Skip to comments.Beware the Internet Sales Tax
Posted on 04/19/2013 4:44:41 AM PDT by IbJensen
The Internet sales tax is back, and it could be the next big vote in the Senate.
The proposed law would enable states to force businesses to collect sales tax from customers who live in their stateeven when the businesses have no connection to that state.
As Heritage President Jim DeMint has said, this violates the classic American principle of no taxation without representation. Retailers would be forced to act as tax collectors for states in which they have no voice.
Under current law, retailers are required to collect sales taxes only in states where they have a physical presence. But Senate Majority Leader Harry Reid (D-NV) is pushing for a vote on a new Internet sales tax that would hit all online businessesno matter where theyre located.
Consider the absurdity of such a law. When a customer buys a product in a store, does the cashier ask for the customers home address? Of course not. The store simply charges the state and local sales taxes applicable for its physical location, no questions asked.
Brick-and-mortar stores like Wal-Mart are in favor of the Internet sales tax, because they see these online retailers as competitors. But the other big proponents of the tax are state governments, which would be able to reach into other states for revenue.
States are struggling with their own budgetsbut they should have to make the hard decisions to manage their budgets, rather than trying to collect taxes from citizens of other states to help cover their expenses. As DeMint said:
Politicians want this bill passed to raise new tax revenue for broken state governments facing budget shortfalls. But legislators in state capitals dont want to make the hard decisions to cut spending or raise taxes on their constituentsthey fear the voter backlash. So theyd like their allies in Washington to make it legal for them to tax people who cant vote against them.
This taxation without representation might boost some state tax collections, but it wouldnt help the economy. Heritage legal expert David Addington has written that hobbling out-of-state businesses that sell through the Internet or mail order catalogs does not help the national economy.
Instead, the Internet sales tax would increase the amount of tax dollars millions of Americans pay, encourage states to increase the size and scope of their governments, favor some states over others in granting federal authority, and discourage free-market competition in interstate commerce, Addington wrote.
Its simply another bad idea coming out of Washington at a time when consumers and businesses are struggling to get by.
Deny ALL government any new sources of revenue. In fact we should be insisting upon the rollback of each and every form of taxation as it all is merely confiscation in the name of socialism!
States should (hateful phrase:) 'level the playing field' for brick and mortar sales outlets by elimination of ALL sales taxes!
I’d hazard to guess that many states have people in place to track down information that will allow them to coerce buyers into paying.
Years ago, I bought a van from my Brother In Law. He had it titled under his plumbing company because he bought it for personal use, but paid for it with a company check.
6 months after the sale, I got a bill from the Department of Revenue for $600+ tax. Private sales are exempt, but apparently they didn’t consider my buying it from the plumbing company a private sale. I had no choice but to pay lest they hold any tax return, lottery winnings, or issue liens.
It will happen, just how and when is the question. They have to get the information first, and the first company that releases the data to an out of state government is the first company I blackball.
How does this get pass the commerce clause?
If they can’t ban it, they want to tax it. If they can’t tax it, they want to ban it.
I cant wait to see what treasonous Republicans in congress support this. Mccain??
All I need is the Federal government to collect sales taxes for lib governor O Malley here in this single (Dem) party state.
Tell you what, when states like Maryland and CA increase their state sales taxes they should be doing something that ads value to the products sold in the state (By being nice to local employers) vs on the internet with no taxes.
I say that this has nothing to do with the Commerce Clause of the U. S. Constitution.
The clause states that the United States Congress shall have power “To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” Courts and commentators have tended to discuss each of these three areas of commerce as a separate power granted to Congress.”
It has nothing to do with taxing the hell out of the confused and tax-imporverished citizens.
It doesn't and will get smacked down by the Federal Courts, the Supreme Court already ruled in 1992 that states can't collect sales tax on business's that don't have a physical presence (or Nexus) in the state (which is why states can't collect sales tax on internet sales today). No federal law can override a Supreme Court's ruling on the Constitution, (that would take a Constitutional amendment). My guess is that they are trying to scare businesses into doing it, knowing it will take years for a lawsuit to work it's way through the courts, then once the system is set up, it will be easier for them to just keep doing it regardless of the eventual ruling.
“As Heritage President Jim DeMint has said, this violates the classic American principle of no taxation without representation. Retailers would be forced to act as tax collectors for states in which they have no voice.”
Should it be allowed and we do nothing, like we always do, then we have proven we are not worthy of what the Founders risked life and fortune for future generations.
IbJensen~:” It has nothing to do with taxing the hell out of the confused and tax-impoverished citizens.”
apillar~:”.. knowing it will take years for a lawsuit to work it’s way through the courts, then once the system is set up, it will be easier for them to just keep doing it regardless of the eventual ruling.”
It is just an immediate “knee-jerk” response to Congress inability to control their own spending.
It allows them to ‘kick the can down the road’ a bit longer and not deal with their own moral and financial bankruptcy.
This way we all end up contributing to continuation of status quo , without solving the spending issue.
Silence on this issue is a decision to continue Congress’ insatiable appetite for revenue.
Illegal ~ heck yeah !
But since when has ‘over-reach’ held this administration or Congress back from obeying Constitutional law ?
But it will institutionalize this form of non-representative taxation
All this “hope and change” .. is now ‘beans and franks’ for everyone .. except Congress.
Judge John Roberts?
It does not. The businesses in other states are not paying taxes, they are simply collecting them. They are being "forced", but only if they CHOOSE to sell to people in those states. That is not taxation. It is a cost of doing business, and one they have control over.
Given the simplicity of programming to properly collect taxes, this is hardly even a burden. The law could be set up to allow out-of-state companies to collect additional fees to cover the collection and reimbursement of the taxes, or the law could allow business to deduct that cost from the taxes collected before remittance, if that is a real issue.
Note that many businesses already do this, including Amazon for some purchases (those made by partners which have business in states). Target, WalMart, Barnes and Noble, Lillian Vernon, Reebok, Sports Authority -- all these companies have online sales and manage to collect sales tax for states.
AS to this suggestion: States should (hateful phrase:) 'level the playing field' for brick and mortar sales outlets by elimination of ALL sales taxes!
First, there is nothing hateful about "leveling the playing field". In fact, it should be a core value of conservatism that any taxes that are applied are done so equally, fairly, and as broadly as possible across the widest range of people, so as to equally burden ALL citizens, rather than using the tax policy to punish a few for the benefit of the connected.
Second, given that states and localities do need to collect taxes to pay for essential government services, a sales tax is one of the better taxes for that purpose, precisely because it meets many conservative principles. The tax applies to virtually all residents of a state, it applies equally to all transactions, not picking winners and losers, it is somewhat under control of the individual, who can choose to not buy something if they don't want to pay a tax, and it tends to tax only money someone would have, since if they were broke, they wouldn't be buying things (I am ambivalent about whether a sales tax code that excludes BASE items like food violates conservative principles -- it does some, but enhances others like not forcing people who can't afford it to pay a tax).
A well-written national law could be a great benefit. It could require simplified tax codes for participation, to minimize the burden on out-of-state businesses. It could limit the requirements to businesses that do less than some minimum amount of out-of-state sales, so as to not burden micro-businesses that would be driven out of business by this. It could allow for fees to reimburse the businesses for collection.
I'm guessing once they have a bill in place, I will oppose it because it will be written badly. But I support the principle of collecting sales tax from individuals for items purchased out-of-state.
The commerce clause specifically grants the federal government the right to regulate interstate commerce. So, the congress has a constitutional right to dictate that commerce that takes place across state lines must include collecting the sales tax for the state in which the buyer resides.
The Supreme Court has previously ruled that a state cannot tax out-of-state sales DIFFERENTLY than in-state sales, because that would be a de-facto tariff. And they have ruled that absent a federal law, a state cannot force a company that has no business in the state to collect taxes for the state.
Every state with a sales tax already requires their residents to pay “sales tax” directly for any items not already taxed. This makes millions of people tax cheaters, sometimes felons.
Sadly, many conservative brag about being felons, in the misguided notion that being for “lower taxes” is the same as being allowed to cheat on their taxes because “government takes too much”.
It is because the nation has so many people who are immoral and won’t pay their taxes without force that states are pushing this. If everybody did what the law required, and filed their “use tax” forms and paid the sales tax they owe, we wouldn’t be talking about this.
It is sad that we need our liberties curtailed by a police state simply because we refuse to obey the law otherwise.
Wrong. The courts ruled that the congress had to act to enable states to collect this tax. That is what congress is now discussing.
” I cant wait to see what treasonous Republicans in congress support this. Mccain??”
The usual suspects..
Why not oppose sales taxes of any kind in all states?
Allowing states to collect more taxes, as this proposal definitely would, just gives them more money to spend on enlarging their domain.
Your response suggests that there is some constraint against taxes that this particular proposal thwarts.
Here in Virginia, they just raised the sales tax, and they added other taxes, to fund transportation. And the law specifically says that if the internet tax doesn’t get enacted in a few years, the sales tax will go up more.
In other words, they will collect the money. The only question is whether they will collect MORE money from the law-abiding to make up for the tax cheats, or if they will collect the money from everybody equally.
I’d prefer that when I buy something, and my neighbor buys the same thing, that he and I pay the same tax. I prefer that he NOT be able to easily cheat on his taxes because he buys from out-of-state, while I who also buy out-of-state pay my taxes, because my signature on my tax form which says “under penalty of perjury, I swear that everything I have said is true” means something to me.
It amazes me that so many people are willing to lie under oath on an official form, simply because they know it is almost impossible to catch them.
When the law is only obeyed because you have no choice, then we are truly a lawless society.