Didn’t mean to ignore your reply. What you are saying in consumer goods does apply but many major markets that have expanded reach by the internet do supply items through wholesale and manufacturing outlets that do require tax be applied by the wholesaler — my industry, construction, is a good example. To avoid tax being applied to the entire cost of a finished structure, most or the time sales tax has to be paid by all suppliers for every material purchase.
When this was an extension of what was done for the mail-order business, which made up 3/4 of one percent of the retail market sales, it was a good thing to get a new market segment underway, but now internet sales make up 5.2% of all retail sales and when you balance that against cars, gas, groceries and other items that don’t have a significant market on the interstate internet, you have a much bigger percentage in the true examination.
My big concern is to eliminate excuses for new taxe types and new tax rates, this modest change for something that never had an official exemption and keeps the tax at the State level meets that concern for me.
The problem is not with capturing the uncollected sales/use tax, it’s the method.
What they are proposing shreds the concept of jurisdiction based on physical presence. The MFA allows all the states to reach across state lines and force business that have no connection to that state to act as tax collector as well as be subject to audits and legal liability for any errors.
That’s the problem. All of this can be avoided by simply using origin based sales tax which does not need Federal enabling legislation, nor does it subject business owners to the legal jurisdiction of states in which they have no presence. At our expense I might add.
The states don’t want to do the simple, legal and constitutional thing because they don’t want the competitive pressure this will put on their tax rates because origin based sales tax allows shoppers to discriminate between high tax, low tax and no tax states.
I am further rubbed raw by the MFA because I live in a non tax state and this represents a substantial burden on my business because I don’t need to collect sales tax in my place of business but now must comply with the laws of 45 states that I don’t live in.
Origin based sales tax is not an additional burden because no one would be subject to any states jurisdiction except those they have a physical presence in. Which is exactly how it is now.
This is a bad law enacting a complicated scheme that tramples on basic and settled legal principles of jurisdiction that is typical of democrat created legislation.
It will have unintended consequences that we will all regret if we let this camel’s nose in the door.
There are better ways to accomplish the collection of sales and use taxes.