Online Sales Tax: Circling the Money-Prey

This is how they operating: tightening the screws on you so they can spend money to buy votes from identifiable special interest groups. Here’s Steph Machado from WPRI:

As consumers move further away from retail stores and toward online sellers, Governor Gina Raimondo is making moves to ensure the state doesn’t lose out on the sales tax revenue that would’ve been paid on products if purchased in stores. …

The tax would result in about $35 million in revenue for the state in fiscal year 2018, which begins July 1. It would help offset some new spending in the budget, including Raimondo’s free college tuition plan that would cost $10 million in its first year, eventually reaching $30 million in 2021. Hull said the online sales tax is expected to generate even more revenue in future years.

This is a broad-based tax increase, pure and simple, and it’s especially insulting, given this language in state law:

…upon passage of any federal law that authorizes states to require remote sellers to collect and remit sales and use taxes, the rate imposed under this section shall be reduced from seven percent (7%) to six and one-half percent (6.5%). The six and one-half percent (6.5%) rate shall take effect on the date that the state requires remote sellers to collect and remit sale and use taxes.

What is supposed to happen when the state starts collecting online sales taxes is that the overall rate goes down so it isn’t just another money grab and Rhode Island ceases to be so much higher than its neighbors. Instead, Democrat Governor Gina Raimondo’s spokesman plays it cute with a moralistic tone:

“This is already a law that you have to pay this,” said Director of Revenue Robert Hull, referring to the seldom-followed law that requires Rhode Islanders to pay a use tax on their online purchases each year. “This puts the internet retailers in the position to actually step up and do the right thing.”

It takes some chutzpah to chide online retailers for not “doing the right thing” when your administration is bullying taxpayers in order to collect more money without following through on the legal requirement to lower the tax rate when the state can collect those taxes.  This is on top, by the way, of the 2014 outrage of charging Rhode Islanders a minimum use tax via our income tax returns.

The legislative language does not appear to be available, yet, so I can’t get into the specifics, but in summary:

  • The governor intends to force Rhode Islanders to pay taxes for online sales…
  • While still charging us the minimum use tax, which is supposed to cover online purchases, and…
  • Without returning the additional revenue to taxpayers, as is explicitly contemplated in state law
  • So she can buy votes with a free-college entitlement.

You’re money-prey to these people.

ADDENDUM (3/29/17): Beginning in February, Amazon voluntarily began collecting sales taxes in Rhode Island.  Still no word on a sales tax reduction or change in the minimum “use tax.”

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