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July 31, 2011 / 74

Congress Poking it’s Nose into the Amazon/California Sales Tax Issue

It has come to my attention that SEN Dick Durban, (Idiot,  IL) has introduced legislation in the Senate to force all online retailers to pay sales taxes to the States their customers live in. And Rep John Conyers Jr. (Idiot, MI) is introducing the same sort of thing in the House.,0,6544519.story

There are a lot of fallacies being tossed around over this issue. The biggest is that things cost less when ordered online because the buyer doesn’t have to pay sales tax. Okay. But though both online and brick and mortar stores have to pay shipping to them, the brick and mortar store doesn’t have to charge shipping to the customer. So are you going to force the brick and mortar store to pay into a fund to reimburse the shipper or the customer for their shipping costs? (Shipping costs are usually much more than sales taxes would be.) And how do you level the playing field for the services that the brick and mortar store gets in return for their sales tax collection, that the online retailer would be paying for but would have no access to?

And let’s not forget that the brick and mortar store HAS a physical presence in the State – and so not only receives those services provided by the State, which the online retailer does not, but the brick and mortar store ALSO gets to VOTE on who is running the State and how, while the online retailer does not.

There are a lot of small retailers, and people who aren’t “retailers” but who sell things on the internet via E-Bay and such, who would be excluded from the markets because they couldn’t afford to collect and remit the taxes. And there are a lot of things that are not AVAILABLE locally, that once such legislation makes it prohibitively expensive for small specialty retailers to sell online, these things would not be available anywhere at any price!

I recently bought a scythe to mow my small field of grain with. The local hardware stores don’t have scythes. The Big Box stores asked me what a scythe is. But I was able to get the item online in just a couple of weeks. Where would I buy a whetstone for my scythe? (They aren’t the same as the whetstones you buy for knives.) And a lot of the time, the online store sells items made by local craftsmen, while the Big Box store deals in bulk and sells only merchandise made in China or some other overseas mfg. Have you looked into buying a broadfork lately?

And consider also the small online retailer. If a mom n pop online store sells 20 items in a year for $10 each, that’s $200 in “revenue” (LESS cost of goods sold). But then the online retailer has to pay sales tax to HOW many States? Let’s say that all twenty items were sold to folks in DIFFERENT States. For $200 in revenue, the mom n pop store now has to file TWENTY  Sales Tax forms with TWENTY States. (AFTER spending the time to familiarize themselves with the laws of those twenty States, and get the forms, and comply with any OTHER laws that would apply to a business that sells things in their State… such as FILING INCOME TAX FORMS FOR THAT STATE!!!

Sales tax is just the opening gun. California probably would REALLY like to collect income taxes on ALL businesses that sell things to people in their State. California is busy running businesses out of their State, so they now seek to tax businesses in other States, and run them out of business altogether. And all you States that think it would be okay to charge the online businesses in your State California Sales Taxes, consider that this reduces the amount of money those people have to spend in YOUR State, and the expenses involved in filing those CA taxes will reduce the taxable revenues for your State.

Congress – the US Supreme Court has ruled on this issue. It’s a can of worms that you do NOT want to open!!!

Consider – the greedy person killed the goose that laid the golden eggs to get at the trove he assumed was inside. If this law runs countless small online retailers out of business, at over $2 TN a year in online sales, is this an income tax revenue goose you want to kill?


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