Internet Sales Tax Laws

Internet Sales Tax Bill Looks Dead



House Judiciary Committee Chairman Bob Goodlatte (R-Va.) says his committee will not take up the Senate-approved Marketplace Fairness Act, which would let states require online merchants to collect sales tax. According to Generation Opportunity, an activist group that campaigned against the legislation, "Goodlatte's statement effectively kills the bill." WSLS, the NBC affiliate in Roanoke, describes the congressman's position this way:

Goodlatte said the bill is unfair to consumers since they would have to pay more.

"Transactions on the Internet are going to increase," the Republican congressman said. "It's obviously something where we want to make sure that the many, many businesses in this community who do business online and you don't see them because they don't have storefronts are treated fairly."

Goodlatte said the states should reach an agreement so Congress doesn't have to get involved. He said House Republicans will work on their own version of the bill that protects consumers.

I criticized the sales tax bill and suggested a better approach in a column last month.

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  1. I think Steve Stivers supported this legislation to allow this tax on internet commerce.

    Anyone from OH know anything about that? I would be very interested bc I voted for the guy but probably should not have.

    1. I think only the Senate has weighed in formally.

  2. I have a better idea. Return to the once well-established principle that no physical presence means no nexus. Seriously, what is the justification for a state I do nothing more with than ship product to its residents taxing me? It’s absurd.

    Politically, I’m surprised supporting this doesn’t result in massive consumer outcry. We’re the ones screwed by this. No government has a right to our money. It’s time we start understanding that.

    1. I have it on good authority that taxes are the price we pay for having our dogs shot by strangers who bust into our homes civilization.

    2. “No government has a right to our money.”

      Sounds like you are one of those greedy monsters who doesnt want to pay your fair share. I am sure the IRS auditors will be paying you a visit soon.

      1. I have to be on their list just by virtue of commenting here.

    3. This is just them trying to get away with shit because their own citizens are cheating them anyway, since most states with sales tax have use taxes for out-of-state purchases.

    4. You physically sending your products into the jurisdiction constitutes no nexus?

      1. I had something written up citing Worldwide VW and Asahi, which got eaten, unfortunately. Suffice to say that I don’t see the difference between mail order companies of yore not charging sales tax, and the Cheese Iron in Maine not charging sales tax when they ship me something tasty from Jasper Hill.

        The problem is that the resident buyers in the state are not paying use tax, which is an enforcement problem of the buyer’s state towards the buyers; not the seller. Don’t you run into jurisdictional issues with states trying to assert taxing powers on non-state residents? Don’t the states have 11th Amendment immunity from the Feds trying to force them to force their residents to collect a debt on behalf of another state?

        That said, re-reading Asahi, I can see the ‘equities in that case balancing’ (friggin’ O’Connor decisions: everything’s a balancing test and you have no idea ahead of time where the court will come down.) towards finding it just to impose personal jurisdiction over an out-of-state seller. If it’s o.k. to impose PJ on them, why wouldn’t it be o.k. to impose upon them the duty to pay the required fees for conducting a commercial transaction within that state?

  3. Goodlatte said the bill is unfair to consumers since they would have to pay more.

    If only they took this approach with every tax they levy. Stop coddling the producers, with tariffs and other protectionism taxes.

  4. I’m cautiously optimistic about this news, except for this:

    Goodlatte said the states should reach an agreement so Congress doesn’t have to get involved. He said House Republicans will work on their own version of the bill that protects consumers.

    That leaves a lot of wiggle room for more problematic legislation.

    1. This has been going on for twenty years. Probably won’t get settled anytime soon.

      Practically speaking, with Amazon trying to put DCs in most states, probably to offer next or same-day delivery, this issue will fade somewhat as they push their competitors to do similar things.

      1. Which is why Amazon wasn’t fighting it tooth and nail. They’re about to take on grocery stores. And you had better goddamn believe the minute I can get the milk and eggs drop-shipped to my door in a coldpack every x days, I will never set foot in a grocery store again except for weird situations. Kind of like how the mall is now for “oh shit I totally forgot I need something before 5pm tomorrow at 3pm today.”

        1. I believe they and Walmart both are starting to lease space in other retail stores for people to pick up their orders.

          1. Damn. If I could just pick up my prepaid box’o’groceries on the way home from work 2x/week, my life would be awesome. (Since I do the cooking, sending the gf to the grocery store is a great way to start the makeup sex process, but useless for getting actual useful groceries.)

            1. Right now in Seattle (and maybe other places) Amazon offers the ability for you to buy something and then pick it up yourself from their many dropbox locations around the city, and you can pick it up the same day. I’ve never used it but I want to try it.

              1. The problem with being used for Amazon’s experiments is that they may not always be benign.

                1. I’d take a couple of rotten eggs or a tail on my newborn for this convenience.

                  1. “Say, what would happen if we irradiated our customer base? Could they develop mutations that would make them buy more stuff from us? Let’s test this on Seattle!”

                    1. It is not as if Amazon would be testing it on human subjects.

          2. Just looked it up. Sounds like Amazon is renting space for its Amazon Locker and Walmart will follow suit in its own stores for its online business, which is nontrivial.

        2. See, I will never give up shopping for food or clothes by hand. I need to see the product, inspect it, make sure it looks right. Yeah, if I know exactly the pair of shoes I want and the size because I’ve bought the exact same pair before, I will choose Amazon to buy from, but otherwise, I need to examine what I’m buying. Even with free return policies, the hassle of returning the item now begins to be the same as the hassle of going to a brick and mortar store to get it, so why not just go to the store in the first place?

          1. So, if I can develop a mechanism that replicates the experience through virtual reality and haptic interfaces, you’ll never leave your home?

            1. Can I play tennis that way?

              1. Absolutely. And if you pay a premium, you can play tennis while getting a virtual blow job.


          2. I’m pretty much the same build I’ve always been. Amazon can ship me 3 pairs of dockers khakis, 10 pair of boxers, 10 undershirts, and 5 pair of non-white socks every year and my wardrobe is 90% handled. If I could find a good shirt supplier and a good supplier of jeans, I’d never set foot in a clothing store again.

            1. Some apparel companies have come up with increasingly good systems for dealing with remote sales, including insanely liberal return policies and quick turnaround times. Like Zappos.


              Excellent return policy as well (the return label is in the box). Zappos is also good (owned by Amazon).

        3. Amazon would love this law. They can afford to hire tax attorneys and CPAs to deal with 50 different tax codes. Small Mom and Pop businesses would not be able to compete with them.

          1. Until Amazon decided to start rolling out DCs everywhere, it was opposed to these kinds of laws and fought them. They were a major player in the opposition to the New York affiliate-nexus ruling, which many observers thought was unconstitutional (which stopped no state from jumping on that bandwagon).

    2. I think that is the point of it.

  5. If I buy something in tax-free New Hampshire, I’m legally required to declare this on my Maine state income taxes, and pay sales tax to Augusta for the privilege of using something that crossed state borders without first having had any sales tax paid on it.

    How is this not a violation of the Commerce Clause?

    1. How is that even the tiniest bit enforceable?

      1. They can enforce it on businesses through audits, since they should keep records of where they purchased their material and whether or not it was declared, but on individuals not so much.

    2. Because tax havens!

  6. I’m still astonished they haven’t implemented these taxes yet, considering the state of our debt. I’m honestly not sure how this happened, and kind of confused, much like when Hugh wakes up with no pants on in the park.

    1. Well, there are multiple lobbies at work here, the ones supporting e-commerce and mail-order players, the ones supporting national brick-and-mortar retail, and, of course, those supporting consumers. It’s politically dangerous, really, to change the status quo.

      1. Which is, of course, exactly how it’s supposed to work. On this issue the federal government hasn’t been able to threaten, collude with, or eliminate enough factions to allow them to “build a consensus” that the federal government needs to be in charge. Not yet.

    2. I’m signed up to get Progressives United email blasts, and the latest bit of agitprop they are flogging to the outer party is a bill that will force Millionaires to pay their fair share into social security for the first time in history!

      They are really reminding me of the junkie tossing his couch cushions hoping to find a fiver or at least 5 quarters in there somewhere.

      1. Fair share. I like how too much is never enough. Seriously, how many think the tax rate on “rich” people should be 99%?

        1. My progressive liberal father has been advocating for a maximum income since I can remember. A 100% tax on income above some arbitrary amount, like a million dollars a year. Then the other thirty million or whatever that the rich CEO would have been paid will go to the government which will use it to give everyone else a basic minimum living standard. The guy is clueless about history and economics.

          1. And morality.

            1. And morality.

              How is it moral for someone to be rich while children starve? By not giving up his wealth to feed starving children, isn’t that rich person causing those children to starve? That rich person might as well be plucking food from the starving child’s mouth because, as Tony likes to remind us, not giving is taking and not taking is giving. So not taking money from the rich to feed the poor is exactly the same as taking money from the poor and giving it to the rich. See?

      2. Sounds like a great idea, as long as you eliminate the payout cap too. After all, fair is fair.

  7. Killing this bill isn’t enough. It should be burned to ashes, and the ashes mixed with holy water, so that it doesn’t come back like Freddy Krueger.

  8. What? Some good news today? How the Hell did that happen?

    1. It’s expected news. Everyone knew it wouldn’t pass the House. Or likely even make it anywhere. The surprise is that it passed the Senate, but I’ll bet you that a lot of the votes there for the bill were only cast because they knew the bill would die.

      1. It’s a rhetorical shock.

      2. In that case, the sorry-ass senate republicans who voted for it are even bigger morons than we thought.

  9. Has Tulpa been clutching his pearls here yet?

  10. OT: If anyone needs a manly gift for Fathers Day.

  11. Tulpa haz a sad. 🙁

  12. Marketplace Fairness Act or Anti Dog Eat Dog Act?


    1. The Consumers Still Have Money Act.

  13. He said House Republicans will work on their own version of the bill that protects consumers.

    Er? The problem with this bill is not so much that consumer will pay sales tax. The problem is that it makes it extraordinarily complex for small internet businesses to legally operate if they have to collect and file sales taxes for thousands of different jurisdictions. Supposedly “free” software notwithstanding (who is going to pay for the upkeep of the software?).

    If there is going to be any internet slaes tax, then it should be based on the residency of the SELLER not the BUYER. So the seller only has to calculate the sales tax for the jurisdiction in which he resides. The current bill effectively treats internet sales as if they happen in the jurisdiction of the buyer. It would be much simpler and more efficient to base it on where the seller lives.

    Sure, that might allow some sellers to disguise their location, but it’s infinitely less problematic than making the sellers keep track of the local sales taxes in the residency of every person who buys from them.

  14. Or maybe not. Perhaps a call to the Chairman’s office before publishing would have been instructive.…..le/2531330

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