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What Congress *should* do is legislate that states may only charge sales taxes in the place where the transaction originates, which, in the case of Internet or catalog transactions, is where the store is located. So if a company is based in California, and California charges a 5% sales tax, everyone who orders from such company will be charged the 5% sales tax, irrespective of where they live. (And in the case of a brick-and-mortar store, everyone would get charged the sales tax, even if they asked for the product to be shipped to another state.) If this causes companies who sell a lot through the Internet or catalogs to relocate to states with no sales tax, then good for them. And if it results in states lowering their sales tax to be more competitive, then even better.

And before anyone objects to Congress legislating over state tax collections, what I’m proposing would be as basic a regulation of interstate commerce as you will ever find (it would be prohibiting states from laying taxes on companies located outside the state), and Article I, section 8, clause 3 of the Constitution ennumerates the regulation of commerce among the states among the express powers of Congress.

RE :”What Congress *should* do is legislate that states may only charge sales taxes in the place where the transaction originates, which, in the case of Internet or catalog transactions, is where the store is located. So if a company is based in California, and California charges a 5% sales tax, everyone who orders from such company will be charged the 5% sales tax, irrespective of where they live”

I think that is the way it is now, they can do that now. But states dont want to do that because it hurts companies in their states vs others.

This bill allows them ‘in effect’ to raise taxes in other states, the businesses in other states. That is what they want.

Very good solution. Representatives from the high sales tax states will hate it, but it provides the necessary clarity. If Congress lets the exiting situation go on they are derelict in their duty - as you point out, it is their job to figure out an equitable way to tax Internet sales.

States already have the power to do “origin” based sales tax. Federal legislation is not required for this idea.

State legislators don’t want to do this because of their local business lobbies, because they don’t want to be seen as responsible for enacting additional taxes and because high sales tax states like CA, NY and IL would be disadvantaged when shoppers flock and businesses relocate to states with lower sales tax rates.

This legislation is their cluster**** solution to their political problems. The states pass the buck to the Feds and the Feds claim its not a new tax, just a new enforcement method, plus these are state taxes so blame your state for the high sales tax rates.

I live in a non sales tax state by choice, but this law will force me at my own expense to become a tax collector for 45 states that I do not live in and cannot vote in while making me legally liable for any errors I might make and subject to their tax law, audits, fines and punishment.

It’s not enough that I am a tax slave to the Fedgov and the state I live in. I now get to be everybody’s tax b*tch.