Tuesday, July 17, 2012

Here Come the Online Purchase Taxes

Some Republican governors, eager to enrich their thinning state coffers, are endorsing a tax that would be imposed on products sold online. According to the National Conference of State Legislatures strapped, states could reap as much as $23 billion in new annual revenue, Breitbart reports.

Cato Institute favorite, New Jersey Gov. Chris Christie recently struck a deal that will cause Amazon to collect sales taxes on NJ state's online purchases. He called taxation of online sales "an important issue to all the nation's governors" and endorsed federal legislation that would allow states to tax online purchases.

According to Breitbart, Amazon.com, which initially viewed with disfavor the idea of a sales tax, has decided that they now like the idea. Why? Because Amazon plans to offer same-day delivery, which will mean it needs more local warehouses, and it will then get hit by state taxes anyway.

Amazon agreed to start collecting taxes in NJ in July 2013. Amazon also supports federal legislation mandating state sales tax collection on online purchases, since this would take away its competitors’ pricing advantage as it expands its warehouse concept.

Online taxes will really hurt small internet businesses.

Steve DelBianco, executive director of NetChoice, a trade group representing eBay, Overstock.com and others, said, "Besides the Republican support, this position change is being driven by the millions of dollars being spent by the big-box retailers—and now Amazon—to push the sales tax through Congress."

States that already have an online sales tax are Kansas, Kentucky, North Dakota, New York, Texas and Washington. Other state that are planning to join them are California (Sept. 2012), Indiana (Jan. 2014), Nevada (Jan. 2014), New Jersey (July 2013), South Carolina (Jan. 2016),Tennessee (Jan 2014) and Virginia (Sept 2013).


  1. Looks like I'm done shopping at Amazon.

  2. More crony capitalism. I love how successful businesses/people do the "I'm now successful and don't want to give others the chance to be successful" gig. The more time goes on, the more this looks like Atlas Shrugged...

  3. Taxation is theft but...

    FYI, all states have long had "use taxes" on their books which applied only in the case of a purchase that was not subject to sales tax on a sale by an out-of-state seller non-resident to a resident because the home/taxing state had no jurisdiction over the non-resident seller. The buyer is expected to report the sale and pay over the use tax to their home state. There's a place to report and pay your use tax on the Michigan 1040 form.

    1. Who does this though? I know even in Texas (no state income tax) there is such a form, but I know no one who pays.

      This is bad because people will be forced into paying whereas now it's as though it were voluntary.

  4. Looks like I'm starting a competing book delivery business in AZ... ;)

  5. Once again, the Republican Party demonstrates that it is also the party of taxation without representation.

  6. Thanks Jeff Bezos, you crony capitalist money grubbing scumbag. When Kalifornia starts collecting the online tax in September I will buy less from Amazon. A lot less. How in the hell does that help Amazon? It may not even help Kalifornia since the higher prices will suppress sales volume.

    And what is up with Cato Institute and it's love affair with Ann Coulters favorite fascist porker, Chris Christie? Talk about an unholy alliance. It's like watching your little sister marry the guy who used to beat you up in gym class.

  7. Just another reason why I revoked my Republican membership years ago. There is NOTHING conservative about advocating for something like this. More and more every day I start putting serious thought to leaving this country for a more free country like Singapore. It's a tragedy that we have lost this country to a bunch of statists / socialists.

  8. Shame, such a shame. Costs up, employment down etc etc. Same as in Europe, the bureaucrats looting the tax payers for money.

  9. One way around this is to use an online mail forwarding service which offers a street address (not a P.O. Box) in a state with no general sales tax (Oregon, Montana, New Hampshire, Delaware), which would allow someone to legally shop anywhere online without paying sales taxes. With Amazon now caving and set to collect sales taxes in California and other states, there's going to be a great business opportunity to create a service like this.