Marketplace Fairness Act = Federally enforced interstate sales tax

[AZRedhawk44]

http://www.redstate.com/2013/03/18/the-marketplace-fairness-act-is-more-unfair-than-status-quo/

Might as well call it "The anti-dog-eat-dog rule."

The advent of the internet has simplified life for millions of consumers in this country.  But for state governments, many of which are hungry for more tax revenue to purvey their rapacious welfare states, e-commerce has complicated their ability to collect all sales taxes owed to the state – at least without directly taxing the consumer, something the statists are too scared to do.

The Supreme Court has already ruled in Quill v. North Dakota that an individual state has no power to directly tax or compel tax collection of citizens of other states.  A business must be physically located in a state in order for that state to require it to collect sales taxes on the state’s behalf.  This 1992 decision took place long before e-commerce became a factor in the economy.

and finally:

To the extent that the status quo gives an advantage to online vendors, the MFA would overcorrect the problem and hurt online vendors.  While brick and mortar stores are forced to collect taxes from everyone, they are only subject to the tax of their home state.  So if they are located in a state with no sales tax or a low tax they collect the lower tax, even if the customer is from a high tax state.  Under the MFA, online vendors in a state like New Hampshire would still have to collect the high rate of taxes of customers from California.  So red-state companies will have to serve as tax collector for high-taxed blue states, thereby obviating the benefit of being in a red state and blurring the effectiveness of laboratories of democracy.

Moreover, why would we want to encumber online businesses with the technicalities of establishing a tax collection system that would satisfy nearly 10,000 unique tax jurisdictions in this country?  Hence, whereas under the current system brick and mortar businesses have to collect more in taxes, under the MFA online vendors in red states would pay even more, plus they would incur the cost of the new regulatory burden of complying with the myriad of tax codes.  That is a recipe for killing jobs and raising the cost of goods.  It’s for good reason that the Quill decision referred to such a scheme as a “burden” and violation of due process.

Kill it.  With fire.

Your senate critters in DC are voting on this tomorrow.  Call.  Senate bill 336.  Oppose it.

[Tallpine]

King George III is starting to look like a libertarian 

[brimic]

Any law with the word "fair" in it usually isn't.

[RevDisk]

Ayep. Basically, trying to hide a money grab as "helping small (brick and mortar) businesses". 

Technically, in many states, the citizen is supposed to pay the difference if subject to lower or no sales tax. This is called a "use tax". My mom has been a tax accountant for longer than I have been alive, and she rolls her eyes at that one. Here in PA, there is a "formula" to guestimate how much use tax you "statistically" should be paying. "Pay me $20, and we'll call it quits."

[Scout26]

Yep, Illinois asks you if you made any "out of state purchases" on your tax return.   

I have yet to meet anyone stupid enough to answer that question with a "Yes".

[brimic]

Yep, Illinois asks you if you made any "out of state purchases" on your tax return.   

I have yet to meet anyone stupid enough to answer that question with a "Yes"

Ours does too.

[De Selby]

I'm hoping an advocacy group will challenge that - use taxes are in my eyes of dubious constitutionality (since they're essentially taxes on business with another state by the same name.)

[Monkeyleg]

The idea that internet retailers have an advantage over brick and mortar stores is a fallacy. The online stores can charge less, and not charge tax. What they can't do is allow the customer to examine the item. They don't incur the shipping costs that online merchants do, nor do they have to eat many costs from returns and fraud that online retailers do. They also have the sense of trust, just by their presence, that online retailers have to struggle to create and maintain.

There are advantages and disadvantages for both types of retailers. Politicians are just looking for new sources of revenue. What they'll do is shrink their revenue base, as small online retailers like me won't be able to afford the extra accounting costs to keep up with paying taxes to all states.

With this kind of mentality, I'm surprised that government didn't require car owners in the early 1900's to use a horse and buggy at least three days a week, just to be fair to horse stables and buggy makers.

[Waitone]

At one time NC was hitting an internet tax twice.  First you had to itemize what you  purchased.  later on the forms you were assessed an internet tax based on a percentage of your income.  I hope they've fixed it by now.

[RevDisk]

Also, brick and mortar stores have to noodle out ONE local tax code. If this passes, each and every small eCommerce store will have to be compliant with somewhere between 10,000 and 50,000 different local tax codes. Toss in more complexity and expense in just doing business.

[HankB]

Yep, Illinois asks you if you made any "out of state purchases" on your tax return.   

I have yet to meet anyone stupid enough to answer that question with a "Yes".

When I was a young kid, Illinois also expected its citizens to pay a "personal property tax" on anything they owned - furniture, jewelry, televisions, anything of value. When my Dad got that tax form, he'd just tear it up and throw it away. Eventually, that tax was abolished.

Years later, Chicago instituted a sales tax to support the CTA, the city-owned bus company. (Or was it a gas tax?) They expected Chicago residents to pay that tax on things that they bought in the suburbs - and they got a judge to order the suburbs to collect that tax!
 
The suburbs noted that it was a Chicago MUNICIPAL judge who gave that order, and his jurisdiction ended at the city limits - so much to the dismay of the mayor & city council, they were unable to loot the 'burbs.