 Democrats in Congress are hoping to push through a measure that would allow states to collect over $23B USD extra annually from citizens. The measure would allow states to tax currently untaxed online sales. (Source: The BS Report)
Proponents say measure would pull in $23B USD extra in taxes from citizens
Enjoy your tax-free internet purchases from sites like Amazon.com while you can. If Democrats in Congress get their way, an internet sales tax provision -- similar to those adopted by a handful of states, like North Carolina and New York -- will soon become law.
Rep. Bill Delahunt (D-Mass.) introduced a new bill, the "Main Street Fairness Act", co-sponsored by Reps. Michael Capuano (D-MA), John Conyers (D-MI), Stephanie Herseth Sandlin (D-SD), and Peter Welch (D-VT), all Democrats. Not a single Republican has been willing to sign on as a bill sponsor.
The exact text of the bill at this point is unknown as it's been submitted to the Library of Congress from the Government Printing Office, and may take a day or two to be transferred into the electronic system. You can check here to find the text once it is posted.
It's thought that the bill would dissolve the so-called "nexus" protections, which allow for companies without significant presence in a state to avoid paying sales tax on orders from there. That concept was defined by the case Quill v. North Dakota, which concluded, "Congress is now free to decide whether, when, and to what extent the States may burden interstate mail order concerns with a duty to collect use taxes."
Cash strapped states are cheering the measure. They say it could rake in as much as $23B USD extra tax revenue from citizens yearly. The National Conference of State Legislatures has endorsed the measure.
Frustrated by being outmaneuvered by primarily online competitors, brick and mortar retailers also heartily support the measure. The Retail Industry Leaders Association, whose members include Wal-Mart, Home Depot, Costco, AutoZone, Target, and IKEA, applauded the move.
In related news, the American Civil Liberties Union (ACLU) has joined the fight against North Carolina's plan to tax online purchases. The group filed a complaint attached to Amazon.com's lawsuit against the N.C. Department of Revenue.
The fight is stemming from Amazon.com's refusal to turn over customer information that could lead to collection from and possible prosecution of citizens who failed to report their online purchases. The ACLU says the demand for information violates citizens' guarantees of "free speech, anonymity and privacy".
Katy Parker, legal director for the ACLU of North Carolina Legal Foundation, comments, "The ACLU is not taking issue with the department’s authority to collect taxes on these purchases, but there is no legitimate reason why government officials need to know which North Carolina residents are reading which books or purchasing which specific brands of products. We had hoped the department would narrow the scope of its requests in order to protect privacy rights, and we are surprised and disappointed that it has become necessary for us to take legal action in order to safeguard consumers’ rights."
Amazon's suit began in April with a filing in the U.S. District Court for the Western District of Washington against the N.C. Department of Revenue. The outcome is significant as if the ACLU, Amazon.com, and others can successfully fight having to turn over sales records, any national level internet sales tax revision could be made, in essence, impotent.
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