Taxing items sold on the Internet should not be used as a quick fix to repair a seriously injured state budget. Our state should look for multiple solutions to correct current problems and help stabilize our economy as opposed to just keeping our heads above water.
Six percent sales and use taxes are levied on Internet and mail-order purchases made in Michigan, but little of it is collected, according to the nonpartisan Senate Fiscal Agency. In October 2001, the agency estimated Michigan was losing $100 million to $300 million in uncollected sales and use taxes, an amount that has undoubtedly grown since.
Michigan is a part of a multistate coalition that agreed in November to make revisions to tax laws that would allow states to collect, but because of the changeover of many legislators, the process has been slowed.
The coalition is working to create common definitions for states on taxable goods and services.
The endeavor stems from a 1992 U.S. Supreme Court decision that left the door open for states to simplify their tax definitions and collect on all interstate purchases.
If the state wants to raise taxes in order to solve budget problems, it would be wise for them not to roll over taxes that should be left alone.
When online shopping was first introduced to the public, it was a good idea then to not tax in order to promote sales. But times have changed since the trend was introduced. People are more comfortable with shopping online and the system continues to improve.
Online spending during the 2002 holiday shopping season was up 24 percent from 2001, according to a report from Nielsen Net Ratings, Goldman Sachs and Harris Interactive.
Taxing products sold on the Internet makes sense as long as it is the same sales tax we normally pay. Other states tax items sold on the net and it was bound to happen in Michigan. This could possibly be a solution to increasing revenue for the state provided it is not looked at as a cure for the sickly budget.
