Chris Christie supports equal collection
I’ve written before about the issue of equal collection legislation.
The basic idea is that many residents of states don’t pay the use tax that they usually owe when they purchase items from out of state sellers.
It’s different with in-state sellers (such as your chain brick-and-mortar stores, or “Mom and Pop” stores). Those stores can be compelled by the state to collect sales tax at the time of sale.
Most people, I think, perceive this as meaning that you don’t have to pay sales tax on out-of-state purchases from places like Amazon, even though that’s not what it means. Oh, I suppose you don’t “have” to pay it, but you owe it in the same way that you owe income tax.
Different states have tried different ways to redefine things with so-called “Amazon laws”.
Amazon itself supports a national sales tax policy (not a national sales tax). They want all internet retailers to have to collect the sales tax at the time of sale. Why would they want that, when it presumably gives them a competitive advantage not to have to do it?
For one thing, they don’t want to be singled out. If they collect sales tax, other online retailers should have to collect sales tax the same way.
This has also been perceived as something Republicans would support less than Democrats. It is additional regulation on businesses: it may be perceived (again incorrectly) as raising taxes (rather than as changing the collection method).
That’s why it’s big news that Chris Christie, a leading light Republican, has supported equal collection:
Christie doing it may lead to other Republican governors supporting it.
However, it’s important to note that this is a deal between New Jersey and Amazon…it isn’t Federal regulation.
I also want to point out that there are people who think that having equal collection policies (however they are achieved) will right a wrong and allow brick-and-mortars to compete more fairly with online retailers.
I’ve said before (as a former bookstore manager); brick-and-mortars can’t compete with the internet on selection. I don’t think they can compete with it on prices (even with sales tax collection). Online retailers can charge for shipping, but I do think it is more efficient to be an online retailer in many cases. One big issue? No shoplifting. Yes, you’ll still have employee theft, but shoplifting is a much bigger issue than you think.
It will “level the playing field” a bit, though.
I’ll go back to my basic principle: people will shop in a brick-and-mortar, paying higher prices, having the inconvenience and expense of driving there, and having the smaller selection…because they like the people who work in/own the store and want to support them.
That’s the trick. I know, I know…it’s easier said than done.
“Another romantic lunacy. We assume that a personality problem can be liquidated merely through an understanding of it – as though a man could lift a mountain once he admitted it was heavy. No: recognition is not synonymous with solution. I fly toward freedom as a moth toward the candle, and nothing so insubstantial as Reason will turn me aside.”
–Dr. Charles “Doc Bedside” Bedecker
written by Piers Anthony
While this is a very tough time to get anything passed at the Federal level, I could see how, if all the states had already required equal collection, the Feds would then step in to unify it.
States have a significant motivation to make this happen (they need the money), and Amazon has a significant motivation to guide the process so the impact affects them and their competitors evenly.
Are the days of no tax collection on internet sales numbered? Not numbered, I think…but an end seems likely.
Oh, I should mention (despite that being a good exit line) ;) that most of the proposals I’ve seen for this have minimum sales thresholds. If you sold your old bicycle on eBay, you might not be required to collect sales tax (the buyer would still pay use tax, I think). If you sold a thousand old bicycles, that might be different. Think of it selling just a few items like having a garage sale, in terms of enforcement.
What do you think? Will there be a national policy mandating collection of applicable sales tax on out-of-state internet purchases? Would that violate the interstate commerce clause? Does it matter for this issue which party wins the Presidential election? Is the current situation unfair? Feel free to let me and my readers know by commenting on this post.
This post by Bufo Calvin originally appeared in the I Love My Kindle blog.