Salter – Political, judicial stars aligning for online sales taxes

One of the nation’s more troubling tax inequities may fall as both the political and judicial stars appear to finally be aligning to address creation of a nationwide system of collecting existing sales taxes already owed on retail purchases made online as those taxes are already collected on counter sales.

In the existing system in Mississippi, the buyer owes 7 percent sales tax on the counter sale purchase of a hammer at his local mom-and-pop hardware store. The state has legally required the merchant to serve as the tax collector and before he walks out with the hammer, the state through the seller collects the sales taxes due from the buyer.

But if that same buyer in that same Mississippi town decides to buy the same hammer online at the same price, the online seller is not compelled to serve as the tax collector for the state of Mississippi. Mind you, the buyer still owes the tax. But he doesn’t pay it because he isn’t compelled to do so.

Sid Salter
4/15/13