What they are proposing should require a Constitutional amendment. It violates clauses in Sec 9 & 10 of Art I.
But you’re OK with them just passing a law to do it, huh?
You said — But you’re OK with them just passing a law to do it, huh?
—
Ummm..., I think you forgot what happened. The “law” was already passed, a very long time ago, to put a “moratorium” on the individual states putting sales tax on items sold in their state — i.e., “stop” the states from collecting their sales taxes in their states. Some might even consider that a violation of the states 10th Amendment rights, and the Feds “interfering” into state sales tax business (but the Feds did do it, anyway).
So, that was the law that was passed. No one complained about the moratorium to give time for “online stores” to build up their business before the states started collecting their sales taxes.
However, there’s no “law” that says the Feds *have to* continue the moratorium. All they have to do is let it lapse and that’s the end of the moratorium on state sales taxes. Then all the states *jump right into it* and start collecting their individual sales taxes, just like they intended to do, originally, about a decade and a half ago.
All it requires for this to happen is to *not continue* the federal legislation... :-)
I see people here on this thread are pretty ignorant about what is going on with this “sales tax” for online purchases... LOL..
Perhaps this will help clear away some of the “fog” of what is going on...
Bush extends moratorium as states move to streamline sales tax systems
Publication: Government Finance Review
Date: Friday, February 1 2002
Bush Extends Moratorium as States Move to Streamline Sales Tax Systems. In November, President Bush signed legislation extending the moratorium on Internet-related taxes for two more years. A recent study by the University of Tennessee estimates that uncollected sales taxes will cost state and local governments $13 billion this year and $55 billion by 2011. One of the major stumbling blocks to the implementation of any sales tax on electronic commerce is the disparity between state tax codes. To address this, 19 states and the District of Columbia recently began an initiative to streamline their sales tax systems by establishing uniform definitions, standardizing rules, and simplifying the registration process.
(Sources: Associated Press, November 28, 2001; National Governor’s Association, November 29, 2001)
Y’all haven’t been paying attention. All that has been happening over the years, is a *continuation* in a few-year extension, of a “moratorium” on state sales taxes.
NOW..., many could consider this *interference* by the Federal Government, into *state affairs* of how they should be able to collect their sales taxes for items which are sold to citizens in their states. It effectively *stopped* the states from collecting those sales taxes.
But, all good things don’t last forever, and neither do “moratoriums” last forever. All that is needed for a “moratorium” to *not last* — is simply *not to extend it*... nothing more than that...
Okay, another article (I think around the year 2000) which also speaks about making the “moratorium” permanent — but that was never done, so all it has to do is “expire” and nothing else...
House Limits Internet Tax Moratorium to Two Years; Senate Allows it to Expire
With the Senate failing to act on extending the Internet tax moratorium and lawmakers not returning to session before its October 21 expiration, the moratorium on new and discriminatory Internet taxes and the ban on Internet access taxes will lapse, opening the door to “economic mischief” by local and state taxing authorities and implanting further uncertainty in the already crippled technology market.
Senate failure to pass an extension to the moratorium is the direct result of obstruction by some members, led by Senator Byron Dorgan (D-North Dakota), who refused to deal with the issue without provisions allowing states to shift their tax collection duties onto out-of state businesses. The House of Representatives overwhelmingly approved a clean extension of the moratorium, H.R. 1552, on October 16, but for only two years.
The limited two-year extension passed in the House is a watered down version of H.R. 1552, sponsored by Representative Christopher Cox (R-California), which initially called for a five-year extension of the ban on multiple and discriminatory taxes that do not apply to offline purchases, and sought to make permanent the moratorium on Internet access taxes — provisions in line with recommendations by the Advisory Commission on Electronic Commerce authorized by the Internet Tax Freedom Act (ITFA) of 1998. An amendment by Representative Spencer Bachus (R-Alabama) in the House Judiciary Committee to limit the extension to two years set the stage for the House vote.
[ ... ]
All this time, I fully well expected the moratorium to “expire” with a lot of states opposing the extension of it. However, the moratorium kept being extended — but — *never* permanently. So, once again, this is a *moratorium* and it can expire and not be renewed. In addition, it can be considered *interference* by the Federal Government into state affairs and a violation of 10th Amendment issues that the states are currently fighting for right now...
In case anyone doesn’t realize it, what everyone is facing, soon, is an “all out assault” on the Internet — by the various states — in order to get their “sales tax revenues”...
This is *not* a Federal issue, but a “states rights” issue in that the individual states have a right (they say) to collect the sales taxes for items sold to residents in their states — or else — it’s simply a “get-out-of-jail-free card” by online retailers to avoid, totally, the states’ sales taxes.
What the Federal “moratorium” did was to avoid that *all out assault* by the individual states — upon the Internet and Internet retailers. It’s not the “Feds” who are trying to “tax” here — they are trying to “squash” it, for now. It’s the *states* who are trying to tax here, via their “sales taxes”.
Furthermore, the states *also* intend to *tax your internet service* to make up for the lost revenues on their sales taxes ... hoo-boy! Now, *that* is something else that was prevented by this Federal “moratorium” on the Internet and Internet retailers...
This is also one of those 10th Amendment Issues, where the states maintain their rights (and not the Feds) to tax the citizens in their own respective states.
People should *get their facts straight* before accusing someone or some agency ignorantly... LOL...
Commentary: Assault begins on federal Web sales tax moratorium
By Gartner Viewpoint
By French Caldwell, Gartner Analyst
Although California’s governor may still veto the Internet tax bill coming to his desk, the bill may be the opening salvo on the federal moratorium on new Internet taxes.
In California, sales of goods over the Internet are treated as sales of tangible goods and are subject to the rules of “nexus” and California’s sales and use tax.
In the case of retail sales, when a California resident buys goods over the Internet from a retailer that maintains a physical retail presence in the state, sales taxes are collected.
However, to compete with e-tailers such as Amazon.com, many brick-and-mortar retailers have established separately incorporated e-tail operations. In this case, the new e-tailers are building off the brand name of the parent and may share other corporate functions such as marketing, advertising and buying. Besides allowing brick-and-mortar companies to get around their own internal cultural and corporate barriers, the independently incorporated e-tail outlets have the added advantage of being “tax free.”
Bill AB2412 is an interesting attempt to rein in those e-tail outlets of brick-and-mortar companies. The proposed law extends the concept of nexus, which up to now has been dependent on physical presence within a territory, to include branding and other intangible relationships that may tie an e-tailer to a brick-and-mortar parent.
Although California’s governor may veto AB2412, this bill is definitely the beginning of an assault on the federal moratorium on new Internet taxes. The U.S. House of Representatives has extended the federal moratorium beyond its current sunset of October 2001, but passage in the U.S. Senate is less sure.
Whether California’s bill becomes law, other states will likely attempt similar legislation. The growth of online sales and the potential erosion of the sales tax base, which is being masked by a good economy, is too much of a threat and an opportunity for the states to ignore. Regardless of the extension of the federal moratorium, this issue will be ultimately decided in the courts. Alternatively, but less likely, under its power to regulate interstate commerce, the U.S. Congress could settle the issue through national sales and use tax simplification.