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The election might be over, but politics isn’t. As a lame-duck president, Barack Obama will use his remaining days in office to push any outstanding policy proposals, either through Congress, also now a lame duck, or by executive order.
Also known as the silly season, this is when bad policy tends to rear its head. And of all things silly, pushing for an Internet sales tax bill is perhaps one of the worst.
The debate over collecting taxes on Internet sales is not new. For years, large retailers have aggressively lobbied Congress to enact new taxing authority that would allow states to reach across borders to collect revenues on Internet sales.
However, the Supreme Court’s 1992 Quill decision ruled that a company must have a physical presence in a state before it is liable for taxes.
While brick and mortar retailers have been demanding new legislation in the name of “fairness,” and state tax agencies are looking for ways to expand their tax bases, efforts to collect Internet sales taxes typically undermine state sovereignty and individual liberty. By expanding the reach of state tax agencies beyond their borders, consumers would be subjected to enforcement actions for which there is no public accountability. Consumers who have no vote for the governors or legislators controlling the tax rates would be subjected to fines and penalties imposed on them by these agencies.