Conservablogger Power Quote

"...But when a long train of abuses and usurpations, pursuing invariably the same object evinces a design to reduce them under absolute despotism, it is their right, it is their duty, to throw off such government, and to provide new guards for their future security..." The Declaration of Independence


Thursday, March 28, 2013


The marketplace fairness act is touted as a way of leveling the playing field between brick-and-morter and online retailors (in terms of state sales taxes).

Proponents of this act like it because online retailors in many states don't charge a sales tax and thus have an unfair advantage compared to stores in states that do charge sales tax.

Think about this for a minute.

Suppose this act is passed, the state of New York would be able to audit businesses in other states to ensure they are getting all they are due. States that charge high state taxes would be able to harrass states that have lower, more business friendly taxes.

Here are five reason why this is a bad deal, all the way around.

1. The bill expands state tax authority - State governments will be able to tax across their borders despite clear legal and judicial precedent arguing otherwise. Plus, in the case of an audit, businesses would be required to settle disputes with out of state revenue boards in out of state courts.

2. The bill saddles small business with bureaucratic red tape - Small businesses would be forced to accommodate over 9,000 highly variable state and local tax codes, collection standards, and remittance schedules.

3. The bill threatens privacy - Business and state revenue boards with a track record of losing private information will have more chances to do so.

4. The bill discourages tax competition -- Rather than competing to lower taxes and attract businesses, states will compete to raise taxes on residents of other states.

5. The bill imposes bigger and bigger government - The bill will open the door for further government intrusion into the Internet and for states to reach across their borders for other taxes.
At the end of each year, businesses are responsible for sales tax.
Businesses can choose to tax their customers at the point of sale or pay what they owe in sales tax at the end of the year. Businesses, therefore, act as a tax collection arm for the state in which they are located and are the immediate taxpayer, not the consumer. During an audit, it is the business that is responsible for settling any outstanding balances. The state revenue departments do not pursue consumers over individual purchases; the state revenue departments pursue the business.

No comments:

Post a Comment