Originally published July 24 2005
Supreme Court nix on mail-order and e- commerce taxation could be reversed
by Mike Adams, the Health Ranger, NaturalNews Editor
States are now having second thoughts about the tax cushion given to internet companies. With internet profits soaring, many states are going to fight the earlier precedent.
The cybergeneration's period of grace comes with an implied statute of limitations.
Then a dispute between a mail order office equipment maker called Quill and the state of North Dakota scrambled the rules of retail competition.
Always on the lookout for new tax revenue, the state government decided to change its definition of "retailer" to include out-of-town mail order outfits.
The Supreme Court came down in favor of Quill, writing a decision that by extension proved to be a boon to the sundry e-start-ups populating the high-tech landscape later in the decade.
With their lower cost of overhead, many Internet-based companies, such as Amazon.com and eBay, went on to thrive.
Thirteen years later, Internet retail is far removed from its fledgling beginnings.
Some estimates reported by The Washington Post put the total lost state revenues from untaxed Internet sales in the neighborhood of $16 billion in 2003.
With states under increasing pressure to make ends meet, governors are hard-pressed to understand why Internet retailing should any longer qualify as a special case.
Earlier this month, for example, tax collectors from 18 states announced an interstate agreement on uniform sales tax regulations.
They also pledged to supply businesses with software to help them collect taxes online.
Unsurprisingly, previous demands for the mandatory collection of sales taxes on mail and online transactions have gone nowhere.
I suppose the tech industry's lobbyists can always fall back on the argument that e-tailers would face an undue burden on interstate commerce if compelled to comply with a multiplicity of state tax laws.
But the cybergeneration's period of grace comes with an implied statute of limitations.
Writing for the majority, Justice John Paul Stevens said that "the underlying issue is not only one that Congress may be better qualified to resolve, but also one that Congress has the ultimate power to resolve."
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