The Road to Serfdom

Here Comes the Internet Tax

Taxman1 What is the single modern invention most responsible for enhancing peoples' freedom and standard of living across the world? Arguably, it is the Internet. Yet, Democrats from revenue-starved states and Congress are proposing to make it less free by taxing Internet commerce. (Content regulation should be coming soon to a screen near you.) This should not come as a terrible surprise. After all, the Internet was just too good, too free, too easy, too innovative, and too favorable to small businesses for government to stay away. So now, several states, and Congress, are considering laws that would require online retailers to collect state and local taxes from online consumers. New York was the first state to pass such a law last year in defiance of the 1992 U.S. Supreme Court decision, Quill v. North Dakota, which held that retailers must have a physical presence within a state for that state to require sales tax collection. The decision, which was based upon the dormant commerce clause doctrine -- which essentially says that Congress’s power to regulate interstate commerce implicitly denies such power to the states -- upheld a bright line physical presence test. It also held that only Congress, through legislation, could delegate broader powers to the states. New York's legislation attempted to end run around Quill by requiring online retailers to collect state and local sales tax if they had affiliate advertisers within the state. ...Here Comes the Internet Tax