|Friday, March 24, 2000||
Volume 65, Issue 118
Moeller on taxes
|Are states losing
too much tax money?
No new taxes! At least, not on the Internet. Not yet, anyway. Sales taxes on Internet purchases are the current hot topic.
Present taxes are based on a 1993 Supreme Court ruling that said state sales tax couldn't be imposed on a business, unless its physical presence is in that state. (Let's not discuss that. Many Internet users seem to go into their own "state," as their eyes glow with the light from their monitor.)
If all a business has is a Web site, but there's no physical presence, like a warehouse, then there's no tax.
Of course, those poor big businesses that already have stores will have to shell out.
One problem is Congress just isn't sure how to deal with whether or not to tax Web purchases. If it does, then by what standards?
One argument against any tax is that it would be too difficult to regulate which state tax to pay. I have to agree with this. I mean, if I live in Texas and this guy tries to start up a small business selling homemade widgets -- only he doesn't actually sell them at a store or warehouse -- he just logs-on from wherever he is to see if he needs to make more and ship them. But, he's in Milwaukee when he gets the order, in DeMoine when he ships it and he picks up the parts when he drives through Minnesota. If I was in Louisiana when I ordered the widgets for my friend in New Mexico, then I pay taxes to which state using what percentage based on 30,000 tax jurisdictions ... Aggh! I'm confused. And so is Congress. And warehouseless businesses will be too.
Come on, give small business a chance to branch out on the Internet. The corporate tykes can hardly start out anywhere else anymore.
But where do we address international business? Wouldn't it put American businesses at a disadvantage to have to pay a sales tax when stuff sold from across the border or overseas can be sold cheaper and without any tax? Oh! Or maybe we can tax them! But how? Oh, we're back to that problem.
Of course, the majority of the people who pushed for the sales tax on the Internet were folks who don't purchase on the Web. Doesn't that sound like a classic case of "if I have to do it, you do, too!"?
How about if we all grow up and start looking for ways to help each other instead of pointing the finger?
There is one real problem in this, though. Some small towns really depend on sales taxes to pay for roads, schools, ambulances, fire trucks and such. The people in those towns can't afford to lose any money.
But perhaps the point to take away from this isn't to increase sales taxes, but to redistribute what is already taxed.
"Hey! I don't want my taxes to pay for Louisiana's roads!"
So redistribution of taxes isn't exactly easy. But couldn't Congress concentrate on working out how to pay for schools and ambulances instead of bombs, and on how to redistribute the taxes already imposed on people instead of how to get more money out of them?
But in truth, the 19-person committee Congress appointed to decide what to do about sales tax on the Internet doesn't seem to be very interested in placing any taxes. In fact, it has permanently banned taxes on Internet access and decided that the Spanish-American War was finally paid for. At least, I guess that's why the 3 percent tax on telecommunications was lifted -- that's why it was levied to begin with.
But while a majority of the committee thinks sales taxes should not be applied to Internet sales, it didn't quite have the two-thirds vote necessary to convince Congress.
Let's hope we poor students can count on e-commerce Web sites for cheaper textbooks and no sales tax.
If not, I guess our only hope would be to order out of catalogs. Businesses that sell through catalogs don't have to charge tax unless their physical presence is in that state. Maybe Textbooks.com could put out a catalog if everything goes awry.
The way to actually have a say in all of this is to write your representative in Congress with your opinion.
Since I know we're all busy and don't like to meddle in political affairs, I'll just recommend to buy what you can while you can and keep one eye on the news to see Congress' final verdict.
Melançon, a post-baccalaureate student,