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EDITORIAL: Internet sales taxes

When California pols imposed strict new regulations on vehicle emissions and demanded automakers meet a quota for selling "green" cars in the state, it would have been interesting had Ford or General Motors told them to stick it, opting instead to close their Golden State dealerships.

That didn't happen, of course -- California is a big market.


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  • But now it appears that some big Internet retailers aren't as timid as the automakers when it comes to battling state meddling.

    The main point of contention involves the collection of sales taxes. In most cases, Web retailers don't have to charge sales taxes in states where they lack a storefront. Traditional retailers hate this -- as do many state politicians eager to get their hands on as much money as possible.

    So a handful of states have come up with a novel theory, arguing that they can indeed collect sales taxes from Web retailers that use online affiliates which are located within their borders.

    These affiliates help large retailers such as Amazon.com by linking to products or promoting deals -- and they receive commissions if sales result.

    But the move has already backfired. When North Carolina lawmakers recently moved closer to passing a bill forcing retailers to collect sales taxes based on affiliate sales, Amazon cut off all its affiliates in the state. It has taken similar steps in Rhode Island and Hawaii, as has Blue Nile Inc. and Overstock.

    The states are "shooting themselves in the feet," Rebecca Madigan, founder a California group that represents affiliate marketers, told The Associated Press. Affiliates are advertisers, not salespeople. "They don't deliver product, they don't take any money from a consumer, and most of the time they don't even know who the consumer is," she said.

    Nor is this all simply a matter of fairness. Storefront retailers by their very physical presence impose certain costs on communities that their Web counterparts do not.

    Where this will lead, nobody knows. But rest assured that the government's pursuit of online sales tax revenue will never end -- it is simply the nature of the beast to seek domain over every human endeavor.

    In the meantime, kudos to Amazon, Blue Nile and others for fighting the good fight in the effort to keep the Internet a relatively tax-free zone.

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    Gene Short wrote on July 12, 2009 07:17 AM: I do believe I heard on the news the other day that there is a Federal law that prohibits state's from collecting sales tax on internet sales due to the complexety of each states tax laws. However, that doesn't seem to stop can't get enough tax politicians trying to gouge uninformed voters.


    mormons are mis understood wrote on July 06, 2009 11:03 PM:

    douglas wrote on July 06, 2009 09:18 PM: most likely at some point with the state budgets in tailspins, there will be some national "reciprocity" to collect each jurisdiction's sales tax.

    there is precedent in cross jurisdiction taxation. in some "metropolitan" areas, sports arenas are funded by a "regional" sales tax boost. those new taxes cross into neighboring cities and counties. same with a created "regional" transportation bureaucracy, with taxing/confiscation powers.

    worse the "change" administration will impose some "needed" v.a.t. on many categories of goods and services, nationally imposed. "independents" and some "conservatives" have proposed such a v.a.t. but on condition that the rate be established in advance and the i.r.s./income/cap gains/death taxes be simultaneously eliminated. the leftists of course have consistently objected. they've claimed that some segment of the population would be unfairly overtaxed. the real reason is that the gubmit spending would be limited to that percentage collected. limited by the health of the economy. since the "change" regime is for unlimited overspending, if a v.a.t. is imposed, the i.r.s. will continue as usual.

    i still want to have explained how a gas pump will know if the customer earned less than $250k a year when those numbers spin away while pumping. if the "change" oaf didn't lie multiple times, only those wealthy earners will pay the new, promised ["skyrocket"] energy increases.


    Rick wrote on July 06, 2009 06:40 PM: Good for Amazon, Blue Nile and others for taking appropriate actions to, "Just say no to state taxes on internet sales".

    State morons grant themselves largess over time in the form of money and benefits and they want someone else to pay to keep it going. Not once have you heard a Sate person say, hey, lets take a pay cut. Or, "Gee, maybe making more retired then I did working is not a good bookkeeping move!"

    The current answer is, "need a looser, look to the State leadership and employment rolls." The benefits start here!

    But when they ask you to pay for that looser in the form of taxes "NO should always be the answer."

    I love that line they hand out for consumption where they say, "They negotiated for what they got."

    What a crock! Negotiated with whom? Some other state looser? Behind closed doors? To keep learned people from seeing what they were up to?

    Then all that's left is to buy a good politician to claim the negotiations fair and true and you've got yourself a law that can't be broken - except by bankruptcy - which no state has the balls to do. That would mean starting over - "they say!" We would have to collectively think - "They fear"! We would have to live within a budget -"for once and forever". That's just not fair - "they think'! It's not the largess promised me and others.

    I think all the taxer's should get fired and have to work outside the government system for 5 or more years, without the ability to contract with the government system or a contractor. They might get a new appreciation for their real worth!

    Rick Blum


    Tim wrote on July 06, 2009 04:48 PM: Steve,Mormons are against everything the libs are for.
    It may not make sense for normal thinking americans,but for the libs,they grasp at anything.

    Example,nutcase below.


    Steve S. wrote on July 06, 2009 03:07 PM: Where did the Mormons appear in this article friend [what is your real name – input here]? Perhaps, you need to reread the article again and make comments based on what is given and not your tainted religion bigotry.


    imaginaryfriend2 wrote on July 06, 2009 01:04 PM: I always felt the only way an internet sales tax would work is at a federal level.


    Free Nevada wrote on July 06, 2009 12:48 PM: I like this editorial. The same point can be made about Nevada adopting taxes on non-hospitality small businesses, first in '03 and now increases in '09 with inevitably more to come. This will drive all businesses out of the state, some even back to California (which is more expensive but that's not the point --California has a ton of advantages, Nevada had just one: 1-888-4NO-TAXES).


    Allen wrote on July 06, 2009 12:27 PM: To [insert inane, rambling, off-topic sentence-as-name here],

    You're making yourself look even more ridiculous. You should stop before you hurt yourself.

    "when overstock and other mormon based companies fight to protect only their profits and not all of american citizen's rights, then they are not 100% in favor of america,just their own special interests"

    Overstock, as well as any other company, does not exist to protect other people's rights. Businesses exist to provide a profit to their owners. Providing a good/service to a paying customer who is fully aware of the nature of the good/service is not a scam.

    and since this topic is about taxes. and scams are in place to basically steal from american's. it makes all of the posts on-topic and related, and diversions you make to draw attention away from anyone involved in scamming innocent-through-not-knowledgeable. are basically unconstitutional to even the mormon internet police and their diversions."

    I'll be frank, here. I have no idea what you are talking about. Your incoherent assembling of words and random punctuation simply isn't making sense. I did get a chuckle out of "mormon internet police," though.

    "fiat currency is money/paper a government declares can be used to pay taxes."

    See, here is where your lack of reading comes into play. This is not the definition of "fiat currency." This is the definition of "legal tender." But thanks for playing.

    "yet fiat currency to most people is money "not backed" by any precious metal or backed-by-something /guaranteed not to be worthless...

    Assuming you mean legal tender here, this sentence just doesn't make sense. You say that to most people, currency is either unbacked currency or commodity money. Gee, that seems to include, well, just about everything.


    why mormons police the internet wrote on July 06, 2009 11:12 AM: when you live a lie you have to attack others who know the truth, to hide,coverup those lies.
    when overstock and other mormon based companies fight to protect only their profits and not all of american citizen's rights, then they are not 100% in favor of america,just their own special interests . simply, the same can be said about the federal reserve and the profits they make off tax-payers aswell.
    and since this topic is about taxes. and scams are in place to basically steal from american's. it makes all of the posts on-topic and related, and diversions you make to draw attention away from anyone involved in scamming innocent-through-not-knowledgeable. are basically unconstitutional to even the mormon internet police and their diversions.

    fiat currency is money/paper a government declares can be used to pay taxes.

    yet fiat currency to most people is money "not backed" by any precious metal or backed-by-something /guaranteed not to be worthless.
    either way the federal reserve note is not backed by tangible anything or gold in fort knox and no matter how big a diversion you create or make,to draw attention away from the truth.
    the federal reserve will continue to make money off americans because of the powerful scam artists in high places.and because the constitution is being stifled, guarantees them a profit and a social security card built-in-customer from cradle to grave.

    telling the truth about who someone really is, is not bashing.lying and pretending to be something you are not, while secretly turning your own profit wheels and gears, is a fraud, regardless of what you hide behind to do it, whether it be a phony religion and a powerful goon squad of armed agents or verbal attacks and internet policing.

    the prophet or profit is still false except in your "all that matters" bank account$


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