Republican state senators have blocked a vote on a House-approved measure that would force amazon.com and some other online retailers to start collecting Indiana's 7 percent sales tax this summer. That's six months sooner than the date under a deal Gov. Mitch Daniels reached with the company last year.
But the whole thing may be moot. There's a measure before the U.S. Senate that may get a floor vote as early as today:
The days of tax-free online shopping could finally be numbered.
The Senate is planning to vote on a bill as soon as Monday that would give states the authority to collect sales taxes on all Internet purchases, handing local governments as much as $11 billion per year in added revenue that they are legally owed — but that hasn’t been paid to them for years. …
The bill introduced by Sen. Mike Enzi (R-Wyo.), called the Marketplace Fairness Act, would grant all states the power to collect taxes from out-of-state vendors selling goods to their residents.
I realize that simple fairness requires this change. It adds to the cometitive disadvantage brick-and-mortar stores face when they are forced to be tax collectors and online retailers aren't. Those of us who make online purchases are supposed to declare them when we fill out our taxes, but most of us don't and there's really no way to enforce it.
But let's not pretend there won't be any negative effects from taking another $11 billion a year out of the private economy. Yes, that's "added revenue" for local governments, but it's also money out of pocket for American taxpayers. Economic reality cannot be suspended. When things cost more, people buy less. Having the online costs increaseis not going to send people back to storefronts. It's just going to make them shop less, period.
If you have an Ohio driver's license and yout car has Ohio plates, but you buy a set of tires in Fort Wayne, the state of Indiana expects to collect sales tax.
Amazon has somethong like seven warehouses in Indianapolis. The only reason they aren'y already taxing sales to Indiana buyers is that Induana gave them an incentive to locate in Indiana.
If we are going to make things equal, then online sales ought to subject to the tax where the online company is located.