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See Full StoryIf it feels as if the summer is already racing by, consider how the legislators on Capitol
Hill feel. October is just around the corner, and that means somebody has to do something
about Internet taxes.
October is the month the current moratorium on Internet taxation expires. Unlike so many
other issues our legislators contemplate, the debate over Net taxes has a real urgency.
The moratorium only applies to "new internet" only taxes. The issue of internet sales tax is well protected by Quill v. North Dakota. The odds of any legislation to overturn the nexus qualifications of this decision are slim if none. The real solution is to streamline the sales tax system to a flat internet sales tax. This will satisfy the states' greed and ease the cost of compliance for companies. The good news is that by the time you get all the states to agree, the issue will be under the rug again. The real question is, should e-commerce companies be taxed at all? After all, why should my company pay for the boots of a police officer in Houston, TX when I only have 1 contract worker in the state? We have used no state resources, UPS has collected tax for their use of the road, and all I did was take an order through a computer to a server in CA. Why should I have to charge my customer and bear the cost of remittance?
It does not make sense, the law is antiquated and the states need to learn to tax in new millennium.
It does not make sense, the law is antiquated and the states need to learn to tax in new millennium.
The US is not alone in the Internet environment, and decisions that state legislators think are in their purview have international implications.
First, right now, the US is one of the few (maybe the only) nations that sees it as too early to apply the existing tax environment to the new economic environment. If the US does not extend the moratorium, the signal to other countries around the world is that the EU approach is the one to follow.
Second, the nature of economic exchange is changing rapidly, and the mode of taxation needs to be reconsidered in light of the technological fact. Thus a continued moratorium, but one that induced legislators to consider approaches to streamlining the currently complex environment of state and local taxes, is the way to go. Let the National Governors Association work a little longer on this issue.
Finally, we must remember that whatever technology gets used to track purchasing patterns so as to ensure that tax is applied is potentially a violation of privacy. Thus, this matter is not just about tax, but also about other policy issues that have domestic and international ramifications.
First, right now, the US is one of the few (maybe the only) nations that sees it as too early to apply the existing tax environment to the new economic environment. If the US does not extend the moratorium, the signal to other countries around the world is that the EU approach is the one to follow.
Second, the nature of economic exchange is changing rapidly, and the mode of taxation needs to be reconsidered in light of the technological fact. Thus a continued moratorium, but one that induced legislators to consider approaches to streamlining the currently complex environment of state and local taxes, is the way to go. Let the National Governors Association work a little longer on this issue.
Finally, we must remember that whatever technology gets used to track purchasing patterns so as to ensure that tax is applied is potentially a violation of privacy. Thus, this matter is not just about tax, but also about other policy issues that have domestic and international ramifications.
