Rauschenberger: ‘Online Buys Should be Taxed’

Today is Cyber-Monday, a day for big deals on high tech. Not everybody is happy about that, however.Tax Commissioner Ryan Rauchenberger for one says online purchases should not be exempt from sales tax. He says it gives them an unfair advantage over local brick and mortar outlets.

In a report from NBC/North Dakota News, the commissioner and others also claim the tax exemptions are "costing the state millions of dollars" in uncollected revenue.

To be more specific, buyers can opt to pay a five percent "use tax" on products purchased online. As you would imagine, few buyers opt to pay the use tax.

Tax experts say the current sales tax arrangement is due to a 1992 Supreme Court decision, Quill vs. North Dakota, in which the court ruled, businesses without a "brick and mortar" store in the state should be exempted from the sales tax charges, as they lacked a "physical presence."

The commissioner supports a multi-state campaign to petition the Supreme Court to overturn the Quill ruling.

To be sure, not everyone likes the idea of another tax. A 2016 article from the libertarian Reason webpage suggests it's just another way for the states to "wring as much tax revenue out of consumers as possible."

Further, it says if the if the states are really concerned about leveling the playing field, perhaps the answer would be to lower sales tax for local brick and mortar outlets.

[Source: KFYR-TV, Reason.com]