Illinois' Illogical Internet Tax

Facts are stubborn things...

Illinois is all about taxes.

That’s it.

Pat Quinn has raised income taxes, banned the death penalty and is attempting to tax something that he hasn’t the authority to tax.

Is he bucking for Obama’s job?

No, Pat Quinn is a clueless idiot.

In other words, he’s bucking to BE Obama

You make it. We take it.

No fork it over. :)

Indiana is following. My tax preparer asked if I had purchased any products over the Internet. Well, maybe I did or did not. Apparently, I have to tell the State of Indiana so that they can collect sales taxes from my Internet purchases.

Idiot dems have no idea how the economy really works.

To them, business is just a giant chicken to be plucked.

The entire country will become one big Detroit if they have their way.

We work, this doesn't give us the right to think we profit personally because of it.

We need to learn to live this simple fact.

That was what I meant....in my haste I didn’t word it properly.

It isn't about revenue.

It isn't about 'fairness.'

It's about control.

Man, do I wish for a governor like the one north of the Cheddar Curtain.

Well surprise surprise surprise. State tax junkies lose another battle. God help the poor people of Illinois. They lose every day!

No one keeps receipts of Internet purchases and people are not going to list them as expenses on their tax forms! Its human nature... no one is going to pay more in taxes than they have to!

So Democrats will actually lower government revenue! Amazon is exiting IL.

Ka-ching!

Reason number 87 why I’m glad my association with Illinois has been brief.

Them are idiots.

When my work days are over, I will vote with my feet. This state can go to hell.

Some truth, some facts, some obvious misunderstanding.

Fiscal Policy: Illinois becomes the latest state to enact a law imposing a sales tax on Internet retailers.

The tax is NOT on internet retailers. It is a tax on citizens of the state who purchase things; the tax already exists in law, this is an attempt to improve tax compliance by requiring the internet companies to collect the tax at the point of purchase, just like stores do.

Advertised as saving "main street" jobs, it's yet another creative way to drive them off.

If the internet company truly has no business in the state, how can requiring them to collect sales tax from the customers drive jobs out? It's not like the company can pull jobs from the state if they don't have business in the state. And if they DO, then they should collect sales tax just like every other business in the state.

If the premise was correct, there would be no business in the state, since the state has required all business in the state to collect sales tax for decades now.

Ignoring the truism that when you tax something you get less of it, Illinois Gov. Pat Quinn on Thursday signed legislation making the Land of Lincoln the latest state to enact what's dubbed the Amazon Tax.

This is true. If you include sales tax on goods purchased, you will slightly decrease the amount that people buy. But if the internet company has no business at all in the state, how can reducing the money citizens spend on out-of-state goods hurt the state? That's like saying we would hurt our country if we found a way to get fewer people to buy things from China.

According to the Tax Foundation, such taxes do not produce huge revenue streams. "Rhode Island," it says, "has seen no additional sales tax revenue from its Amazon tax, and because Amazon reacted by discontinuing its affiliate program, Rhode Islanders are earning less income and paying less income tax."

They saw no additional sales tax because Amazon refused to collect it, and instead pulled their affiliates. Now, if you assume Amazon gets no business advantage from the affiliate program, then you have to ask why Amazon even has it. If they DO get a business advantage, you have to ask why they wouldn't collect sales tax. If the answer is that providing a way for citizens to cheat on their taxes gives Amazon a competitive advantage over companies that also employ people in the state, you have to explain why helping criminals is something we should applaud.

This is the wrong way to go about fixing the inequity of sales tax collection. We need congress to pass a law setting up a system to facilite collection of sales tax by companies above a minimum threshold of sales. It's not 1992 anymore -- computers have made it trivial to track sales taxes, and the law could require states to streamline their sales tax rules and publish them electronically to keep it simple.

It should not be a significant burden for internet companies to collect the tax -- state businesses do it already, and they make money. And if an internet company can only make money by aiding and abetting criminals, that's not something we want to encourage.

Meanwhile, states owe it to their citizens to either brutally enforce their out-of-state sales tax collections, or drop them. It's not fair to punish the law-abiding citizens by letting the tax cheats get away with it.

Yes. Every state that has sales tax requires residents to pay it directly if a business doesn't collect it for you. It's a pain to keep track of, and because it's hard for the state to investigate, it is easy for people to break the law.

That makes it hard for those of us who are morally compelled to obey the laws duly passed by our representatives, whether we agree with them or not. Because we see so many others who don't hold the same moral standard, who think laws that are inconvenient should be ignored if you can get away with it.

States encourage this because they do so little to advertise the law -- in part because if they do, it points out that people are blatantly violating the law and getting away with it, and it might teach others to flout other laws, and the next thing you know, foreigners think it's perfectly OK for them to come into our country and take our jobs, because why should they obey the law about legal immigration if citizens don't obey the tax laws?

Anyway, Indiana's tax web site tends to describe their sales and use tax mostly in terms of businesses having to collect it, even though it is also an individual responsibility. Here are some Indiana Use Tax Answers found in the individual tax section:

Why should I report and pay the Indiana Use Tax?
If you self-report the use tax due you will only owe the tax. If you wait until the Department of Revenue issues you a bill for the use tax due you will have to pay a 10 percent penalty, plus interest. The Indiana Code requires use tax to be paid unless at least an equal amount of sales tax was paid on your taxable purchases. IC 6-2.5-3-2

What if I've paid sales tax to another state?
The Indiana use tax rate is 7 percent, same as our sales tax rate. Thus if you:

Paid sales tax of 7 percent or more to the other state you do not owe use tax to Indiana
Paid sales tax of less than 7 percent to the other state, your Indiana use tax will be the difference between the Indiana 7 percent use tax and the amount you paid to the other state.

That's an interesting thing a lot of people don't know -- even if you pay sales tax, if it's less than your own state's tax, you have to make up the difference.

In Texas, if you live in a high-tax county, and buy something in a low-tax county, Texas requires that you actually file their use tax for the difference. Amazing but true.

Illinois is losing jobs and the state government will see reduced revenues because of this legislation, regardless of any possible pretenses to the contrary.

I don't see why you believe taking a priggish attitude about the whole thing does anything to ameliorate the idiocy of Quinn's actions given the sorry state of the economy, particularly in Illinois. The time to consider such legislation is when the economy is doing well. As usual, Democrats are behaving in a delusional and destructive manner.