Only a politician would consider a 103-page document “streamlined.” But in introducing S.2152, aka the Sales Tax Fairness and Simplification Act, and S.2153, the Streamlined Sales Tax Simplification Act, Sen. Mike Enzi (R-WY) and Sen. Byron Dorgan (D-ND) apparently do.
The senators’ bills, introduced in December, aren’t 103 pages long. But the Streamlined Sales and Use Tax Agreement (SSUTA) that they refer to is. Basically the bills call for Congress to make provisions of the SSUTA law. Currently a voluntary agreement among 19 states, the SSUTA requires remote sellers to collect customers’ local taxes even if the sellers do not have a physical presense in those localities. The reasoning, if I’m reading the bills and the agreement correctly — and I’ve not yet read the entire SSUTA (hello! it’s 103 freaking pages!) — is that consumers are supposed to be paying the local taxes on remote purchases themselves, but since hardly any of them do, let’s have the merchants do the local governments’ work for them.
Now, if the cities and counties and states can’t seem to enforce the collection of the sales taxes from their residents, why do they think the businesses can? Especially as there are roughly 7,600 sales-tax jurisdictions in the country, which have varying tax rates and rules regarding what items are subject to tax. S.2152 calls for a “single sales and use tax rate per taxing jurisdiction” (albeit with exceptions), but I see nothing in there about streamlining the number of jurisdictions.
If the U.S. had a uniform value-added tax, as is common overseas, or a system similar to Canada’s (the 7% federal goods and services tax and an additional provincial tax), I could see that perhaps the time has come to put the burden of tax collection on the remote businesses, just as local businesses have to collect and remit the applicable local taxes. (Not that I’m advocating a VAT, which is in effect a regressive tax — oops, I forgot my resolution to keep my political beliefs out of this column…)
But in trying to pawn off the collection of their myriad local taxes onto out-of-state businesses that don’t benefit from most of the services provided by those taxes, the states remind me of the Massachusetts parents who as of mid-January were planning to sue cereal maker Kellogg and children’s TV network Nickelodeon for “directly harming kids’ health” with ads for sugary foods. You don’t want your kids eating Super Sugar and Trans-Fat Pops? Don’t buy them, or don’t let your kids watch Nickelodeon. True, it’s not easy (and yes, I do know this first hand), but it’s your job. Don’t make businesses do your job for you.
The same should hold true for local governments. You want the tax dollars, then earn them.