Kelleigh Nelson — Internet Sales Tax Coming…
“All the world should be taxed” —Caesar Augustus
The only difference between a tax man and a taxidermist is that the taxidermist leaves the skin. —Mark Twain
The power to tax is the power to destroy. —John Marshall – Chief Justice of the Supreme Court
On Thursday, February 14, 2013, Senator Lamar Alexander, Republican from Tennessee, joined fellow lawmakers in reintroducing a bill that would allow all states to require online retailers to collect sales tax just like their “Main Street” rivals.
The idea isn’t a new one. However, a 1992 Supreme Court decision stated that a business must have a physical presence within the state in order for the state to collect sales tax when someone purchases from that business.
Similar legislation was introduced in 2012 to “level the playing field” so that local businesses didn’t have “unfair competition” because of the local taxes. The Marketplace Fairness Act from last year never left a Senate committee. We would hope the same thing would happen with this new bill.
Before internet sales, we had catalogues that came in the mail. If the catalogue business did not have a store in your state, you paid no sales tax. Now, with internet, we order from these same businesses, via internet, rather than calling the catalogue company on the phone. It’s the same premise.
The Governor of Tennessee is Bill Haslam. When he was first elected, he announced his plan to contact all of the state governors and have them pressure the Congress to push for an internet tax on all purchases whether the business had a presence in the state or not.
Haslam has already changed the taxes for Tennesseans by breaking an agreement our former governor made with Amazon. Amazon is coming to Tennessee, not as a storefront, but as a shipping hub. Our former Democrat Governor Bredesen, had an agreement with Amazon that Tennessee sales tax would not be charged on purchases from Amazon despite the presence of a shipping hub in the State. Bredesen wanted the 600 jobs in Tennessee, but did not want to punish the citizens of Tennessee for bringing those jobs to our State. Our Republican Governor has seen to it that this agreement is now void, and starting in 2014, Tennesseans will pay 9.25% sales tax on purchases from Amazon.
In 2011, when I was asked to critique the local Tea Party here in Knoxville, and attended several meetings, I learned their main focus was against spending and taxes. The chairwoman kept saying their goal was to cut off the head of the spending snake. Unfortunately, they didn’t allow me any real time to speak to the subject, and they never launched a fight against the internet tax. As I explained in Part 2 and Part 4 of the series on The Tea Parties, this group was infiltrated with RINO change agents from their inception.
Haslam claims Tennessee is already losing between $300 million and $500 million a year on untaxed Internet sales. However, this is money the states never have had in their coffers, so how can he claim it is a loss?
Gov. Bill Haslam testified before Congress in July 2012, on behalf of a bill that would have let states collect sales tax on Internet purchases. “This is an issue of fairness,” Haslam said in prepared remarks released by his office. “Comparable businesses that sell the same things are not being treated the same. Most people I talk to understand that and agree that isn’t fair.”
In 2012, the House Judiciary Committee considered a bill that would clear up the 20-year-old Quill ruling, which said states can collect sales tax on catalog sales only if the vender is physically located within their borders. The rationale was that it would be too complicated for catalog retailers to calculate the sales tax in each jurisdiction where they sell goods.
The ruling was later applied to Internet retailers. But………..