Sen. Dick Durbin thinks it unfair that Internet retailers don't have to charge the same high rate of sales tax that the brick and mortar retailers are required to charge. In my area of suburban Chicago, that number is 9 percent when the state, county and local sales taxes are added up.
Why don't we really make the marketplace fair by having all retailers, both Internet and brick and mortar ones, charge the exact same rate based on where they are located. This is how it's currently done for brick and mortar retailers, so "fairness" should mean we are imposing the same tax burden on the Internet retailer. One rate, based on the physical location of the business, not the home state of the shopper.
If I locate my Internet business in Wisconsin which has a 5 percent sales tax, I collect 5 percent and give it to the state of Wisconsin. I don't collect 9 percent and send it to Illinois or even just the 6.25 percent state of Illinois sales tax. I also don't collect taxes for 50 other states and even more U.S. territories.
When I travel in Wisconsin no retailer every asks me where I'm from before calculating sales tax on my purchase. Why should an online retailer have to do so? To quote Dick Durbin, "That's not fair!" If the state wants to collect taxes on out-of-state purchases by their residents, put the burden on the state not the out-of-state retailer. My guess is that if this "fairness" principle were embraced, all interest in taxing Internet sales would disappear overnight.