Internet Sales Tax

Jazz Shaw has an article on internet sales taxes up at Ace of Spades. I disagree with nearly all of it, and this comment to the post explains why pretty well:

This article misses the point of the sales tax argument almost completely.

The “fairness” thing is, as usual, a RED HERRING.

The real issue is whether sellers who do NOT have a nexus in a state should be compelled to collect taxes for that state. There are HUGE problems for all but the largest sellers:

1. Finding out what the sales tax rate is not easy, and states do not help. Sellers would be in constant legal jeopardy, with no practical way out for any but the largest sellers who can afford a full-time staff to deal with this problem.

2. Do we really want a new on-line business to register with every state and every locality in the country in order to do business on-line? There are over 2000 tax entities in Kansas alone!!! The ludicrous alternative is to restrict on-line sellers to selling in only a highly restricted list of customers in areas where they are registered: this defeats the major advantage having e-commerce!!

3. Remitting the sales tax would force all but the smallest sellers out of business because of the extremely high cost of figuring, collecting, and filing the tax in over 100,000 taxing jurisdictions in the USA alone!!!

So the REAL issue is, how many on-line sellers do you want: millions, or just a half-dozen huge sellers??

Allowing states to collect internet taxes from all internet sellers would create an insurmountable legal and fiscal barrier to entry of new on-line merchants, the destruction of millions of existing on-line businesses, and less choice and higher prices for all on-line purchasers.

This measure would probably force most on-line business to be evicted from the USA and instead conducted from small foreign countries which have business-friendly laws.

landlines on November 25, 2012 at at Ace of Spades

I’ve mentioned this before, but often one of the complaints about fairness that comes from brick and mortar stores is that people come in to their stores to paw over the wares and then go home and buy from Amazon or some other online discount seller.
Although I do think that’s a bit tacky, I’m not really very sympathetic about this, because if people come in to your store at all, you’re more likely to make some money via impulse purchases than not.  An astute business person would take advantage of this.

There are probably far more people who make use of Amazon’s site, their ratings, descriptions, ISBN numbers and pricing, and then check out the books at a library or look for them at used bookstores, or even access Amazon *from* the used bookstore or a yard sale in order to price check a book.

After all,  Amazon is accessible 24 hours a day and it doesn’t cost gas to get there, and you don’t even have to get dressed to go there.

This isn’t really a ‘fairness’ issue.