Just a few points.
I don’t think it is unreasonable for a state to allow out-of-state stores to keep a percentage of collection as the cost of doing business. But that would be written into the federal law. If the state didn’t like it, the state should be able to NOT PARTICIPATE in the federal law. The state can continue to try to collect use tax directly.
I happen to think states would pay, because it would be like hiring a collection agency, they’d at least get some money where now they get no money.
I don’t think if this type of law as “forcing” a store in one state to abide by the laws of another state — although this actually happens now, as a store in one state that wants to sell certain products into another state have to abide by the laws of that state for sales. But I don’t think that is what we are talking about here.
There would be a federal law, not state law. The federal law would proscribe what any store in any state was required to do when shipping a product across state lines. I have no doubt the feds can write this law badly. But if they wrote the law correctly, there would be a single location where any store could get the correct sales tax info, much like federal instant background check for gun sales.
Each state which wants to participate would have to set up online methods for supporting the tax, which would feed through the single service. So when processing an online sale, the store would take the shipping address, send it through this service, and would get back the tax rate and state collection address, which should include electronic means of collection.
As to the more general question of whether they should be subject to laws, if the didn’t want to be subject to the sales tax of texas, why couldnt’ they simply refuse to ship items to texas? They still have the control — just like they could choose not to set up a shop in a state, they could refuse to ship to a state.
Or, they can choose to ship to the state, and collect the tax due in the state.
There is an alternative, which lessens the burden on the stores, but which I imagine people wouldn’t like as much.
Instead of requiring companies to collect sales tax, require them to provide the purchase information to the state government where the product was shipped to. This would be like the tax forms companies currently have to submit.
Then, it would fall on the state to decide what to do with the information. The state could use it to cross-check their residents tax submittals, to make sure they are properly reporting their purchases, as required by state law.
But that is a horrible intrusion into your privacy, having your state know of each purchase (btw, there was some federal law that required all purchases of something over $600 to be reported, I don’t remember if it was Obamacare or something else). I guess you could just have the value reported, but then how would the state know if the item was taxable or not?
Anyway, I am not an advocate for the bill. But I have no problem with the idea of the bill should it pass, and I can and do argue that it is a good thing.
I do agree with the various problems that people point out. It isn’t often that you can find a way to get government involved where there aren’t significant downsides.
In the end, it could be that sales tax is just not a good way to collect money for government. However, from a conservative perspective, it’s one of the few taxes that is not skewed toward rich people (in principle — in fact, state governments often find ways to minimize tax on things poor people by more of, and vice versa).
It is hard for the state to raise sales taxes, because EVERY VOTER feels the pain.