My home state senator is a dolt. Dick Durbin wants to tax internet purchases in order to "save" businesses on what he calls "Main Street." CNET News:
The proposal--expected to be made public soon after Tax Day--would rewrite the ground rules for Internet and mail order sales by eliminating the ability of Americans to shop at Web sites like Amazon.com and Overstock.com without paying state sales taxes.
Dick Durbin of Illinois, the second most senior Senate Democrat, will introduce the bill after the Easter recess, a Democratic aide told CNET.
"Why should out-of-state companies that sell their products online have an unfair advantage over Main Street bricks-and-mortar businesses?" Durbin said in a speech in Collinsville, Ill., in February. "Out-of-state companies that aren't paying their fair share of taxes are sticking Illinois residents and businesses with the tab."
At the moment, Americans who shop over the Internet from out-of-state vendors aren't always required to pay sales taxes at the time of purchase. Californians buying books from Amazon.com or cameras from Manhattan's B&H Photo, for example, won't pay the sales taxes at checkout time that they would if shopping at a local mall--which is what Durbin means by giving online retailers an "unfair advantage."
On the other hand, there are some 7,500 different taxing jurisdictions in the United States, each with a set of very precise rules describing what can and can't be taxed and at what rate. That makes it challenging terrain for retailers to navigate.
There are more reasons why Americans shop online than avoiding the payment of sales taxes. Ease, convenience, comparison shopping - the whole world of shopping at your fingertips. The only thing adding sales taxes to online transactions will do is make things harder on both the retailer and the customer. It may even get to the point that some online retailers will refuse to sell in some states.
Internet sales taxes have been examined by Congress several times over the last 15 years and the same problems with adding them are still there. Best leave well enough alone and allow the growth of internet sales to continue apace.