Fri, Oct. 18

Editorial: Implications of Internet business a taxing dilemma

The Cottonwood City Council balked this past week at instituting a new use tax for items purchased out of state where no sales tax may apply.

And while that may earn council members a pat on the back from consumers looking for the best deal possible, such "use taxes" one day no doubt will be the new levy arena for government at every level.

We can thank the Internet for that.

Internet-based businesses grow in popularity with consumers every day. That means the playing field between online retailers and traditional brick-and-mortar businesses becomes exponentially more uneven.

Many states have attempted to plug the dike. In Arizona, the so-called Amazon law now requires that online Goliath to now collect state and local sales tax, but there are many who do not. For example, eBay is hit and miss on sales tax collections. Don't think for a second the consumer is not savvy enough to recognize the difference between those who do and those who do not.

Policing online sales tax collections and their proper distribution is a nightmare to say the least. Further, asking taxpayers to abide by an honor system and accurately reflect their online purchases on state tax filings is only as good as an individual's own code of honor.

But not finding a solution represents a real threat to traditional retailers required to collect state, county and local sales tax, not to mention those governments who rely on that tax to provide services we all expect from City Hall.

There is an old saying that the only two things sure in life are death and taxes.

Death is still on the table. The taxman is wondering through the maze of Internet businesses like a rat looking for a piece of cheese.

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