Printed on: April 30, 2013
Educating Rev & Tax
Give credit to Idaho's U.S. senators, Jim Risch and Mike Crapo. Last week, Crapo and Risch got behind a concept widely misunderstood by their base and opposed by the special interests conservative Republicans often ally with.
A 1992 U.S. Supreme Court decision forbids states from requiring out-of-state retailers to collect that state's sales or use tax. And so, with the rise of the Internet, states such as Idaho annually miss out on millions in owed revenues and put their brick and mortar businesses at a disadvantage.
Risch and Crapo get this. Despite misguided opposition from folks like anti-tax zealot Grover Norquist and groups such as the Heritage Foundation, the Senate, with the help of Crapo and Risch, moved closer to a vote on the Marketplace Fairness Act.
That bill would allow state governments to force Internet retailers to collect taxes from customers and remit proceeds to state and local governments. That's the same standard required of brick and mortar businesses.
Idahoans who purchase items over the Internet are supposed to voluntarily pay the sales tax. That rarely happens, and the state loses between $35 million and $60 million in owed revenues annually. Just as troubling, Idaho's traditional businesses start each day at a 6 percent disadvantage. Common are the stories of people entering a store, conducting their research and heading home to make their purchases online.
Twenty-four states, including red states such as Utah, Arkansas, Georgia, Tennessee, West Virginia and Wyoming, are members of a consortium working together to make the transition as seamless as possible when Congress gives its green light.
Idaho has refused to join. The culprit is a hard-right faction in the House Revenue & Taxation Committee that appears to have bought hook, line and sinker the misleading arguments being made by the Norquist/Heritage Foundation crowd.
There is hope on the other side of the aisle. A streamline sales tax bill unanimously passed the Senate in 2010, but it takes two to tango, and until enough votes can be found in the House Tax Committee, Idaho will remain on the outside looking in.
Clearly, change will only happen if leadership in the Republican Party, specifically Gov. C.L. "Butch" Otter and House Speaker Scott Bedke, get serious about educating their rank and file.
The way to do that is to emphasize, over and over again, this truth: Collecting sales taxes on Internet purchases isn't a new tax. It's not a tax increase. It is, as Senate President Brent Hill, R-Rexburg, said to the Idaho Falls City Club on Friday, the logical step and right thing for anyone who cares about business in Idaho.
But we'd better get moving. Congress, at long last, appears ready to act, and the Internet isn't getting any less popular.