Could the Internet sales tax issue finally get fixed?

The sales tax regime used by the states has been having real problems in recent years, as online commerce has greatly changed the flow of commerce.

Republican-run states have been reluctant to pass new taxes to adapt to the shifts, but would rather that existing taxes be applied to the new commerce. However until now, legislative efforts to make that happen have been failing pretty badly. This time may be different.


Bluntly: previous efforts for Internet sales tax laws have been completely hijacked by special interests, were very greedy, and didn’t seem likely to pass. The so-called Marketplace Fairness Act wasn’t an attempt at fairness, but an attempt to punish online retail.

But now there’s a new bill, one that would force states to simplify. Importantly, the tax collections by retailers would be done according to rules set by the retailer’s base state, not by the buyer’s state. The buyer’s state would only set the tax rate.

This quote in the Wall Street Journal probably represents my view:

“People have dug into positions for literally years now,” said Brandon Arnold, executive vice president of the conservative National Taxpayers Union. “I think this strikes a pretty reasonable balance.”

Something like this I think deserves a full legislative process to refine, giving guys like Ted Cruz a chance to look at it and suggest fixes. But this bill seems to be something that’s actually fair, and not picking winners and losers.

And to me that’s the most important thing.


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