With tax revenues all over the nation in a downward spiral, it is no wonder that many states are trying to close any loopholes in the avoidance of paying sales tax. The latest one we are hearing about is the state of North Carolina, where the struggle occurs as this is written.
There are those that say we should be closing all the loopholes in the tax laws, but to them I say that is easily done – move to a flat income tax, nothing else, and let the various governments learn to live on it. As a person that votes in the Democrat column most of the time, and someone who understands mathematics, I get the idea that this type of tax is regressive, and therefore seemingly unfair to low income persons. Of course it is. But the point of all of the tax question, and one I agree with, as one who in many ways is Libertarian, is that all tax is unfair to some group, so the very most fair situation is equal percentage across all people.
I suppose the H & R Block lobby isn’t going to take that one lying down.
Because no one can agree on a flat tax, there will always be ways that the clever will use to avoid some or all taxes. Since the amount that the average person might buy on Amazon would be minimal, why fight so hard over this small amount of avoidance? Also, since most of this uncollected tax occurs because of out-of-state purchases, it might seem to the intelligent mind that it just could be the small minded and greedy locals, unwilling to compete fairly, may have more than a little to gain by pushing this sort of thing in their own areas of influence.
The PC World article tells that North Carolina not only wants taxes going forward, they want to go back seven years, and have Amazon help them in their exploits –
Amazon is fighting back against what it calls an invasive inquiry from the state of North Carolina. The retail giant has filed a lawsuit challenging North Carolina’s demand that it hand over the names and addresses of every state resident who purchased items on the site since 2003 in order to collect income taxes.
In a 14-page complaint [PDF] filed in U.S. District Court for the Western District of Washington, Amazon claims the state’s request “will invade the privacy and violate the First Amendment rights of Amazon and its customers on a massive scale.” Beth Stevenson, director of public affairs at the North Carolina Department of Revenue (DOR), declined to comment.
Putting it in the language of the area – “damn revenuers!” I would think that if Amazon is going to put forth so much effort, it should get a cut of the taxes collected, as an agent in the collection.
Amazon’s main argument is that it has already complied with the DOR by providing “the order ID number; the city, county, and zip code to which the item was shipped; the total price for the transaction; the date of the transaction; and Amazon’s standard product code for each item.”
Providing more personal details about the more than 50 million orders between August 1, 2003 and February 28, 2010 could curb individuals from purchasing potentially controversial materials out of fear of disclosing their choices to the government, Amazon says. The suit uses Lolita, Fahrenheit 9/11, Brokeback Mountain, and the music of Eminem as a few examples of items that are apparently considered controversial.
Oh, so that is the problem. I had not thought of the possibility that anonymity could be the reason for purchase at Amazon. I was only thinking about my reasons for buying from them, savings. With that concept in mind, I would think it could be successfully argued that Amazon is correct in its reticence to give names and street addresses (it should be a slam dunk, but he law is not always as easy as it seems to the logical mind)
New York passed a similar law last year, dubbed the “Amazon Tax,” when the governor decided to tax all online purchases. Earlier this year Colorado enacted a similar law, which resulted in Amazon removing its marketing affiliates from the state. Federal law prevents states from requiring out-of-state retailers to collect sales tax if the company does not have a physical presence in that state. Amazon has already removed itself from North Carolina and currently doesn’t collect sales tax there.
According to Amazon’s complaint, North Carolina is also violating the Video Privacy Protection Act of 1988, a law that makes it illegal to disclose personal information about movies rented for entertainment purposes. The Video Privacy Protection Act archaically covers “prerecorded video cassette tapes” but has language protecting “similar audio visual material.”
“Despite assurances from tax collectors that the era of Big Brother isn’t here, they seem to be doing a lot to rewrite the book for modern times,” Pete Sepp, the executive vice president for the National Taxpayers Union, told CNET. “Unless Amazon succeeds, extraordinary demands like these could become the norm.”
It has been argued in California that if the state did this same sort of thing to Amazon, it would flush business from this state like an old fashioned high-volume toilet. That was where it ended, as people actually woke up and saw the light (the state’s unemployment rate, being third highest in the nation has a marvelous way of clearing the mind about monetary policies).
What may happen is states that have policies that are conducive to business by online retailers will enjoy the taxes that these companies produce, and the ones that are unfavorable will find that no business wants to be located there, and only the direct service businesses will stay. I doubt that they would like that.
The way that interstate processes work was put into place long ago, and those people had a decent idea of what was needed and what was not – they also did the ruminating on the subject in a time with far fewer interruptions, and most likely came out with the proper outcome.
Until we get to that flat tax, based on income, where no form of additional taxation is necessary, the old ways probably should not be circumvented by a few who don’t have the big picture.
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