It is an argument as old as the internet - enforcing state sales taxes on internet sales.
In the 2017, the issue has reared its head again in the form of Senate Bill 2298:
This bill is a state version of what has been attempted many times in Congress.
In 2011, the "Mainstreet Fairness Act" as it was called then was introduced in Congress:
In North Dakota, I have worked for many years on this issue. In 2011, here is what I wrote:
This bill, which is being called the "Mainstreet Tax Fairness Act," is sponsored by two of the most liberal big-government Democrats in Congress: Sen. Dick Durbin, D-Ill., and Rep. John Conyers, D-Mich.
As one writer has noted, "Illinois tries to make its spending woes America's problem." On the national level, this bill has pitted "big box stores" against online retailers. The "big box stores" feel it is unfair that they must remit sales tax to states while online retailers don't.
The basis of the op-ed's support is that states are losing out on $23 billion worth of sales tax revenue that companies aren't remitting to the states where their sales are made. While there is a case to be made that many companies should be remitting that sales tax, the obvious reality is that this is a tax hike that will be passed along to consumers.
They may not want to call it a tax hike, but in the end that's exactly what it is.
In 2013, the bill was once again being promoted in Congress:
But while the people promoting this bill are using the sentiment of tax fairness, the real purpose of this proposal is to generate more revenue for states.
On the issue of tax fairness, consider the ways the sales tax is unfair:
Montana does not charge a sales tax, so North Dakota lets Montanans shop tax free. But is it fair to North Dakota customers that Montana residents come to Williston, N.D., or Dickinson, N.D., and pay no sales tax there?
And is it fair to Montana businesses that North Dakota uses tax policy to poach their customers?
Minnesota does not charge sales tax on clothing; North Dakota does. Is it fair to Fargo and Grand Forks retailers that North Dakota residents can go across the river and buy clothes tax-free?
Of course, it's not just the sales tax that has problems with fairness.
When it comes to property taxes, local governments routinely issue subjective exemptions and abatements that let some property owners get out of all or some of their property tax liability.
State law lets cities create "renaissance zones" in which a new business can move in an get property tax and income tax exemptions, while the businesses next door get punished for being in business and paying their taxes all along.
Let's not forget that the income tax also is riddled with exemptions and credits that let some people and businesses get out of more of their tax liability just by being able to afford the right accountants and lawyers.
There are countless ways that the tax code is unfair to one taxpayer or another. While it is proper to try to eliminate those differences, expanding the tax burden to include activities previously exempted by federal laws and court cases is not a proper way to do it.
There really is no need for new arguments against it, these same points are still valid.
If the state needs more revenue and more fairness, let's work to eliminate the unfair policies in state law that reduce revenue,
Until then, tell the legislature to leave their hands off internet sales.
