Dean,

While I can empathize with the need of states to generate tax revenue in these most difficult times, I disagree with this one post of yours. My primary reason for disagreement is that Congress has exclusive jurisdiction over interstate commerce, and until they pass uniform sales tax laws and schedules there exists the risk of a trade war among the states. This risk may appear to be slight, but it is worth noting at this point, all the tax breaks states are willing to extend to large corporations to encourage them to migrate their operations to the host state.

The purpose of the interstate commerce clause in the Constitution was to prevent trade wars from erupting among the states. So, until the states can get their act together, I respectfully disagree with the notion that businesses must pay sales tax in states where they have no physical presence.

Scott

Amazon will never be a sales tax *payer*. It will be a sales tax *collector*, the same as any other vendor. The additional taxes will be paid by consumer taxpayers. How will the taxpayers benefit from this?

As it now stands, online retailers have an unfair tax advantage over traditional brick'n'mortar retailers. Plus having a guy in a brown truck deliver goods in multiple layers of packaging material to your doorstep is a very energy inefficient and wasteful way to do business. So if anything, taxing online retailers should act to discourage consumers from making unnecessary and wasteful online purchases.

Dean--I have no problem, in principle, with subjecting mail-order and internet sales to sales tax. However, only Congress has the authority to do so.

Allowing the states to impose taxes without a uniform system denominating the items to be taxed and any exemptions from tax is impossible to administer, both from the standpoint of the merchant and from the standpoint of the taxing authorities.

If one wants to subject these sales to tax, there has to be an interstate compact, approved by Congress, with one set of taxable sales and one set of exemptions. Theoretically, there would also be only one national tax administrative body setting forth the rules and regulations with respect to the imposition and collection of the tax.

The sales are already subject to the tax; the issue is requiring Amazon (and other online vendors without physical space in a state) to collect it.

As the editorial notes, online retailers that do have physical presences (Target is a good example) have managed to figure out local tax rates, exemptions, and so on, so Stuart's objection has already been addressed.

Massachusetts has been more aggressive than some states, in that the "use tax" on such items is now a line item on the main income tax form, thus making it a worse offense to not report it. There's also an income-based "safe harbor" amount, for those who don't have records of all of their out-of-state taxable transactions, which is roughly an additional 5 basis points on the income tax rate.

Hmmmmm wrote, Amazon will never be a sales tax *payer*. It will be a sales tax *collector*, the same as any other vendor. The additional taxes will be paid by consumer taxpayers. How will the taxpayers benefit from this?

Dean's point isn't in re taxpayers---it's obviously in re the unfair advantage that Amazon et al. have over brick 'n mortar stores.

However, your point isn't completely valid. While the consumer is the party who remits the tax, the actual bearer of the burden of the tax depends on the elasticities of demand and supply. Who remits the tax doesn't affect that computation.

Interesting that you want Amazon to pay "like every mom and pop store in the country". Amazon's NOT a mom and pop store.
Why shouldn't Amazon be treated as every other rapacious tax-avoiding monster sized company capable of buying influence of our Congressmen?

Mr. Williams' response to my comment is, in a sense, correct. That is, large retailers such as Target, can comply. Small retailers, who abound on the internet, would find it impossible to comply.

As to use tax, in practice, it is virtually never paid by consumers. Moreover, in my practice, I have seen small businesses get hit with use tax and have to pay substantial penalties. In most cases, these businesses would have been more than happy to pay a sales tax on the original purchase, thus having the selling merchant collect and remit the tax.

Cynthia- are you sure it is more efficient to have everyone drive to different stores than to have one UPS guy deliver to many people? Buses are more efficient than cars so I wouldn't be too sure without crunching the numbers.

If it's really true that having a UPS guy deliver our consumer goods to our home is cheaper than having us drive to the store to purchase them, then why don't we all just sit at home and have all of our consumer goods delivered to us -- anything from, say, a 5 lb sack of sugar to a 5 carat diamond ring in a box.

To the extent that sales tax is regressive, I would think that liberals would be happy to see any purchasing option that helps people avoid paying it. Of course, there's the problem that it's mostly higher income people who know how to shop online, but that's an education issue, not a financial one, if you're assuming that shopping online without taxes is really cheaper than shopping in stores.

I don't buy the argument that small retailers can't figure this out. Small retailers purchase software for a variety of business needs. Somewhere there will be a package that converts delivery addresses into taxes payable, and updates the tax rates as fast as they change (probably automatic internet updates).

One of the best parts of Obama's speeches is that they seem to implicitly acknowledge his limitations. In this speech, Obama said "Even those of us with the best intentions will at times fail to right the wrongs before us." For liberals, that may be the lesson of the first year of Obama's presidency.