Internet Sales Tax Laws

J.D. Tuccille Debates Thom Hartmann Over Internet Sales Taxes


Yesterday, I appeared on Thom Hartmann's show to discuss the wisdom of Internet sales taxes and how they should or shouldn't be applied. Hartmann seemed firmly fixed on the idea that sales taxes are not just a good thing, but that they must necessarily apply where the consumer lives rather than where the vendor is located — a requirement that involves some logistical challenges in a nation of thousands of tax regimes. Note, by the way, how he seemed to assume at the 5:00 mark that a point I was making about how his stance has potential civil liberties implications if simply viewing a Web page invokes legal jurisdiction was somehow a call-out to a tussle over international trade.

Still and all, any debate is a good debate, and I thank Thom Hartmann for having me on.

Reason columnist Veronique de Rugy has dealt, at length, with the subject of Internet sales taxes.

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    Speaking of tyrannical tax policy.

    1. You and all your earnings belong to the state. And your future earnings too.

      1. Also past earnings and any property (real or personal) acquired with them. Your body too. Your thoughts are yours to keep, just don’t let the state catch you using their body to express those thoughts.

  2. Thom Hartmann is the moron who put together the cockamamie theory that state militias in early America were really just slave patrols and so the 2nd Amendment is the codification of slavery and therefore should be done away with. Haven’t listened to the audio yet, but I hope JD brought that up. Thom should be humiliated with the facts everywhere he pops his disingenuous head out.

    1. Nope. Didn’t come up. I guess hijacking the conversation would have been bad form on Hartmann’s radio show.

    2. I always think of him as the Michael Savage of the Left.

      1. The way he can start off with a premise I agree with, build on it slightly, and then jump to a conclusion way out of left field always reminded me of Glenn Beck.

    3. The comments for that article are terrible.

  3. a requirement that involves some logistical challenges in a nation of thousands of tax regimes

    A challenge cheaply solved by a company formerly called Vertex (back when I was in the consulting business). Vertex would send a file with any rate changes daily.

    1. And was this cheap solution as cheap as simply dealing with the jurisdiction where you were located? And did it give you a vote for the politicians who set the rates you had to pay?

      1. Forget it, Jake. It’s Buttplugtown.

        1. I wish this comment section had upvotes so that I could upvote this comment.

      2. JD, companies that sell nationwide need a service that provides accurate tax rates by zip code. There could be 10,000 or more tax jurisdictions.

        1. I notice you didn’t bother to answer his questions, just reiterated your point like he said nothing at all.

          1. Well, if JD is saying selling into one single zip code is as simple as remembering that tax rate he is correct.

            Most business is far more complex than one single tax jurisdiction.

            He brought up “thousands of tax jurisdictions” – not me.

            1. Mostly he brought up the idea that these taxes being based on the user’s location would be more expensive to track than just letting them be based on the vendor’s location, something you’ve now ignored for TWO comments in a row. Stay classy, OB.

              1. Which one is simpler? A single tax rate at each business due to its location so that it is trivial to instantly display the tax for each product or one that changes with each and every customer, requiring additional time and expense (and software) to look up the tax rate for every single customer? Will we then have people using fake IP addresses or driving to a neighboring state to use a computer to get a lower rate, just as they do now to buy alcohol?

                If something is simpler and cheaper and allows the democratic process to work as it ought with respect to taxes, what would the obvious conclusion be?

                1. If something is simpler and cheaper and allows the democratic process to work as it ought with respect to taxes, what would the obvious conclusion be?

                  But if you do this all the vendors will flock to low tax havens and the big spending cities and states will lose a two big sources of revenue (sales and business taxes). How will these cities and states fund their next corrupt boondoggle under such a scheme?

      3. No it didn’t. It didn’t take into account local tax holidays for ill-defined categories, city boundaries, customers who provided non-official city and street names and didn’t include their county names, and certainly none of the myriad podunk hospital, stadium, school, and other little districts unknown from even five miles away.

        The solution is clear and simple: base the tax on the merchant’s location, just as with brick and mortar stores. Politicians would hate it because it removes another point of control and means they would actually compete on local taxes, which scares them to death.

      4. I think you fail to see the beauty (or duplicity, depending on your point of view) of JD’s proposal – if you accept that an online transaction takes place on the server side of the transaction rather than on the customer’s side, what happens when the server is located in Costa Rica and the transaction involves a bet on the Lakers game?

        This is why the sales-tax-based-on-merchant-location argument is a non-starter. It makes sense that if I travel to Chicago to shop at Sears I pay the Chicago sales tax rather than my local sales tax so why shouldn’t I be taxed the same if I send my web browser to Chicago rather than my body? But sense has got nothing to do with taxation policies. In this case, if you admit that transactions take place at the place they take place – the server – you kinda have to admit that online gambling takes place in Costa Rica and not my house.

        1. Edit button!

          I meant to say ‘you kinda have to admit that online gambling takes place in Costa Rica and not at the houses of the sorts of lawless degenerates who engage in online gambling’. Not that I would know any of those sorts of lawless degenerates.

        2. Technically, you are supposed to pay your state’s sales taxes on goods you bring back to your home state. I know very few actually do this (or know of it), because it is too difficult for your state government to track and make you and frankly ridiculous. That is the revenue the states claim they are losing.

    2. The market can’t be called on to solve problems until your problem can’t be solved outside the market. Yep.

  4. You should have coughed on him, JD. Microbes and bacteria are fucking KILLERS – let Hartmann fight to the death with the bacteria. If he survives, he has proven himself in battle and is worthy to live. If not….. A WITCH!

    1. I think there’s a segment of Republicans who are still mad at Dan Savage for that.

  5. Watch out for the robots man!

    celainea 4 hours ago

    When robots start doing his job for free, then J.D.Tuccille will complain.? Capitalism is a dying system & the Capitalist are killing it.

    1. Man, just look at what those mechanized looms did to seamstresses. Scary stuff! If you want a glimpse of the future, just imagine a robotic workforce tailored to serve human consumers’ every need?forever.

      1. *shudder* What a dystopian nightmare. The only thing that could be worse is if scarcity were eliminated.

        No… what would be even more nightmarish is if the need for politicians to save us from ourselves was eliminated. Now that would be a truly awful world not worth living in.

        1. The great thing about scarcity is that it can never be eliminated. Our imaginations are such that there will always be some new (and therefore scarce) wonder for us to pursue.

    2. What would a robot J.D. Tuccille do, exactly? Write 1,000 libertarian articles a minute while holding debates on every cable channel at once?

      J.D., would you even complain if someone built a robot to do this?

      1. Hell, no.

        1. J.D., if said robot is built, make sure you have cool finger missiles like Johnny Sako’s Giant Robot!

  6. Man, I’ve been pronouncing it J.D. “too-seel” this whole time, but the actual pronunciation should have been obvious.

    1. Hartman pronounced it too-chilly… frankly, I’d like Mr. TooChilly to tell us how his name is pronounced.

  7. like Clara answered I am shocked that any body able to profit $7089 in 1 month on the computer. did you look at this web site

  8. The End of Growth
    Economist Jeff Rubin and environmentalist David Suzuki might seem an unlikely pairing. But they’ve been touring Canada together, talking about the natural limits to growth from their very different perspectives. We listen in as they try to convince a Calgary audience that we’ve already exceeded the capacity of the planet.

    1. Hahahahahaha. You’re the best. It’s interesting that doomsayers have been trying to claim we’ve reached the limits of growth since Malthus did it in like 1800. Now that progressive policies have totally obliterated growth in America and Europe, they’re trying to claim that it’s not their fault, we’ve just exceeded the planet’s capacity!

    2. Well, don’t you worry little fella, humans presently occupy less than 1% of the Earth’s land mass, and we haven’t even began to populate the 70% that’s water.

      Regardless what nonsensical untruths Rubin and Suzuki are telling they’re just trying to frighten you.

      1. Yeah, apparently some people have never flown around the planet in planes very much, at night, looking out the window. It’s mostly dark, folks, nobody’s home.

        1. It’s because hardcore leftists all live in liberal enclaves in the middle of cities. It’s awfully easy to freak out and convince yourself that humans are a plague of locusts when you’re surrounded by 4 million people.

        2. Everyone should spend some time flying around if for no other reason than to see how little of the Earth is populated or developed by humans. It really puts things into perspective.

          1. You know, it would really be amazing to see just how quickly people, working together, of their own free will, without massive interference from government, could solve most of the problems that still plague mankind today. Most remaining problems, like scarcity, is caused mostly by governments.

            We could, through technology and innovation, probably eliminate nearly all scarcity and even poverty in a few decades, without interference from the fuckheads who want to save us from ourselves. For the most part, the only good politician is one swinging from the nearest lamp post.

            1. Also, liberals sometimes come up with some really good ideas. Like the recent trend of aquaponics(not saying liberals came up with this, but I know some locally who are really high on the idea), I find very interesting. Then they decide that government is the way to implement it, and there goes the farm. Government can fuck up even the greatest of ideas, it’s what they do best.

              1. A friend of mine from Tequila, Mexico is operating a commercial aquaponics endeavor in one of the states down there. He’s not computer literate so he came to me for help researching the project.

                Whether “liberals” came up with the idea is questionable. The Aztecs were utilizing a rudimentary form in pre-Colombian times.

                Fortunately for my friend government hasn’t gotten involved. Last he mentioned it he was still turning a profit helping people have access to fresh food that would otherwise be unavailable in their local.

            2. is caused are caused…

              Grrr, bad grammar, getting tired…

          2. Didn’t the Sierra club accidentally admit on a website calculator they had put up that the entire world’s population could (and should) live in one county in Texas, and when it was politely pointed out to them, they took the calculator down?

  9. Listening to Hartmann is beyond annoying. To skip straight to J.D. start the video at 2:30.

    Hey, Hartmann, some of us live in states that have rejected the implementation of a sales tax. My state is one of those states. It’s also one of the few states that operates within budget.

    Local businesses around here that thrive have figured out they must compete with the Internet. They set their prices accordingly. It’s a win-win arrangement. When someone’s either not going to save, or save very little, they buy locally.

    Hartmann obviously doesn’t understand competition is crucial to a healthy economy.

    Hats off to you, J.D., you have more patience to deal with idiots than I’ll ever have.

    1. I’m all for a sales tax, and for it being the only tax. Straight up flat sales tax. No more punishing people for working hard and doing better.

      The worst tax is property tax. And why politicians will never willingly let go of it, is that they can’s stand the thought of someone living off the grid and being totally self sufficient.

      The way it stands now, no one owns property, we just rent it from government, and they can raise that rent anytime they want, for any made up reason, so we have no real property rights.

      1. People will never reach a consensus on anything. That’s why it’s important localities, counties, and states to have the Liberty to rule themselves.

        Personally, I’d have to give the flat sales tax more thought. It’s difficult to see how it would benefit us in this state. We have no sales tax, low state income tax, and low property taxes.

        My guess is that most likely people in this state wouldn’t view the idea favorably. In your state it may be cheered.

        1. I definitely agree with you that the more decentralization the better. Which is, of course, why we are supposed to be a union of states, with a federal government of limited scope. But, you know, commerce clause, penaltaxes, feds totally ignoring any sense of autonomy by the states.

          1. We’d do very well as a union of states no doubt.

            1. Some much better than others of course. Which would only reinforce that pesky 2nd amendment, for when, you know, the states that failed because of their big government ideas, want to cry foul and come and take our stuff?

      2. where are the feds charging property tax?

        1. AP, if your reply is to me… where did I say that the feds are charging property tax?

          I said it is the worst form of tax. Nothing about the feds. It’s all local(city, county) as far as I know.

          And yet, not one place that I know of has ever repealed it. North Dakota tried, I think, but it failed.

          1. but it’s the least centralized of all the taxes.

            1. and yet, it still sucks ballz

              1. cogent point

  10. Didn’t watch the video.

    That being said, there is nothing ideologically wrong with taxing internet sales based on the point of delivery. The patchwork nature of sales tax rates and distribution of sales tax revenue does make implementation extremely problematic for all but the largest sellers.

    Still, a lot of libertarians have advocated replacing income and property taxes with consumption taxes because of they are somewhat more voluntary than the other types.

    1. more voluntary than the other types.

      You have it absolutely right.

      If you do not wish to pay taxes, don’t buy anything.

      1. I concur with that, also.

    2. As long as Internet sales taxes don’t apply to my state in which we’ve chosen to not implement a sales tax I have no problem with those of you who wish to voluntarily pay more taxes doing so.

      There is however another angle that alarms me. To put in place any type of system that regulates tax collection on the web is going to require substantial, and even greater, governmental encroachment.

      With a tax system the next obvious requirement will be the need to I.D. all users, to monitor what they’re buying, how much they’re spending. Ultimately, what everyone is doing, when, where, how much and with whom.

      Personally, I see the Internet as the greatest tool we have to exercise free speech, protect human rights, and force transparency. Seems a shame to throw it away over a buck.

      1. Personally, I see the Internet as the greatest tool we have to exercise free speech, protect human rights, and force transparency

        It absolutely is, and must be protected at all cost. It’s already being attacked in so called ‘liberal social democracies’, like the EU and Australia. You can bet our elected assholes are wetting their pants for any opportunity to follow that lead… remember SOPA?

        I swear every fucking thing they do is some slimy backdoor plan to invade our privacy and strip away more of our rights.

        1. Who can forget SOPA.

          We lost the battle to restrict government within the limits of our Constitution. If we lose the battle to keep government out of the Internet it’ll be a loss of epic proportions.

          1. I’ve said right here on H&R, that I am for drafting a citizens petition, and getting millions of signatures, basically saying that, the internet is ours, fuck with it, and we will use your hides for making drums, boots, jackets, and other interesting souvenirs of the once mighty US political machine. Seriously. Not that it would deter them, but at least they were warned.

            1. Seriously, the internet is the line in the sand.

      2. As long as Internet sales taxes don’t apply to my state in which we’ve chosen to not implement a sales tax I have no problem with those of you who wish to voluntarily pay more taxes doing so.

        I agree, and this is a validation of the idea of taxing sales at the delivery point.

        There is however another angle that alarms me. To put in place any type of system that regulates tax collection on the web is going to require substantial, and even greater, governmental encroachment.

        Agreed, this is problematic and may be a deal breaker for me on the idea of applying sales taxes to internet sales.

        With a tax system the next obvious requirement will be the need to I.D. all users, to monitor what they’re buying, how much they’re spending. Ultimately, what everyone is doing, when, where, how much and with whom.

        This does not logically follow.
        It is currently impossible to engage in completely anonymous internet commerce. No further encroachment on internet users is necessary to implement a sales tax on internet sales.

    3. That’s fine, but… again, doesn’t it seem simpler (more simple) that the tax is charged by the locale of the retailer?

      That not only seems more logistically feasible, but also more fair to the locality where the business is incorporated.

      I do think there are civil liberties ramifications of another county or state extracting taxes from me based on a legislation that exists in a jurisdiction they’re not within.

    4. I think the more salient point is forcing a retailer that is outside the jurisdiction to collect it. The state/city may have the right to make the consumer pay the tax, but how does it have the right to force some retailer on the other side of the country with no connection to the state/city to collect it and send it to the state/city? If the state/city wants the tax because the consumer lives in the city/state, then it should go get it from the consumer.

  11. Any Veronica Mars fans?…..ckstarter/

    Interesting to see if this will start a trend of fan-financed films.

    1. Exciting, I enjoyed the show although it had some rocky bits.

      1. Q: Veronica better end up with Logan, Rob. She just better.
        A: That’s not a question.
        Q: We’re just saying…
        A: I hear you. Remember it’s noir. There aren’t a lot of happy endings.
        Q: Noir, my ass. We’ve waited a long time for this.
        A: (Busily reworking super-grim ending.)

        This made me laugh

    2. What’s a Veronica Mars? If she lives on Mars and has 3 boobs, I’m in.

      /dirty old bastard

  12. Am I drunk or a lot of you are really making a lot of intelligent observations?

    Mere 9.5% ABV on this label, so it is unlikely the former.

    1. You’re drunk, man.

    2. Is that weak wine or really strong beer you’re drinking?

      1. Barleywine. Not a fan of wine wine.

  13. For someone who doesn’t care, Heather Mallick sure wastes a lot of time telling us.

  14. OT: So a progressive friend of my brother’s says he would “never support Ron Paul because he doesn’t believe in the separation of Church and State.”

    He then quotes the following from Paul’s The War on Religion:

    “The notion of a rigid separation between church and state has no basis in either the text of the Constitution or the writings of our Founding Fathers. On the contrary, our Founders’ political views were strongly informed by their religious beliefs. Certainly the drafters of the Declaration of Independence and the Constitution, both replete with references to God, would be aghast at the federal government’s hostility to religion. The establishment clause of the First Amendment was simply intended to forbid the creation of an official state church like the Church of England, not to drive religion out of public life.”

    1. Continued…

      “The Founding Fathers envisioned a robustly Christian yet religiously tolerant America, with churches serving as vital institutions that would eclipse the state in importance. Throughout our nation’s history, churches have done what no government can ever do, namely teach morality and civility. Moral and civil individuals are largely governed by their own sense of right and wrong, and hence have little need for external government. This is the real reason the collectivist Left hates religion: Churches as institutions compete with the state for the people’s allegiance, and many devout people put their faith in God before their faith in the state. Knowing this, the secularists wage an ongoing war against religion, chipping away bit by bit at our nation’s Christian heritage.”

      I thought he was being disingenuous about Paul “not supporting” the separation of Church and State. What do y’all think? While I don’t care for Paul spending political capital on religion in public life, the progressive’s response seems very off the mark.

      1. Would Ron Paul use taxpayer money to fund churches or sign laws imposing a state religion? No? Then his views on that issue shouldn’t concern anyone.

        1. That is what I am telling him. But he keeps insisting that allowing, say, the ten commandments in the courtroom would still be an endorsement of religion and would therefore run afoul of Supreme Court rulings. I added that I think any speech, so long as its funded by private citizens, should be allowed in any public place. I realize that may go against some case law, but that seems to be much more consistent with the absolute nature of the first amendment.

          1. I agree with Ron Paul that the left hates religion because it competes with the state for the loyalty of the people.

            I also agree that the separation of church and state is not nearly so rigid so that a privately donated Nativity scene can’t be put on a firehouse lawn.

            IMO, a law would have to use force to compel people to engage in religious behavior or would funnel taxpayer money for purely religious purposes.

  15. I like how Thom Hartmann ignores your argument and simply moves on to the next non sequitur/unsupported assumption.

  16. Don’t have time to listen to the debate right now, but Hartmann’s argument about the sales tax having to do with the tax jurisdiction of the buyer is the law of the land. We fought a war over “taxation without representation,” ya-know.

    The argument has never been about who has the right to tax but how the tax can be collected. Honest people, BTW, pay use taxes to their state for all of the Amazon purchases made during any tax year. Sadly, even if they win the battle, brick and mortar businesses will continue to lose out to the constant deals available on Amazon because the Prime option eliminates the last advantage (no freight) of the B&M types.

    1. Honest people, BTW, pay use taxes to their state for all of the Amazon purchases made during any tax year.

      I think you mean “morons”.

  17. Hartman’s argument is complete rubbish and it really makes no sense to tax purchases based on the delivery address. Online retailers aren’t not using the “commons” outside of the jurisdictions in which they already pay taxes. The firms used to ship their goods are using the the roads, police, fire(?) and potentially paying taxes along the way. Private infrastructure like the internet isn’t supported by tax dollars.

    Should tourists have to pay their native sales tax when they are away from home? There’s not much difference in what Hartman is arguing.

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