Tuesday, May 02, 2006

Stating the Case for Online Sales Taxes

The Internet has Congressman Ernest Istook all worked up. That was plain to see at the press conference he held on the Hill last week. But it wasn't music piracy, child porn, ID theft or the other usual hot-button technology topics were riling the Oklahoma Republican.

Istook took his time on the steps of the Cannon building, just across the street from the Capitol, to talk about taxes. Sales taxes to be exact. His new bill, introduced last week, would offer the federal government's stamp of approval for a national online sales tax plan.

Istook is a proud Republican -- not exactly a pro-tax poster child. But Republicans also call themselves the party of states' rights. Simply put, the Washington politicos should keep their grubby hands out of the states' affairs. And that means if they want to tax Internet sales, so be it.

Most states require citizens to pay use taxes on things they buy online or in another state, but few consumers comply because it's almost impossible to enforce. Not only that, a 1992 Supreme Court decision forbids the states from forcing businesses to pay up if they're located in another state.

That's why people in Washington, D.C., like buying big-ticket items in sales-tax-free Delaware. It's what sends Mainers over the border to buy their liquor in New Hampshire. It's what is sending more people than ever onto the Internet to buy just about anything.

The national sales tax plan would throw all this aside and let the states take the money they say they need to keep vital services up and running.

That argument has found little support on Capitol Hill so far, prompting Istook and William Delahunt (D-Mass.) to take the first step.

"If Congress does nothing, then we will be besieged with larger-than-ever requests that Congress make up the difference to support local schools, roads, public safety and hospitals," Istook said.