Taxes are a fact of life, but we have more control over them than Government probably would like us to realize. The really insidious taxes, of course, get introduced as temporary measures and then stay and increase and increase. Personal income tax was a temporary expedient but I don't really ever see an end to it -- unless you want to hide in the wilds of North Dakota.

Sales taxes of all kinds are a particularly vile form of intrusion on a commercial transaction; to be told that the price you are paying for a product or service just increased for the benefit of the location where you purchased it is, to me, like having to pay a fine for shopping. Those States that expect a "use" tax of some kind (effectively a sales tax for buying somewhere else but using it in your location) are just operating as regulated, legal extractors of money.

Somehow the European version of sales tax, value added tax (VAT, TVA en Français) sounds much more respectable, but it is actually much more hostile. VAT is added to every transaction in the chain of sale, not just to the end user's price, and a vendor pays the difference between the VAT it collected and the VAT it paid to its supplier. In that way the state has an accurate picture of the revenues and expenses of a sales operation well before it sees any tax return. In addition VAT is enforced by the heaviest players in Government. In the UK, for example, VAT is overseen by Her Majesty's Customs and Excise, and if you thought the IRS had draconian powers . . .

In the U.S. most communities have fought hard to keep their cities and counties under some sort of restraint over the level of sales tax; people are mobile enough that they will travel to other locations for larger purchases. I live in a State with no sales tax and some of our communities have lots of out-of-State shoppers at the malls. The same is not true in Europe, where VAT is a country-wide thing. In some of those countries, where VAT was introduced at rates like 5% (sounds like those credit card offers in the mail) VAT is now in excess of 20% -- and rising -- and you may even pay the tax on a transaction like a house purchase.

So, our Government bosses in the U.S. sat down recently to discuss reports and take their own advice on whether transactions on the Internet should carry sales tax. Their conclusion seems to have been that for the moment the moratorium on sales tax should be continued but that their options should be left open.

I am always surprised when I realize that there are still people out there who don't "get it."

Regulating the Internet is not a task to be taken on lightly by anybody. Some of us feel that Government has been edging around this topic a little too closely of late and may even have provoked some incidents to show that the big G needs to help us out. Taking this a stage further to suggest that there is any way of successfully controlling and enforcing a sales tax on the net is just incredibly amusing. As it is today, enforcing sales tax is poorly done; most people are not aware of use taxes, let alone paying them, even in B&M (brick and mortar) operations.

Even if a local authority were to go after only the bigger e-commerce sites for the collection of sales tax -- easy targets, maybe -- they would still be blooded. Is the point of sale the location of the main offices of the company? Or the location of the shipping warehouse? Or the location of the main servers? Or the location of the mirror server that received the order? If you applied these questions to an operation like Amazon.com the multiplicity of the possible answers is staggering.

And even if a company like Amazon was pinned down to a particular location, do you think the company would abandon its business revenues to comply? No, methinks the operation would end up in the cornfields of Alberta, or on a sun-drenched island in the Caribbean, or maybe it would take over the complete population of a Pacific island as its employees.

The problem with the people running these programs that they are as parochial as it is possible to get. Listen up! www is world-wide web. Until we get the Government of Earth (not in my lifetime), the Internet needs to be kept safe from sales tax.

Analog Main | Product of the Week | Columns | Editorial | Tech Notes

		Click here to get your listing up.