Online sales taxes are unfair


Alex Eder

Sales taxes that are made on a state by state basis run into many issues with courts, and some have been struck down, such as the case in Illinois. These laws are fought in many states because they let states attempt to control companies that are based in other states. The taxes in New York for example can be levied on a company such as Amazon, even though they are based in Washington and may have no actual physical presence in the state. This is unfair to these online companies who will have to deal with differing rates of taxes in different states, where they may or may not have any actual buildings.

The sales taxes themselves on online companies fail to raise significant funds and the estimates vary wildly. States that include these taxes have made little, and  “most likely lost revenue overall because many retailers cut ties with affiliate marketers in the state,” according to a recent Bloomberg Law article. These laws drive away online deliveries, and make the state unappealing to large online companies to open up new offices or distribution centers. Since the taxes are overall ineffective, they just add unnecessary burden to consumers and online retailers.

The main argument for these taxes is that they level the playing field between brick and mortar stores with the growing online industry. While it is true that some traditional retailers are having trouble keeping up with their online counterparts, the solution is not to try to tax the online one down. These more traditional stores must make significant changes in order to keep up with a changing market that is dominated by online parts. It is not the government’s job to keep every failing business afloat when they are taken over by new ideas and markets.

The only way that an online sales tax would be fair would be if it was levied on a set, nationwide level. This would negate the issue of states regulating other state’s business, as the  national government has the right to regulate domestic trade. It would also make it simpler for online companies and consumers to keep up with the tax, as it would not eliminate the differing rates state by state. Finally it would also even the playing field between brick and mortars and online retailers, as proponents of the state by state taxes want.