To the Journal editor:
Why does a sporting goods store owner in Michigan have to charge his customers sales tax? Because that store owner and his employees are benefitting from the services the state and local municipality are providing to that store owner. Services like roads and law enforcement.
So, why would a woman in Michigan, who purchased a pair of shoes from a mail order house in Nebraska, have to pay Michigan sales tax to Michigan? What services did Michigan provide to that online seller whose warehouse and distribution center are located in Nebraska? The answer is none, whatsoever.
This is why legislation to force online sellers with no physical presence in Michigan to collect and then remit sales tax to the State Department of Treasury is wrong. But this is only one of a hatful for reasons why the so-called "Main Street Fairness Act" is bad for consumers and bad for Michigan. Here are some others:
- It's unconstitutional. In Quill v. North Dakota, the Supreme Court clearly defined what establishes a taxable nexus. (The Tax Foundation).
- It's taxation without representation. If New York needs more revenue, they can raise sales taxes and force internet sellers across the country to pay the tax. (From Washington Times)
- It places an undue compliance burden on online retailers. They will have to compute tax rates for over 9,000 jurisdictions. (From National Review Online)
- It will destroy jobs and put and impose massive new costs on small business. (Heritage.org)
- It puts e-tailers at a distinct disadvantage to brick and mortar retailers who only have to collect taxes for their own state.
-?It would burden the fastest growing segments of the economy, thus slowing economic growth. (The Foundry)
- It will threaten privacy as business and state governments with a track record of "losing" private information will have more opportunities to do so. (Taxeswithoutborders.com)
- It will only lead to more opportunities for cash-hungry government to collect more revenue.
- It will discourage tax competition rather than competing to lower taxes and attract businesses, states will compete to raise taxes on residents of other states.
I suspect that this bill is not about leveling the playing field but rather about politicians using their power to tax and bring in more revenue for them to spend.
Former state legislator
State Director of
Madison Project Michigan PAC
and author of the Core Principles newsletter