Legislation is slowly making its way through Washington D.C. that will institute a Sales Tax on internet purchases. Those in favor of this tax, although most refuse to call it a tax instead using the phrase Collection Issue, say it is unfair that internet sales do not have a sales tax whereas brick and mortar stores do have such a tax.
To understand why it is completely fair that Internet Sales don’t have a sales tax while Brick and Mortar do have one we have to understand the purpose of a Sales Tax, or any tax at all.
The rationale for such taxes is that in order to sell something to a consumer, the product and the customer must get to your store by state and federally built roads. They park in your store on free use parking lots generally built and maintained by municipalities. Stores use utilities; gas, electric, water, sewage, whose infrastructure requires government moneys. Internet sales clearly do not require this upkeep although if there is a warehouse where the product is delivered in the state it does require such resources. The roads used to deliver such a package to your door are also under that umbrella of activity.
However, the trucks that deliver goods pay gas taxes for the upkeep of the road. Gasoline taxes are generally justified as a way to pay for road and bridge building and maintenance. That makes perfect sense to me.
The only real justification for this new tax is the warehousing of goods which need employees to unload and load product for the consumer. These employees need water, heat, parking, etc. That is why Amazon is working out its own sales tax scheme with various states because they are building a network of warehouses all over the U.S. to ensure that your product is delivered promptly.
Now, here is my main point. If we become a society that orders our goods online we will significantly lessen the burden on utilities, parking lots, roads, and other government provided services. Brick and mortar stores will disappear and parks will appear. If we stop driving our cars all over to pick up toothpaste then the government spends less money and our taxes should likewise decrease. But, if we tax internet sales, whose price is lower for natural, capitalistic reasons, we are unfairly benefitting brick and mortar stores! Taxes should be lower on internet sales. This will, and is, creating many positive effects on consumption of gasoline, water, electricity etc! Not that the government should decide this one way or the other. If one business practice is cheaper and people like it then it should win out.
I’m not totally opposed to taxation on internet sales whose goods go through a warehouse in that state or municipality. I’m just saying it should be significantly lower for those specific cases and if there is no warehouse, there should be no tax at all. The reason it is lower is that only large trucks have to deliver the goods as compared to many cars coming and going. Warehouses have fewer employees than equally sized brick and mortar store where one warehouse might replace fifty or more traditional business locations.
The benefits of internet sales are many and we shouldn’t be discouraging this with unfair taxes that help brick and mortar stores under the misguided guise of “fairness”.
Tell me what you think in the comments!
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