Index for Insanity, Inc.
Marketplace Fairness Act aka Internet Sales Tax
Some of the discussion regarding the Marketplace Fairness Act, aja Internet Sales Tax is quite interesting, but it typically shows people to be hypocrites.
The claim is that this needs to be done to make things fair, but how is it fair when there is an exemption for those who have less than $1 million in sales? Is it fair that a business which has $999,999.99 in online sales is exempt, but a business with one cent more has to deal with the sales tax? Is it fair to force a business to collect sales tax for another state in wihch they don't live? Is it fair to force businesses to learn ALL of the sales tax issues in ALL of the different states, counties, cities, etc.?
Take a look at:
Wikipedia: Sales taxes in the United States
Notice that some states charge sales tax on food, clothes, etc. and other states do not. Some states have tax holidays, which the business in another state would need to know about. The mess it creates is going to be large. Bigger companies will be able to deal with it better because the overhead over all the sales will be less. It could kill smaller businesses. Remember that $1 million in sales does not mean $1 million in profit. Some businesses have low profit margins due to the items that they sell. This extra cost could cause them to lose money.
If you look at the bill:
H.R. 684: Marketplace Fairness Act of 2013
there are many interesting things. You need to look to see what it includes, as well what it ignores. Where does it talk about resale exemptions? Instead of having one program which can determine whether an item is subject to sales tax in another state, what the tax rate is and a means of submitting the sales tax, it will have 50 separate programs, along with a separate means of determining if the item is subject to sales tax. Then there are the certified software providers in which you can pay money to get a single program, instead of 50.
What is the process for a business to get a refund on the sales tax due to a return? With a business in a state, there is going to be continued sales, so a refund is easy as you would just not pay as much the next time, but you might not always make a sale to another state, so it would be much harder to get the money back.
One thing that I also noticed is that there are businesses which are for this because it will help them compete and they won't have to collect the sales tax. If this is supposed to make things fair, shouldn't it apply to EVERYONE? Then, if you think that it is the government's job to level the playing field and to make things fair, then shouldn't something be done about businesses which are located in areas in which it is cheaper to be in vs. businesses which are located in expensive areas? How about businesses which bought their building/land years ago vs. a new business where the real estate costs have gone up? What about a business which is located in a state which has no state sales tax?
The bottom line is that states have laws regarding the paying of sales tax for out of state purchases, so if the state wants to, they can enforce these laws. We don't need new laws and we don't need a real mess because states don't want to enforce the current laws.
Index for Insanity, Inc.
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