Very recently, the Colorado state government decided to pass a law that forces Amazon to collect state sales tax. Amazon promptly closed their Associates program in Colorado rather than deal with this. The reason? It’s too freaking onerous for an online retailer with an innovative system like their Associates program to deal with every single government tax agency, from the IRS all the way down to municipal levels. There’s a good piece on the Denver Post that deals a great blow to the stupidity of the legislature on this measure: read it if you’re interested in the story further.
The point I wanted to add to this was regarding the issue of “fairness”. Harsanyi at the Post writes:
Once you get past the hyperbole of embarrassed legislators, the argument— and it has appeal — is that there is a lack of “fairness.” Why should out-of-state online stores have an advantage over the traditional stores in the state?
Well, Amazon came up with better technology, it offers better services and, thus far, it has had a far superior business model. That’s why. Let’s leave the slippery concept of “fairness” to toddlers and legislators.
I’ll add to that: how is sales tax “fair”? Seriously, now, how it is? I have some money I worked my butt off to earn and I want to go buy a CD to listen to on the weekend. It’s listed at $10, but I have to pay another buck (or whatever) to the state actually take possession of it. No one is doubting that, strictly speaking, they have the raw power to pass these laws (try not paying your taxes and see what happens), but is it “fair”, in the sense of lack of injustice? I don’t think so.
If you’re talking about “fair” as in everyone should be treated equally, then I’m sure those same legislators would be against any sort of progressive income tax, since it’s not “fair”. For me and not for thee, right?
Thankfully, Oregon doesn’t have a sales tax (yet), so this won’t be an issue for us any time really soon. I hope.