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It's Here! Internet Tax Introduced in U.S. Senate

by Steve Faber
3 replies
Well, the moment we've all been waiting for is here at last. Senator Dick Durbin of Illinois has introduced his Main Street Fairness act requiring all Internet business to collect sales taxes. The problem for Internet marketers is that, instead of implementing an easy to collect universal tax rate, his legislation requires local taxes be collected and remitted.

See it here:
Critics of Durbin’s New “Main Street Fairness Act” Say it Will Trade High Paying Small Business Jobs For Minimum Wage Retail Positions | allmoneynews.com

Any thoughts, plans, or ideas?
#internet #introduced #senate #tax
  • Profile picture of the author JohnMcCabe
    If I recall correctly, there's an election scheduled for next year. As far as the economy goes, none of the people up for reelection have much to brag about. So this proposal is one way of giving the politicos something to talk about when they start stumping for votes. Even if it fails (and I have a feeling it will, given the current climate), Durbin, Conyers, et.al., can say "I tried, but those blankety-blank other guys blocked it."

    I'm under no illusions that some sort of tax collection scheme is coming. There's too much potential money floating around in the ether to let it continue without trying to tap it.

    I do think that any final implementation will require some kind of simplified tax, perhaps a uniform online sales tax.

    I also believe that there will be a threshold for sales, below which the vendor would not need to collect tax. This would be similar to the 1099 system for reporting sums paid to contractors.

    Of course, it's possible that reason will prevail. (Although given both parties' recent records, that's about as likely as Juan Valdez's donkey winning the Breeder's Cup.) Maybe they'll realize that a system that both sides bitch about just might be reasonably fair to both. And that the income tax paid by the small businesses and online sellers is more valuable than the possible sales tax dollars to be gained (and lost when those businesses fold).

    Just don't hold your breath...
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    • Profile picture of the author myob
      Most states that have sales tax already have a requirement for residents to pay retail sales tax on all internet purchases. For example, here in California, you must declare your purchases and pay the appropriate tax when filing state income tax. Doesn't everybody already pay their legally-mandated internet sales tax now?
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      • Profile picture of the author Steve Faber
        Originally Posted by myob View Post

        Most states that have sales tax already have a requirement for residents to pay retail sales tax on all internet purchases. For example, here in California, you must declare your purchases and pay the appropriate tax when filing state income tax. Doesn't everybody already pay their legally-mandated internet sales tax now?
        This legislation shifts the burden from consumers to businesses. The main problem for smaller businesses is that instead of there being one, easy to collect tax, the business is subject to whatever taxing jurisdiction the buyer resides in. That could, and most probably will, if past government initiatives are any indication, be an undue burden on many online businesses. (Yours, perhaps?)
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