Internet Taxes Threaten Your Online Business
The State of New York is trying to force large online retailers to collect and remit sales taxes for purchases made via the Internet. Amazon.com is suing to stop this insidious government power grab.
So your Internet business isn’t as big as Amazon’s (yet)? You might be thinking “What’s the big deal?”
Whether you’re a Democrat, Republican, Libertarian, or Independent, you should be concerned.
Here’s why it is important to you.
The underlying theory behind the tax collection is that sales online make you the tax collector for the welfare state even in states where you don’t have a physical presence. Imagine the chaos if you had to collect and remit sales taxes to all 50 states, taxes up north to Canada, and across the Atlantic pond as a VAT tax for the European Union coffers. 99.9% of today’s Internet marketers would either be guilty of tax evasion or go out of business trying to comply.
This is exactly what’s in store if these politicians and bureaucrats get the chance to make you an involuntary tax collector to pay for their bridges to nowhere and other pork barrel projects.
Fortunately, there are the Amazon’s of ecommerce who have the deep pockets to fight the government.
Note that this is not a unique situation. For years, the National Governors Association, its county and municipal counterparts have been arguing that they should have the right to tax the Hades out of Internet transactions to pay for excessive spending habits. Ayn Rand referred to these types as “second-handers.”
That’s being polite.
What can you do to fight them?
1. Post your support for Amazon’s fight against New York on your blog and encourage others to do so.
2. Let your elected politicians at the local, state, and federal level know that you’ll do everything in your power to ensure their opponents are elected if they so much as think about trying to turn you into a tax collector.
3. Order a copy of Ayn Rand’s “Atlas Shrugged” or Harry Browne’s “How I Found Freedom In An Unfree World” via Amazon and ship it to the New York State Department of Taxation and Finance.
About the Author
With an advanced international law degree from Georgetown University and more than 15 years of real world legal experience, Attorney Mike Young is President of the Internet Ethics Council and creator of Website Legal Forms Generator software. He helps entrepreneurs protect and grow their businesses online.
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Really nice post. I write about helping online businesses run successfully.
The legal angle to the whole picture is actually very important.
I’ll be sure to put up something on my blog sometime.
Keep up the good work
Del,
Thanks for stopping by and commenting. Glad you’ve found the posts here about Internet law and business to be helpful.
Best wishes,
-Mike
Mike,
Great post, Mike. This could lead to a nightmare for small businesses.
I’m curious why governments expect the tax to be collected based on where the buyer is rather than the seller.
For example, I live in Florida. If I go to Atlanta and buy something, they charge me whatever the Georgia (and local) sales tax is, not what the sales tax is where I live. Then they would file sales tax returns to their home state.
So why should Internet businesses be expected to collect varying taxes for all 50 states? If sales tax is to be collected, shouldn’t it be paid to the state where the retailer is located?
I love your idea of sending the Rand and Browne books to NY state- people should also read those!