Sen. Dick Durbin thinks it unfair that Internet retailers donít 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 donít 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 itís currently done for brick and mortar retailers, so ďfairnessĒ 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 donít collect 9 percent and send it to Illinois or even just the 6.25 percent state of Illinois sales tax. I also donít collect taxes for 50 other states and even more U.S. territories.
When I travel in Wisconsin no retailer every asks me where Iím from before calculating sales tax on my purchase. Why should an online retailer have to do so? To quote Dick Durbin, ďThatís not fair!Ē 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 ďfairnessĒ principle were embraced, all interest in taxing Internet sales would disappear overnight.
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