Democratic senator wants Internet sales taxes

[WestVirginiaRebel]

CNET:

A Democratic senator is preparing to introduce legislation that aims to end the golden era of tax-free Internet shopping.

The proposal--expected to be made public soon after Tax Day--would rewrite the ground rules for Internet and mail order sales by eliminating the ability of Americans to shop at Web sites like Amazon.com and Overstock.com without paying state sales taxes.

Dick Durbin of Illinois, the second most senior Senate Democrat, will introduce the bill after the Easter recess, a Democratic aide told CNET.

"Why should out-of-state companies that sell their products online have an unfair advantage over Main Street bricks-and-mortar businesses?" Durbin said in a speech in Collinsville, Ill., in February. "Out-of-state companies that aren't paying their fair share of taxes are sticking Illinois residents and businesses with the tab."

At the moment, Americans who shop over the Internet from out-of-state vendors aren't always required to pay sales taxes at the time of purchase. Californians buying books from Amazon.com or cameras from Manhattan's B&H Photo, for example, won't pay the sales taxes at checkout time that they would if shopping at a local mall--which is what Durbin means by giving online retailers an "unfair advantage."

On the other hand, there are some 7,500 different taxing jurisdictions in the United States, each with a set of very precise rules describing what can and can't be taxed and at what rate. That makes it challenging terrain for retailers to navigate.

In New Jersey, for instance, bottled water and cookies are exempt from sales tax (PDF), but bottled soda and candy are taxable. In Rhode Island, buying a mink handbag is taxed, but a mink fur coat is not (PDF).

Durbin's bill will be called the Main Street Fairness Act, which follows legislation introduced last July in the House of Representatives bearing the same name. A possible co-sponsor is Sen. Mike Enzi, a Wyoming Republican who backed a similar proposal before and did not respond to a request for comment.
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Because the idea has worked so well in his home state already...

[Saltbag]

Because of the complexity of all the state sales tax laws and the burden that it would put on small internet businesses, I'm afraid that the feds will feel compelled to put another federal institution in place to facilitate taxing internet purchases and getting those moneys to the individual state/local levels appropriately. Little to no overhead, of course.

 

Hey, it meets the criteria: 1) Perceived fairness, 2) Bigger government, and 3) Increase taxes despite the cost.