I appeared on CNBC yesterday afternoon to debate the so-called "streamlined sales tax" proposal.
A lobbyist from the National Retail Federation argued that taxing Internet sales is a matter of fairness for big sellers like Target.com. I pointed out that the streamlined sales tax proposal isn’t gaining momentum in Congress right now. But if e-commerce retailers were forced to collect sales taxes for states where they don’t have a physical presence, the only winners would be big box retailers like Wal-Mart and Target. Small businesses that are just learning how to use the Internet to compete with the big guys would be the losers, along with their millions of customers.
The NRF lobbyist insisted that the streamlined sales tax proposal would make tax collection simpler for everyone. I pointed out that it would be anything but simple for small e-commerce retailers and that with 40 state governments running surpluses this is no time to raise taxes for online shoppers.