Friday, March 16, 2018

Republicans Want an Internet Sales Tax

Many House Republicans are pressing GOP leaders to attach legislation to the omnibus spending bill that would let states collect sales tax from remote online retailers, reports The Wall Street Journal.

From a WSJ editorial:
The Supreme Court’s 1992 Quill decision forbids state and local governments from requiring businesses without a “physical nexus”—that is, property or employees—to collect sales tax. States complain that this restriction puts brick-and-mortar stores at a competitive disadvantage and reduces government revenues... 
The real reason some Republicans in Congress are now rushing to pass their kill Quill bill is that they want to get credit for axing the Court’s 1992 decision with retailers at home. But stuffing such an important policy change inside a huge spending bill with little debate would be a political scam. Raising taxes on small business and consumers won’t be a good look for Republicans in November, nor an inducement for investment and growth.
-Robert Wenzel 


  1. I expect Pres. Trump to get behind this effort to impose sales taxes.

  2. My understanding from researching the issue decades ago was that states are allowed to collect a so-called use tax from the customer but cannot charge a sales tax to be collected by the out-of-state vendor. Michigan income tax returns have a section requiring you to report all of your out-of-state purchases on which you did not pay sales tax and you are required to pay the identical use tax along with your income tax payment. Since most people do not report their purchases or pay the use tax, state and local governments want to force the out-of-state vendors to collect it at the time of sale.

  3. It smells to me like, yet another government power grab.

    1. It is a way for big business to force small business off the Internet. Amazon can afford to collect taxes from all 50 states. The small guy cannot afford to have people doing that, it is a nightmare for the small marketer on the Internet. Big Business = big campaign donations, small business = no campaign donations.