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Press Release

    Tech Bytes - Tid Bits in Tech News: Polling Futility

    07/10/2000

    Last month, the International Council of Shopping Centers (ICSC) released the results of a Wirthlin Worldwide survey on Americans’ viewpoints about Internet taxation. According to Wirthlin, “Americans support collecting existing state and local sales taxes on Internet purchases.” This should be no surprise because existing state and local sales taxes already apply to the Internet and electronic commerce.

    State and local sales taxes are currently collected on e-businesses that have a physical presence in the purchaser’s state. The standard for “physical presence” is so broad that it applies to businesses that have only one warehouse, office, distribution center, or even one salesman in the given state. E-businesses are already subject to the taxes and regulations of each and every state in which they are located. Forcing retailers to live under the laws of states in which they are not would be an historic distortion of federalism's principles.

    Several features of the poll call into question its credibility as a public opinion gauge. For example, the language of the polling questions repeatedly relies upon misleading labels. New taxes are called existing taxes time and again and a pro-tax claim for “fairness” is repeated over and over.

    Beyond these obvious misrepresentations, the merits of the survey are dubious because the questions are arranged to engineer predetermined results. Consider the following progression of questions:

    “Do you favor or oppose allowing states to collect sales taxes on purchases made over the Internet just like they collect sales taxes on all other purchases made at stores in their states?”
    “Many states rely on sales taxes to pay for basic programs like police and fire services, public hospitals, education, and highway construction. As more and more purchases are being made on the Internet, some say these programs are at risk if states cannot collect sales taxes on purchase made over the Internet. Do you believe these state services will be hurt or reduced if sales taxes on Internet purchases are collected?”
    “Which of these state-funded services would you be most concerned about being hurt or reduced by states if they lose funding by not collecting sales taxes on Internet purchases?”
    “Initially, this may sound like a good thing for consumers to avoid paying sales taxes, but there is a price. States will lose billions of dollars in sales taxes and will be forced to either increase other taxes or cut back state programs. Do you agree or disagree with this statement?”
    “Do you favor or oppose allowing states to collect sales taxes on purchases made over the Internet just like they collect sales taxes on all other purchases made at stores in their states?”
    The responses to the first question were divided 44 percent to 44 percent, with 12 percent refusing to answer. Not surprisingly, 58 percent of respondents to the final question favored such taxes, while 34 percent apposed them and 8 percent refused to respond.
    The irony of the survey is that its engineered conclusion, “Americans support collecting existing state and local sales taxes on Internet purchases,” is used as evidence to support a radical scheme to federally restructure state and local tax collection. Advocates of the creation of special, or new, taxes for the Internet should heed author George Orwell’s advice and use language, “as an instrument for expressing and not for concealing or preventing thought.”