Taxing the Internet
Congress may finally close the “loophole” that allows people to avoid sales taxes by shopping online, the New York Post reports. While the issue has been bandied about since roughly the advent of the Internet as we know it 15 years ago, the dire straits state and local governments now face may force the issue. Under proposed legislation, online retailers would be required to collect sales taxes (presumably based on ZIP code) for local governments.
JammieWearingFool is outraged at this “bi-partisan confiscation of your money” but, as Glenn Reynolds reminds us, “Technically this isn’t new taxation, as you’re supposed to pay “use tax” on things you buy online from out of state. (I do this). But most people don’t, and to them it will feel like a new tax.”
Quite right. As much as I dread having to pay taxes on purchases made online, I’ve never really understood the rationale for exempting goods purchased online and thus giving a rather decided advantage to Internet sellers in preference to brick-and-mortar companies who invest in the community.
What I’ve always felt was odd about these proposals is that, if I’m buying something from, say, Amazon, why shouldn’t Seattle, Washington, which houses the company, get the money rather than Alexandria, Virginia, which is providing nothing? When I buy a book from the local Barnes and Noble when on travel, they don’t send the taxes to my home jurisdiction.