Posted on 08/02/2012 8:11:39 AM PDT by 92nina
[Yester]day the Senate Commerce Committee [held] a hearing to push for an Internet sales tax. This follows a similar effort by the House Judiciary Committee late last month. And while the Wall Street Journal ran a cover story recently claiming (somewhat misleadingly) that GOP governors are throwing in the low-tax towel and signing off on online sales taxes, Sen. Jim DeMint (R-S.C.) has an op-ed in the same pages today telling fiscal conservatives why they should do the opposite. So, what’s all this Internet tax talk about?
The Senate’s Marketplace Fairness Act and House’s Marketplace Equity Act – currently the leading contenders amongst federal online tax bills – would raise state-level taxes on Internet and out-of-state purchases while upending critical taxpayer protections built into the tax code to protect Americans from the tax laws of other states. From a taxpayer perspective, any bill that touches Internet sales taxes must preserve the physical presence standard and protect consumers from a higher tax burden. Unfortunately for taxpayers, the federal online sales tax bills miss the mark widely on both fronts.
Under the U.S. Supreme Court’s ruling in Quill v. North Dakota, it is a violation of the Commerce Clause for a state to require an online or remote retailer without a physical presence in that state to collect and remit the sales tax. The Senate’s Marketplace Fairness Act, sponsored by Sens. Dick Durbin (D-Ill.) and Mike Enzi (R-Wyo.), would permit overzealous state tax collectors to reach well outside their borders and force online and other out-of-state retailers to collect their state’s sales tax.
[Yester]day, ATR submitted written testimony against the Senate bill. Here’s the long and short of it for taxpayers:
State-level Tax Burden Will Increase: In support of his bill, Sen. Enzi stated recently that “the Marketplace Fairness Act is not about new taxes.” The legislation even included a purely rhetorical section called “No New Taxes.” Yet, proponents are also quick to point out that it could raise as much as $23 billion in tax revenue from consumers at the state level. And while consumers do owe “use tax” on products they purchase online and out-of-state, this measure shifts the tax collection burden to out-of-state retailers, which is certainly a new form of taxation. At the least, businesses that do not pass sales tax liability onto consumers at the register will see new out-of-state sales taxes come out of their bottom line.Dissolving Physical Nexus Weakens a Fundamental Taxpayer Protection: The physical nexus standard is a staple of our tax code, preventing states from reaching across their borders to force out-of-state businesses and individuals from complying with their tax codes. The Marketplace Fairness Act will dissolve the physical nexus requirement for collecting sales taxes. To put it simply, measures to dissolve the physical presence standard have the potential to usher in the second coming of taxation without representation in America.
Outsources State Tax Rules to an Unelected Body: Under the Marketplace Fairness Act, twenty-four states operating under the Streamlined Sales and Use Tax Agreement (SSUTA) would be able to tax remote sales almost automatically. Remaining states would have to comply with a number of requirements or choose to join the Streamlined Sales Tax Project (SSTP).
Reliance on SSUTA allows a handful of tax administrators and state lawmakers on the Streamlined Sales Tax Governing Board – which has long advocated for tearing down the physical nexus standard for sales taxes – to control remote sales tax decisions for states and incents the states that are not part of SSUTA to join. Non-SSUTA states will watch helplessly as the “streamline states” hassle their resident businesses to collect more tax revenue.
Increases Tax Code Complexity: The bill will force online, catalogue, TV and other retailers to comply with over 9,600 sales tax jurisdictions across the country, while brick-and-mortar stores must comply with only the one where they are located.
Here’s the bottom: The effects on taxpayers of the Marketplace Fairness Act and similar legislation would be dramatic. From a taxpayer perspective, any bill that touches remote sales taxes must preserve the physical presence standard and protect consumers from a higher net tax burden. Unfortunately, the federal online sales tax bills miss the mark widely on both fronts.
For a more indepth look, check out ATR's written testimony.
Read more: http://atr.org/ramifications-congresss-internet-sales-tax-a7096#ixzz22Oxo5Au8
They’ve nickle and dimed us to death
Fools like Alexander are 100% stupid on this issue. If they force taxes for state to state then consumers will go OUT of state.
Government needs corporations
Corporations do not need the governments.
Local governments use sales taxes to promote and benefit their local brick-and-mortar businesses. Making an out of state internet seller collect those taxes for them is basically requiring them to do the work to collect and forward tax money that will be used to benefit their competition, who will put them out of business if they can.
Heeere comes our national sales tax!
The democrats’ wet dream is coming true
But the govt uses it a lot.
You don’t want our troops to get paid?
Local governments use sales taxes to promote and benefit their local brick-and-mortar businesses. Making an out of state internet seller collect those taxes for them is basically requiring them to do the work to collect and forward tax money that will be used to benefit their competition, who will put them out of business if they can.
Here in NH, we have no sales tax.
People have been adamant that if the state imposes a sales or income tax, they will have to repeal the property tax.
Most of us will buy local or shop by phone if the feds do this.
As for states that already have a sales tax, I surmise that most of those folks are already rankled about the state sales tax.
Having to fork-over additional sales tax to the feds is a deal-killer.
Actually the proper internet tax method is to realize that it’s mail order and all the old mail order rules apply exactly the same way as they did for the Sears catalog in the 19th century. Really this is a puzzle that’s been solved, and everybody conveniently forgot about it in the 90s.
Some small local businesses are already reverting to cash only.
Now, why do you think that is?
:)
We don't need a third party; we need a second party....
Or Craigslist will become even more popular and there will be even more bartering.
FedGuv Inc gets enough money.
I would rather buy local.
If it happens, I will buy locally,even if they have to order the item...I am 70 years old,and have paid the feds a lot of money in taxes.....I am fed up with it is their money and let us use it. After $100,000 in education, it is my money..We did it...my wife and I....thank God for a wonderful CHRISTIAN WOMAN..
I can understand large and even some specific medium sized companies trying this, but; no mom and pop shop or any average Ebay seller should be expected to collect taxes and send them to every state that they or he and/or she sold an item or more to. This is another administrative nightmare for every small business, not to mention the time wasted and the cost. So, are these sellers or even of used goods going to have to charge a tax,too? Once something like this starts where does it end?
Agreed. This WY. Rep must have his head in the sand, as he darn sure is not pro business. He sounds like an attorney or more like a person who has worked for the gov all his life. Read this carefully about the 9,600 different tax rates. Heck, we have 9.25 here, and 6 miles down the interstate it is less in the next county. Talk about a nighmare -UNREAL.The Internet business will dry up for all but the largest corporations.
You forgot 'cuts to police and fire', 'it's for the children', 'babies going hungry' and 'wanting grandma to eat dog food while pushing her down the steps'.
To believe that any group is committed to reducing their money is naive. Even churches don’t do that.
The only spending that a political party wants to reduce, is the other party’s spending. Who would/could run on a platform of reducing their own spending? They would never get elected.
Got that right, but it would be a waste of dog food.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.