Upholding Internet Sales Tax Law, Essay Example

Summary

The key issue in the article is whether the legal system has provided the most suitable case laws that can be used to re-examine the issue of Internet sales tax law. The US Supreme Court has ruled in favor of a Colorado law that gives states authority to collect sales taxes out-of-state purchases made on the internet. However, the court is also accused of failing to conform to a 1992 decision of the case Quill Corporation v. North Dakota, which prohibited states from collecting taxes from companies that have no local physical presence. The Quill Corporation v. North Dakota is said to be a disadvantage states. The law requires out-of-state merchants to report transactions, as well as their customers to the state taxation authorities in order to encourage customers to pay taxes on their purchases. However, the law is criticized for violating the Constitution’s commerce clause, as it discriminates against interstate commerce. Another case of Direct Marketing Association v. Brohl, No. 13-1032 also fails to approach the issue in a way that the court can suitably address it (Liptak).

Comment

In my opinion, the Internet has caused sweeping systemic and structural changes that require that a law be established to harmonize online sales. Still, the Colorado law has been over-exaggerated. It is clear that the law will eliminate the standards for physical presence, which is an imaginary line of protection that protects taxpayers from a potential harassment by out-of-state collectors. The law may also prompt the retailers in the remote regions to violet the privacy of the customers by wanting them to know where their customers live. It will also be arduous and expensive on the part of online retailers, as it will require them to constantly research, and keep abreast with the various tax laws in each state, before collecting and remitting taxes to the local authorities of each state (Liptak).

Works Cited

Liptak, Adam. “Upholding Internet Sales Tax Law, a Justice Invites a New Case,” New York Times, viewed 21 April 2015, <http://www.nytimes.com/2015/03/04/business/supreme-court-backs-trade-groups-challenge-to-internet-sales-tax-law.html?_r=2>