A bill proposing to expand Internet sales tax nationwide is moving forward in the Senate, despite many critics who feel it infringes on states’ rights and Internet commerce.
Yet despite the fears of many conservative anti-tax activists, this bill will not be an infringement, but rather a benefit to many states and small businesses.
Many have cited the Internet Tax Freedom Act to try and claim the injustice of the bill, which is already in effect in California. However, the Internet Tax Freedom Act was passed in 1998 when the Internet was just beginning to be something that everyone had in their homes; back in the days of AOL and “You’ve Got Mail.”
The act was set up to prevent people from having to pay taxes for access to the Internet itself or to email, but does not exempt tax from being collected on sales over the Internet as these are made at the state level like the taxes on mail orders were once upon a time.
There is no way at that time anyone could have anticipated the life the Internet would take on or the effect it would have on brick-and-mortar stores.
Today, most people can’t go more than an hour without being “online” either through their phones, laptops or tablets. Under current law, online retailers can collect sales tax in states where they have a physical presence, like a flagship store or warehouse. With the new bill, sales tax would be collected in the state where the purchaser lives, regardless of the presence of a physical store in that state.
The tax is estimated to collect between $22 billion and $24 billion that have so far gone uncollected. This new source of revenue could help the many states currently in dire financial straits like our beloved California. While the tax bill hasn’t been in effect long enough in California to get a real idea of the effect, the possibilities are that we could see millions of dollars in revenue being used for transportation expenditures, aid for local governments and public education.
As a student at a public university I am all for something that will generate more revenue for my school, even if it means having to pay a measly 4 percent more on my online shopping.
Another fear is that the bill will ruin Internet commerce and force customers into shopping at brick-and-mortar stores against their will.
Yet, In my experience, the main motivation for shopping online rather than in store is because it is more convenient to sit at home in pajamas and shop than it is to go out into the world (or because the item is only available online).
Nobody is stopping those of us who prefer the convenience of online shopping to continue to do so, rather the bill is evening the playing field between material stores and online retailers. For those who can only shop online, or simply prefer it, they will continue to do so unimpeded. Those who are able and don’t mind venturing out of doors will find in-store costs to be more comparable with their online counterparts.
This will give small businesses a fighting chance against the big Internet companies. Small businesses are a staple in many communities and getting rid of them would not only be getting rid of a member of the community but taking away jobs from our neighbors or friends.
It is only fair that companies selling the same products should pay the same taxes. This new bill is not raising taxes, but rather providing legislature to enable states to enforce already-established tax laws. Many online companies were at first opposed to the bill but after researching it clearly big name companies like Amazon have realized it is not a threat to them and now support the bill.
Despite the cries of the doomsday-ists the benefits of this bill far outweigh any negatives.