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Web letter: Taxing online sales could have a downside

In response to John Ketzenberger, “Congress leveling tax field for retailers,” (May 3), touting the benefits of extending the sales tax to online merchandise, I have questions:

Wouldn’t it be simpler to have online stores collect and remit the sales tax due in their state of business, rather than to the more than 9,000 different sales tax jurisdictions? For example, if an online store is located or headquartered in Indiana, then it would simply charge 7 percent tax and remit it to Indiana. If located in Ohio, charge 6 percent tax and remit it to that state. If located in New Hampshire, charge no sales tax. Simplicity itself, without having to keep track of so many jurisdictional rates.

Will the exemptions being discussed ($1 million in one instance, $10 million in another) be indexed for inflation? And if we are talking about the impact of online stores on mom and pop operations (which really today don’t exist), with exemptions online stores would still have an advantage, would they not? And if exemptions are given to small online operations, why not the same exemptions to small brick and mortar operations.

Perhaps that is what the state of Indiana should do – allow stores with less than $1 million (or $10 million) in sales to be exempt from charging and remitting sales tax. Wouldn’t that help small operations to survive in the face of huge retailers such as Wal-Mart, Meijer and Target?

What I see Ketzenberger arguing for is an extension of government power beyond its geographical boundaries and an increase in governmental bureaucracy which in the end will cost taxpayers more overall.

Couldn’t the state of Indiana estimate the amount of use tax (with annual purchases correlated to annual income) and add that to one’s Indiana income tax form? But perhaps that would make taxpayers realize how much they are really paying in sales taxes, and also realize that this push for “market fairness” is simply one more way to separate money from people’s wallets in a hidden fashion by making someone else serve as the tax collector, rather than the state itself.