Sales Tax System Should Be Uniform
Perhaps even more important is a fourth point not stressed by the sellers: how communities are to exist if an ever-larger percentage of their tax revenues disappear into an
e-fog. Rather than point to No. 4, I suggest we make the answer to that our point No. 1. It's basic to all other considerations. So here are some suggestions I think modern computers make practical:
• Be simple and add no new sales tax. Each state shall set a single sales tax for all taxable out-of-state commerce. That can be the state sales tax plus some modest addition to allow for an average of local taxes.
• Remove the burden on the seller. Sorry, e-commerce sellers, but you'll have to bear the same "burden" other sellers do: collect taxes, keep records and ship the tax dollars somewhere.
• How it will work. E-commerce sellers will collect sales taxes, just as many other direct marketers do. Sales and tax records, by dollar amounts for each ZIP code, will go to each state monthly, along with the dollars due. Standard business practices will allow for actual collections, returns, etc. The state will then reimburse each municipality.
All this will require a uniform system for reporting and tax transmission, one that can be applied to both national and international business, something today's
e-world makes simple.
Personally, I see no reason why foreign sellers should be excused. That just opens an invitation to move sales and shipping offshore to gain advantages over state-bound sellers. Having lost a huge share of U.S. manufacturing, are we now ready to have that joined by a few trillion dollars in sales?
• The BizRate.com research. According to the same story, a BizRate.com study shows that 75 percent of Internet buyers will buy less if e-commerce sales taxes are included and a large percentage will not buy at all!
I would like to know, however, what exactly it is they would not buy, especially since shipping and handling charges seem to cause no such resistance.
If tax payment were mandatory and uniform - no matter where and how one bought - I very much doubt that it would cause a precipitous drop in overall sales. It might even force more e-businesses to learn the fundamentals of direct marketing to their benefit, as well as to that of their stockholders.
Fred Hahn Associates