Internet sales tax: Point/Counterpoint
Should Congress allow states and local jurisdictions to collect sales taxes from remote sellers?
The writers for this week’s Point/Counterpoint answered the question for McClatchy-Tribune. We are unable to republish their entire comments online. An excerpt follows.
A level playing field could give states a boost of $23 billion.
Matthew Shay. is president and CEO of the National Retail Federation.
Retailers compete with each other every day on price, service, convenience and selection. Good retailers try to match or exceed their competitors in every area. But, under the current system, the law gives remote sellers a singular advantage brick-and-mortar stores can’t match because they aren’t required to collect sales tax.
States already can tax online purchases
Michael Greve, is the John G. Searle Scholar at the American Enterprise Institute and an adjunct professor at Johns Hopkins University.
There is no “sale tax exemption” for out-of-state vendors. State and local sales taxes are owed by consumers, not producers. If the good or service is provided by an in-state firm, that firm must collect the applicable sales tax form the consumer. If the stuff comes for a remote seller that has no contact with the consumer’s state, the sale is not tax -free: The consumer owes a use tax equivalent to the local sales tax.
July 1, 2012 - 5:18 PM
Got a link to the original? Googling “McClatchy-Tribune” isn’t very useful, since The McClatchy Company has newspapers in 15 states.
I think it is a total cop-out for the sellers who will ship to any state refusing to collect the sales tax due in that same state. While I agree that it is the buyer’s responsibility to report the sales tax, like other responsible things, it somehow does not get done.
On the small ticket items it is easy to overlook but when you get up into the hundreds of dollars in sales, that money is denied the states that deserve it.
This is an issue and it is indeed millions upon millions of dollars that states are not getting.
Like health insurance, some people will do the right thing and some will not.
If I went out of state and purchased an item, then had it shipped home to Virginia, then I wouldn’t pay Virginia taxes. I would pay taxes to the locality where the goods were sold. I would not get a reprieve from the local sales taxes simply because I live in another state, nor would the business get a reprieve from collecting the local taxes. I could also, in a sense, go to the seller via mail order for the transaction. I could go to them via the telephone or I could go to them via the internet. In any case I’m going to that business and virtually to that locality of the business. Therefor the business should collect the appropriate taxes for the locality where they are located and process the transaction, no matter the residence of the purchaser. Likewise, if Virginia wants to impose collection of tax monies from that business, then they should pursuade that business to relocate to Virginia and make those sales transactions in Virginia.