I saw an article http://bit.ly/KBzWqm while I was away regarding Amazon.com ‘agreeing’ to charge sales tax in New Jersey beginning July 2013. The first thought I had was – Amazon.com now has a business ‘presence’ in New Jersey and that is often (but not always) the big factor on whether or not a company has to charge ‘internet’ sales tax or not.
My instinct tells me that whether it is to be state by state or nationally, the debate over whether or not to charge sales tax for internet sales is a sham. In my opinion the simple answer is that any buyer of products or services over the internet should be charged a tax based on either where they live or a flat internet national sales tax (dare I say a ‘flat’ sales tax?). This opinion on the subject is in stark contrast to that of the DMA (Direct Marketing Association) which has a primary mission of fighting internet sales tax on behalf of its members. I remind readers that we own a company that is completely reliant on internet sales and I realize what I am offering to sign up for.
Charging internet sales tax could result in other benefits. For example, at the retail level there are many buyers that are ‘showrooming’ http://bit.ly/LLJ89h pricing by visiting retail locations and then either use a mobile best price application to see if any other local retailers will beat it, OR they simply go online and try to beat that price at any one of hundreds of online retailers. By charging internet sales tax I believe brick and mortar retailers will recapture some of those lost sales to the web. The problem of showrooming has been going on for longer than retailers would like to admit but finally the word is getting around.
In reality I am surprised (in retrospect) that a world without internet sales tax has lasted as long as it has. Good lobbying by organizations like the DMA has a great deal to do with it. This is sure to be an unpopular opinion particularly with my many associates that are part of the DMA. An internet sales tax is really a consumption tax and is not received equally since those that are more well off are less impacted than those that are less well off.
How about a 3% across the board internet sales tax? Collected by the state (please keep it away from the federal government) in which the purchaser resides or has a place of business, it would raise some state tax revenues, is not usurious and is a start at acknowledging that internet buying (mobile or otherwise) is great for consumers and brands alike.
If you do not see my idea as a potential middle ground do you have a better idea? Is the status quo better?