Tax-free Internet shopping may be at an end

CNET News ^ | April 15, 2009 | Declan McCullagh

[Comparative Advantage]

If a little-known but influential alliance of state politicians, large retailers, and tax collectors have their way, the days of tax-free Internet shopping may be nearly over.

A bill expected to be introduced in the U.S. Congress as early as Monday would rewrite the ground rules for mail order and Internet sales by eliminating what its supporters view as a "loophole" that, in many cases, allows Americans to shop over the Internet without paying sales taxes.

Currently, Americans who shop over the Internet from out-of-state vendors aren't always required to pay sales taxes at the time of purchase. Californians buying books from Amazon.com or cameras from Manhattan's B&H Photo, for example, won't pay sales taxes at checkout time that they would if shopping at a local mall.

"We will have the bill ready for introduction by next Monday," said Neal Osten of the National Conference of State Legislatures. "We finalized the language and now we're working out the remaining issues and adding some new provisions at the request of various stakeholders."

This is hardly a new debate: pro-tax officials and state governments have been pressing Congress to enact such a law for at least seven years. They argue that reduced sales tax revenue threatens budgets for schools and police, and say that, as a matter of fairness, online retailers should be forced to collect the same taxes that brick-and-mortar retailers do.

[jmcenanly]

There are statesmen around, it is just that they are all writing books and blogs, or hosting radio talk shows.

[DuncanWaring]

How could Campaign Finance Reform possibly pass Constitutional muster?

How could 20,000 laws infringing on the right of the people to keep and bear arms possibly pass Constitutional muster?

[FreedomPoster]

Amazon doesn’t have nexus in California?

I’d be really surprised at that.

[webschooner]

Does anyone know if when this law passes, will companies be able to get around it by locating outside the country, in Canada, Mexico, or anywhere offshore?

[rabscuttle385]

Next the 0bamatrons will be pawing through EBAY and making sure all sales taxes are collected

I wonder how long before they have inspections of yard sales.

[Camel Joe]

Once the inflation sets in McDonalds workers will be earning $250K a year!

[Atlas Sneezed]

Meanwhile, outfits like Amazon brought this on themselves by blatantly flaunting the law: they have regional warehouses throughout the country from which they ship, but pretend they don’t need to collect taxes for sales in the states where they’re located.

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But those aren’t retail service facilities, and the retail service is what is taxed with a sales tax.

[savedbygrace]

You make a good point.

[DuncanWaring]

Many more good points made here:

http://home.hiwaay.net/~craigg/g4c/vin/vin-billofrights.htm

[CottonBall]

This will be ridiculous to implement. A huge burden on the internet companies. To keep track of each and every county’s tax rate? Even within this state, most places get the tax rate wrong in different counties, much less all over the nation.

[CottonBall]

Amazon doesn’t have nexus in California?

What is 'nexus'? Amazon doesn't have any retail stores anywhre - that's the current legal status to charge sales tax.

[CottonBall]

If they are going to make us live as if we are in a depression, we might as well quit buying anything and force everything to crash. Only then... will we have a chance to rebuild.

True. Socialism will continue to creep into everything we have and the Constitution will continue to be ignored - unless something drastic happens economically.

[CottonBall]

Article I. Section 9. Clause 5. No Tax or Duty shall be laid on Articles exported from any State.

Looks like we're covered. Unless an activist judge gets ahold of it.

[savedbygrace]

Another good column by Vin. Thx.

[CottonBall]

Meanwhile, outfits like Amazon brought this on themselves by blatantly flaunting the law: they have regional warehouses throughout the country from which they ship, but pretend they don't need to collect taxes for sales in the states where they're located.

A warehouse doesn't count, it's a retail store that does. Amazon et. al., hasn't flaunted anything.

[DuncanWaring]

You’re welcome.

[logician2u]

No State shall, without the Consent of the Congress, lay any Imposts or Duties . .

Well, I guess that pretty much blows that argument.

The current Congress is likely to consent to anything that will bring more revenue to the government.

(Thanks for looking it up.)

[FreedomPoster]

Yes, but if they have any significant presence there, they have nexus for state tax purposes, meaning they would have to charge state sales tax.

I’d just be surprised that Amazon would have no operations at all in CA, but I guess it might be so.

[elkfersupper]

By the way, if you move to Oregon, you won’t have to worry about the problem. They don’t have sales tax there and — therefore — you don’t have to pay it “online” either... (that’s the way it works...).

There are about 3 people in Oregon who think the way I do.

No, thanks.

[Star Traveler]

So much for your sales tax problem, then... :-)