Internet Sales Taxes: Just in Time for Christmas?

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A U.S. House committee today is hearing the pros and cons of a bill that would finally allow states to collect sales taxes on stuff bought online. The states desperately need the money. Sales taxes account for a third of all state revenue, and the bulk of it goes towards public education, but that tax base is eroding thanks to a proliferation of online sales outlets. One study estimates that by 2008, the states will be losing $33 billion in revenue on “remote” sales, $18 billion of which comes from virtual stores.

Internet retailers have successfully batted down such proposals in the past, arguing that they would infringe on interstate commerce. But the states have gotten smarter and in recent years many have banded together to create uniform tax codes and a voluntary agreement to tax these companies, hoping to get around the constitutional issues. The bill, introduced by Massachusetts congressman William Delahunt, would let those states bound by the agreement tax remote companies.

At the hearing today, the bill got support from retailer J.C. Penny, which has to collect sales taxes on its Internet business because it also has bricks-and-mortar stores in many states. It wants to level the playing field to make it easier to compete with companies that are solely online. Opposing the bill, though, is the Direct Marketing Association, once known as the junk-mail lobby but which now represents catalog sales companies and electronic merchants. Not surprisingly, the DMA is opposed to the legislation, and DMA rep George Isaacson insisted that state legislators have vastly overestimated how much money they’re losing in sales tax revenue. He says the figure is more in the range of $145 million as opposed to the many billions claimed by the state legislators. Still, that’s a nice chunk of change that could put a few new teachers in the classroom without causing too much pain to the general public. No word yet on the bill’s prospects, but no doubt it will create a nice fundraising vehicle for legislators on both sides of the aisle.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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