Re: ADI vs. Internet Pricing

["Robert L Bass" <robertlbass@xxxxxxxxxxx>]

> There are some Federal regulations that prohibit
> states to enact any regs which inhibit interstate
> trade...

It's not a set of federal regulations.  A US Supreme Court decision in Quill
v. North Dakota established that states cannot force a company located
outside their borders to collect sales taxes on their behalf unless the
company has "nexus" (a physical presence) within the taxing state.

> In general this prohibits the charging and collection of sales taxes on
> interstate sales.

Technically, it only prohibits states from forcing out of state merchants to
collect on their behalf.  A number of states can require their citizens to
report and pay sales tax on things bought over the Internet or otherwise.
Enforcement is between the state and its citizens -- the merchant is under
no obligation to assist the states in any way.

> However states find innovative ways to try and
> get around that.  One Arizona tries is to charge a "USE" tax and make the
> buyer responsible
> for it...

Exactly.  The same is done by CT, FL and several others.

> Personally I think its a deliberate attempt by the
> state to circumvent Federal regs, but hey they are
> getting away with it...

Although the "no sales tax advantage" clearly benefits online merchants like
me, I disagree with you on this one, Bob.  The states have every right to
collect sales tax from their citizens.  If their citizens wish otherwise
they can vote in new legislators.  Unless and until they do, they'll be
legally obligated to pay their own sales taxes but online vendors like me
are not required to assist them in doing so.

> Taxes suck.  "Its about plucking the maximum
> number of featehrs from the goose with a minimum
> of squaking."  (Hamilton I think)

Heh, heh, heh...  :^)

--

Regards,
Robert L Bass

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