More Cha-Ching for States 💰

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Goodbye internet retail therapy?

South Dakota has proposed instating a sales tax on internet retailers to increase the state's revenues. The issue has made its way to the Supreme Court in the case South Dakota vs. Wayfair. The lawsuit is against online home goods retailer Wayfair.com, where SD argues that the state should be able to impose a tax if the retailer makes over 200 sales or a minimum of $100,000.

South Dakota's reasoning

This past holiday season there was $100 billion in estimated sales online. Cyber Monday also hit new highs with $6.59 billion in sales. South Dakota is trying to capitalize on the ‘new’ retail market and adapt to the times so their government can stay funded.


Greedy Government:

National Review: States Angle for More Sales Tax, Small Businesses and Inflation Be Da*ned

Hot Air: Internet Sales Taxes Are Just Another Government Money Grab

Those against an internet sales tax say this places “extreme administrative burdens” on companies from out-of-state. Small online retailers will suffer and potentially be forced out of business if they are required to pay “abusive” high online sales tax. Those against it say the tax is not in the best interest of businesses, and that the government is doing this out of greed. They also point out that according to statista 90% of retail shopping is still done in person.

Greedy Online Retailers:

The Hill: The rise of e-commerce leaves state budgets shortchanged

Mother Jones: Trump Can’t Fix the Internet’s Tax Problem, But the Supreme Court Can

Those for an internet sales tax say that state and local governments are “losing big”, since they forfeit collecting billions of dollars in tax revenue on online shopping. They say that the retail market has changed, and that taxes need to be placed on e-commerce because it is a massive industry in the modern era. Many states ‘rely’ on sales tax for funding of critical government operations and need this boost.


The politics

Online sales tax isn't a new idea. The issue is something that Democrats, including Obama, have supported for at least half a decade. Even Trump has jumped on the online sales tax bandwagon. This is a rare occasion where Trump is actually breaking from party lines, but it may be driven by Trump's animosity towards Amazon CEO Jeff Bezos and his newspaper The Washington Post. 

Happy Tax Day 2018

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