I have given some thought to the debate over the taxation of internet sales. As a consumer, I like the idea of buying things online and saving money by not having to pay tax on my purchase.
On the other hand, I am aware of what a use tax is and know that if I purchase something online that comes from another state or country, I should be paying a use tax on the product. In realty though, the state is not in the position of tracking me down to pay the use tax, except on products that you have to register, like an automobile. In that case, if you buy a car outside of the state of California, for example, and you live in California, before you can register and license the car here, you are going to have to prove that you paid some sort of tax on the vehicle.
So, where do I stand on the issue? To be perfectly straight, I think Internet sales should be taxed, even though my direct personal interests might dictate otherwise. I do support the passage of the S. 1832, the Marketplace Fairness Act and H.R. 3179, the Marketplace Equity Act, legislation, which David Simon and ICSC is, so vigorously, lobbying for.
Why you ask? Well, I think that taxing Internet sales, just as you tax brick & mortar sales will help promote local retail sales helping local employment, which in turn helps the economy. It also helps each state improve their tax revenue on sales that the states are already entitled to, for the most part.
Without quibbling over semantics, notwithstanding Mr. Simon’s reference to fairness, I don’t think fairness has anything to do with the discussion. Brick & Mortar retailers need smart, not fair. Taxing someone else to give yourself a competitive advantage or equality is a recipe for mediocrity. Internet taxation is good simply because it is likely the best thing for our society as a whole. Instead of striving to bring yourself up to the level of your competitors, you are trying to bring your competitors down to your level.
Now, consider whether taxation of Internet sales will solve brick & mortar problems? The answer to that question, in my humble opinion, is likely no. It might help, but it won’t solve brick & mortar problems. Selling product over the Internet has its own unique advantages and disadvantages and Internet sales will probably continue to grow at a rapid pace, with our without taxation. Brick & Mortar needs to learn how to take advantage of the Internet and learn when it makes sense and when it does not.
I am not sure if it is Minnesota or Iowa, but I have a friend who lives in Sioux Falls, South Dakota and he drives a short ways into a neighboring state to buy clothes which are not taxed in the other state.
Posted by: Howard F. Kline | February 09, 2013 at 06:55 AM
The days of tax free shopping are quickly drawing to a close for all except those willing to drive to places like Delaware or Oregon.
Posted by: Ippbxs | February 05, 2013 at 09:13 PM
Well put and I totally agree.
Posted by: A Facebook User | February 07, 2012 at 01:28 PM