Online Sales Tax Is a Money Grab by Politicians

This is a crazy argument. The only entity that knows what a customer is buying is the seller. The seller knows that, regardless of sales taxation. The states provide the tax rate data and the seller plops its sales into that data. The states don't see what is being purchased, just the money. Does Mitchell even understand how sales and use taxes are administered?

mike of IN 4:35PM August 13, 2012

Agreed -- it really would be terrible if collecting sales tax online meant a) taxation without representation or b) that purchases would have to be tracked in a giant database.

The good news is, the Marketplace Fairness Act doesn't call for any of that.

Sales tax is already due on online purchases (assuming you live in one of the 45 states with sales tax). When you make a purchase online, you owe your state sales tax on that purchase. If the online retailer doesn't collect it, you're supposed to calculate how much you owe and pay it with your income taxes.

The Marketplace Fairness Act would allow states to, if they choose, require online retailers to collect that sales tax. But the consumer is still the one paying it, and the sales tax is still going to the consumer's home state to fund fire and police, schools, services for children and the elderly, and more. And the consumer has been able to vote on what that sales tax rate is. So the consumer benefits from the services the sales tax pays for and has a voice in what that sales tax is. This is the definition of taxation *with* representation.

As for tracking purchases: Colorado and North Carolina have tried variations on this, and I was horrified by it. Most states have abandoned this idea, though it's worth noting that they attempted it in the first place because the absence of federal legislation limited the ways they could enforce their sales tax laws; the Marketplace Fairness Act would make these kinds of efforts completely unnecessary.

And I can definitively state that keeping track of a customer's purchases is *not* necessary for collecting sales tax online. The retailer needs to apply the correct sales tax rate for the customer's location and remit the sales tax paid to the customer's home state. There's absolutely *no* need to keep track of what anyone buys.

R. David L. Campbell of CT 10:28PM August 09, 2012

It's literally stealing from communities to not be able to collect these taxes. Communities receive benefits in jobs, property taxes and the multiplier effects of those benefits by having a localized economy.

Government needs to intervene in letting silly loopholes such as the online tax avoidance pick the winners and losers in the market place. That's a subsidy to the Amazon's of the world.

MC of MN 8:58PM August 08, 2012

The U.S. is the only developed country without a value added tax (VAT) and that is the only reason why we have the highest corporate tax rate in the world. If we imposed a 4% VAT we could lower the corporate rate to 8% and eliminate all business tax expenditures in the process. The U.S. would have the most competitive business rates in the world and there would no longer be a need for deferral of several trillion dollars in foreign corporate profits.

Just as the U.S. wants to be competitive with other countries, states want to compete with other states. This competition can be counterproductive. For example, a state may place high taxes on items often purchased out of state but keep low taxes in home grown and manufactured goods. It would be unseemly for the federal government to enforce clearly competitive policies by one state against all others. Discriminatory policies also arise where jurisdictions vary widely in the sales tax rates. States with no sales tax or low sales tax rates would have their businesses burdened. The suggestion that the enforcement would apply only to larger businesses would only add to the discrimination.

Read more at www.TaxNetWealth.com

Eugene Patrick Devany of NY 3:43PM August 08, 2012