Eventually, we'll have to tax Internet

Published 7:42 am Monday, November 29, 2004

By Staff
I've shopped there. Taken a class there. Done tons of research, arranged travel, and used it to work remotely, away from the office.
We're talking about the Internet, of course, that vast network of products, information and communication many of us depend upon daily.
Just last week, thanks to a tip from Betty Jones, I decided my niece and nephew couldn't live without the "Little People Christmas Story." No, not the one available in area department stores, but the one that requires batteries and plays "Away in a Manger" when you place the angel on top of the stable roof.
So I ordered it directly from the manufacturer and helped a delivery service make a nice chunk of change. What I didn't do in the process was support the local or state economy.
This holiday season, consumers will spend $219.9 billion, according to the National Retail Federation. Last year, during the four-day Thanksgiving holiday shopping weekend alone, online holiday sales topped $820 million, an $85 million increase over the same period in the previous year. The growth trend is expected to continue this year.
While most of us love the convenience of e-commerce, we need to realize that, collectively, when we shop online, we are undermining lots of local tax bases. Sooner or later, I believe we're going to have to address that.
Twice since 1998 Congress has passed legislation banning states and local jurisdictions from taxing Internet access unless the tax was already in effect prior to the original 1998 law. Most recently, on Nov. 18, the U.S. House passed the Internet Tax Nondiscrimination Act, which prohibits states from taxing Internet access. It also bars states from placing "multiple or discriminatory taxes" on electronic commerce. Already approved by the Senate, the measure awaits the president's signature.The new Internet tax ban does not, however, exempt Internet retailers from collecting and remitting sales taxes to states.
If the current rate of e-commerce growth continues, something in the tax structure will have to change for the sake of local governments on whom we depend for roads, protection, education and recreation.
We're going to see the wee ones today. I'm probably more tickled with their new toy than they will be. But I'm also feeling a little guilty about the $2.40 Alabama, Escambia County and Brewton would have collected if I had bought the scaled-down version locally.
Michele Gerlach is the publisher of The Brewton Standard. She can be reached at michele.gerlach@brewtonstandard.com, or 867-4876.