States are hurting for tax revenue, they need the money for useful things such as paying teachers, fixing bridges, repairing water systems, etc. etc. etc. Sales tax revenue has been decreasing as more and more people buy online. But I doubt that repubs in Congress would agree to do anything on this, because not doing anything is another way to choke government.

Sales tax are a state issue and so is the collection of the revenue. Should those who buy something online from a state with a sales tax pay for sales tax in another state even if their state has no sales tax? Remember there are 2-3 states (I've lost count which it is) that do not have a sales tax. Oregon, my home state, is one of them. The same problem exists in Washington where people come across the border to by cigarettes, groceries, and other things in Oregon because they are cheaper. So the problem is not just online, people are also physically getting around sales tax if they live near a state without one.

First, Sales taxes are regressive, it hit the poor more the the rich, for the poor MUST buy things to live, the Rich "invest" and thus do NOT pay as much sales tax as a percentage of their income as people of lesser income. In fact the less

No, the bigger problem is the fairest tax, the tax that people of all income groups pays roughly the same percentage of their income, is real estate (and that is why it is so hated, people with money can NOT get out of paying their fair share by coming up with alternative taxes. Worse, if real estate taxes are to high, they are "self correcting" in that people will pay less for real estate with a higher real estate tax then a near by property with lower taxes on it. It is for this reason most local taxes tend to be real estate taxes, for if set to high for the area, real estate value will go down to reflect the high tax on real estate,'

States also have the option of Income Taxes, but Income taxes are another tax hated by people with money for you are taxed on your income not what you have to buy.

This is the problem with Real Estate taxes, it is one of those taxes that hit the poor more then the rich (as a percentage of income) and thus liked by people with money.

Thus you have a solution, but it is a solution State Legislatures do NOT want to embrace, rely on other taxes and abolish the Sales Tax.

Except I was saying that it is unfair for 47 or 48 states to be taxing others on the products they buy on the internet, while 2 or 3 don't (again I can't remember which states besides Oregon don't have a sales tax). The federal government shouldn't get involved in the enforcement of sales tax. It's a state issue.

Oregon will never have a sales tax. It's been voted down in Oregon over a dozen times.

The only hope is to eliminate it on a state by state basis. If the people who live in states with a sales tax are serious about it they'll browbeat their legislators to repeal it.

Last edited Sat Oct 19, 2013, 01:32 AM - Edit history (1)

Oregon, like New Hampshire, Alaska and Montana, ban a STATE sales tax but do permit local govenrment to have one on prepared foods.

http://en.wikipedia.org/wiki/Sales_taxes_in_the_United_States

And even Delaware has a "sales tax" in the form of a 3% "document fee" on the sales of automobiles. Given that the major source of revenue from sales taxes tend to be tied in with the sales of Automobiles, would make Delaware a State with a Sales Tax.

As far as I know there is no place in Oregon that has done that yet.

I live in South Korea and we have a 10% VAT tax on everything that is built into the price. For example if you buy a Coke that is $1.40, then 14 cents is the VAT. The good news is that you can file that as a deduction on your taxes. I had one year I ended up getting all of it back because I had so many deductions. I don't agree with it, but when you live in a foreign country you pretty much have no choice.

We understand the politics of the issue but what is the legal basis for this decision?

Last edited Sat Oct 19, 2013, 01:31 AM - Edit history (2)

I have little sympathy. Lower the sales taxes. They're regressive.

is the fact that every jurisdiction -- about 10,000 of them -- has different rates and different rules on different types of items, and each require a separate return for their jurisdiction. This makes collecting sales tax for all be the largest retailers (amazon, etc.) cost prohibitive.

It would be MUCH easier if states charged a uniform amount (say average) and their were only 50 jurisdictions -- in addition one return which is filed with sales by zip code. In addition, the feds / uniform commercial code could define which items are taxed or not.