Now’s the Time for an Internet Sales Tax

From The Business Insider

For years the internet has enjoyed its status as a relative haven from taxation, much to the chagrin of sales-tax reliant states. But with the fiscal situation growing more and more dire across all levels of government, and internet commerce continuing to eat into traditional forms of business, the lack of internet taxation sticks out like a sore thumb.

Indeed, the National Taxpayers Union, a libertarian anti-tax group says big tax hikes are definitely on the way.

Says the NTU:

Congressional sources say that introduction of federal legislation to implement the “Streamlined Sales Tax Project” (SSTP) could happen as early as this week. This comes in response to ongoing deliberation surrounding the issue of tax policy toward the Internet and the SSTP, a campaign that would allow states to collect sales taxes on transactions made by residents beyond their borders. States need Congress’s blessing for SSTP because of previous court rulings that governments cannot force firms within their jurisdiction to collect taxes on sales made to out-of-state customers.

“It is unfathomable that lawmakers, in good conscience, would place yet another tax burden on American families given our current economic climate,” said NTU Director of Government Affairs Andrew Moylan. “Passage of SSTP legislation would shovel more money into the coffers of states that don’t deserve it, while resulting in even more economic pain for hard-working taxpayers who have suffered enough.”

While the legal issues are certainly tricky — particularly as it pertains to inter-state transactions — the NTU is wrong on this one. It’s time to start bringing the internet into tax parity with traditional forms of commerce.

First of all, the government needs the money. Yes, politicians could cut spending instead (and that may be preferable) but as long as citizens continue to support pro-spending measures, they need to be paid for.

Second, a big argument in favor of not taxing the internet is that such taxation would slow down innovation online, something we’ve been (smartly) eager to nurture over the years. But at some point that argument starts to lose its resonance as the internet grows more mature (if anything, perhaps it’s physical commerce that really needs the help with innovation these days, given how miserable going to a store can be). What’s more, to the extent that internet commerce innovates based on the protection of being tax-free, it may not be particularly desirable.

What’s more — and it’s somewhat surprising that this doesn’t get more play — it’s regressive to tax physical commerce and not tax electronic commerce, the latter of which is more popular with the affluent. There’s no particularly compelling reason to offer a tax-haven to those who are more likely to be shopping online.

So yes, it’s coming as the NTU says, due to economic reasons. And it’s a good thing.

Realtime results for Internet Sales Tax

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  salestaxhelp: New York upheld its new sales tax law that will tax all of Amazon.com and Overstock.com internet sales,retailers question constitutionality.
  about 2 hours ago from web · Reply · View Tweet
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  AvalaraSalesTax: The Internet as Enabler: Using the Cloud to Bring Automated Sales Tax Management to the Masses http://bit.ly/vdxov (expand)
  about 4 hours ago from TweetDeck · Reply · View Tweet
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  RonyMac: http://bit.ly/uFKF (expand) : ebanza.com » Now’s the Time for an Internet Sales Tax http://bit.ly/3gD9tK (expand)
  about 4 hours ago from twitterfeed · Reply · View Tweet
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  ebayalternative: New blog post: Now’s the Time for an Internet Sales Tax http://bit.ly/J6H0o (expand)
  about 8 hours ago from Twitter Tools · Reply · View Tweet
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  iQuack: California sales tax at 9.5% plus a rip-off “recycle fee” makes internet buying much cheaper. I’d have bought from Amazon if not in a hurry.
  about 24 hours ago from web · Reply · View Tweet
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  jrhinkle: new upcoming NC taxes drive Amazon away – related to state sales tax on internet retail @ghaff http://www.wral.com/news/state/story/5448822/
  2 days ago from web · Reply · View Tweet
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  dhatfield: RT @WXII Any local business cut from Amazon.com today? Company says its bc of the new #NC tax on internet click-through sales.
  2 days ago from web · Reply · View Tweet
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  WXII: Anyone own a local business that was cut from Amazon.com today? Company says its bc of the new #NC tax on internet click-through sales.
  2 days ago from HootSuite · Reply · View Tweet
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  desmondbalbin: If you want to block Hawaii out from millions of dollars of internet revenue then do nothing to oppose Internet Tax on affiliate sales!!!
  2 days ago from web · Reply · View Tweet
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  crazydeelz: Twitter Tweets about Marketing as of June 26, 2009 – rgremill: North Carolina votes to tax internet sales. Amazon s… http://ow.ly/15Gf3U
  2 days ago from HootSuite · Reply · View Tweet
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  mmarmont: North Carolina votes to collect sales tax from Internet transactions; Amazon kills its Associates program there – http://tinyurl.com/nxnwcc (expand)
  2 days ago from web · Reply · View Tweet
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  GammasWorld: RT @WXII: Anyone own a local business that was cut from Amazon.com today? Company says its bc of the new #NC tax on internet sales.
  2 days ago from TweetDeck · Reply · View Tweet
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  kevinklinewxii: Anyone own a local business that was cut from Amazon.com today? Company says its bc of the new #NC tax on internet sales.
  2 days ago from HootSuite · Reply · View Tweet
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  WXII: Anyone own a local business that was cut from Amazon.com today? Company says its bc of the new #NC tax on internet sales.
  2 days ago from HootSuite · Reply · View Tweet
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  mg_business: Amazon.com Cuts Off Affiliates in North Carolina over sales tax: Amazon.com Inc., the largest Internet retailer,.. http://tinyurl.com/mtg7dv (expand)
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