Internet Sales Taxes: Just in Time for Christmas?

Get your news from a source that’s not owned and controlled by oligarchs. Sign up for the free Mother Jones Daily.


A U.S. House committee today is hearing the pros and cons of a bill that would finally allow states to collect sales taxes on stuff bought online. The states desperately need the money. Sales taxes account for a third of all state revenue, and the bulk of it goes towards public education, but that tax base is eroding thanks to a proliferation of online sales outlets. One study estimates that by 2008, the states will be losing $33 billion in revenue on “remote” sales, $18 billion of which comes from virtual stores.

Internet retailers have successfully batted down such proposals in the past, arguing that they would infringe on interstate commerce. But the states have gotten smarter and in recent years many have banded together to create uniform tax codes and a voluntary agreement to tax these companies, hoping to get around the constitutional issues. The bill, introduced by Massachusetts congressman William Delahunt, would let those states bound by the agreement tax remote companies.

At the hearing today, the bill got support from retailer J.C. Penny, which has to collect sales taxes on its Internet business because it also has bricks-and-mortar stores in many states. It wants to level the playing field to make it easier to compete with companies that are solely online. Opposing the bill, though, is the Direct Marketing Association, once known as the junk-mail lobby but which now represents catalog sales companies and electronic merchants. Not surprisingly, the DMA is opposed to the legislation, and DMA rep George Isaacson insisted that state legislators have vastly overestimated how much money they’re losing in sales tax revenue. He says the figure is more in the range of $145 million as opposed to the many billions claimed by the state legislators. Still, that’s a nice chunk of change that could put a few new teachers in the classroom without causing too much pain to the general public. No word yet on the bill’s prospects, but no doubt it will create a nice fundraising vehicle for legislators on both sides of the aisle.

PLEASE—BEFORE YOU CLICK AWAY!

“Lying.” “Disgusting.” “Scum.” “Slime.” “Corrupt.” “Enemy of the people.” Donald Trump has always made clear what he thinks of journalists. And it’s plain now that his administration intends to do everything it can to stop journalists from reporting things it doesn’t like—which is most things that are true.

We’ll say it loud and clear: At Mother Jones, no one gets to tell us what to publish or not publish, because no one owns our fiercely independent newsroom. But that also means we need to directly raise the resources it takes to keep our journalism alive. There’s only one way for that to happen, and it’s readers like you stepping up. The deadline’s almost here. Please help us reach our $150k membership goal by May 31.

payment methods

PLEASE—BEFORE YOU CLICK AWAY!

“Lying.” “Disgusting.” “Scum.” “Slime.” “Corrupt.” “Enemy of the people.” Donald Trump has always made clear what he thinks of journalists. And it’s plain now that his administration intends to do everything it can to stop journalists from reporting things it doesn’t like—which is most things that are true.

We’ll say it loud and clear: At Mother Jones, no one gets to tell us what to publish or not publish, because no one owns our fiercely independent newsroom. But that also means we need to directly raise the resources it takes to keep our journalism alive. There’s only one way for that to happen, and it’s readers like you stepping up. The deadline’s almost here. Please help us reach our $150k membership goal by May 31.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate