Alliance for Main Street Fairness: Internet Tax Lobby

By February 11, 2011Internet Lawyer

Alliance for Main Street FairnessWho could possibly be against an alliance for main street fairness? You should be in this case because “fairness” to this DC-based lobbying group means that you pay more taxes.

The Alliance for Main Street Fairness starts off from the faulty logic that the government should loot more money from online business transactions in order to be “fair” to those selling in brick-and-mortar stores.

According to the Alliance for Main Street Fairness, offline businesses are at an unfair advantage because Internet businesses don’t collect and remit sales taxes on transactions. This is a twisted half-truth at best.

Here’s why…

1. Many brick-and-mortar businesses sell online too. They have the same advantages in ecommerce as Internet-only businesses.

2. Like their offline competition, most legitimate Internet businesses collect sales taxes for transactions with residents of the states where they are based and remit those taxes to the state government.

3. If you’re going to cheat the government out of sales taxes, you can just as easily do it offline as online.

Let’s say that you own both a brick-and-mortar shop and a related website that both sell widgets. Both are based in New York City. If a California client phones your shop and orders a widget, when you ship it to California, it should be the responsibility of the client to remit any sales/use tax for that transaction due to California.

But what if the same California client ordered the widget from your New York City-based website? The Alliance for Main Street Fairness wants you to become the tax collector for California by charging sales tax on the transaction to the California resident and then remitting the sales tax to California’s state government.

Now imagine trying to handle the paperwork and tax collection for all 49 states where your business is not based plus the hundreds of cities that will jump on the bandwagon and require you to collect taxes and fees for transactions with their residents.

Not only is this unfair, the tax and regulatory burden will kill most online business, including business websites owned by brick-and-mortar companies.

What you’re seeing here is an unholy alliance between special interest groups and cash-strapped governments looking to raise your taxes instead of cutting spending.

Perhaps even more noxious is the unconstitutional interpretation of the Interstate Commerce Clause to permit state governments to interfere with online business in this manner. In the quest to raise revenue, the U.S. Constitution is conveniently ignored.

What are you going to do? Spend hundreds of thousands of dollars of your money and years of your life litigating the issue to the U.S. Supreme Court against taxpayer-funded lawyers representing the state?

There’s nothing fair about making business website owners become tax collectors for 50 welfare states and their municipalities. Let’s hope that Amazon or another big online retailer takes a stand one of these days and gets this misconduct stricken down as unconstitutional.

Regardless, don’t be deceived by the Alliance for Main Street Fairness. If your neighbor’s car gets stolen, this type of “fairness” insists that your car should be stolen too so you can both walk.

Socialism disguised as “e-fairness.” Pay what you owe but don’t be suckered into paying more or becoming a tax collector if you don’t have to.

To your online success!

-Mike the Internet lawyer

Author Mike Young, Esq.

Mike Young has been practicing business and technology law since 1994 and is an angel investor in startups. He's been an entrepreneur since 1988. To get legal help from Attorney Young, click here now or call 214-546-4247 to schedule a phone consultation.

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