Given the volume of support this Internet sales tax had down in Austin, don’t be surprised to see it come back again despite the veto. Remember that this Internet sales tax bill, like hotel taxes, is designed to put the screws to those who are based in another state so that Texans won’t notice their politicians are tax-hiking socialists. It’s a lot easier to steal the wealth of someone who can’t vote for your opponent in the next election.
Socialism and the Texas Internet Sales Tax
What makes this type of wealth redistribution particularly appalling is that it is done in the name of “fairness” to brick-and-mortar businesses. In reality, it’s simply a money and power grab that benefits the Wal-Marts instead of small business. If your e-commerce site has shipping fees, why not handicap it further by imposing tax and other regulatory burdens so that you’re at a disadvantage to your larger offline competitors?
That’s the twisted logic behind this type of “fairness,” also known as crony capitalism. It’s the same type of logic that supports taxpayer bailouts of General Motors and additional taxes levied on import cars in the interest of “leveling the playing field.” In other words, an Internet sales tax is designed to ensure that your slower offline competitor wins the race by having the government kneecap your business.
Congrats on the Texas Internet Sales Tax Veto
Hats off to Texas Governor Rick Perry for vetoing HB 2403.
I have serious concerns about the impact and appropriateness of House Bill No. 2403. In particular, I believe this legislation risks significant unintended consequences. My strong preference is to conduct a thorough policy discussion with Texas lawmakers, consumers, retailers and technology experts – and with other states and even the federal government – about interstate commerce and the structure of state sales taxes in the 21st century. That conversation is underway, and I believe that a consensus can and should be reached that balances the competing interests, respects federalism, and is fair and equitable. I call on the legislature to review this issue further while we reach out to our federal delegation and our friends in other states to build consensus. – TX Gov. Rick Perry (May 31, 2011)
Unfortunately, the statement of his objections makes this Internet lawyer think the governor has left the door open to a future Texas Internet sales tax.
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.
