Upload & Sell: Off
| p.1 #14 · Internet sales tax comes to vote this week |
If things were only as simple as most folks think.
First, every state that has a sales tax also has a use tax. The use tax applies to any transaction subject to sales tax on which the tax was not charged and requires the purchaser to self-report and pay the tax to the state. So, law-abiding customers will not end up paying any more than they currently pay if this legislation passes. They will simply not have to go to the trouble of reporting and paying the tax separately from the purchase transaction. Those who don’t believe in rule of law can be expected to resent an end to their gravy train.
Second, Quill was actually a step away from the Supreme Court’s earlier National Bellas Hess decision. A close reading shows they realized the Hess decision was wrong but they did not want to upset what they called “long settled expectations.” So, they threw out the due process basis of Hess and substituted “long settled expectations” and the dormant commerce clause. They out-right invited Congress to legislatively allow the states to require sales tax collection. In other taxes, such as income tax, they subsequently ruled physical presence was not necessary (see for example Geoffrey and denied reviews in FIA Card Services and Lanco).
Third, after the court’s invitation to Congress in Quill, Congress told the states that if they could remove the burden of reporting to more than one collector in each state, have one rate for each state and generally simplify things then Congress would allow the states to require collection. The states have argued among themselves almost ever since, but lately development of the Streamlined Sales Tax Project among the states and computer tax programs have led to effective removal of the burden on businesses. A very cheap computer program and requiring the customer to key-in his billing address (which he already does) will automatically put the tax on the bill. Fear of that progress led Congress some years back to pass temporary legislation limiting “taxation of the internet.”
This is not a new tax. It is merely effective collection of an existing tax. I have not been paying it, but I’m not going to whine about how unfair it is that I will have to start paying what I have owed all along.
I hear complaints about the loss of local camera stores. Well lots of local businesses have disappeared due to internet competition. Equal enforcement of the tax already imposed on sales will help the small businesses.