Ten years ago when I worked at Indelible Blue, I learned how online retailers have to deal with a myriad of tax codes. State and local governments have extremely complex tax laws – upwards of 7,500 tax jurisdictions across the U.S. It makes paying another state’s taxes damn near impossible for a small business like Indelible Blue.
That’s why I took notice when N.C. House Speaker Joe Hackney says he wants to tax online sales as if these companies are in North Carolina:
Hackney said he would talk to Pelosi about granting states the rights to interstate sales tax collection. He said it would bring in an additional $400 million to $500 million a year for North Carolina’s state budget, especially helpful given the current budget crunch.
“It’s a tax that is already on the books, so it is not a new tax,” he said. “It’s just collecting the one that’s there.”
Oh, how many ways can I say that this is a Spectacularly Bad Idea? You know that $400 million to $500 million it would bring in? The state’s check might say it came from Amazon but the money would come from the pockets of North Carolinians. In case you weren’t paying attention, these are folks who aren’t too keen on parting with half a billion right now.
Not to mention that these companies don’t benefit from anything the state of North Carolina provides, like roads, police, laws, or even a workforce. Why should they pay North Carolina when all they receive from the state is a tax bill?
We already claim this stuff on our income tax. I hope Speaker Hackney is prudent enough to leave it at that.
Not only a bad idea but NC already collects this tax on the state income tax form.
This whole tax on online purchases scheme is a scam. If I didn’t buy it from a company in North Carolina, why should I pay our sales tax? It makes more sense that I should pay the sales tax for the state/city where my order was accepted, since that’s where the sale actually occurred. The only difference is that I didn’t have to physically travel there to make the purchase.