Turns out there’s only ONE Republican in the entire Nevada Legislature who got the Internet tax issue (SJR5) correct. Every other Republican (along with every Democrat, but that was a given) voted to empower and force out-of-state companies to suck “use” taxes out of your pocket for out-of-state online purchases despite myriad conservative reasons not to do so.
“I see a few problems with the Marketplace Fairness Act,” writes Assemblyman Wes Duncan (R-Las Vegas), who was excused from the final vote but confirmed to me he would have been a “No” on the floor, just as he was in committee.
“First, it empowers states and localities to impose sales taxes on entities they arguably have no jurisdiction over which goes directly against the holding in Quill which requires retailers to have a physical presence in the taxing state. Second, this would be highly burdensome on smaller retailers who have to comply with thousands of taxing jurisdictions. Third, it discourages tax competition between states and allows them to reach across state lines.”
And Assemblyman Duncan only scratched the surface on why this is such a VERY BAD idea.
The Retail Association of Nevada (RAN), which represents big-box retailers such as WalMart and Best Buy, claim this Internet tax bill will “level the playing field.” Hogwash. Unless brick-and-mortar stores are going to be required to start charging customers a “shipping charge” to carry their purchases out of the stores!
In a press release this week, RAN noted that “Retailers who have a physical location in Nevada are required to collect (sales) taxes and send them to the state.” Which is true.
But RAN went on to claim that by making online retailers that do NOT have a physical presence in our state “operate under the same rules, Nevada will become a more equitable place to do business.” Which is NOT true.
It simply is not more equitable for Nevada to be able to pass tax-collecting rules that apply to non-Nevada entities – which do not use our schools, libraries, police, firefighters and other government services – that have no vote. That’s the very essence of taxation without representation!
Supporters of this Internet tax collection scheme – and let’s be perfectly clear here; YOU will be paying this tax, not the online retailer – maintain that YOU are already required to pay this tax by law. YOU just don’t.
As RAN puts it, “this tax is not new, but rather already due.”
So what RAN is really trying to do here is FORCE you to pay a tax you object to (and let’s face it, if you don’t even know about it, you sure as hell didn’t agree to it!) by making out-of-state companies the mandatory tax collector for the government – much like how your employer, through withholding, is forced to collect and remit your federal income tax payments every paycheck.
Instead of making it easier for the government to collect a tax the citizens of Nevada never agreed to, what Republicans in the Legislature SHOULD be fighting for is repeal of the ridiculous “use” tax on out-of-state purchases outright.
By the way, do you know why they call it a “use” tax and not a “sales” tax? Because one state is precluded by the Constitution from taxing goods purchased in another state and the courts have affirmed this. So sneaky state legislators invented a new tax called the “use” tax and apply it to anything you purchase out-of-state which is intended to by “used” where you live.
So if you buy a t-shirt in Utah to be worn at home in Nevada…you owe this stupid “use” tax even if you buy it in person at the WalMart in Provo and not online!
You see, if you travel to a state with a lower sales tax rate than Nevada’s “use” tax rate, you are legally required to pay Nevada the difference. For example, if Nevada’s “use” tax rate where you live is 8 percent and another state’s sales tax if 5 percent, you have to pay the 5 percent to the state where the sale was made AND remit the difference of 3 percent to Nevada.
But if this Internet tax bill is approved, it’s inevitable and only a matter of time before that brick-and-mortar retailers around the country are going to have to start checking ID’s and charging the highest tax rate on the books and remitting the differences to the state of origin of out-of-state visitors.
For the record, the U.S. Senate voted in favor of this Internet tax on Monday. Sen. Harry Reid voted for it (naturally). Sen. Dean Heller voted against it (thank you!).
Now the bill moves to the House. Democrat Reps. Steven Horsford and Dina Titus will vote for it (naturally). I’m waiting to hear how Republican Reps. Joe Heck and Mark Amodei intend to vote. Let’s hope they follow Heller and Duncan’s lead.