Quote:
Originally Posted by PRBuzz
Don't need a national sales tax, just require companies to collect the current state sales tax irregardless of whether they have a brick&mortar location in a given state.
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Simple in theory but logistically very difficult. Taking into consideration additional local and county taxes, there's probably something like hundreds of different sales tax codes (just throwing a number out there) - with additions/adjustments/tax holidays changing every month. It would take a small army of people just to keep up with the changes from week to week. I know you said "collect the current state sales tax" but the problem would then trickle down to the local level.
Forget the business logistics of knowing all the local taxes for a minute, how would states even enforce their collection of taxes from an out-of-state company? If I registered and operated a business out of New Hampshire, the Massachusetts Dept of Revenue doesn't have access to my tax filings or sales reports so they have no idea how much product I sold to residents of Mass. What means of enforcement would Mass have even if they did know my sales numbers? If it goes to the courts, then only the lawyers leave with money.
There are two driving forces behind trying to make online companies collect state income tax - the states who want that money are a small part, the bigger player are the local retail stores. Online stores gain a perceived competitive advantage in Sales Tax places like Taxachusetts because people don't pay their Sales Tax after the fact like they are suppose to and states don't really have a way of forcing you to. So, the states are mad because they aren't getting that Sales Tax and the domestic business are mad because the state's Sales Tax makes their prices 6.25% (or greater) higher than online.
Also, a National Sales Tax on internet purchases doesn't solve the problem either. It would merely step on a state's rights to regulate the tax and put that money that should have gone to the state in Uncle Scam's pocket.