Governors Seeking Internet Tax

greenspun.com : LUSENET : Unk's Wild Wild West : One Thread

http://dailynews.yahoo.com/h/nm/20010804/pl/tech_governors_tax_dc.html

Saturday August 4 5:57 PM ET

Governors Seeking Internet Tax

By Leslie Gevirtz

PROVIDENCE, R.I. (Reuters) - Wyoming Gov. Jim Geringer on Saturday urged Congress to allow states to tax e-commerce to replenish state coffers.

Geringer, speaking on the opening day of the National Governors Association summer meeting, warned that without such a tax, states stand to lose annual revenues topping $30 billion by 2003.

``The Internet is here. E-commerce is here to stay,'' he told reporters. ``The Internet as a marketplace will only grow.''

The federal ban on states taxing the Internet is due to expire in October. States, seeing the budget gaps increasing and the savings shrinking as the U.S. economy slows, are lobbying hard to persuade Congress to let them tax such sales.

``It's one of the most misunderstood'' issues, said Michigan Gov. John Engler. ``In Michigan, taxing the Internet and drilling in the Great Lakes are sort of the great lies. Neither is happening, but we got a lot of people trying to stop it.'' The governors emphasize that they want to level the playing field between online businesses and bricks-and-mortar businesses. While states can impose sales taxes on shops in malls or downtown, they cannot impose such a tax on e-retailers.

Geringer said that the states were seeking to tax sales transactions, not content.

The federal government already imposes taxes on Internet sales that total $90 billion annually, according to Geringer.

``Anyone who has ever purchased a ticket online has had a federal Internet tax collected,'' he said.

Geringer and the other 39 governors who are attending the four-day conference in the smallest U.S. state are trying to come up with a simplified system.

``Anyone who wants to sell nationally would have only one set of tax rules to comply with,'' he said. He estimated about 20 states had already enacted enabling legislation for such rules.

-- (in@the.news), August 05, 2001

Answers

There is no justification for taxing the internet.

The reasons that brick and mortar businesses are taxed is supposedly to cover the costs of the infrastructure upkeep. As water, sewer, garbage etc. are not used and roads, parking areas do not need upkeep and repair, the "local" area of an online business should not be allowed to tax the sales of those businesses. I don't care if they try to justify taxing it with the "logic" that they are "loosing" XXX amount of money in taxes, they can't loose something they never had. If the internet did not exist, they wouldn't have that money, now they act like they have some kind of right to collect it. How will they keep track of where the taxes come from? The server could be in one state, the storehouse in another (already being taxed) and the business office in yet another.

It almost looks like governments are drooling for the source of added income. Maybe they should think about knocking off the tax breaks big businesses are given in their areas, to use to pay for maintaining and building the infrastructures in their area. It doesn't make sense to add more burdens on small and startup businesses.

-- Cherri (jessam6@home.com), August 05, 2001.


This is a proper tax. An indirect excise tax, just like the constitution allows.

-- KoFE (Your@town.USSA), August 05, 2001.

Moderation questions? read the FAQ