Senate Approves Internet Tax: What Next?4 min read

The internet is a free platform where commerce thrives. Many credit this to the fact that no country controls or taxes it…yet. Last fall, we reported the United Nation’s closed-door meeting in Dubai to discuss controlling the internet. Along with PIPA and SOPA, the convention’s aim to control the internet failed. Regardless, nobody, including the US, is giving up easily.

The president and political party that vowed not to raise taxes on anyone who earns less than $250,000 a year is working feverishly to tax anything that moves—or at least anything that moves across a state line through e-commerce.

Worse yet, the Democrats and President Obama aren’t alone in their lust to increase taxes. Senate Republicans are pulling away from pledges not to increase taxes. On a vote of 69 to 27, the Senate passed a bill that would allow states to collect sales tax on Internet, catalog and telephone sales in their states even if the seller has no physical presence in the state. Fortunately, so far it looks like the legislation is in for a much tougher battle in the House.

Higher taxes now!
Apparently some politicians think that the main problem in this country is that we just aren’t paying enough in taxes; although, the Tax Freedom group says that in 2013 our total tax tab adds up to $4.22 trillion, nearly 30 percent of our combined incomes. We have to work 108 days to shoulder that enormous tax burden, and 14 of those days are just to pay our existing sales and excise tax bills.

That’s just not enough, say many in Washington and even mega-Internet retailers like Amazon.com. The fact that Amazon is supporting the bill illustrates a very important truth: when corporations get huge, they sympathize much more with big government than they do small business.

Politicians are trying to feed the American people a public relations version of Valium, telling everyone to calm down because the bill exempts Internet retailers with less than $1 million in sales and bookkeeping won’t be an issue because states are required to provide software to take care of the accounting.

Yes, that’s exactly what businesses want—software from 46 states to integrate into their e-commerce systems. That shouldn’t be difficult or expensive! I guess they’ve never heard the dangerous words, “We’re from the government, and we’re here to help you.”

You must be punished!
As with so much legislation coming out of Washington today, it seems that this bill was drafted solely for the purpose of punishing smart business owners who locate their companies in low- or no-sales tax states.

The Telegraph, out of Nashua, New Hampshire recently covered the issue and related the story of Rondo Music. It moved from New Jersey to New Hampshire to escape the tyranny of the sales tax. The company sells a lot to New York as well, and it had to collect sales taxes for both states.

Company President Kurt Zentmaier was able to chuck a filing cabinet full of binders that tracked sales to companies and individuals who were exempt from sales tax because they were resellers, nonprofits, charities, churches, etc. This nightmare will come back big time, from sea to shining sea, if states are able to require Internet, telephone and catalog retailers to start collecting their sales tax.

This might be the right place to discuss the purpose of state and local taxes. They are to pay for state and local services. Out-of-state retailers will not receive any services for the sales taxes they are forced to pay by the passage of this bill. Shouldn’t states reimburse the retailers for the costs associated with collecting and distributing the tax? Sorry, I was imaging a world where people are expected to pay for the services received. Back to reality.

The Ultimate Irony
Those of us old enough to have watched the Internet come of age—or at least become increasingly bigger and faster—will remember the 1998 bill that President Clinton signed into law. It prevented states from collecting taxes on Internet commerce. Ironically, it was called The Internet Tax Freedom Act. In 1998, tax freedom was critical. For some reason in 2013, a vague thing called “leveling the playing field” is vital to our national interests.

We’ve talked about the government wanting to tax our internet movements before, and now it is completely clear than when our politicians say they want to “level the playing field,” what they are really saying is they want everyone under the thumb of full and relentless taxation.

Although the Senate easily passed the bill, it faces a much tougher time in the Republican-controlled House. According to Yahoo News, a fight is expected in the House – there will be many voices raised in protest at yet another tax strapping our economy-pressed citizens.

Rebecca is a dedicated blogger who writes for NewNet, an internet, managed hosting and wholesale unified communications provider in England. In addition to blogging, Rebecca spends her time reading the latest news, mountain biking or relaxing at the beach. 

Rebecca Fletcher

I'm an avid writer and blogger living in the Shenandoah Mountains of Virginia. I enjoy photography, cooking, natural health/eating organic, green living, photography and traveling. When I'm not writing about my latest adventures, I can be found reading the news, hiking my mountains or listening to country music.

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