Issues on which I agree with Donald Trump, volume 1

Digital ad from the National Retail Federation

This is a small set. In general, he has a world view to which I do not subscribe. (In fact, I often find it terrifying.)

In the past few days he has tweeted a lot about Amazon.com. An article on Bloomberg.com about this has two paragraphs that point out one of the few policy agreements we do have – sales tax collection fairness.

Trump supports bipartisan bills in Congress that would allow states to mandate collection of sales taxes because U.S. policy should ensure that “those who are competing with Amazon are on a level playing field,” White House spokesman Raj Shah said Thursday.

In 2017, Amazon, which also supports the bills, began collecting sales tax in states that levy them, but the company doesn’t charge shoppers sales tax when they buy from third-party vendors that sell on the site. Those sales make up about half the company’s volume.

If states are going to rely on sales taxes to pay for education, medical care, the justice system, environmental cleanups, foster care, etc. then we should insist that the taxes be collected fairly so that everyone pays their fair share. In Washington this comes up a lot because we don’t have an income tax, making the fairness of sales tax collection more crucial. Places this comes up:

  • Internet sales. If you buy things from vendors located out of state it is difficult for states to require them to collect the sales tax. The customer still owes it, but collection is not possible after the fact. There is a multi-state consortium that Washington is a member of that has coordinated action by the states to simplify their collection rules to make a national system feasible. We are pursuing legislation in Congress (Streamlined Sales Tax) and challenging a Supreme Court decision from 1992 based on the widespread availability of services that easily calculate the tax.
  • Boats and RVs. Many, many people come up with amazingly clever schemes to buy a large boat or RV out of state to avoid paying sales tax, then try and hide it from the Dept. of Revenue. There are bills presented every few years in the Legislature to exempt rich people from paying taxes on mega yachts with arguments about getting minor additional servicing revenue in ports. My research led me to conclude that any new revenue would be swamped by small increases in avoidance.
  • You live here, you gotta register your car here. Lots of people try to avoid this to avoid paying the sales tax. Sigh.
  • Large art purchases. Many people buy art from out of state and have it shipped here, not knowing that they need to pay sales tax on it. Periodically the Dept. of Revenue subpoenas the sales records of large art dealers and contacts the owners about the taxes due. This is actually real money.

Actual legislation in Congress would be the best way forward as we would have a simpler to administer sales tax system. Failing that, a win in the Supreme Court would let states require collection with today’s complex rules. It’s still doable. One way or the other we need to make this change.

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