Battle Lines Redrawn in Web Sales Tax War

Jeremy Bray received an e-mail message this morning with an unwelcome surprise: Amazon.com told him it had canceled its affiliate program, which provides small payments for referring customers, for everyone in the state of Colorado.

The reason? A state law, which Democratic Gov. Bill Ritter signed last week, slaps onerous new restrictions on large out-of-state sellers like Amazon, which said it has no choice but to end its marketing program in response.

Bray, a blogger who has lived in Pueblo, Colo., for more than 20 years, told CNET on Monday that he's now trying to "bring as much attention to the issue as possible in hopes of getting Colorado to repeal" the new law.

Colorado is not alone. Fifteen other states have considered or are considering enacting laws targeting Amazon and other e-commerce companies that typically do not charge sales tax for shipments sent outside their home state, according to a report released Monday. Four states including Colorado have already enacted them.

"I see this as a trend moving along - a lot of states are considering doing it," said Joseph Henchman, director of state projects at the non-partisan Tax Foundation in Washington, D.C., which published the report. But, Henchman says, the laws "won't solve short-term budget problems, they signal business-unfriendliness, and they're probably unconstitutional."

Click here to read the full CNET article
By Declan McCullagh of CNET News

[eeodonnell]

Charging tax on interstate commerce is illegal according to the Constitution, but government seems to think the document is just a piece of paper these days anyway, as GW said - illegal searches, jailing indefinitely without trial, torture - so disregarding it on the tax issue wouldn't bother politicians at all. Brick and mortar stores take advantage of local services - indeed the police's job seems mainly to protect business, not citizens, so if a tax is levied on internet stores that don't have a presence in a particular state, it should be a lower tax than in-state stores collect. The authors of the Constitution may not have envisioned the internet, but they also didn't envision taxes as a revenue engine that would be put on every bill we pay, item we buy, etc - they were specific to certain purchases.

[omnibus66]

The full time job of government is to steal from the people. They are very clever and resourceful, and almost always succeed in this never ending quest to take all of your money and whatever other assets you may temporarily possess.

And they call it progress.

[barbaram99]

As a legally blind person I asked my sighted friend about this as he has bought online..Some do and don't.. I don't..When my friend bought my Vista desktop on the phone..He was changed the tax in the state the company is in. Dell changed both TX tax and WA tax in 06 when I got my first computer. I know there are states like NH that don't have sales tax. How would bussiness handle this issue as they are the ones that are to pay it to states they do business in as the person ordering pays it with their order. Forget doing business out of Nation as they change more and different rates etc. I don't know if they change duty or not.

[Gamesman001]

If they do this in all states then the only online deals worth buying will be from other countries. China does not charge tax nor does any other large country doing business online. This will hurt all of America not just a couple of states.

[eeodonnell]

Yes but most of the credit card companies have now added on a charge for any purchases may outside of the US - someone gets us coming or going.

[jsilver2th]

rickwar: "Sales tax is a legitimate tax in virtually every state."

In Oregon we do not have a Sales Tax and we do just fine. Garbage like this will force small timer mom and pops off of the internet which is what the big boys want I guess.

Oregon should become the capital of internet sales without a sales tax and become the Deleware of internet.

[mposman]

It is interesting that there is such concern for the well being of the companies conducting business on the internet. What has been sorely missing has been the recognition of all the "mom & pop" businesses that have been destroyed by the internet retailers because they have not only paid rent but have been charging sales tax and not been able to compete with the "free stuff" that the internet businesses have been able to avoid. Eventually the reality that there is "no such thing as a free lunch" will occur to consumers.

[BuddyBeanbags]

Just think of the nightmares this will cause online retailers keeping track of and paying 50 different state sales tax rates. This sounds like taxation without representation to me.

[clarkalex]

try over 3000 different jurisdictions and rate schemes. Counties and cities add taxes as well in some cases. Throw in that some state (etc.) tax food and some do not. Some call candy food and some do not, etc. What results is a taxing nightmare. Now throw in all the different reporting requirements to the various jurisdictions and agencies.
In short, without a single flat rate system, states are kidding themselves if they think anyone is going to be able to keep up.

[mposman]

They have the software to handle it.

[rickwar]

A: Sales tax is a legitimate tax in virtually every state.

B: The loss from sales tax revenue is in the millions of dollars, and in case you don't get it the loser is your state to provide services.

C: You do pay sales tax if there is a Nexus in your state

D: The "no sales tax" gives an unfair advantage to the web seller of between 5 and 8% which amounts o a larger discount to the consumer. The businees ding business in the state has to charge you.

E: If you as a consumer is honest (You are arn't you?) there is normally a way to report what you bought online or mail order on your yearly taxes. (You do that don't you? Or do you simply lie?)

F: Contrary to poular belief you actually cost yourself by not paying the sales tax for your state and you are losing the benefits. In our state it's set for 90% infrastructre and 10% can be used for "community services" library, parks etc:

And just to clear the air I own 4 business and pay in my sales tax colections and have a website where outside the state there are no taxs paid.

In the end it needs to be enforced.

[rf35]

E: If you as a consumer is honest (You are arn't you?) there is normally a way to report what you bought online or mail order on your yearly taxes. (You do that don't you? Or do you simply lie?)

I've never seen such a section on my Colorado income tax form. I'm in the military stationed overseas at the moment. I use the Internet for the majority of my purchasing. If I bought from brick & mortar stores, they would not be getting anything. I see no reason why CO should be getting sales tax money from me when I'm not living in the state so cannot reap the benefits (if any) from said tax. Same with income tax, but that's another issue. And since my military APO mailing address is technically in New Jersey, how would a company know which state tax to charge?

[tsigili]

Already knew about that, and agree, that sooner or later, everyone will be taking their pound of flesh, from the public, on the internet.

The sad part about that problem, is you can't actually go into a local retail store and find what you need. So, it isn't really about trying to avoid the taxes, even. It is that no one is doing a good job with retail, because everyone is carrying the same things. Mostly NOT the things people actually want and need, but what they make the most PROFIT on. That is greed. Pure and simple.

The greed has permeated our entire society, government, business, and the public at large. Is is a pandemic of greed, and corruption.

[jd2408]

I am trying very hard to buy made in USA products. In order for me to do that, and support the American worker, often I go on line to find it. It is very hard to find made in USA in our local stores.

[j_flood]

Either change the laws, or add a Federal flat 5% value added tax on all goods and services to pay down the federal deficit.