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federal internet sales

Illinois Internet Tax Declared Unconstitutional

By Internet Lawyer

An Illinois county judge has declared the state’s Main Street Fairness Act unconstitutional. The “Amazon Tax” imposed by this state legislation is typical class warfare by a bankrupt government looking to loot funds from ecommerce transactions.

Given a similar ruling on Colorado’s Internet sales tax, you can expect this issue to ultimately be decided by the U.S. Supreme Court.

Of course, there are special interests and corrupt politicians who are not content for the nation’s highest court to rule on the constitutionality of state taxes on interstate commerce. They intend to ignore the Court’s 1992 Quill decision on the same issue that struck down taxes that interfered with interstate sales by mail order.

You will see an unholy alliance of Wal-Mart, Amazon, and politicos like “Dick” Durbin try to ram through a federal Internet sales tax. Never underestimate the greed and corruption of those involved when there is money to be robbed from entrepreneur Peter to give to sloth Paul.

Of course these second-handers don’t realize that at some point those who produce will start asking “Who is John Galt?

Court kills Colorado Internet sales tax

By Internet Lawyer

A federal district court judge just ruled Colorado’s Internet tax (nicknamed the “Amazon tax”) is an unconstitutional burden on interstate commerce.

That’s the good news.

The bad news is that Amazon and other big online retailers have been cooperating with efforts to pass a U.S. federal Internet sales tax supported by offline stores like Wal-Mart under the term “Main Street Fairness.”

Why?

Big retailers like Amazon have the infrastructure in place to collect and remit Internet sales taxes but it would be easier if they just paid the federal government instead of 50 states and thousands of cities.

Smaller online competition gets hurt because most business website owners will not have the ability to handle collection and remittance of sales tax to places beyond their home state or province.

On the bright side, maybe this finding that the Colorado Internet sales tax is unconstitutional will encourage Amazon to grow a pair and actually fight this issue up to the U.S. Supreme Court instead of cooperating to get a federal Internet sales tax in place.

To learn more about Internet taxes, check out Chapter 27 of my book on Internet Laws: How to Protect Your Business Website Without a Lawyer.

Amazon Supports Federal Internet Sales Tax Bill

By Internet Lawyer
internet sales tax

Amazon.com supports a federal internet sales tax

Why have lawmakers proposed to initiate a new internet sales tax?

Responding to pressure from states and from organizations, members of the United States Congress are considering passing a federal internet sales tax bill which would force internet companies to pay a sales tax.

Traditional ‘brick and mortar’ retail stores specifically feel that they are at a disadvantage when competing against internet retailers who are not bound by the same tax laws as the ‘brick and mortar’ stores. Though some states have worked on bills which tax online retailers, most states do not as of yet tax purchases made over the internet. Responding from pressures by ‘brick and mortar’ stores, and from individual states who feel that an internet tax would raise state revenues in this difficult economic time, those in Congress have considered passing an internet tax law.

Why does Amazon support the federal internet sales tax bill?

Surprising to many observers has been that Amazon.com, one of the world’s largest online retailers, supports some federal effort to subject internet retailers to taxation. This comes as a particular shock considering Amazon’s opposition to internet sales tax proposals that have arisen in different individual states, including Illinois and Connecticut. Amazon has even stopped conducting business with land based ‘affiliates’ in states mandating an internet sales tax, so as to avoid being subject to those state taxes.

Despite these efforts and the fact that the company could potentially lose business as a result of a tax on online goods, Amazon has consistently supported a federal effort to subject online retailers to an internet sales tax. Representatives of the company claim that Amazon already is subjected to a sales tax in around 50 percent of its total sales across the world, and that sales tax has not adversely affected business. The company also claims that a single internet sales tax policy in the United States would enable Amazon to more effectively sell products in accordance with the law, since the company would not have to deal with the tax policies of each individual state.

What problems could occur if the new internet sales tax proposal became law?

Critics, however, fear that a federal internet sales tax would serve as an undue burden on internet companies. Some argue that small online businesses would be subjected to heavy taxation which could, in turn, stifle the innovation the internet has come to represent. Those opposed to the new tax further contend that the tax subjects these small internet retailers to the same massive tax obligations that large retailers, such as Amazon, are more capable of enduring.

Small companies feel that Amazon’s support of the tax might stem from the belief that Amazon’s small competitors might be forced out of business if a tax was implemented. Companies such as eBay, free-market enthusiasts, and many concerned about the future of the internet have all voiced their concern about what they perceive as a biased and counterproductive internet sales tax.