Battle Over the Internet Sales Tax Intensifies

By Abraham Hamadeh on July 12, 2011

In recent weeks, several states have debated imposing an Internet sales tax on businesses operated within the state. California has already pushed through a new Internet sales tax, with Governor Jerry Brown signing the legislation and hailing it as a ‘tax revenue’ increaser. As with all government actions, there have been some unintended consequences with the new California law; Amazon and O.co have shut down their affiliates based in California, taking thousands of jobs with them. On July 7, Amazon announced opening its fourth facility in neighboring Arizona, where no Internet sales tax exists. The new facility would bring in hundreds of jobs and is slated to open this fall. State governments should understand the basic formula that lower taxes and less government equates to more freedom and prosperity.

In Tennessee, Governor Haslam recently halted plans to tax Internet purchases in his home-state, but now wants to take the lead in seeing a federal version implemented.

“The whole streamlined sales tax is a big deal, and I'm more than willing to play a leadership role." - Governor Haslam

Governor Haslam couldn’t be more wrong. A quasi-federalized tax plan would be disastrous to consumers and businesses alike, creating stringent regulations and compliance burdens on businesses, forcing them to shift as much of the costs as possible to consumers.  Senator Dick Durbin (D-Ill.) has been planning on introducing the Main Street Fairness Act of 2011 since April, but has yet to do so.  This delay is good news because the proposed federal tax would raise prices for consumers while thwarting the development of one of the most dynamic sectors of the economy.  Keep the pressure on your Senators and tell them you will not stand for new taxes, ask them to oppose the Main Street Fairness Act of 2011.
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SRW's picture
Sten WilsonAs a conservative Republican I can not support your efforts supporting tax evasion. Sales tax legally due on Internet sales is in no way a new tax. I believe Freedom Works should help educate consumers regarding sales and use tax legally due on Internet purchases. Just because an Internet retailer does not desire to collect and remit sales tax due does not mean sales and use tax are not due. In fact unless a consumer resides in a state where the sales tax rate is 0% the sale tax is legally due to be filed on their individual state tax return. Furthermore, my company with less than $50K in annual sales is enabled to calculate, collect and remit sales tax in any jurisdiction in any state. My company subscribes to a free Certified Service Provider on the internet which handles all aspects of my sales tax transactions. Contrary to your statements, my company has become more efficient through eliminating unnecessary administrative burdens and costs associated with tax filing the old fashioned way. its no longer the 1960s or 90s when the Internet was in its infancy. Computers are amazing at calculating numerical complexities such as the thousands of tax jurisdictions. In fact its just as easy today for a company to calculate, collect and remit sales tax legally due in any jurisdiction in any state as it is to calculate and determine shipping rates. The Mainstreet Fairness Act is beneficial to small ad medium sized businesses. Consumers continually choose to evade taxes legally due. Taxes that are beneficial for educational, health care, infrastructure, and various programs we all benefit from. Instead new taxes and state fees are being created and increased to make up for the declining sales tax revenues over the past decade. Since sales tax legally due is too much of a burden for consumers to remit, the Mainstreet Fairness Act enabling states rights to collect tax legally due will simplify consumers lives eliminating the requirements and filing on their individual tax returns. I urge you to partner with the many republicans including Congressional Representatives and Senators who support the Mainstreet Fairness Act enabling states rights to collect sales tax legally due. Help small businesses to save unnecessary administrative costs and expand markets. Save consumers the unnecessary burden of having to track and remit sales tax on their returns. Help to reverse the growing mall vacancy rates now over 20%. And most importantly help support and streamline tax collection for state and local municipalities providing much needed funding for vital education programs and so much more. There is no longer any reason not to immediately submit and approve the passage of the Mainstreet Fairness Act.
43 weeks 1 day ago