Sarasota News Leader

02/15/2013

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Sarasota News Leader February 15, 2013 OPINION revenue neutrality. In other words, the money collected in taxes from Internet merchants (the ���fellows behind the tree���) will be used to reduce the tax burden on in-state merchants (���you��� and, to the extent that certain legislators also are engaged in retail trade, ���me���). There has been no shortage of patriotic fervor in advancing this cause yet again, and not just in the Legislature. Editorial pages around the state have been opining that it is time to make online merchants pay their ���fair share,��� and ���level the playing field��� with in-state merchants. If history has taught us anything on this matter, however, the latest effort will terminate in one of two eventualities: The Legislature will manage to scrub this bill and the matter will go away for another year; or the law actually will pass and be declared unconstitutional by the courts. The former is more likely, given the penchant for high drama in Tallahassee. Like so many other issues that, regardless of importance to the well being of the state or its citizens, are simply vehicles for posturing and shameless opportunism, the Internet sales tax likely will never rise above the status of ���legislative diversion.��� No one who supports this cause should feel badly, though. Probably threefourths of everything dealt with in the Legislature would fall under this heading. But just suppose that, by chance, the bill makes it through the labyrinthine committees and both the House and Senate, then is signed by the governor and becomes law. What next? Page 63 The likelihood is that the courts will invalidate the law because it appropriates to the state powers that are reserved to the federal government by the U.S. Constitution to regulate interstate commerce. If Florida or any of the other states that have been clamoring to capture this elusive tax revenue want to accomplish what they have not been able to achieve before now, then they will have to turn to Congress ��� because Congress could solve this matter quickly and efficiently. Very simply, the Congress could establish a national Internet sales tax of 4 percent. This tax, like the federal unemployment tax, would be mitigated by sales taxes remitted by merchants to the states, eliminating the liability if the state tax exceeded 4 percent. But, if not mitigated by a state sales tax, this revenue would pass directly to the states whose residents received shipments of goods sold by Internet merchants. Every online merchant would collect this tax from every transaction for which goods were delivered to any of the 50 states. At the end of each month, the merchant would remit the appropriate amount to each state where the goods went, that state���s share of the 4 percent tax collected. No longer would merchants be required to keep track of a hodgepodge of state and local sales taxes. Amazon, for example, would collect 4 percent of its gross sales delivered within the United States. It then would cut 50 checks each month to each of the 50 states,

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