sales taxes. Californians buying books from Amazon.com or cameras from Manhattan's B&H Photo, for example, won't be required to cough up the sales taxes that they would if shopping at a local mall." That could all change, though.

Comments

Legalize pot...

[pinkj]

Legalize pot and tax that instead please.

I have never understood this.

[bmo]

What is the difference between mail/fax/phone order and purchases made through "teh intertubes"?

Mail order has never had to collect sales tax except for in-state customers. Why are web based businesses any different? Why were states not clamoring for sales tax collection in the heyday of mail order? Politicians act as if web based businesses are getting special treatment.

They aren't. They never did get special treatment.

So what's going to happen now? Internet sales are going to be taxed but mail order won't be? Because I certainly don't hear about mail order sales being slapped with a tax in any of these discussions. It's all about skimming off of internet sales.

Fine.

I'll just slap a stamp on it or fire up the fax machine and send orders that way, like I did 15 years ago.

It was nice knowin' ya, Internet commerce.

--
BMO

Re:I have never understood this.

[Mortaegus]

The reason why this is stupid is because the tax would be going to the wrong place!

If I purchase something online, then the tax, if I am required to pay it, should go to that small city in Pennsylvania where their warehouse is located, not my local municipal. That's the place I am buying from, anyhow. The internet is like a magical doorway that teleports me into their store, all the way across the country, where I browse around and make a purchase. Then the internet teleports me back and I wait for them to ship it.

If the states wanted to argue that they needed to tax goods coming in from other states that would be one thing, but that isn't within their constitutional powers. Interstate commerce is governed by the federal level of government. Which makes the whole argument even more ridiculous.

Re:I have never understood this.

[dgatwood]

I mind it a lot for several reasons:

• The purpose of sales tax is to pay the cost of police, fire, and other local services that a business requires. A business in another state does not have those requirements, gains no benefits from the taxes it pays to the city where I live, and thus should not pay those taxes.
• Sales tax is inherently regressive. The poor spend a high percentage of their income on taxable goods. This is still true even if you eliminate taxes on food. The rich spend very little as a percentage of their income, and thus are impacted far less by sales tax. This is exactly the opposite of what a proper tax scheme should be.
• The states need to be weened off of sales taxes anyway. Sales taxes are a notoriously unreliable way of bringing in revenue. When times get tough, people stop buying things, and sales tax revenue dries up. States that depend heavily on sales tax revenue (Tennessee and California come immediately to mind) end up with massive budget shortfalls. The only way to fix that is to continue to deny them the sales tax and force them to find a more robust way to bring in revenue.

Sales tax shouldn't be expanded. Sales tax should be reduced and possibly eliminated. It is pretty much the worst kind of tax you can create because it discourages spending that is necessary for a healthy economy, is hardest on the people who can least afford it, and has a tendency to drop off steeply when the states need the money the most. Pushing for expanding sales tax betrays a lack of even a basic understanding of economics. It's the sort of thing politicians like because it "closes loopholes" instead of "raising taxes", but in the long run, it will only harm the U.S. economy and drive sales tax revenue down.

Re:Everyone

[NotBornYesterday]

What, exactly, are you talking about? Is all your "news" from the op-ed pages?

Gov. Deval Patrick yesterday refused to rule out a tax hike [emphasis mine] next year - handing his opposition a hot campaign issue - as he signed a pared-back $27.6 billion budget and looked ahead to an estimated $2 billion deficit [emphasis mine] with a nearly dry rainy day fund.

Those are the facts, no matter how you slice them. They have drained our state's savings, continue to overspend, and continue to raise taxes. Mind you, this is the same guy who got into office and immediately started spending money on himself (office, car, etc) way beyond what was appropriate. He (and his liberal tax-and-spend buddies in the MA houses of congress) has spent us to ruin.

• The sales tax hike from a year ago raised taxes on existing items, and started taxing items that had been exempt before. It has directly hurt MA businesses by sending sales across the border.
• This is the same state politicians who have kept increasing tolls on the Mass Pike despite the fact that the road has been paid off for years, because our corrupt pols can't bring themselves to give up a cash cow.
• The "temporary" income tax hike is still in place, years after we were promised it would be gone. They even refused to act on the referendum the voters passed to reduce it to where it by all rights ought to be.

Massachusetts has been abused by its corrupt politicians for decades. It is STILL Taxachusetts. Pick on Glenn Beck after you get your facts straight.