What’s needed is protection for Internet sellers and consumers.
Imagine if the cashiers handling your Black Friday checkouts asked to see your driver’s license so they could look up sales tax rates and rules for the town where you live, then file returns and face tax audits for every state their customers came from. That sounds crazy, but it’s exactly what the latest Internet sales tax bill would require for any business that sells through a catalog or website.
Lawmakers in Congress, backed by deep-pocketed lobbyists from Walmart and Amazon, want to impose a radical new tax regime under the guise of “leveling the playing field.” In reality, the only things likely to get “leveled” are the small businesses that go online to compete with the superstores, and American consumers who value the choices they find on the Internet.
The websites of big box retailers already have to collect sales tax for every state because they have stores everywhere. And with its new distribution centers, Amazon is already required to collect sales tax for over half of the U.S. population. So these retail giants favor a new tax regime to make things a bit easier for themselves while imposing a boatload of new costs on their smaller competitors.
Just who are these competitors? Think about your favorite specialty catalog for vintage gifts or hobby and craft supplies. Or that new website offering monogrammed jewelry or hard-to-find accessories.
These small businesses already collect sales tax for states where they’re located. But this new tax would require them to spend thousands of dollars to integrate “free” tax software and expand their back office. Worst of all, these small businesses would face tax demand letters and audits from 45 states, the District of Columbia, U.S. territories and hundreds of tribal organizations.
And that’s where this new tax hurts the American consumer. Greater tax compliance costs will mean fewer start-ups and small sellers offering you the new products and specialty items that just can’t find a place on Walmart shelves.
The Internet creates new challenges for business and government, and we need smart solutions that are simple enough for a small business to handle. But the Internet sales tax bill passed by the Senate and supported by USA TODAY just gives the government new tax and regulatory powers that are as big as the Internet itself.
Steve DelBianco is executive director of NetChoice, a trade association of e-commerce businesses and online consumers.