The Internet Sales Tax Rush

WSJ ^ | April 21, 2013

[george76]

Harry Reid and Wal-Mart hope nobody will notice their online revenue raid.

Every time Congress has taken a serious look at proposals to boost Internet sales taxes, it has rejected them. That's probably why pro-tax Senators are trying to rush through an online tax hike with as little consideration as possible.

As early as Monday, the Senate will vote on a bill that was introduced only last Tuesday. The text of this legislation, which would fundamentally change interstate commerce, only became available on the Library of Congress website over the weekend. And you thought ObamaCare was jammed through Nancy Pelosi's Democratic House in a hurry.

For Senators curious about what they're voting on, it is the same flawed proposal that Mike Enzi (R., Wyo.) introduced in February. It has been repackaged to qualify for a Senate rule that allows Majority Leader Harry Reid to bypass committee debate and bring it straight to the floor.

[Uncle Miltie]

Because nothing fixes an economy like higher taxes.

[Dogbert41]

And open borders.

[taxcontrol]

IF
And that is a big IF

... we are going to implement an Internet tax, it should be based upon the shipping and receiving address. Require each state to publish their “Internet tax rate”. Then based upon the two addresses, average the internet tax. Say the shipping address has a 4% tax and the receiving address has a 6% tax. The average would be 5%. Charge that 5% to the customer, then split the amount into an equal amount that then gets remitted to each state.

The net effect will be to push shippers (and their jobs) to lower taxed states. Likewise, individuals in high tax states will want to move out of those states.

[Opinionated Blowhard]

Hey. The beast needs to be fed and its current sources of revenue aren’t enough to pay for its ever-increasing appetite. If only Internet users paid their “fair share”, all our deficit problems would be solved . . . .

[Blood of Tyrants]

Because we ca TAX our way into prosperity!

[Buckeye McFrog]

State Legislatures are the farm system for Congress. Hence Congress is not going to thwart their desires for new revenue. That would be like the Yankees getting undercut by their Triple-A team.

[Blood of Tyrants]

Are you kidding? More likely the result would have the consumer being taxed the full rate at BOTH ends.

[apillar]

Any Internet seller with more than $1 million in annual sales would be forced to serve all of the nation's tax collectors.

What will most likely be the end result is if "Joe Internet Golf and Tennis Store" has $1.5 Million in sales. Joe will split it into two separate companies "Joe's Internet Golf Store" and "Joe's Internet Tennis Store" each with less than $1 Million in sales to avoid the cost and legal liability associated with the new law.

[lewislynn]

Boy are you naive. The new internet tax would be a tax on the shipping state sale, a tax on the purchase state sale PLUS the federal tax.

The US Senate is not interested in splitting the taxes with the states and leaving themselves out.

The net effect will be to push shippers (and their jobs) to lower taxed states...

LOL!
The net effect will be to (further) push shippers (and their jobs) OUT of the country.

[CaptainAmiigaf]

There are states that DO NOT impose sales taxes on a variety of goods. My own state, Taxachusetts doesn’t tax food and clothing (believe it or not).
Can you imagine the cost and scope of the tax laws each internet seller will have to calculate when the “selling state” imposes a sales tax, but the “receiving state” does not.
I see a disaster in the increase in the costs of doing business on the net. There are small sellers who will be driven out of business by the inflated costs.

[sickoflibs]

Rush a vote?

Notice you don’t see any Senators talking about this one.

Who are the GOP Senators willing to screw us on this?

And who is lobbying for this besides high sales tax governors?

[NoLibZone]

Taxes,taxes,teaxes.

That’s all the Dhiminicrats know.

[dfwgator]

Republicans like their taxes, too.

[rudabaga]

Walmart, Amazon, any big store that wants small competitors shut out of their market.

[beelzepug]

Virtually every city in Washington has its own tax rate due to the fact that cities and counties are allowed to add local sales taxes. These may include public transit, enhanced 911, hotel/motel tax, just to name a few. I imagine other states do likewise. What a job trying to keep up with those.

[Amendment10]

First, as I have previously ranted in related threads, bear in mind that all taxes that corrupt Congress threatens us with wrongly ignore that Justice John Marshall had officially clarified the following limits on Congress's power to lay taxes. Justice Marshall had noted that Congress is prohibited from laying taxes in the name of state power isuses, essentially any issue which Congress cannot justify under its constitutional Section 8, Article I-limited powers.

"Congress is not empowered to tax for those purposes which are within the exclusive province of the States." --Justice John Marshall, Gibbons v. Ogden, 1824.

Next I will point out that many things that we order from Amazon, for example, are imported goods. And since I find the Constitution's language about federal taxes to be a bit confusing, I will reference an excerpt from Thomas Jefferson's writings as to how the federal government layed taxes to fund its operations after the Constitution was ratified.

"The rich alone use imported articles, and on these alone the whole taxes of the General Government are levied (emphasis added). … Our revenues liberated by the discharge of the public debt, and its surplus applied to canals, roads, schools, etc., the farmer will see his government supported, his children educated, and the face of his country made a paradise by the contributions of the rich alone, without his being called on to spend a cent from his earnings." --Thomas Jefferson to Thaddeus Kosciusko, 1811.

But now that greedy-as-Congress unions have forced American manufactures to use foreign labor in order to be competitive, I question if us poor folks are now paying import taxes on many of the goods that we buy without knowing it.

Also, since the Founding States had individually retained their sovereignty as evideced by 10A, I'm thinking that Clause 5 of Section 9 of Article I still prohibits Congress from laying taxes on goods exported from one state to another, especially since the exported good is these days probably a foreign-imported good subject to federal tariffs as in the early days of the country.

So with all the above in mind, can Congress's threat to lay an Internet tax not only be regarded as double-taxation on foreign-imported goods, but also a Clause 5 of Section 9-prohibited tax on those same goods when later exported from one state to another, the way that I'm reading Clause 9 anyway? (And don't forget Justice Marshall's clarification of Congress's limited power to lay taxes.)

[sickoflibs]

RE :”Walmart, Amazon, any big store that wants small competitors shut out of their market.”

I still dont pay sales tax on my amazon but they did have some trouble in CA with that.

Reminds me of under GWB years when some grandma got hit up with a demand of ~ $50K by a record company because her granddaugher downoaded a few songs.

I dont see that happening anymore, but online radio stations must pay to play the sonds now but every windows 7 has a built in audeo recorder to record the stream as it is playing.

Now they seem to target those who share files.

[sickoflibs]

RE :”Walmart, Amazon, any big store that wants small competitors shut out of their market”

Ironic that in the GWB years when Walmark was underpricing other stores and many folded and some states/cities went after them how National Review and others defended them as market success, now they (walmarts) want to use the government to crash internet companies as others tried to do to them.

[Noob1999]

You forgot the 2% or so vig that the Federal government will skim off the top!