Focus Point - Internet TaxesCommentary by Pete du Pont
August 07, 2001
I'm Pete du Pont with the National Center for Policy Analysis. Ok, why not tax Internet sales? We tax sales at brick and mortar stores, after all.
But there's a big difference. There are benefits from state and local governments that the local customer at a traditional store receives which an Internet customer living in another state doesn't.
For example, the in-store customer benefits from highways, police, planning and zoning and so forth that the long-range customer never sees. In fact, the Internet purchase helps the economy of the seller's state, adding to state income without imposing costs on the state's taxpayers.
And in any event, 80 percent of Internet sales are business-to-business which are exempt from sales taxes anyway. In 1992, the Supreme Court said catalogue -- and thus Internet -- sales were exempt from sales taxes. And an Ernst and Young study shows collection and compliance costs for a national retailer might come to 87 percent of the tax collected.
In other words, a pain in the neck for all concerned, profiting nobody much of anything and costing us taxpayers once again.
Those are my ideas, and at the NCPA we know ideas can change the world. I'm Pete du Pont. Next time, World War One.