I love how this works. As 2012 kicks off, so does the legislative session in Indiana. Well, it was until the Democrats decided to play their games from last year and stall the session by not showing up.
Anyhow, State Sen. Luke Kenley (R), chair of the Senate Appropriations Committee, would like for Congress to require all online retailers to collect the seven percent state sales tax from customers.
Currently, only online retailers with a physical location in the state are required to collect sales tax. Individuals are supposed to pay a seven percent "use" tax for an online purchase if no tax was collected, but according to the state Department of Revenue, that hardly ever happens.
This goes back to the deal Indiana made with Amazon.com to get then to open a warehouse. Not only did Amazon open a warehouse, they opened three, and just last summer announced plans for a fourth.
Oh yeah, part of the deal was state legislators not asking for an online sales tax. Wonder how those plans are coming along at the present?...
Kenley's idea comes as the estate tax faces an uncertain future. The estimated loss would be about $165 million a year, but that would not start until 2020, so the online sales tax would be Kenley's idea for replacing that lost revenue.
So let me get this straight - in order to replace a tax that hasn't even been lost yet, rather than collecting taxes the state is already entitled to collect, the plan is just to create another tax, breaking a deal that has spurred growth and created jobs?
Yeah, I'm not sure how they keep getting reelected, either.
Is it so bold to call for reducing spending by the estimated amount the estate tax would bring in, if it gets eliminated, rather than go back on your work in such a blatant fashion? What would be the spin if Amazon not only decided not to build a fourth warehouse, but pull up stakes on the other three and move the whole operation to another state? Kentucky's right next door, and they play host to a major international shipping hub. Sure, they are a crap state in 99 of 100 possible terms, but do you think Amazon would care, if they could get a better deal, even temporarily?
As for State Sen. Kenley, the various retail groups howling over the "unfairness" of the online tax break, and others like U.S. Sen. Dick Durbin (D-IL), who has pending legislation to make online retailers nationwide collect sales tax, if they want to impress me, they need first to eliminate every single corporate subsidy - across the board, from top to bottom with all nooks, crannies, and crawl spaces accounted for, before I would entertain any argument on the fairness of a tax break.
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