Online sales vs. local stores

A few days ago, we published an article about an impending Federal law that would require merchants who have no physical connection to a state, county or city to collect sales taxes for those locations. The good news is that the bill has been held up in Congress. There is still time to contact your Senator and Representative and urge them to vote this bill down.

Here are the issues:

State and local governments think they need money. They see taxing internet sales as a way to generate tax revenue that is not visible to the taxpayer. Since almost no one wants another tax, politicians think they can con the public into believing this is not a "new" tax, . 

This is a half-truth. A tax that we, as a non-resident company in your taxing district, don't collect, already exists in your taxing district. You are supposed to report the out-of-state purchase and send the local tax collector the amount of the tax. Some people do. Others do not, for what ever reason. If someone is unwilling to pay the tax directly, why should a company hundreds of miles away be asked to collect it for your local taxing authority?  And to do so without compensation for the bookkeeping cost and labor cost of doing it?

Yes. We collect tax for sales of Native American Jewelry to customers in our home state (Florida). And we get a small "commission" for doing so. We do so willingly. After all, we get the benefit of the infrastructure our local taxes support. 

By the way, there are thousands of separate taxing district in the country. Thousands of different sales tax rates. How can a small business keep track of all those rates and afford to file returns/reports for all of those taxing districts/rates? Doing so will only raise the cost to you as purchaser not just by the amount of the tax but also by the amount of the overhead for collecting and forwarding those taxes.

Hardly seems fair. And "fairness" is the other rationale proponents submit for creating this new tax collection protocol. They claim it is unfair for corner merchants to have to collect sales tax while internet merchants do not. Is it also unfair that online merchants have to pay (or collect for) shipping? Or that online merchants have to pay to design, maintain and host websites?

In the end, who pays for the government's greed? You do.