From Robert Whitcomb's "Digital Diary,'' at GoLocal24.com
I hope that the U.S. Supreme Court reverses itself and decides that retailers on the Internet can be made to collect state and local sales taxes in states where they have no physical presence. If somebody in a state buys something at a physical store in that state and has to pay its sales tax, it’s only fair that someone residing in the same state pay sales tax in buying the same product online.
The problem goes back to a 1992 Supreme Court ruling that spurred Internet shopping. That ruling, Quill Corporation v. North Dakota, said that the U.S. Constitution bars states from collecting sales taxes from enterprises that don’t have a physical presence in a state. But in these surreal times, more and more of us don’t seem to have a physical presence anywhere.
Internet retailers complain that collecting the taxes will be too complicated. But in a world where, for instance, social-media companies can micro-target customers with great precision, I’m sure ways can be found to efficiently manage the tax collection.
It has long struck me as bad public policy that physical stores (whose owners pay local property taxes and otherwise contribute to the local economy and civic life) must collect sales taxes from local consumers patronizing these establishments while businesses living on computers far away don’t have to. Unfair advantage.
This inequity has deprived states of billions of dollars in tax revenue to pay for essential services and transportation and other physical infrastructure.