Democratic Senator Wants Internet Sales Tax
A proposal to enforce state sales tax in online purchases is expected to go public after Tax Day.
Is tax-free online shopping coming to an end? If Democratic senator Dick Durbin of Illinois-- the second most senior Senate Democrat-- has his way, consumers will not only be paying state sales tax in brick-and-mortar shops downtown, but when buying goods from Amazon.com, Overstock.com and other out-of-state online vendors.
"Why should out-of-state companies that sell their products online have an unfair advantage over Main Street bricks-and-mortar businesses?" Durbin said in a speech in Collinsville, Ill., back in February. "Out-of-state companies that aren't paying their fair share of taxes are sticking Illinois residents and businesses with the tab."
A Democratic aide recently told CNET that Durbin plans to introduce his bill-- called the Main Street Fairness Act-- after the Easter recess. The bill follows legislation introduced last July in the House of Representatives bearing the same name, and may have already signed on Sen. Mike Enzi, a Wyoming Republican, as a co-sponsor.
While a handful of online retailers actually charge state sales tax, typically out-of-state retailers are not required to collect taxes. Instead, consumers are legally bound to pay their state sales tax outside the virtual transaction on April 15. The problem is, very few tax payers actually cough up the money to the IRS. Naturally the proposed bill will force consumers to pay state sales tax at the time of the transaction, and for local hometown shops, this may be a holy grail of sorts, repelling online shoppers and pushing them back into Main Street businesses.
According to CNET, the Direct Marketing Association is already geared up to fight the legislation. Last year it sued Colorado to block a state tax law requiring out-of-state retailers to turn over to the Department of Revenue (DOR) confidential purchasing history information regarding their Colorado customers, and even certain customers in other states.
"You're just giving the states a blank check to make changes without any congressional oversight," said Jerry Cerasale, the DMA's senior vice president for government affairs, in a statement to CNET. "We oppose that.We think that's abrogating the authority of Congress."
In the other corner of the Taxed Internet vs. Free Internet fighting ring, the Alliance for Main Street Fairness and "like-minded" companies including Walmart and Best Buy are expected to provide full support for Durbin's forthcoming legislation. Even Amazon supports a sales tax structure although the online retail giant hasn't set a system in place.
"We've long supported a truly simple, nationwide sales tax system, evenhandedly applied," said Paul Misener, vice president of public policy for Amazon
The proposal is expected to be made public soon after April 15.
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no no no
I agree with this. Online stores have an unfair advantage over bricks and mortar stores. I'm ont an overzealous "buy local" guy, but we do have to keep a healthy competition.
We've been through this several times over the years. I'm not crazy about the state sales tax proposal. Would it apply to state sales taxes only or would it also apply to county and city sales taxes? If it applied to all of them the price I pay for products online will increase 9.5%.
This is how the Democrats plan on stimulating our economy... by taxing us even more. Notice how the republican's haven't been pushing for this crap.
"Out-of-state companies that aren't paying their fair share of taxes are sticking Illinois residents and businesses with the tab."
How out of touch is this idiot? It's not the companies who pay the sales tax it's you and I, their CUSTOMERS.
Or, ya know, shops could actually be competitive. Just saying.
Main Street Fairness Act? Dumbest Name Ever Act.
Why would anyone pay their state sales tax to the IRS?
THIS IS NOT ABOUT 'FAIR TAX' THIS IS ABOUT CONTROL. YOU'RE ALL BEING BRAIN-WASHED THAT PARTISAN POLITICS... THIS IS ABOUT DESTROYING THE MIDDLE CLASS AND CORPORATE DOMINATION AND ENSLAVEMENT. THE ONLINE COMPANIES HAVE SHIPPING TO PAY. THIS IS DESTROYING FREE MARKET AND COMPETITION. THE REPS DO NOT CARE ABOUT 'BETTERING YOUR LIFE' OR COMPETITION. THEY ARE ALL UNDER THE BANKERS BELTS. WHY DO PEOPLE NOT SEE THIS?!?!?!?!?!
ZOMG... ALEX JONES... THAT'S ALL I'VE GOT TO SAY.
DO NOT WANT!
Let me guess. You do bailouts for large companies with no interest, stimulus checks, and you cant even pay your employees, but you still seem to get a fat check. BS
His first name says it all. Dick
Shipping + Sales tax. No thanks. Goodbye internet shops. Main Street Fairness Act = Backroom Deal Act.
If State Governments want their local brick and mortar stores to be more competitive, they will stop compelling them to commit extortion. Unless / until it can show it contributes to the transaction (e.g. by providing consumer fraud protection, which it does not do now; jilted consumers must front large attorney's fees to even begin an investigation), Government needs to unhand other people's money.
GOVT!!!! STAY OUT OF THE CUSTOMERS MARKET! STOP SHOVING YOUR HANDS DOWN FREE MARKETS PANTS
THIS IS THE FACE OF CORRUPTION
I'd like to see Congress actually solve problems instead of making up new laws that don't solve anything. Runaway spending and lavish vacations for Congressmen and **** for the rest of us. Holding hostage the U.S. while they argue about pennies of a million dollar bill (our budget) it's sick and I hate it. Also these senators are in their MID-SIXTIES no wonder they want to put a sales tax on online purchases- they probably have never even ordered something off the internet anyway. They're just finding a way to get money and I'm sure it's not going to hurt them.
P.S. I love Newegg
And I want a fair tax plan... We get taxed on what we make, what we buy, if you invest you get taxed, buy a house or car and you get taxed yearly... How about a 1 time tax on what you buy? Luxuries would cost a LOT more than what they do today, but at least we'd have our freaking money... That would be nice.
On a semi-intelligent note, would this tax apply towards person-to-person transactions? After all, it hardly seems fair to charge sales tax on an ebay (or non-amazon but on amazon) item.
... unless yard sales and all other forms of secondhand shopping are correspondingly taxed.
If this is passed, I'll probably cancel most of the trivial purchases I make (a $4.98 v-game plus $2.98 shipping... PLUS sales tax? Old v-games aren't THAT good). Depending on what the percentage is, of course.
The states can set up their own internet sales tax if they want to (like my state did). The fed's don't need to be involved.
Some kind of online tax is needed. Local shops have higher overhead AND the customer pays tax. Online shops have nearly no overhead and don't require taxes. No matter how slim the local shops margins, they simply can't compete with that. Now with shipping for online stores and higher overhead for the small local shops, it evens the playing field.
I don't want to pay taxes, I doubt anyone does. But this needs to be done in order to stimulate local business.
This will be nightmare to implement though. Simple enough for the major web stores, but there are simply so many small shops out there that it would be a mess.
Imagine the barrier to startups... "gee I now have to calculate changing sales tax for 50 states?" Imagine all the time and effort that gets wasted in software development on this stupid proposal.
Online shops hurt walk-in shops.
Walk-in shops have the potential to employ more people than online shops, since more face-to-face interaction is required.
You want to help the economy as a whole? You tax internet transactions so the brick and mortar stores have a reason to hire more people.
Online shops use the money they make to automate as much of their business as possible. More automation = less jobs.
My interest in spending my money will suddenly dwindle. You lose.
jjames, local shops are all well and good but they dont have the stock and rare items some of us are after, for example some items i buy regually online (in the uk) is only sold in a handfull of shops in the country
if you want something quick you go local, and there is nothing stopping the local shops openening websites as well, it is cheap to do so anyway
Don't worry, a federal sales tax on all internet purchases is surely coming next.
Douchebags.
Yah this is total BS
Only way to do this whole thing right....cut medicare, medicade, social security, military, tax rich, poor.....generate about 1.5 trillion a year doing this and fix the GD deficit in 10 years...the reinstall the social programs including universal healthcare once we are running a slight budget surplus. Oh, and create a constitutional amendment that only allows us to go into the red during a grave and imminent threat to national security.
Why don't the Democrats first make it so that companies like Obama's favorite GE pay taxes on their $14 Billion in profits before making the average american have to pay more taxes shopping online?
The Democrats say all this crap about helping the middle class yet at the end of the day the only people they help is the unions and corporations that bribe them with campaign contributions. Here they go again trying to raise taxes on every American!
B&M's benefit from police and fire services, the automobile infrastructure, and often many different public utilities, all paid for with taxpayer money. Those services are the ONLY reason to pay any sales tax at all. The fact that these disgusting pathetic slimy nation-ruining politicians cant even understand that simple fact shows just how much trouble we are in. There is simply no excuse for anyone to tolerate politicians this stupid. NONE. This braindead country needs to cast off the dead weight of politicians like Durbin.
Exactly so brick and mortar stores should just take orders when you walk in and then ship the item to you. That way the brick and mortar stores do not have an advantage over the online stores and it stays competitive. Because that is what you want government to do right? Cripple the business's with an advantage so the consumer has more choices all of them poor!
Ahh yes. The Democratic Socialist never met a tax they didn't like.
"Out-of-state companies that aren't paying their fair share of taxes are sticking Illinois residents and businesses with the tab."
That is incorrect.
If the out-of-state companies were collecting the sales tax, they would be remitting the same.
I'd rather pay a tiny bit extra in taxes each year than cut programs that help a lot of people. And of course, tax the hell out of the wealthy. The main problem is corporations have too many loopholes to avoid taxes. Was it GE that paid no taxes this year? That's f'ed up.