Sales Tax and Another Threatened Lawsuit Against Money-Grabbing Government

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Is it me or are the policies the Rhode Island General Assembly is implementing sparking more lawsuits, lately, indicating a desperation to find new ways to squeeze money out of a strangling economy? Here’s the latest:

The new rules order online retailers with no physical presence in the state to collect the state’s 7-percent sales tax on purchases by Rhode Island buyers or mail those buyers a letter notifying them that they owe the equivalent use tax on the items. Buyers already owe use tax on purchases made from out-of-state sellers, including websites, but very few actually pay it at the end of the year.

NetChoice, an e-commerce trade group that’s challenged online sales tax policies in states across the country — including a current lawsuit against Massachusetts — is urging senators to reject the sales tax provisions in the Rhode Island budget, which they call “privacy invading,” costly and unfair.

“Don’t pass this law,” said Carl Szabo, senior policy counsel at Washington, D.C.-based NetChoice. “It is hard to understand what the purpose of it is except for the perception that the Internet is hurting Main Street. Now Amazon, Walmart and most of the top 20 online retailers collect and remit sales tax for Rhode Island.”

NetChoice is coming off a victory on Wednesday when Massachusetts Gov. Charlie Baker, responding to the lawsuit, abruptly canceled plans to begin collecting sales tax on Internet purchases from out-of-state retailers.

The next question is who is going to sue over the fact that Rhode Island will effectively be double-taxing the thousands and thousands of Rhode Islanders who pay the minimum use tax on their income tax returns even though they’ve already paid sales tax on all of their online purchases?



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