And that revenue is lost forever

This letter to the editor of the Oklahoman — well, its heart is in the right place, but its brain seems to be on backorder from Amazon:

“U.S. Senate passes bill to let states tax online sales” (Business, May 7) quotes the Oklahoma Tax Commission in saying the state loses $185 million to $225 million in tax revenue from Internet sales each year. If the state loses that much, then some citizens gained an equal amount in savings. And where would these citizens most likely spend that savings? Right here at home! The state would get its pound of flesh when those savings were spent.

So does the state really lose on Internet sales? Time and effort would be better spent in figuring ways to cut government spending to reduce taxes, including eliminating the sales tax on food and clothing.

Which would result in savings to some citizens, which would be spent — where, exactly, and on what?

The real problem here, though, is not so much with the letter as with that gratuitous term “loses”: why, we’d have that $185-225 million if it weren’t for, um, the fact that no law currently allows us to take it. Obviously we should have more laws to allow the state to not “lose” money, right?

But hey, this spate of pooch-screwing was aggravated by having these alleged “sales tax holidays” in which tax is charged, no matter what you heard: the prices are simply adjusted downward by the amount of the tax. Sales tax, we learn from these things, is purely arbitrary, and subject to the whim of the government. And of late, fewer of us are inclined to indulge their whims.







2 comments

  1. David Richard »

    15 May 2013 · 12:25 am

    I don’t begrudge sales tax for things that I buy locally. I think of it as a forced “thank you” for the state and a local business combining their resources to provide something that I need or want.

    It’s a bit irritating when I pay sales tax when I have to travel beyond my comfortable hub of commerce into another city or even another state. In that case, I look at the tax as additional punishment heaped on top of travel time, traffic, and parking hassles. Even so, a business provided the good I bought, and they owe their own tithe (paid by me) to the government.

    But sales tax doesn’t even make sense when it’s applied to an internet-based purchase. The only other entity entity with a local presence in the transaction is the USPS, UPS, or FedEx.

    There is absolutely no reason for my state or township to be able collect a sales tax for something they do not provide for me to purchase, and did not sell to me.

  2. McGehee »

    15 May 2013 · 6:48 pm

    I could tolerate paying the sales tax charged in the jurisdiction where the seller is located — after all, I pay sales tax in other locales when I travel and if there is a way to recoup that tax paid I’d probably do like most and blow off the hassle.

    In my opinion if an online vendor’s local sales tax is more than I care to pay I can choose another vendor. That will have the effect of encouraging vendors to seek lower-tax states to set up in, rewarding the people thereof for keeping the sales tax low because my money is going into their economy directly, the way it should.

    As I’ve said in the past, if I had a smalltime online operation and the internet tax went ino effect as passed by the U.S. Senate, I’d block people from shopping on my site if their billing or shipping address is in a state or city that charges tax on the transaction. Whatever income I lost by that policy would be less than the cost — not all of it monetary — of complying with thousands of different sales tax schedules.

    The “Sorry, you can’t shop here” page would clearly explain that they’re excluded because they’ve let their government try to draft me as an unpaid clerk to collect their taxes for them. If I don’t even live there, that’s unacceptable.

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