Mimsy Were the Borogoves

Editorials: Where I rant to the wall about politics. And sometimes the wall rants back.

National Review supports seller-location-based sales tax

Jerry Stratton, November 29, 2014

I am no longer the lone wilderness voice crying for sales tax based on the seller’s location rather than the buyer’s. From the December 8, 2014 issue of National Review’s non-bylined The Week on John Boehner’s decision not to fast-track an Internet sales tax bill:

They say it’s only fair, since brick-and-mortar stores charge sales taxes. Those stores want to make it easier to tax Internet sales too. And the federal government should act. But it should make sales taxes follow the seller’s location rather than the buyer’s. That way competitive pressure will moderate tax levels: A state that wants the next Amazon to locate in its borders will have an incentive to keep sales taxes low.

I’m thinking the right way to do it would be to let state governments opt in. If the state legislature acts to opt in, then that state’s businesses must collect sales taxes from the residents of all other opt-in states; if the state has not opted in, its residents and its sellers are free from Internet sales taxes.

In response to Punishing low-tax states: An Internet sales tax that looks at the customer’s state instead of the seller’s state punishes states with low sales taxes and inhibits competition.

  1. <- Marketplace unfairness