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Firms Will Regret Deal With Devil On Internet Tax
Investor's Business Daily ^ | 24 April 2013 | Editorial

Posted on 04/24/2013 2:43:47 PM PDT by IBD editorial writer

Government: Non-Internet businesses claim a looming, unprecedented collection of state sales taxes on their online competitors is not a new tax. They will regret their pact with the devil tax collector. The new Internet sales tax legislation currently being steamrolled through the Democratic-controlled Senate with White House support is not some kind of untax, a government revenue version of the Uncola. It's not that "certain je ne sais quoi, fresh, clean, no aftertaste!" The National Retail Federation imaginatively claims "this is not a new tax" and claims that non-Internet stores "cannot compete on sales tax," and therefore "Congress needs to address this disparity." Calls to "tax the guy across the street," however, always come back to haunt the first guy. For some time, though, Amazon.com — obviously judging the tax as inevitable — has stood together with the non-Internet, pro-tax businesses; eBay, on the other hand, remains committed to "protect small online businesses, not potentially put them out of business" via new taxes. This is not a new issue, and it's no surprise, considering the perennial greed that is second nature to government. In 1992 the Supreme Court, in its Quill decision, unanimously prevented North Dakota from audaciously collecting sales taxes from a company with no physical presence in the state but whose North Dakota customers used its software to place orders.

(Excerpt) Read more at news.investors.com ...


TOPICS: Business/Economy; Editorial
KEYWORDS: ebay; internet; tax; taxes
Just watch what they can do after this.
1 posted on 04/24/2013 2:43:47 PM PDT by IBD editorial writer
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To: IBD editorial writer

So far, we Americans have been spared the indignity of wearing gas meters in order to pay a fart tax; however, the time is coming, and you can bet the farm on it.

Surprising, really, that our various government Masters don’t just stand by the head of the line on payday and simply confiscate all paychecks.


2 posted on 04/24/2013 2:50:47 PM PDT by Jack Hammer (American)
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To: IBD editorial writer

This will kill small business internet operators who deal with specalty items in high volume and razor thin margins.

Of course the big business donors of Obama will be the most apparently benefited..


3 posted on 04/24/2013 2:56:10 PM PDT by GraceG
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To: IBD editorial writer

Now my advice for those who die
Declare the pennies on your eyes
‘Cause I’m the taxman, yeah, I’m the taxman
And you’re working for no one but me.

(George Harrison)


4 posted on 04/24/2013 2:57:30 PM PDT by newheart (The worst thing the Left ever did was to convince the world it was not a religion.)
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To: Jack Hammer

Surprising, really, that our various government Masters don’t just stand by the head of the line on payday and simply confiscate all paychecks.

What do you call the practice of “Withholding”
on someone’s paystub.....?

They got you beat by it the only thing is they haven’t cranked it up to 100%.... yet.....


5 posted on 04/24/2013 2:57:40 PM PDT by GraceG
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To: IBD editorial writer

Someone explain this to me. I’ve been paying sales tax on internet purchases for years. What am I missing here?


6 posted on 04/24/2013 2:58:57 PM PDT by slumber1 (Don't taze me bro!)
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To: IBD editorial writer

I have to wonder will places like Harriet Carter be affected since they both send out a catalogue and also have a website http://www.harrietcarter.com/

So could someone place their order over the phone and NOT get chaged a tax, but using the computer will get you taxed....?????

I am confused...


7 posted on 04/24/2013 2:59:14 PM PDT by GraceG
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To: GraceG

“...the only thing is they haven’t cranked it up to 100%.... yet.....”

Yeah... not yet...


8 posted on 04/24/2013 3:00:36 PM PDT by Jack Hammer (American)
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To: slumber1

Someone explain this to me. I’ve been paying sales tax on internet purchases for years. What am I missing here?

Are you ordering somethign form the same state you reside in?

The current rules work like a mail order cataloge.


9 posted on 04/24/2013 3:01:46 PM PDT by GraceG
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To: IBD editorial writer

Wait for the municipalities to chime in for their sales taxes over and beyond the state sales taxes.


10 posted on 04/24/2013 3:09:33 PM PDT by Average Al
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To: IBD editorial writer

Not that it matters anymore, but...
-
Constitution of the United States
Article 1 - Section 7.
All bills for raising revenue shall originate in the House of Representatives...


11 posted on 04/24/2013 3:14:33 PM PDT by Repeal The 17th (We have met the enemy and he is us.)
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To: IBD editorial writer

This will hit lower income Ohomo voters hardest of all.


12 posted on 04/24/2013 3:20:09 PM PDT by Some Fat Guy in L.A. (Still bitterly clinging to rational thought despite it's unfashionability)
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To: GraceG

this hasn’t passed yet has it?.....I can’t imagine getting any real deals on the internet if now we’re going to be taxed for it...


13 posted on 04/24/2013 3:20:41 PM PDT by cherry
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To: GraceG

If the argument is that some products simply cannot be sold if the government takes a cut, then let’s fix that for everybody, not just companies selling from other states.


14 posted on 04/24/2013 3:22:43 PM PDT by CharlesWayneCT
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To: slumber1

You are missing that apparently 98% of your fellow citizens, which seems to include 98% of the declared conservatives, are tax cheats, and most are proud of it.

There are people who have no problem signing a form that says “I am reporting all my owed taxes”, and on that form falsely claiming 0 dollars of untaxed purchases.

A lot of them will probably claim ignorance, just like Tim Geithner did. Maybe they are ignorant, although income tax programs are pretty clear, and the state tax forms explain what that entry is in great detail.

Now, to be fair, there are some states that don’t have an income tax, and so people in those states can argue that they aren’t actually committing felony perjury, just willfully avoiding their tax obligations.

Welcome to the 1%, my FRiend — the 1% who actually pay their “use tax” each year, because it is the law, and law-abiding people don’t cheat on their taxes.


15 posted on 04/24/2013 3:26:04 PM PDT by CharlesWayneCT
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To: IBD editorial writer

Curious...does IBD pay sales tax on its sales of newspapers?


16 posted on 04/24/2013 3:27:25 PM PDT by Dutchboy88
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To: Average Al

I believe that under the bill, states will have to provide a single tax rate to be used for these purchases, and it will be the state obligation to pass the tax down to localities.


17 posted on 04/24/2013 3:27:25 PM PDT by CharlesWayneCT
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To: Repeal The 17th

This bill does not raise revenue, in the sense that it is not a new tax, nor is it a federal tax.

It is a bill to require the COLLECTION of a tax.

Of course, the senate routinely flouts the constitution anyway, by taking house bills and “replacing them” by amendment to be revenue bills. It’s a dirty trick, but the courts have not ruled against it.


18 posted on 04/24/2013 3:28:57 PM PDT by CharlesWayneCT
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To: IBD editorial writer

Any time something in the free market works, they cut it down and kill it. End goal is to have all the means of production in the hands of the government.
See communist manifesto.


19 posted on 04/24/2013 3:31:34 PM PDT by I want the USA back (Pi$$ed off yet?)
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Comment #20 Removed by Moderator

To: cherry

I think there will be plenty of deals, just like there are today. There’s no way that say, a local ma and pa computer store can match the deal-power of a TigerDirect or Egghead, but now both will have to pay the same sales tax, is all. In every case I can think of, the “deal” was more than just the difference between sales tax and no sales tax.

Here’s the thing: like it or not someone has to pay to plow the snow, fix the potholes, provide the fire and police protection, etc. I like a deal as much as anyone but I’d rather see the $ going to my local gov’t who are people I know and can call up or go look in the eye than to avoid the sales tax and have to rely on federal tax $ trickling down to the local level to pay for needed services.

The real battle ought to be over keeping more tax dollars at the local level rather than allowing federal and state bload and inefficiency to go on.


21 posted on 04/24/2013 3:32:30 PM PDT by bigbob
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To: IBD editorial writer
Don't all tax laws have to originate in the House. This is just more of the RATs wreaking our Constitution.
22 posted on 04/24/2013 3:39:41 PM PDT by fella ("As it was before Noah, so shall it be again,")
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To: IBD editorial writer

Tax or no tax I’m still going to do most of my shopping online. The time, aggro and gas I save vice traipsing around trying to find what I want at brick-and-mortar stores is still worth it.


23 posted on 04/24/2013 3:49:52 PM PDT by PLMerite (Shut the Beyotch Down! Burn, baby, burn!)
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To: IBD editorial writer

Had the misfortune of hearing Obammy talk about how this would “level the playing field”. It does nothing of the sort- it is just a revenue grab. If it is a leveling, wouldn’t the by e-tailers have a proposal to make non-Internet purchases subject to shipping and handling fees?


24 posted on 04/24/2013 3:53:05 PM PDT by philled (If this creature is not stopped it could make its way to Novosibirsk!)
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To: IBD editorial writer

I have a small hobby business and sell a little on my website. Most good years I’m lucky if I make a $500 profit.
If I have to do all the paperwork and legal mumbo jumbo crappola to pay sales taxes all over the country, it’s over, I’ll shut it down and give it up.

It’s a hobby and I do it for fun. Any profits are reinvested in tools and inventory to keep the hobby alive. A guy tries to do things legal and above board to make a little extra cash, and the government has it’s hand in his back pocket from every little angle. I have a state sales tax license, a LLC annual report fee, a town business license, all kinds of time consuminmg paperwork, not to mention the extra work on my income taxes.....

I suppose I could double my prices and hire a CPA, but that wouldn’t work because then I would have no customers, or I could just do it for cash under the table and be a law breaker.

Do I really live in a free country? Not if I engage in commerce, no matter how small.


25 posted on 04/24/2013 4:13:56 PM PDT by Trteamer ( (Eat Meat, Wear Fur, Own Guns, FReep Leftists, Drive an SUV, Drill A.N.W.R., Drill the Gulf, Vote)
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To: GraceG

“Surprising, really, that our various government Masters don’t just stand by the head of the line on payday and simply confiscate all paychecks.”

To stop crappola like this, conservatives need to get off their butts and go to local village, schoolboard and county meetings. That means stop thinking of barbecuing ribs, playing golf, remodeling the kitchen and pursuing mammon as the No. 1 priorities of life.

That will take a mighty effort by so-called conservatives to rearrange their lives. It will require them to think about their kids and freedom first before themselves.


26 posted on 04/24/2013 4:24:43 PM PDT by sergeantdave (No, I don't have links for everything I post)
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To: IBD editorial writer
On principle, I don't have a problem with taxing internet purchases. If the small business owner up the block has to collect and pay a sales tax when he sells a product, there's no reason why I shouldn't pay the same tax when I'm buying from a retailer halfway across the country.

I don't like paying the taxes in either case, but what's good for the goose is good for the gander.

27 posted on 04/24/2013 4:26:08 PM PDT by Alberta's Child ("I am the master of my fate ... I am the captain of my soul.")
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To: IBD editorial writer

Most “main street” retail and service businesses are now thickly linked to local governments with many having relatives in both. They’ve regulated for decades against nearby neighbors who would otherwise make real products.

You know that the resistance against buying from them is going to intensify. That’s what the slowdown has been all about. Sustainable revenues in a wealthy economy come, in great part, from manufacturing. A wealthy manufacturing economy is kept healthy by new, tiny starts without debt.


28 posted on 04/24/2013 4:35:17 PM PDT by familyop (We Baby Boomers are croaking in an avalanche of rotten politics smelled around the planet.)
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To: bigbob

So if I pay Amazon sales tax, how does my local government get the money? Does Amazon write them a check?


29 posted on 04/24/2013 4:37:20 PM PDT by dfwgator
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To: newheart

Taxman
https://www.youtube.com/watch?v=ZqK97av7I3s


30 posted on 04/24/2013 4:46:56 PM PDT by familyop (We Baby Boomers are croaking in an avalanche of rotten politics smelled around the planet.)
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To: CharlesWayneCT
Article I Section 10...

No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

The other 99% will probably get right on paying those tax "debts" as soon as there is a widely produced, backed, monetary system to do so...

31 posted on 04/24/2013 5:49:04 PM PDT by Axenolith (Government blows, and that which governs least, blows least...)
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To: philled

Those shipping and handling fees are already accounted for in the retail price of an object in a brick and mortar store.


32 posted on 04/24/2013 5:50:39 PM PDT by Axenolith (Government blows, and that which governs least, blows least...)
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To: CharlesWayneCT

Unlike you, I don’t believe the state I happen to reside in owns me. If I choose to buy something from another state it is none of their business. If anything, the state that I buy the product from would be the one who gets to charge me the tax.

I don’t believe for one single moment that you declare everything that you buy from another state on your state tax form.


33 posted on 04/24/2013 5:59:29 PM PDT by beandog (All Aboard the Choo Choo Train to Crazy Town)
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To: IBD editorial writer

Mail-order catalogs never created this “concern”. Corrupt local governments that have promised 2+ generations of taxpayer subsidized pensions have cities and states scrambling for all of the loose cash they can grab.


34 posted on 04/24/2013 6:29:57 PM PDT by a fool in paradise (America 2013 - STUCK ON STUPID)
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To: newheart

George Harrison’s song against the taxman STILL makes liberal cuss.


35 posted on 04/24/2013 6:30:46 PM PDT by a fool in paradise (America 2013 - STUCK ON STUPID)
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To: beandog

One thing to think about, is the global nature if trade, It’s all going elsewhere.

It is astonishing and quite discouraging, all our products are leaving.

Stop buying things from elsewhere.

Buy American. At a store.


36 posted on 04/24/2013 6:33:03 PM PDT by Cringing Negativism Network
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To: Alberta's Child

Brick-and-mortar stores collect sales tax for one state. Internet retailers will be forced to collect for all 50, regardless of whether they have a presence in the state.

This will be onerous for small internet retailers, who will have to create a system to pay off 50+ governments for their share of sales taxes - and are liable for audit from any of those governments.


37 posted on 04/24/2013 6:48:11 PM PDT by MortMan (Disarming the sheep only emboldens the wolves.)
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To: CharlesWayneCT
Welcome to the 1%, my FRiend — the 1% who actually pay their “use tax” each year, because it is the law, and law-abiding people don’t cheat on their taxes.

I live 8 miles from the VA/MD state line and have limited availability of supermarkets and so, at times, do my grocery shopping in MD. Do you seriously think I should claim all of my groceries in order to pay the idiotic sales tax on food products that VA charges? Or should WalMart in MD carge me the VA food sales tax on my purchases?

Delaware has no sales tax, so a little gal who sells craft items or maybe specialty jellies and mustards on the internet at times should be required to deal with close to 10,000 different jurisdictions when it comes to sales taxes?

38 posted on 04/24/2013 7:02:22 PM PDT by Gabz (Democrats for Voldemort.)
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To: Trteamer

“If I have to do all the paperwork and legal mumbo jumbo to pay sales taxes all over the country, it’s over”

Supposedly the bill (as it stands now) exempts small businesses with under $1 million in out-of-state sales the previous year.


39 posted on 04/25/2013 4:37:12 AM PDT by PastorBooks
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To: Gabz
Maryland has a sales tax. I don't remember off-hand if their exemptions for food purchases match Virginia's exemptions for certain food items. Virginia taxes most grocery-store food at 2.5%.

So yes, if you buy something in Maryland and it is exempt from maryland tax, then at the end of the year, when you are doing your Virginia income tax, you need to fill out the "Use Tax" form. On that form, you would report the total purchases for food items. That is, if you spend more than $100. And I'm not sure if it applies to food; reading the general directions, there is some ambiguity.

The actual rules are as follows:

When you purchase goods, other than magazines or newspaper subscriptions, from a business that does not add the Virginia sales and use tax to your bill or you purchase goods tax-free while outside Virginia, you may be liable for the tax and required to file Form CU-7 to report and pay the tax. This tax is 5% of what you paid for the item ("cost price") except for food purchased for home consumption. 'Cost price' does not include separately stated shipping or delivery charges but it does include a 'shipping and handling' charge if listed as a combined item on the sales invoice.

Who Should File This Form: If the total amount of purchases was from out-of-state mail order catalog(s) only, and $100 or less for the entire year, you do not have to pay the use tax. If the purchases were from out-of-state mail order catalog(s) and exceed $100, or the purchases were of any amount from sources other than mail order catalogs, then you must report these purchases and pay consumer's use tax on the total amount of all untaxed purchases from all sources made during the calendar year. Nonprescription drugs and proprietary medicines purchased for the cure, mitigation, treatment, or prevention of disease in human beings are exempt from consumer use tax.

I BELIEVE that the "food" exception was meant to say you'd pay 2.5%, not that it didn't apply. Note that the $100 exemption applies to "catalog sales", but not things like walk-in sales in stores outside of the state.

Further, it says "untaxed" purchases. But I think the actual LAW covers "undertaxed" purchases as well, meaning if you DID pay tax in another state, but it was less than the Virginia tax, you should pay.

If you don't like this, and most people don't, you should contact your state representative, and your state senator, and also the Governor, and tell them all to change the law.

Here is the link to the Use Tax form you are supposed to fill out. HOWEVER, you can also simply file this with your income tax, there is a line on the state income tax form.

CU-7 Use Tax Form and Instructions

From the instructions, a few snippets:

Line 1b: From Work Sheet Line I, enter the total COST PRICE for food purchased for home consumption for which you did not pay a sales tax
The income tax form instructions can be found here: Form 760 Instructions:
The tax is 5% of the total price except for food purchased for home consumption. The tax rate on food purchased for home consumption is 2.5%.

Enter the amount of Consumer Use Tax you owe on Line 21 of Virginia Schedule ADJ, or file Form CU-7.

On the income tax form you sign, it says this above your signature:
I (We), the undersigned, declare under penalty of law that I (we) have examined this return and to the best of my (our) knowledge, it is a true, correct and complete return.
So, when you do your income tax, if you put "0" on Line 21 of the ADJ form, even though you know you purchased untaxed groceries in Maryland, and you SIGN your tax form, you have just confessed to tax fraud, and are subject to the penalty of law.

That is the law. As I said, if you don't like it, don't blame me -- I didn't write the law, and once a year I write my representatives and explain why it is unfair that I pay this tax and nobody else does, and suggest that if they aren't going to enforce it, they need to repeal it. You should write and ask them to repeal it.

But given that they are counting on money from untaxed sales to fix the roads, it is unlikely they will waive this. In fact, if we don't get a federal right to collect use tax from other companies, our taxes will actually go up MORE to make up for the difference.

As to your question about Delaware -- every bill I've seen discussed has exemptions for small numbers of sales. So it is unlikely a small company doing small amounts of internet sales will be affected. But we need to see the actual language in the bill being debated -- I do not support just ANY fix, I have criteria that I think will mitigate the onerous costs, such that the total compliance costs will be LESS than the current compliance costs (which are in the hundreds of millions, but borne by all the individuals who have to do their own use tax filings every year).

40 posted on 04/25/2013 10:10:13 AM PDT by CharlesWayneCT
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To: a fool in paradise

Every state with a sales tax has a tax which applies to catalog sales. In Virginia for example, the law specifically states that if you buy ONLY from catalogs, and less than $100, you don’t have to pay sales tax. But if you buy more than $100 from catalogs, or make ANY non-catalog untaxed purchase, you have to pay taxes on everything you bought that wasn’t already taxed.

I collect all my bills each year, and fill the worklist out so I can accurately report my tax on my income tax form. I sign that form, and my signature is still my word, and I value my word more than I value the $100 bucks or so I’d save by cheating on my taxes.


41 posted on 04/25/2013 10:12:43 AM PDT by CharlesWayneCT
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To: CharlesWayneCT

Your initial interpretation of the food for home consumption tax is entirely different than mine, as it makes no mention of the VA food tax. Personally, I do not believe there should be a sales tax on food products purchased period - and have let my representatives know this.

Additionally other purchases in Maryland are taxed at a higher rate than VA, therefore, according to the instructions, do not fall into the category. If I happen to be in Delaware and make any purchases that is a different story, but I have such issues with Delaware’s hidden sales taxes that I do my best to avoid making any purchases there anyway. I most especially do not purchase grocery items while there as the hidden taxes make everything much higher than here at home, even after adding VA’s stupid food tax into the equation.

All in all, the entire concept is wrong. In no way shape or form does it level any playing fields for anyone. In fact it places unfunded bureaucratic burdens on some while exempting others. The feds have no business in this debate, it is a state issue and each state should deal with it on their own.


42 posted on 04/25/2013 11:30:10 AM PDT by Gabz (Democrats for Voldemort.)
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To: Axenolith
Those shipping and handling fees are already accounted for in the retail price of an object in a brick and mortar store.

Oh, so the brick and mortar store wouldn't charge me any more to drop it off on my front porch?

43 posted on 04/25/2013 11:42:49 AM PDT by tnlibertarian
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To: slumber1

you need to surf the net until u find a company that does not charge taxes and yet prices are the same

sometimes u can’t help it but generally u can find no taxes


44 posted on 04/25/2013 11:45:10 AM PDT by ncpatriot
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To: GraceG

So could someone place their order over the phone and NOT get chaged a tax, but using the computer will get you taxed....?????

I am confused...”””

I am also confused.

I do very little in ordering things- so I do it over the phone. I do such business with a couple of companies & have done so for at least 28 years. I use their catalogs and make my list of supplies I need for the ranch & I talk to a live person on the phone. I am an ‘out of state’ customer for both of these companies.

I would not order the same items on the internet.

I don’t pay sales taxes now. Will this change, even tho I am NOT using the internet to make my purchases??


45 posted on 04/25/2013 11:49:18 AM PDT by ridesthemiles
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To: ncpatriot

No company charges you taxes. Your state government charges you taxes, and does so on every purchase. Some companies collect the taxes for the state, others do not.

If the company doesn’t collect the taxes, then you have to keep track of it, and pay it yourself. It is more work for you — it is a benefit to you if the company does it for you.

That is, of course, unless you plan to cheat on your taxes, to commit tax fraud, and sometimes perjury. If you are looking to break the law, you probably don’t want anybody to “help you” obey the law. You’d rather they help you hide from the law.


46 posted on 04/25/2013 5:05:03 PM PDT by CharlesWayneCT
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To: tnlibertarian

What does that have to do with the price of tea in China?

The shipping and handling for the production/distribution chain of B&M store merchandise is included in the cost structure of their goods already. Whether or not you can find one that delivers locally and has/doesn’t have a delivery fee is irrelevant to the overall issue of interstate tax collection.

BTW, this is the camels ass under the tent of a National Sales Tax, since apparently the feds would collect this and then “distribute” it. I can see how that ends just as surely as I can forsee the end result of a certain coyote’s purchase of ACME supplies in furtherance of roadrunner hunting...


47 posted on 04/26/2013 6:37:44 PM PDT by Axenolith (Government blows, and that which governs least, blows least...)
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