Quote:
Originally Posted by scrapking
What surprises me is the slow pace of jurisdictions in the U.S. collecting tax on online purchases.
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No surprise.
There are two principles at work:
1- As pointed out above, the Federal Constitution's Interstate Commerce Clause prevents states from taxing out-of-state vendors. They can only tax companies physically located within their borders. (In legal terms: presence.)
2- The Congress has repeatedly rejected all laws attempting to tax internet commerce in the interest of fostering innovation in digital commerce. (They may be onto something as the internet has fostered a *lot* of new business models. Not all succeed, but none has failed because of sales taxes.
)
For years, state after state has passed laws trying to redefine presence and failed to prevail in federal court. In a few cases, Amazon has *voluntarily* agreed to collect sales taxes rather than litigate further in return for state concessions. (The expectation being that Amazon was already looking to establish a physical presence in the state anyway.)
Also, for years, there has been talk of a federal internet sales tax.
So far, it has not happened.
(BTW, in those states that Amazon collects sales tax? They still easily undercut the in-state B&M retailers.)