Will states rights to charge eTax be reformed?

Author: Jared Fallon

Back in 2008, many journalists’ predicted that other states would start following New York/Amazon’s decision to start charging tax for all citizens within the state ordering from Amazon.com, which, in turn, would lead to possible Federal taxes for such purchases. New York’s policy began on June 1 of this year and marks the supposed end of tax-free e-commerce – a movement that began taking full momentum at the beginning of the year. The approach for states’ efforts for charging an e-tax has been proposed and debated over the two most recent National Conference of State Legislatures (NCSL), and has been reviewed with favor from influential people such as Neal Olsten, federal affairs counsel for NCSL. When asked about an pro e-commerce tax policies Olsten was quoted saying “We’ve heard encouraging words from the Democratic Leadership in the House.”

More recently, tax-advocacy groups and lobbyists have pursued such actions, largely claiming that states need the potential millions of dollars in profits that they are missing out by allowing such purchases to continue being tax free. Verenda Smith, associate of the Federation of Tax Administrators, takes a more absurd humorous patriotic route. “Do you want to be a good American, or do you want to be an American who wants to cheat your government deliberately? It’s a harsh way to look at it, but it’s true.” Considering the fact that being a “good” American has a direct correlation with a pay raise for Verenda,  she should read Carnegie’s “How To Win Friends and Influence People” next time she decides to make public comments that are more embarrassing to herself than condemning of the general public. One senator aims to limit such restrictions, and hopes to help keep the internet free, at least to some degree.

Kentucky’s Jim Bunning (R) is proposing S.3670, a plan to regulate certain State and local taxation of e-commerce. Despite the fact that Bunning’s proposal does not address taxation for citizens making purchases within their respective state, it is refreshing to see bills that do not encourage such legislation. More dialogue must be created about such proposals to help encourage online purchases to remain free of such impositions. In recent times, other proposals to limit e-commerce from being taxed are gaining as little momentum as Bunning’s, receiving few (if any) co-sponsors. Action must be taken to, at the very least, limit the amount of jurisdiction states have over such transactions.  

Bunning, a former Major League Baseball pitcher, seems to have been batting 100 in the realm of e-commerce for consumers…we need more with the same mindset in Congress if there are any hopes to keep taxation from reaching the invisible but intrinsic borders of e-commerce.