Editorial Counterpoint: Online use taxes hurt small retailers

In Minnesota, 450 online sellers are threatened by proposed law.

Does the Star Tribune Editorial Board normally support the ability of deep-pocketed corporate campaign supporters to sway members of Congress to support legislation that voters oppose? I suspect not, so I was disappointed that the board’s support for new government tax power is so great as to overcome its opposition to public policy being warped by whoever has the most campaign dollars (“Let states tax online retail sales,” Oct. 3).

As your editorial points out, all retailers that operate in Minnesota, including Internet retailers like Amazon (and some 450 small Internet retailers based in the state), are required to follow state law and collect sales taxes. In addition, Minnesota, like all states, has the power to enforce collection of use taxes from consumers. But states rarely do so, because consumers are voters, and state governments would rather not harass voters.

The Marketplace (Un) Fairness Act is really just a new grant of state tax collection power to allow states to target vulnerable out-of-state businesses that cannot vote against them. In other words, if that bill passes, the state governments of California, Illinois, New York and every other state will be able to send their tax collectors into any other state to audit and enforce their sales tax laws — including Minnesota, where those 450 local online retailers may well be run out of business with audits and red tape.

 

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