A Fresh Look at the ‘Net Tax

Recently, many U.S. states and large bricks-and-mortar retailers are again pushing the “Internet tax” — an effort to add sales tax to online purchases. This gets debated every few years, it seems, and we see similar arguments each time.

What the sates and existing retailers miss is that the sales tax is really a local tax. If I live in Lafayette, Ind. and drive to Chicago, IL for a day of shopping, I’d pay Chicago’s sales tax. And that is only right. After all, I’m contributing to the wear of Chicago’s roads, I’m benefiting from the police officers keeping the area safe, I could benefit from the fire dept. if there was a problem, and their snow crews let me travel around.

But if I sit at home and place the order, I’m doing none of those things. Without stepping foot in Chicago, I don’t benefit from their roadways or safe streets. The people that do — perhaps UPS, which delivers my package — already pay local taxes (fuel, sales, etc.) and that cost is passed along to me as part of the shipping fee.

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