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It is inevitable as death, eventually there will be a system for taxing goods sold on the Internet.

In 1992 the Supreme court ruled that because of the complexities involved in the over 7000 jurisdictions that impose sales taxes it was almost impossible for out of state sellers to know all the rules regarding what taxes were applicable and as result states could not require out of state vendors to collect and remit those taxes.

Initially this ruling was of great benefit to the catalog business. Congress has treated e-commerce similarly.

Businesses on Main Street along with State and Local taxing authorities have come to realize it's not fair. Why should an internet business be exempt from a sales tax that is levied on the same good sold at a brick and mortar business, governmental agencies that have for years collected sales tax are having their tax bases eroded while the demand for services from the public continues.

Much of the growth in sales is e-commerce which is currently exempt from sales tax. Defenders of e-commerce will invoke the dictum that the power to tax is the power to destroy. There is some truth about the deadly consequences of taxes and regulations to inhibit the growth in business but state and local governments must balance their budgets and tax revenue will have to come from somewhere.

Taxes on services are always a possibility, as are higher taxes on alcohol, tobacco, expansion of gambling, lotteries, higher taxes on income, properties, motor vehicles and gasoline.

It's not a question of if there will be taxes on goods sold on the internet, it will be a question of when will the states and the various other taxing authorities streamline their procedures enough to pass the inevitable court challenges or the need for revenue changes the political landscape regarding the issues involved and a federal tax is imposed and rebated back to the states to cover their loss of sales tax revenue.

What will a simplified sales tax collection system mean for consumers, businesses, and governmental agencies is still and open question. Legal scholars of the issues involved agree that just because sellers are not required to collect the tax doesn't mean that consumers don't owe the tax. The sales tax laws are antiquated, unfair and inefficient as are most governmental programs.

If it were only possible to tax Internet porn, spam we could probably lower the federal income tax rates and retire some of the national debt and end the housing crisis.

Learn more about this author, John Asgeirson.
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