Mike Young of the Internet Law Resources blog had this to say about a law passed by the Colorado state government to tax Amazon.com purchases:
Colorado is the latest greedy state to stupidly try to collect taxes from interstate online sales. The response? Amazon.com has terminated all of its affiliates based in Colorado.
The state’s new law would in essence have required Amazon and other online retailers to collect sales/use tax from Colorado residents who make purchases and then turn the money over to the state.
Mike Young essentially thinks the law is stupid and is an example of bad government.
And this is what I wrote in a comment:
I’d like to see Congress pass a law that either prohibits taxes on Internet commerce, or presents a uniform, unobtrusive way to collect and distribute taxes.
As it is now, these few states can make it very difficult for Internet companies and affiliate marketers to do business in those states.
A legal question: does the Colorado law violate the “equal protection of the laws” clause of the Fourteenth Amendment?
And a counterpoint I hear from friends who own brick-and-mortar businesses in my corner of rural northern California: they have to charge about 8% sales tax, whereas Amazon and other online retailers do not.
What is your opinion? Is it fair to not tax purchases over the Internet, yet tax purchases made in a brick-and-mortar store? What’s the best solution to this issue?
{ 2 comments… read them below or add one }
Interesting conversation, John! I don’t think it’s fair that a traditional business charges sales tax and internet sales are not required to. On the other hand, as a consumer, I like not paying sales tax on my online purchases. I don’t have an answer for this one; however, I’m a strong advocate for state governemnts to make the decision and not the feds.
Thanks for your comment Stephanie. One aspect of America’s federalist system of government is that typically states are allowed to do certain things, like determine what will be taxed in the state.
Congress has the power to regulate interstate commerce, so it likely could pass a law either stating no taxes on Internet transactions, or certain taxes in certain situations.
I like having the Internet be free from taxes. I sell products on the net, and I certainly don’t want to hassle with collecting taxes.
I do know many people who go into a brick-and-mortar business to examine a product — a book, a piece of electronic equipment — and then go home and buy it online because they don’t have to pay sales tax.