The tax man cometh — online (WI Gov suggests Internet sales tax)

[arcos]

The tax man cometh — online

The forces of Internet taxation are beginning to muster themselves once again in the statehouses of America. Right now ground zero in the fight is in Madison, Wis.

That's where Gov. James Doyle, a Democrat, thinks he's solved his state's budgetary shortfall in part by levying a tax on the goods Wisconsin residents purchase over the Internet.

Under his proposal Wisconsin residents would be required to pay the state's 5 percent sales tax on anything they buy over the Internet, which would include books and CDs from Amazon.com or songs on Apple Computer's iTunes Music Store. The estimated return to the state's coffers? A measly $3.2 million over two years.

That seems hardly worth the effort to add the extra cost that businesses will have to eat in order to come into compliance with the law. And if Doyle gets his way, other states may seek to follow his example and start a new offensive in their long fight over "tax equity" between Internet and brick-and-mortar businesses.

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http://www.msnbc.msn.com/id/7159177/

[Trillo]

1. A regulation designed to favor large corporations, once again?

The accounting would truly be a nightmare for any business that doesn't have a division full of accountants and tax experts.

And what of the shipping cost inequity?

[Viking12]

2. eyesroll posted this insightful piece in the WI forum

-snip-

But I don’t think Gov. Doyle really gets how things work on the Internet. First of all, compliance is even less enforceable than with mail order, in that there isn’t a product being delivered to a fixed address. Let’s say my dad (who lives in Illinois) brought his laptop to my house and downloaded, on his credit card, LaToya Jackson’s Bad Girl from the iTunes Store (assuming they sell it). Would he owe a nickel to the state of Wisconsin?

What if I took my laptop to his house and did the same thing? Is it the address on the credit card that counts, or the address of the Internet account, or the address where my iBook is registered with Apple? Could I get nailed for leaving the state in order to avoid paying a required tax?


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http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=186x5599

[meow2u3]

3. An Internet sales tax will never hold up in court

It's unconstitutional, unless you buy in-state over the Internet.
See Article I, Section 9, paragraph 5 of the Constitution: No Tax or Duty shall be laid on Articles exported from any State.

[sarcasmo]

4. What about purchases you make outside the US on the net. This will never

work.