Yet another major news outlet has spoken out in favor of online sales tax collection. An editorial in the Los Angeles Times says that current sales tax law unfairly favors online retailers over bricks-and-mortar stores.
The LA Times joins many smaller outlets that have already published editorials advocating online sales tax collection. We strongly recommend this particular editorial because it not only gets all the details right—that sales tax is already due on online purchases, that pending legislation includes an exemption for small businesses, and more—but it also poses a thoughtful argument that considers not just the fairness of online sales tax collection but also the political realities surrounding it.
The editorial ends with this concise summary:
Sales taxes are an important part of the revenue mix for governments because, as consumption taxes, they don’t penalize labor, investment or productivity the way other forms of taxation do. And if states decide to impose a sales tax, they should be able to impose it fairly and effectively. The bipartisan online-sales-tax proposals are a way to accomplish those goals. In the process, they would help states close their budget gaps by enforcing existing laws rather than raising tax rates. Most important, they would eliminate the undeserved competitive advantage some online sellers enjoy because shoppers don’t know or don’t care that they’re obliged to pay taxes.