Tax on Internet sales?

While sales tax revenues continue to slump, it seems few are talking about the elephant in the middle of the room.

I’m talking about sales tax on Internet purchases.

And while our economy has been faltering and local sales slumping for the past couple of years, does anybody know how much business is being done on the Internet that doesn’t show up in our state’s sales figures?

I don’t know if the decision makers collectively think that a tax on Internet sales would be political suicide, that its implementation would be too complicated or what.

 Congress and state legislatures have been grappling with the issue. There is unmeasured opposition in cyberworld, but state and local governments as well as brick-and-mortar retailers are seeking legislation to overturn the 1992 Supreme Court ruling.

With that decision, Quill v. North Dakota, the U.S. Supreme Court ruled that retailers are exempt from collecting sales taxes in states where they have no physical presence, such as a store, office, or warehouse.

Sales tax revenues currently amount to about $150 billion annually and make up approximately one-third of all state revenues. These taxes pay for everything from schools and police to roads, parks, and other state services.

The Supreme Court in its ruling left the door open, specifically noting that Congress has the authority to change this policy and could make laws requiring all retailers to collect sales taxes without running afoul of the Constitution.

The City of Batesville alone depends on over $3.5 million in sales tax money to fund services such as police and fire protection and other essential services not paid by fees or ad valorem taxes.

That money is derived from the Mississippi State Tax Commission after local businesses — the ones that pay also property taxes and rent and who hire local citizens who also pay property taxes or rent — charge a seven percent tax. About 18 percent comes back to the city budget.

So the cyber stores have the advantage of not having to deal with local sales tax, local marketing, local property tax or hiring local employees. The cyber store can then afford to sell their product for a lesser price only having to worry about the shipping costs which are usually paid by the customer, anyway.

This may be good for consumers but it’s bad for community. Yours and mine.