Chaffetz Greases Wheels For Online Sales Tax

The American Spectator quotes CEI`s Jessica Melugin on the Internet Sales Tax Bill:

Jessica Melugin, an adjunct fellow at the Competitive Enterprise Institute, claims in an op-ed for The Hill that Chaffetz’s bill, like other variations it seeks to improve upon, distorts the structure of sales taxation in a way that hurts consumers.

RTPA, she claims, “would give states unprecedented power to reach outside their borders to tax businesses in other states,” since the tax would be calculated based on the buyer’s location. Gas stations, for instance, don’t calculate taxes based on a customer’s license plate.

The real reason most big box retailers support the bill, Melugin speculates, is that they would be better able to absorb the compliance costs than would their smaller competitors.

Instead of a destination-based taxing system, Melugin calls for an origin-based approach by which sellers collect sales tax based on the rate in their home taxing district. States would then separately participate in a revenue-sharing system that sends some of the revenues to the buyer’s home state.