Debate Topic: Should Georgia Tax Internet Sales?

On any given subject, we have real live experts among our readership. Hence, it would be interesting and valuable to offer for discussion issues that may (or may not) make their way to the Capitol for consideration. I’ll be posting topics for debate from time to time and I hope these posts will lead to a vigorous and informative discussion.

Today I want to offer for discussion the idea of requiring online retailers such as Amazon, to charge state and local sales taxes on their sales. As I understand it, current Georgia law requires individuals who purchase items online to pay Georgia sales tax. However, the online retailer does not collect the tax, it’s up to the purchaser to calculate and remit payment on their own. That’s simply not going to happen very often and it’s difficult to enforce that law.

Advocates of taxing internet sales will point to what they say amounts to a competitive advantage for a company that sells their merchandise only online. If you are a small retailer, doing business in Georgia with Georgians, you collect state and local sales taxes while your internet only competitor doesn’t have to. In a competitive market, small differences in price can have a huge impact on people’s purchasing decisions.

Opponents would say that since they have no retail location and may in fact have no physical presence in Georgia they should not be required to collect these taxes. In addition, collecting sales taxes in all fifty states, and being required to deal with the variations of local law could be expensive.

This issue is not going away. As more people purchase items online, many brick and motar retailers will face increasing competition from their online only retailers. Thusfar this holiday season, online sales are approaching $27 billion.

For the first 42 days of the November to December 2011 holiday shopping season, online spending (through Dec. 12) online spending has reached $26.8 billion, up 15 percent from the same time period last year.

Where do you stand on this issue?

UPDATE: I received an email from a reader telling me I better pay my taxes or he was going to report me for tax evasion. He helpfully provided a link to the form I need to fill out. Thanks for contributing to the discussion sir.

UPDATE 2 11Alive: State reminds consumers to pay tax on online purchases

96 comments

  1. Engineer says:

    Sales tax should be relative to the location of company’s headquarters (or location of business, in the case of a franchise), not relative to the location of the purchaser.

    Edit note: I forgot to take into account franchises, so it is added in parenthesis.

        • bgsmallz says:

          That doesn’t make any sense. So I should pay North Carolina sales tax at Lowes and that money should go to North Carolina because the company is headquartered there?

          No offense, but that’s silly.

          • Engineer says:

            That was why I tossed in the franchise thing earlier, I’ll put it in quotations for you, “or location of business, in the case of a franchise”. Since we were talking about internet companies, I had initially posted my comment on the basis of the online companies based in one building.

    • No offense but I’m pretty sure economic theory classifies sales tax as a consumption tax – it’s an alternative to an income tax as a way to pay for government.

      You are thinking about profits when it comes to income tax – and yes you’d pay that where the company is located or made the sale. But consumption is about the person buying, not the person selling, and it’s a tax that is paid for and benefits the consumer when it comes to paying for their government.

      So you have two choices – let Georgians pay for Georgia government with an income tax on income they make in Georgia or let them pay for Georgia government with a consumption tax on money they spend here – or some blend of the two. If I’m paying for government with a consumption tax when I buy a pair of jeans why should I pay the tax if I do it at Perimeter mall but not if I do it through Amazon?

      • Engineer says:

        I prefer to think of it in the same way as a person who goes to another state to shop (like folks around Jacksonville and Chattanooga routinely do). Are you going to make the statement that businesses in other states should have to pay sales tax to GA because the buyers are residents of GA? Because that is in effect what you are demanding be done in your Perimeter Mall vs Amazon situation.

        • Two things – at some point you just have to hope that stuff nets out or gets close to it – but at least in Georgia if you live in DeKalb and go to Cobb to buy a new dishwasher at Sears, Sears will actually charge you the DeKalb tax.

          The problem with your example though is that it would be one thing if Amazon was charging me California sales tax and some Georgia company was charging Californians Georgia sales tax and it could in theory net out. If I go to Chattanooga to eat lunch, I’ll pay TN sales tax and someone else from TN who comes to Atlanta for lunch will pay it here. Not perfect but it works out. With Amazon there’s no offset.

          • “but at least in Georgia if you live in DeKalb and go to Cobb to buy a new dishwasher at Sears, Sears will actually charge you the DeKalb tax”

            Which I’m not sure why you’d want to do that since Cobb is 1% cheaper than DeKalb. 😉

          • Engineer says:

            1st paragraph makes no sense. So how exactly are they (Sears) going to know what county/city you are from (to tax you for DeKalb) if you purchased it in Cobb. Especially if you are paying with cash.

            2nd paragraph, how is there no offset for Amazon? I’m quite certain there are Georgian online businesses that sell goods to Californians. Right there is your offset.

  2. “In addition, collecting sales taxes in all fifty states, and being required to deal with the variations of local law could be expensive.”

    Yep, and in Georgia that would also mean computing the appropriate sales tax for each of the individual 159 counties.

      • nast says:

        But you can only ship to one entered location, but can purchase from almost anywhere. A hypothetical but entirely plausible scenario:

        I am a young travelling consultant who recently moved to Atlanta 3 months ago and currently spend my weekdays on a project in Cincinnatti. Since I only travel with my work laptop, I frequently will remote back in to my computer back home for non-business- related purposes. One day I do just that and purchase a lovely gift from Amazon, which is based out of Seattle, for my dear mother who lives in Tampa and is where the gift will be shipped. Since I’ve been so busy lately, I haven’t updated my credit cards and my billing address is still listed as my old home in Chicago.

        So – which city and state’s sales taxes should be collected on the transaction?

          • nast says:

            Ok, lets go with shipping address. It doesn’t exactly address “paying for Georgia government with a consumption tax on money they spend here”, since Florida gets it, but we’re pretty comfortable that it will balance out in the end. What happens when the goods being purchased are virtual and no physical delivery takes place, only the transfer of bytes?

      • Okay, so then you have to have an updated taxdatabase as tax rates constantly change throughout the country. Then you either have to ask the customer what county they’re in (and assume they’re telling the truth, since it’s not used in shipping or billing) or determine what county they’re in based on their address – which would require another database, since the associated city for some addresses extends over county lines. Or I believe the USPS has an API for that that they charge for, though it’s been a while since I’ve needed to do anything like that. Either way, it’s data that has to be maintained by someone or extra data for the customer to enter and most likely extra costs incurred just to comply.

  3. L. Max Lehmann says:

    Rep. Brockway:

    I am not an expert on taxation, though I have plenty to say about the matter on a quarterly basis.

    My post here is to encourage your continued efforts to use Peach Pundit as a means to garner useful, credible, and wide ranging views on governance. As well, to encourage the incredibly smart Peach Pundit community to share this site information with your friends.

    America faces huge challenges, as does Georgia. Each citizen has a duty to communicate with their elected leaders for this Great American experiment to work well. I commend Rep. Brockway, and all the other elected leaders who read and contribute to Peach Pundit, for helping to pioneer a new, effective tool to stay close to your Constituents.

      • L. Max Lehmann says:

        Thanks, I have seen positive results from Peach Pundit, specifically from Rep. Brockway, and it is remarkable!

        • Calypso says:

          While Buzz may be one of the few legislators who post and reply here (at least on a regular basis), I know that many of them read PP, as well they should. Not only for the reads of the main page posters but also to weigh the response from the numerous replies most generate.

          A daily opinion poll on current and relevant topics, if you will, albeit with a decidedly conservative flavor.

  4. Max Power says:

    Sooner or later all states will tax online sales. The question is whether Georgia will get in front of the trend and collect years of additional revenues while other states dither and argue. I’ve never really been convinced of the physical presence argument, instead the focus should be on where the goods are purchased and consumed. Going on step further I might even suggest a slightly higher sales tax for online sales (state sales tax + an average of local sales tax rates) with the additional tax being put toward STEM education (or bike paths 🙂 )

    As for cost of collecting and remitting the taxes, I believe it will be less than you imagine. Server side software could easily add, collect, and calculate the amount due to each state.

    • L. Max Lehmann says:

      Assertion may be credible: “Sooner or later all states will tax online sales.” But I don’t like it.

      http://www.globalresponsefulfillment.com/Knowledge-Base/Sales-Taxes-for-eCommerce.aspx

      Trade organization, “Global Response” – ABOUT:

      Global Response started business in 1974 as a small customer contact service. Today it is ranked as one the top 50 contact centers in the United States. The company offers a full array of services including fulfillment services, e commerce, inbound and outbound call center services, email and data management, live chat, electronic customer relationship management (eCRM).

      Their conclusions, summarized below, support Max Power (No Relationship to me.)

      “…According to the Center for Business and Economic Research in a report that was published in 2009, lost revenue due to uncollected sales taxes was approximately $34 billion. Consequently, many states today are now cracking down on online businesses and lobbying for new federal tax guidelines that apply strictly to these business entities. …”

      ” … The Streamlined Sales Tax Project of 2000 was an attempt to simplify and solve this issue. But challenging and complex or not, sooner or later, most e-tailers will have to collect sales taxes for online purchases, whether they want to or not. …”

      ” … The whole reasoning for the collection of sales taxes on internet purchases stemmed from the fact that many states were going broke …”

      • Max Power says:

        ” … The whole reasoning for the collection of sales taxes on internet purchases stemmed from the fact that many states were going broke …”

        While I think the urgency for internet tax collection has to do with states’ current fiscal trouble, I don’t believe that’s the whole reason. Let’s face it the shift to online purchasing of goods has been dramatic. It wasn’t Barnes & Noble that put Borders out of business it was Amazon. I think this trend is likely to continue and if states don’t start taxing internet sales they’re going to see a substantial portion of their tax revenue evaporate.

        • jiminga says:

          “It wasn’t Barnes & Noble that put Borders out of business it was Amazon.” Sorry, but huge changes have taken place in the book business brought about by electronic readers like Kindle and Nook. Borders was behind the curve and failed as a result.

          “if states don’t start taxing internet sales they’re going to see a substantial portion of their tax revenue evaporate.” Have you considered that virtually every major (and most minor) retailers already have large online sales operations? Are we to assume they all are committing suicide by selling online? Do you think states will just accept huge “losses” of sales taxes and not react by raising other taxes?

          • Max Power says:

            My point was the impetus behind collecting online sales tax was not merely from the fact that states are facing a fiscal crisis. The fact that more and more business is being conducted online means that states would naturally look to it.

            As for Borders-B&N-Amazon, Borders sold electronic books just as Amazon & B&N the difference being Borders did not tie their books to their own reader. Instead they sold readers made by third parties like Sony.

  5. benevolus says:

    I say yes, although I understand it is complicated and I’m not sure how it could be implemented and enforced. Is there an existing model out there, like maybe cable TV?

    • SWUSCitizen says:

      My company utilizes the FREE service TaxCloud. Georgia is the most recent state to streamline their tax definitions, rates and filing requirements. My company, in NY now easily calculates, collects and remits sales tax legally due for any streamline state including Georgia. I choose to utilize a PayPal Checkout platform which is seamlessly integrated with TaxCloud. The service is also integrated with many other checkout platforms making it super simple and convenient for online merchants. It’s actually easier for me to calculate, collect remit sales tax than shipping.

      Most of the administrative burdens associated with legacy tax requirements have vanished since becoming a TaxCloud merchant. Now my sales tax processes are automated and I no longer pay to frustrate my bookkeeper and accountant with manual tax calculation processes.

      I also, as many of you have mentioned, am certain tax collection on Internet sales are imminent. Until enabling TaxCloud last year collecting tax for over 10,000 varying jurisdictions was burdensome. But amazingly I have discovered the opposite is now true. Utilizing modern technology my small business has eliminated legacy administrative burdens that would have certainly continued to haunt balance sheets. Instead, my customers are saved from the burden of tracking and reporting sales made on my web site and shop without the fear of audit penalties. Most importantly tax revenues are now routed to proper jurisdictions automatically.

      Now Streamlined states are finding savings as well in their tax collection systems. Mississippi recently stated its desire to become a Streamlined state in order to rid itself of costly outdated collection methods. Permitting online sales tax evasion to continue costs all of us in many ways. Federal legislation enabling states rights to collect sales tax legally due is long overdue. I strongly support the Marketplace Fairness Act.

  6. Calypso says:

    I am unsure of my stance on this issue at the moment, as I haven’t done enough research. However, I do feel that avoidance of sales tax is NOT the first, second, or even tertiary reason people purchase online instead of in brick and mortar stores.

    Price, selection, ease of transaction and other factors are predominant to avoidance of sales tax, IMO.

    • Starker says:

      Usually price, selection, and ease of transaction all side with the online dealer. When you add no tax I think that online dealers get the advantage. I agree with the previous post that eventually all states will tax online and Georgia needs to be out in front. Internet sales will only increase and slowly be a dominate force in purchasing goods, and it would be unfortunate for Georgia not to utilize the tax. I am curious why the tax was never put in place. Is it the difficulty in implementing the tax, or is it a legality reason?

        • bgsmallz says:

          Avoiding sales tax is one reason I like Amazon. I used it as an example to avoid the temptation to sign up for a credit card and get 10% off. Why sign up for the Target card if you can get the same deal just buying it online?

          However, as much as I enjoy the free ride on the Internet….errr…I mean, as much as I enjoy claiming all of that sales tax each year on my returns…I don’t think the model of not taxing online retailers is sustainable or beneficial to the state or local governments. If we are going to have sales tax, it ought to be for taxes on all purchases….online retailers shouldn’t get a pass. (It pains me even to write that)

  7. Dave Bearse says:

    Where are the national sales tax folks on this?

    Also, add another 1% should T-SPLOST pass and transportation congestion and wear and tear associated with UPS and Fedex delivery services foisted upon everyone else.

    • Calypso says:

      What’s worse, one UPS truck delivering 200 packages to 200 homes in a day or 200 cars driving to brick & mortar stores to pick them up?

  8. griftdrift says:

    A qualified no. I’d like to understand how it would be enforced.

    Also, Mr. Harper, although it is arguable that Amazon has a competitive advantage over those without an online presence, I would argue that most businesses in the same product vectors as Amazon have online presences, so at best it would be a wash, at worst, you’d add cost to these businesses by having them track these purchases, maintain files for auditing, etc. Cost that Amazon could easily absorb but Ray’s Bacon Of The Month may not.

  9. Christopher says:

    As it stands, most states actually do collect sales tax for internet purchases, but we just don’t pay them. It’s called a Use Tax.

    “Use tax applies when the seller does not charge sales tax on a taxable item. Use tax has existed in
    Georgia since 1951, and it applies to online purchases.”

    So technically, you’re breaking the law when you don’t volunteer to pay the use tax when a vendor doesn’t charge this. This would apply to any transactions where sales tax isn’t charged such as a person-to-person sale or even yard sales.

  10. Three Jack says:

    no, not as a new, standalone tax.

    if part of an overall tax reform package that included the end of georgia’s income tax, lower property taxes and no more ad valorem tax on vehicles, maybe. bottom line is the legislature since being taken over by the gop has spent much time talking about tax reform, now would be a great time to actually do it. you have an insurmountable majority with gopers in charge at every level of government…if not now, when?

  11. MSBassSinger says:

    No, that would be another unenforceable, unthinking Rockefeller Republican’t mistake.

    How about this instead: Use conservative Republican thinking, and lower spending instead of increasing taxation. I suspect if you took a group of real, taxpaying, conservatives (not politicians or policy wonks) and handed them a line item Georgia state budget, they could divide it up and find lots of things State government has no business doing, and by ending those line items, save more than the Internet sales tax would actually generate.

    Seriously, require every Internet retailer, many of which are Mom-and-Pop operations, have to calculate a couby countyunty tax for each state that passes a dumb law like that? How typically Democrat!

    • bgsmallz says:

      Seriously…those internet mom-and-pop operations are so much dumber than the mom-and-pop operations that open brick and mortar stores. We should dumb down our laws to help them out.

      • mom-and-pop brick and mortars typically have one location in one county. Thus, they only collect sales tax at one rate. mom-and-pop Internet operations would have to collect for 159 counties in Georgia plus any other jurisdictions throughout the country (10k plus in total I think I saw above).

        • bgsmallz says:

          Ok…so putting aside the idea that you might have a mom and pop expand into a different county, the point is that they have to calculate sales tax. Why should an internet store be any different? They have maps on the internet, right? It can’t be that much harder than figuring out where to ship the good that was purchased.

          If they are too lazy to figure out the tax rate in the purchaser’s area, just levy the highest tax rate. Laziness shouldn’t be rewarded with an economic advantage, should it?

    • Simple solution – safe harbor at the highest rate per state and if the rate varies they can choose to do the extra work to pay less tax.

      As far as your give the conservatives the budget BS – please spare us. You guys have elected Republican governors and massive majorities in the state legislature here – time to deliver on your promise. What you’re basically telling me is voting for Republicans doesn’t work but handing over power to some sort of magical gang of conservative budget writers would?

      You let your 10 conservative wonder workers do their job, and then we’ll let the other 9,000,000 Georgians have their say.

  12. Steve says:

    I’m having a hard time figuring out the point of this thread. I’m not sure what kind of state-level law is being proposed here.

    I work for an online retailer. We do collect sales tax. We partner with an outside vendor, who tracks state, county, and local taxes around the country… and can calculate a customer’s tax for us based on their street address. This third-party service adds cost for us, but it isn’t an exceptionally difficult process.

    We pay that tax on customer orders from all states in which we have a “nexus”. To grossly oversimplify, we have a “nexus” with states in which we have any physical presence or in which our products are made, etc. Now, it may be that some “nexus” states don’t require retailers to collect tax, and so we don’t charge customers from those states. That’s an interesting question, I really don’t know one way or the other if there are states like that. However, we absolutely do collect and pay sales tax for all locales in which we are legally responsible. Most retailers that I’ve dealt with online do the same.

    So Buzz, are you saying that Georgia is currently one of those (hypothetical) states that doesn’t require “nexus” retailers to collect? Or does Georgia collect from “nexus” retailers, and you’re talking about a new law to collect even from non-nexus retailers? If it’s the latter, then this whole discussion is a lot of hot air… because Federal law pre-empts in this area. You running for Congress?

    • You raise a good point – a lot of smaller e-tailers are probably already collecting and paying sales taxes, because they are more likely to have some sort of physical presence or affiliation in a state. It’s really only the Amazon’s of the world that are able to sell in states like Ga without collecting sales tax.

      • Actually, I would think it’d be just the reverse. The smaller e-tailers are less likely to have a presence in a state. For instance, I just bought a pound of Christmas Lima Bean seeds from Seed Savers Exchange. If I’m not mistaken, I didn’t pay sales tax on them. However, if I go to shop at Best Buy’s website, I’m pretty sure they charge me sales tax.

        Also not discussed on here that I’ve seen yet – foreign sales. What if I buy something from an online retailer in Canada or the UK or somewhere? Are they going to be required to collect and send in sales taxes to the state of Georgia and how on Earth do you plan on enforcing that?

  13. Fiscal Conservative says:

    I can’t believe that so many are supportive of a new tax. Remember how many times in our lifetime have taxes got repealed or lowered? Not many. I own and operate both a brick-and-mortar and internet businesses, and I’m totally against an internet-based sales tax. For a brick-and-mortar store, I can utilize the services of the fire department, police, phone, water, sewer, etc. (And I pay heavily for those too). For an internet-based business, which could be run out of a basement or garage, you only need a phone line, electricity, and you receive deliveries via USPS, FedEx, DHL, or UPS. These companies have no customers coming in and out of their “stores,” and many are next door to you in residential-zoned areas and their locations are completely anonymous.

    I’m sure some will argue that these internet companies do utilize services like the typical brick-and-mortar, but that it not the issue. In the above posts I read about someone’s software package and tax company that can handle the sales tax collection, should it become law. Even if it is easy and rather inexpensive, it is STILL ANOTHER TAX and burden that will be passed along to the consumer in the form of a higher cost of goods and services. And as a CPA, I can tell you that having to pay sales tax to 50 states and perhaps even more local jurisdictions will indeed be a huge burden that will hinder business growth.

    I do agree with one of the previous posts that if the state needs more revenue, it should trim waste in current programs and or increase specific taxes where needed. If we have a problem with our roads, raise the gasoline tax. The more you drive, the more you pay. Still, the consumer ends up paying for all of these taxes.

    No one has mentioned what will happen when these taxes go into effect. We will simply set up shop where there are no internet sales tax collection and or where the tax collections aren’t enforced. Think of all of the businesses along the Canadian and Mexican borders that are located there just because of that.

    As a final thought, think of the internet in terms of a business paradigm change. Remember the showrooms of the 50’s and 60’s, where you went in to browse for a few items and then ordered it out of a catalog? The the big catalogs came along such as Sears and J.C. Penney, and then national franchising started to grow, and then the big-box stores. Internet business started growing in the early 90’s and has evolved to what it is today. Change is a constant in business, and manufacturers and retailers, and consumers, will simply do what it takes to make, sell, or buy goods at the lowest market price.

    Just think of the retired couple that’s selling homemade birdhouses online. Imagine Grandpa having to fill out monthly or quarterly sales tax returns OR have to resort to installing and or buying a software program in order to comply with the sales tax collection requirement.

    As a closing thought, think about the further invasion of privacy along with the possible elimination of cash that will occur when every internet transaction will be monitored and tracked in order to collect sales tax. We are in strong opposition to any form internet sales tax. Just imagine if we market Georgia as an “internet-free-tax” state. Think of the new business that would attract!

    • 1 – we are already an internet-free-tax state, how’s that working out for us?
      2 – sales taxes are a consumption tax paid for by the BUYER as an alternative or partial offset for income taxes. If you have a physical presence, your property taxes (and to some extent income tax) are paying for police, fire, etc. Our sales tax pays for government on the theory of some that consumption is better to tax than income – let’s just stipulate that for this argument and not get ideological about income vs consumption. Basically, government has to be paid for – and part of how I pay for it (for example) is on sales taxes on the groceries I buy. I can buy most of my groceries via Amazon instead of Kroger – so because of where I choose to consume I shouldn’t have to pay my fair share?
      3 – retired couple selling birdhouses – if they’re doing any sort of real business they should be using an accounting package anyway and some sort of e-commerce suite – the tax collection would be handled the same way shipping logistics are. if they’re selling one or two birdhouses here or there let’s be honest – they wouldn’t be impacted and are a straw man.

      and the final point being – if you buy something from amazon you yourself are supposed to pay the tax to the state anyway – but i bet less than 1% do. so really this is ultimately a collection issue vs a taxation issue, and even amazon supports collecting sales taxes they just want it to be uniformly applied.

      • Yeah and I recognize there’s no state sales tax on grocery – though there is county. Feel free to mentally edit the above and replace groceries with clothes or whatever other staple good you can think of.

  14. Doug Deal says:

    One of the things that I was told in civics and government class in my youth was that taxes have to have a rational basis or they are unjust. Sale taxes are fair since the city, township, county, state, whatever, has to provide services like police, fire, courts, adminstrative offices, roads, etc that support a local business. Mail order (at the time, I think people bought everything out of the Sears and Roebuck catalog) was not “fair” to tax since it did not derive benefit from local services.

    Of course, much of what we learn in school is a pile or marlarky, but I think this is a fairly rational was to look at taxation. We should not expect people in other states to pay our taxes and Amazon drives no benefit from our infrastructure and services. Just because it is a potential revenue stream and the state wants money does not mean it is moral to tap it.

    • Dave Bearse says:

      Doug, it’s the Georgia consumer and not Amazon or people in other state that would be paying the tax, though Amazon would collect it. And Amazon through its transportation contractor is using local services in the delivery of its products (though at a lesser level).

      • Doug Deal says:

        There are already laws on the books requiring Georgia residents to remit the tax to the state. Then start prosecuting Georgia citizens and see how far that goes. It is semantics on whether it is tied to the customer or merchant.

        Amazon is not UPS, FedEx or the post office. It is nonsense to say they need to pay local taxes because those indepenent companies use those services, as they are paying them cash to perform it.

      • UPS and FedEx (the transportation contractors) are paid by Amazon. UPS and FedEx then pay fuel taxes for the fuel that goes in their trucks that deliver the packages… don’t they?

  15. The most important point is that Georgia does NOT need to go this alone. There is a federal proposal that would provide a level playing field nationwide and the major Internet retailers are on board with this. If Georgia passes its own legislation, then as we have seen in the past in other states, many Internet retailers would fire all of their Georgia based affiliates of which I am one… effectively putting me and thousands of other Georgians out of business.

  16. Rick Day says:

    Eliminate all sales tax. Problem solved. It’s a disproportionate tax on the poor, anyway. It is also only 33% of the total revenue GA collects (var. sources).

    Increase the tax revenue on income and capital gains because a disproportionate system (and all taxing systems typically are) should not harm those most likely to be harmed (in terms of economics, this case would be the ‘have nots’).

    But I am sure that there are those who are ready to defend tax cuts for people like me, who make more money than them, for that is the way of the devoted of Team GOP™

    • The Last Democrat in Georgia says:

      Eliminating all sales tax, not a bad idea as I would be all for it.

      Though, I might go one step further and eliminate (virtually) all taxes, except property and corporate taxes.

      • See, I’m not a fan of property taxes at all. Is it really fair to tax someone based on what they own, year after year? What if it’s something like a piece of land, or a farm, or whatever that gets passed down from generation to generation? Or a small home on a busy highway that used to be a rural road… should we then look at putting a tax lien on a senior citizen’s home that they worked so long and hard to pay for just because they can no longer afford the property taxes? I’d personally like to see an end to property taxes.

        • The Last Democrat in Georgia says:

          “Is it really fair to tax someone based on what they own, year after year?”

          No….It’s definitely NOT fair as there is nothing fair about having to pay taxes. I wouldn’t mind having to not pay property taxes, either, but considering that property taxes help pay for firemen to help keep people from completely losing their property (and their lives) and police to help protect peoples’ property from those who don’t quite know how to keep their hands off of other peoples’ personal belongings, a very big and seemingly increasing problem, in Metro Atlanta, I might think twice before going proceeding with that one.

          Though, if someone could find a way to adequately fund those very important services without property taxes, I’d would definitely be all for it.

        • Doug Deal says:

          David,

          I used to believe as you do, that property taxes amount to rent and that you truly never own the property. What changed my mind was thinking about how property was held in the past. Basically you had to use it and defend it with your own resources. No one could own more land than they could use or afford to maintain because someone would take it from them.

          Travel forward to today and the need to support your property through your own efforts has been handed off to the government. Sewer, infrastructure, police, courts, and etc all protect, defend or maintain your property, which would likely be reletively worthless without it. Sure, people could defend their own land today, but it is uneccessary because there are government forces that will come to your aid.

          Enjoying the benefits of services and not paying for them is not “libertarian”.

          • Well written post Doug. I personally think every type of tax is unfair and can come up with some great examples about why some noble person (see the poor old person whose rural road turned into a major highway) shouldn’t have to pay them and by the way I don’t want to pay them either. But we have to live in the real world.

            If you buy property and then it becomes worth a lot more (and the taxes go up) do I feel bad for you? Only until you get that new home equity loan to pay the higher taxes, or sell your property invest the windfall in something else and buy a new piece of property at a value you’d prefer paying taxes at.

            • Doug Deal says:

              I have given that a bit of thought too. One advantages of taxing a few things a little is that it is broader based, harder to avoid, and doesn’t as readily pick winners and losers. The problem with taxing only one thing heavily is that it has greater affect on behavior and is much easier to game the system to avoid taxes or cheat.

  17. The Last Democrat in Georgia says:

    “Debate Topic: Should Georgia Tax Internet Sales?”

    Normally I’m not one to advocate raising taxes as I don’t like taxes period. Sales tax, income tax, property tax, etc. I might be even more anti-tax than some of our fellow Tea Partiers as I think that taxes are nothing more than a VERY EVIL necessity.

    I hate paying taxes, I hate seeing taxes being collected, I hate taxes in the morning, I hate taxes in the evening, I hate taxes at supper time, I hate taxes ANYTIME and EVERYTIME. I hate the word “tax”, I hate the letters t-a-x. Simply put, I REALLY HATE TAXES! With a passion.

    But, in this case, in this ONE case, internet retailers have a distinctly unfair advantage in not having to levy state sales taxes on their products. So just this one time, if we are going to keep the current sales tax system, I would say that internet retailers should have to suffer along with their bricks-and-mortar peers and levy sales taxes on their transactions.

  18. CobbGOPer says:

    If you’ll get rid of the state income tax first, then by all means tax whatever internet sales you want.

      • 1) There’s no way the amount of revenue potentially generated by this would eliminate the need for income taxes in Georgia. If it finds it’s way to the General Assembly we could very easily cut some other tax to make things “revenue neutral.”
        2) I’m not proposing this, I’m not even sure if I’m for it yet, I just like to debate ideas.
        3) Many view this as an issue fairness rather than an opportunity to generate more revenue for the State.
        4) If it’s the right thing to do it doesn’t matter whether it’s election season or not.

        • CobbGOPer says:

          I like you, Buzz. You’re the type of people we need in government. Which is why I don’t think you’ll stick around there very long. You’re too ethical.

          And I didn’t mean get rid of the income tax and replace with this, I simply meant that we have enough taxes already. I know you like to debate ideas. Just debate some other ones; stuff like this might give your peers at the Gold Dome bad ideas.

          • The Last Democrat in Georgia says:

            I agree that Buzz is way too much of a stand-up guy (stand-up as in mammal with two legs who walks upright) to be hanging around that slithery cold-blooded crowd that is found in an overabundance under the Gold Dome.

  19. Fiscal Conservative says:

    As retailers and manufacturers, we will continue to fight against this and any and all other taxes that get levied upon our businesses. Already our trade associations are getting ramped up for this, tax free locations and options are being explored, and of course we’re sending money to our favorite (not) group of folks, the beloved lobbyists.

    The Internet was initially hailed as the new and last bastion of free market capitalism. I remember reading articles about the desire of politicians wanting to figure out a way to tax e-commerce transactions way back in the early 90s.

    Thinking ahead, if we lose this fight against taxing internet sales, we give them, the “looters”, precedent to go after taxing all of our other internet transactions such as banking activities, and yes, perhaps even email communications (think of the USPS needing a bailout as of late).

    Remember that the Colonies initially revolted over a 1.5% tax on tea and a tax stamp tax, and we’re considering a new form of tax after we’re already effectively paying 40-60% in taxes already! C’mon guys, let’s get off this new tax bandwagon.

    • Check your internet bill – you are already paying tax on your email messages. This is probably the worst comment of the day and there’s a lot of competition for that.

      What is so hard to understand about paying sales tax (which by law I’m supposed to do anyway through the use tax) when I buy an item whether I drive to Best Buy and purchase it or whether I buy it from Amazon. That is not going to unleash a tax crazy atmosphere where bank transactions and email communications start being taxed – bank transactions in person are not taxed! And you do pay taxes already on your internet service bill which includes all the emailing and web browsing you do – the same way that you pay taxes on your phone bill.

      The tea partiers were more upset about the taxation without representation than the taxation part. By saying that I should be able to use the internet to avoid paying my fair share you’ve turned it on its head – now it’s representation without taxation.

      I’d be surprised if the total tax burden for a high income earner in New York City gets to 50%. Is that where you’re living?

  20. Cassandra says:

    Buzz,

    Being a GT guy and all I think you should consider naming the ratio between posting speed and volume of comments on any particular issue. Call it the Buzz Factor.

    If a topic generates lot’s of comments, really fast, you might be able to draw valuable, useable political inferences from the Buzz Factor…

  21. Calypso says:

    I think Chuck Shiflett made the most profound statement above when he stated that if an internet tax is imposed, “The most important point is that Georgia does NOT need to go this alone. There is a federal proposal that would provide a level playing field nationwide and the major Internet retailers are on board with this. If Georgia passes its own legislation, then as we have seen in the past in other states, many Internet retailers would fire all of their Georgia based affiliates of which I am one… effectively putting me and thousands of other Georgians out of business.”

    I believe that is so important it warrants being said again. Sorry if that goes against posting decorum, mods.

  22. saltycracker says:

    Buzz sez : “1) There’s no way the amount of revenue potentially generated by this would eliminate the need for income taxes in Georgia. If it finds it’s way to the General Assembly we could very easily cut some other tax to make things “revenue neutral.””

    Would like to see revenue comparison of estimated lost internet sales revenue and income taxes.

    Regardless of brick & mortar a sales tax license & collection (with some caveats) should be a part of the tax revenue in Georgia. Software should be able to handle the sales tax business/distribution.

    Any approach to collect sales taxes on defined transactions delivered/performed/completed in the state of Georgia should involve a tax code revision, preferably eliminating income taxes.

    Selections from other taxes to achieve revenue neutrality are suspect as legislators are known to pick winners and loosers.

    The devil is in the details.

  23. Harry says:

    Understand that the Supreme Court has ruled against imposition of sales tax burden on outside sellers with no nexus in a state who deliver by common carrier. Such taxation is said to be in violation of the Commerce Clause. So an act of congress to tax internet sales will be challenged. Nonetheless, if Georgia collects such “internet” sales tax, I hope the offset will be to reduce our noncompetitive Georgia individual and corporate income tax rate structure. I fear our legislative leaders will find some worthy excuse not to do so.

    • The Last Democrat in Georgia says:

      Fear not, Harry, for our legislative will find any and every “worthy” excuse not to do so. And when they run out of excuses they’ll just play dumb as usual as a way to run out the clock on the session.

    • saltycracker says:

      Harry,

      True. It is also illegal for Georgia residents not to remit that (unenforced) tax.

      The below info from an AJC article on the subject suggests it might put a bigger dent into a trade off with other state taxes than Buzz thinks if the Commerce Code can be updated:

      “Georgia’s losses from unpaid taxes are conservatively estimated at $365 million this year and more than $410 million in 2012, according to a University of Tennessee study.”

      http://www.ajc.com/business/not-so-fast-on-1258695.html

      • saltycracker says:

        P.S.

        The amount of internet sales tax NOT collected appears to be approaching the corporate income tax, more than the insurance tax, a lot more than the state portion of property tax or the inheritance taxes and gaining on the fuel tax and lottery take.

        Source: http://www.georgiaencyclopedia.org/nge/Article.jsp?id=h-1353

        Looks like the best choice would be to wind down the corporate income tax making our in-state businesses more competitive.

  24. saltycracker says:

    Buzz,

    On the subject of internet sales:

    1.. Collecting taxes via the seller for sales completed in GA is a probable revenue source.

    2. Software is available to process the sales transaction and distribute the taxes as specified.

    3. Winding down Georgia corporate income taxes is the best trade-off.

    4. Legislation will be needed to make this happen.

    Thus #4 (legislation) will be the object of obfuscation, litigation and continuing complexity.

  25. Lo Mein says:

    It’s UNFAIR and we need a LEVEL PLAYING FIELD.

    So, eliminate the sales tax for brick-and-mortar stores, too.

Comments are closed.