Article is also making a false statement regarding the Supreme Court 1992 decision that sales tax not be collected by merchants in the states where they have no physical presence - it's not because "the patchwork of state tax laws made it too difficult for online retailers to collect and remit sales taxes" - it's because how the interstate commerce is usually conducted, by catalog or between businesses.
Here is the November 14, 2011 WSJ article Should States Require Online Retailers To Collect Sales Tax? that has a pro (by Michael Mazerov of Center on Budget and Policy Priorities) and con (by Steve DelBianco of NetChoice) arguments for "Internet tax."
You can skip the pro-tax part because it's basically the usual "fairness" and "lost revenues" and "government needs the money" pablum (though the latter is the real reason why it's being stealthily moved in Congress).
Here are some salient points from the counter arguments:
• Frustration of state tax collectors and "we really need the money" argument is not a justification or a good reason to overturn Supreme Court's 1992 decision based on the Commerce Clause of the Constitution — to prevent unreasonable burdens on interstate commerce.
• Commerce Department data show that sales tax due on all consumer e-commerce is only 0.5% of total state and local tax revenue, and much of that is already being collected.
• Ironically, an Internet tax bill introduced by Sen. Durbin is called the Main Street Fairness Act, implying that new online taxes would be good for Main Street businesses. In reality, the smaller Main Street retailers will be the ones hurt the most because one of the ways they can compete with big-box stores is by setting an Internet shop, to expand their markets.
• Smaller resellers have to pass through shipping charges which big-box stores can avoid by scheduling in-store pickup and/or return of items ordered online.
• Congressional efforts to overturn the Supreme Court ruling recognized the burdens on small firms by exempting those with less than $5 million in annual sales. Recent tax bills reduced the exemption to $100,000 or $500,000 in sales. (Where did the "fairness" / "equal protection" argument go?)
• The real supporters of this tax legislation are the big retailers who already have extensive brick-and-mortar and online sales presence in most states - it helps them saddle smaller online competitors with significant financial and regulatory burdens.
Also, one of the biggest reasons both big-box and small "Main Street" shops don't make the sale is that they simply don't deal with the manufacturers or don't carry the items or don't have the items in inventory which the buyer needs or wants, but which are readily available and can be easily found online. That goes double for "specialty" items or companies that can't get into distribution, or have no interest in or can't possibly succeed by setting up expensive distribution channels (because of additional costs) and the Internet sales are the only way for them to succeed. No tax law will help the brick-and-mortar reseller compete with this issue, and this is becoming more and more prevalent pattern of shopping. Just because your local stores don't stock or manufacture the items you need, why should you pay additional tax if the item is found and bought in another state, via mailed catalog or online?
States already have collection through the "use tax" - they should not burden resellers in other states to be tax collectors for them... An eventually, if this legislation goes through and is unchallenged in courts, this sets up a perfect detour into (additional) national sales tax - to "simplify" states' sales tax collection and then redistribute the sales tax "fairly" between the states.
This is simply a "camel's nose" legislation and the Republicans should be fighting it tooth and nail, not helping it move along.
I believe this a misprint “ Rep. Steve Womack, R-Ark.,”
Should read “Rep. Steve Womack, R-Walmart”
I’d like to know how may of Steve’s citizen constituents have call his office and asked for a an internet sales tax. Let me offer a guess - 0
It will be a nightmare for small online businesses to meet the tax requirements of all the various tax districts within the nation.
Womack needs needs a serious challenger in 2014.
For so many of us, the blood has already been squeezed from the turnip. All the taxes and fees will only make things much worse.
We pay too many stinking taxes as it is. WTH are these so called Republicans doing with this nonsense?
These elected morons will always try to get more out of us that earn a living so they can fork it over to the lazy SOBs takers. Every politician that proposes yet another tax should be smacked upside the head until the show some common sense or get a real job.
I do wish ill upon any scumbag trying to take more of our EARNED money.
Fine. Bring it on. Been living that lifestyle for decades and happy to continue.
yes this will help the economy. /s
“You can skip the pro-tax part”
Only if you like state income taxes LOL!
Sales taxes are the fairest taxes.
And enforcement of ‘use taxes’ would be extraordinarily intrusive: Orwellian!
So internet sales must, at some point, be taxed by the states the purchase is made in.
I expect the courts to find that the physical infa-structure of the internet is the “brick and mortar presence” of the store.
I read elsewhere about this strong bi-partisan support amounts to 53 co-sponsors.
Well that is less than 10% of congress. I think the media is carrying water for the democrats, again because I don’t think they have the votes to pass it.