Patrick and Delahunt searching for new taxes.

(Paging Barbara Anderson…Paging Barbara Anderson… – promoted by garrett3000)

So our esteemed Governor has a new idea; increase taxes.  Well, it is not actually new to Deval, rather it is new to where he wants to apply it.  Deval Patrick is pushing the state legislature to pass a revised Internet sales tax that would allow the Massachusetts Department of Revenue to collect sales tax from businesses that are not located in Massachusetts, but do business with customers in Massachusetts.  Currently the state collects sales tax on only the items sold to Massachusetts residents by Internet retailers that are located in Massachusetts.  For instance, an Internet retailer located in California that sells to Massachusetts residents does not currently pay Massachusetts sales tax, but will in the future.  Also, Internet retailers that are located in Massachusetts that sell to California residents do not pay a California sales tax on those items.  Under the new system they will.  

Let’s put aside the fact that our own Brad Jones, who once opposed the idea, now seems to like the idea and can’t understand how that might be an increase in taxes.  Congressman William Delahunt wants to copy the idea and institute it on a national level forcing all Internet retailers to collect all state sales taxes.  Ugh!  Delahunt states:

“This will protect Massachusetts businesses that are disadvantaged by the current system,” Delahunt said. “Small- and medium-sized businesses need this in order to compete with large sellers from out of state” that aren’t required to collect and remit sales taxes.

Delahunt’s twisted logic: Massachusetts businesses are at a disadvantage because they pay a state sales tax and others do not.  The way to remedy that situation – tax every business.  In other words make everyone equally disadvantaged.  Doesn’t it seem more logical to remove the state sales tax and thus remove the ‘disadvantage’ instead of the adding more disadvantage?

Here is the problem – Massachusetts has suffered with a state implemented sales tax for a long time.  The businesses located in Massachusetts are being crippled by the fact that customers want to pay less and are willing to travel to out of state retailers to avoid the cost of the sales tax.  We know this because of the large number of retailers located just over the border in ‘sales tax free’ New Hampshire.  We also know this by the large increase in shopping on the tax free holidays that occur once a year.  Customers dislike the tax so much that they seek alternative ways to avoid the tax.  Another way shoppers have found to avoid the tax was to shop online.  Now the state wants to stop that as well.

Further imagine that you are a single mom with a simple Internet retail business.  (I use this example because I have a good friend in this situation)  As it stands today she can handle the business because she pays sales tax on only the items she sells to Massachusetts residents.  Under the new Patrick/Delahunt scenarios she will have to maintain a database of all sales and to which state those sales were made so she can pay the corresponding sales tax.  She will need to know each state’s sales tax percent and work to mail separate sales tax checks to each state’s corresponding Department of Revenue – or face fines and penalties.  In a nutshell – my friend would be out of business.  That is an impossible task to ask of someone trying to operate a small Internet retail business while juggling the affairs of three children by herself.

Deval Patrick was elected, in part, because he spoke of finding new ways to simplify the startup and maintenance of small businesses.  He has done nothing to help those small businesses since taking office and now he wants to add further expense and restrictions to the process of earning a living in Massachusetts.  A lot of people are using the Internet to subsidize their modest incomes by selling things on an Internet retail site.  Many of those people are retired and on a fixed income – or – low income people trying to find a new way to keep their heads above water.  Deval Patrick doesn’t care and is more concerned about pumping up state revenues than offering people real opportunity in the free market system.  That, I think, is too bad.

Read the story from the Boston Globe here: http://www.boston.com/business…

About Vote3rdpartynow

  • to see another mysterious “charge” on all my utility bills.

  • My understanding was that you had to collect tax if you are brick-and-mortar in MA.  Easiest example – amazon has nothing but a virtual presence, no tax.  Barnes and Noble has stores, they can be forced to collect tax.

    Consider eBay.  How would a casual vendor even collect tax?  And submit it to who?  You have to have a dedicated bank account for DOR to accept wire transfers from, you can’t just mail them a check.

    THEORETICALLY, you are supposed to pay MA with a form if you buy something for use in MA in another state which is tax free.  THAT is working out real well.

    This is unenforceable AND forbiden under current Federal law.  Maybe Delahunt should look into this…

  • BrocktonDave

    When I used to sell computers at Circuit City about a hundred years ago (commission), I would go through my sales pitch for a half hour or so, then they would ask me if we had a store in Nashua.

    I knew that my commission would be going to some guy in Nashua at that point.

    We found ways around this…  We would check stock in Nashua, then we would sell the computer in Massachusetts, but they customer would driver to Nashua to pick it up, thus not paying sales tax.  If they wanted to pay $50 bucks in gas then so be it.

  • Where are the Republicans on Beacon Hill when we need them?

    Vote3rdpartynow is right. Governor Patrick keeps saying we have a revenue problem in this state, that we are running out of money because we’re not collecting as much as expected from taxpayers. He wants more taxes.

    But, according to the Governor’s own revenue people, that’s not true. This afternoon the Associated Press ran a story saying that collections during the month of December were actually $55 million above benchmark.

    It’s clear that what we really have is a spending problem in this state, not a revenue problem.

    Why don’t our Republicans on Beacon Hill understand that simple fact? Brad Jones actually said – “There are some questions that need to be vetted and explored, but this is something that is deserving of consideration.”

    Come on, people. Wake up! When are our elected officials – especially the Republicans – going to understand that we already pay enough taxes and what we need to do is cut back on the size of government? Why is the Republican Leader in the House supporting a tax increase?

  • Figuring out various state (and city!) sales taxes is ridiculously complicated for internet sales.  There are companies that specialize in packages to integrate into web stores which are themselves ridiculously hard to implement, and they have to be regularly updated with the current rates for every locality.  The cost of coding state sales taxes and collecting each state’s tax is huge, and it gets in the way of other innovations and programming improvements that us coders would much rather be working on.

    The best solution is to have a federal internet sales tax of 5%, no matter what state the website operates in or has brick and mortar stores in or where the customer lives.

    Republicans are supposed to like the idea of a national sales tax replacing the IRS, so maybe this is a good opportunity to experiment with that?

  • Knightbrigade

    who buys ALL big ticket items and more over the border in NH, this internet scam/tax bs doesn’t faze me much.

    If this gets implemented, there will be some way to get around it. If they try to pass a NATIONAL version, there should be enough screaming from ‘normal’ states to defeat it.

    Oh ya..HEY..BRAD JONES…smarten up!!!   Are YOU a Conservative Republican or WHAT!!!???