Retailers as Unpaid Tax Collectors: Enough Already!!

The debate continues over the "Marketplace Fairness Act". You know, whether sales tax should be levied on internet purchases.

A major issue for retailers, of course, is the administrative burden that would be thrust upon them to remit tax payments to thousands of jurisdictions across the country. That is a tremendous expansion of the retailers' obligation as an unpaid tax collector.

Is it just us, or are the assurances that "free software will be provided to make it easy" seem not all that reassuring? 

One Idea for Easing the Burden

Raymond L. Dever, a retired accountant in Tucson, offered one solution:

"My suggestion would make it the responsibility of a state agency to ensure that these taxes are reported and remitted by their residents.

"Have each state designate one agency to receive once-a-year online submission from each Internet retailer that lists the name and address of every person who made a purchase in that state, the item purchased, and the amount of the purchase. After that submission,the Internet retailer is done." 

We think this is a thoughtful concept. But of course, the retailers still have to compile and report this data. And receive no compensation for providing this service!

Heightens Privacy Issues

Moreover, these suggestions illuminate and magnify privacy concerns: even though the credit card companies and merchants have all this transaction data, how many shoppers want their internet purchases reported item-by-item to a state agency?  

(We will save for another day the discussion of the monetization of shopper data by Amazon, Google, FaceBook, etc, without any recompense for us, the shoppers.)

If the goal – in the interests of fairness – is to collect the taxes at the point-of-sale in order to "protect the consumer's privacy" (that is, not have the information aggregated and reported to public agencies), then retailers should be compensated for providing this "combo service" of tax collecting and privacy protection.  

Another Option: the Credit Card Companies

Here's another option: the credit card companies should be remitting the tax payments directly to the appropriate jurisdictions. 

This is instead of sending those funds back to the retailers, who then must assume the administrative costs of transferring the appropriate amounts to the proper taxing authorities throughout the country.

Saves time, save steps, and just makes more sense!

• They, the credit card companies, already have all the transaction data
• They know where the card holder resides
• They know which items are taxable, and which are not
• They already are distributing funds and keeping records

Say "Yes!" to Fairness...for Retailers!

What do you think? Please let us hear from you.