9/06/2005

Internet Taxes?

While looking for a topic to blog on, I ran across an article that could affect millions of people everyday. The article I found concerns states who are pushing for sales tax on internet purchases. As stated in the article, Utah is one of the states that is likely to implement this plan if possible in the next five years. Though a piece of legislation like this might help out the small businesses that are unable to conduct business online, in my opinion the losses that result elsewhere will outweigh the gains. Companies such as Amazon will be hurt the most because what is the point of buying from them when consumers will now have to pay sales tax and shipping. From my experience, not having to pay sales tax is one of the benefits that pursuades me to shop on the internet. What are your opinions on sales tax for internet purchases?

7 comments:

Ann said...

I hate to burst your bubble, but there are some companies that charge sales tax when you order online. If you order a product from a company that has a store in your area - even if that product is not carried in the store, you pay a sales tax. So is it fair that some companies get to charge sales tax for internet orders and some don't? Is it my fault that the store in my state doesn't carry the item I want? I personally think the shipping and handling is enough - although that money doesn't go directly to the state.

Tyler said...

There are many other positive aspects to consider regarding the purchase of items on the internet. Here are some that come to mind, ease of shopping from home, an enormous variety of products, easy price comparing, and in most cases a very simple return policy. To me those things are important enough regardless of sales tax.

Dr. Tufte said...

-1 on Dan't post for an uninformative phrase to link from.

I think you are all missing the forest for the trees. Think about it: would internet commerce have developed in the first place if it didn't have the (systematic) advantage of no sales tax? Further, in some sense, the creation and use of sales taxes caused the ultimate development of the internet. So, this is really a case of somebody (the states) doing something bad (the tax), having consumers react in a reasonable way (avoid the tax), and then sitting around listening to the bad guys say that they should act even worse.

Danny Ragins said...

Excellent, that was really well explained and helpful

Dr. Tufte said...

Thanks so much!

Matthew said...

Dr. Tufte said the “use of sales taxes caused the ultimate development of the internet,” which is true. I have no problem paying a tax to a business, but when I buy something from a person online (like through eBay), not a business, I don't think that's right to be charged sales tax. The biggest problem though, like Dr. Tufte said, is that consumers are avoiding the tax. I'm posting this on 4/15/08, and I paid my taxes for things I bought online. However, I think the majority of the population didn't because the rule is not well-known, nor is it enforced. So, the honest people who know about it are the ones who get hurt.

Dr. Tufte said...

There's a broader issue here: the sovereign right to tax is based on location, the possession of location, and protection of location.

Exactly what basis is there for taxing transactions that don't take place in a physical location?