Rare Book Monthly

Articles - November - 2013 Issue

A Loss for Internet Sales Tax Collectors

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Originally part of the problem, Amazon now want to be part of the solution.

Another wrench was thrown in the works of those who are attempting to force internet retailers to collect out-of-state sales tax. Two years ago, Illinois attempted to force out-of-state retailers with over $1 million in annual sales, though having only the most tenuous of connections to Illinois, to collect that state's sales tax. Now, the Illinois Supreme Court has said "no."

 

The rush to charge sales tax on internet purchases can be traced to the company that was born in books - Amazon.com. Of course, books are only a small part of what this internet behemoth now sells. States, which depend on sales tax for much of their income, looked longingly at Amazon. If only there was a way to make them collect sales tax from customers within their borders. For the most part, there was no way.

 

Long ago, the U.S. Supreme Court ruled that an out-of-state retailer could only be forced to collect a state's sales tax from in-state customers if they had a “nexus” with the state. Their conclusion was based on the Constitution granting the federal government the exclusive right to regulate interstate commerce. “Nexus” would provide enough contact between retailer and state to make the transaction intrastate rather than interstate commerce, subject to state regulation. Generally, “nexus” was considered to be some sort of in-state presence, such as a sales office, employees, a warehouse, or, of course, a store. Most internet retailers, like the direct mail companies that preceded them, have no such presence. They take and ship orders from outside of the state. There is no nexus, so there is no requirement to collect sales tax. That is why most internet orders you place do not have a sales tax charge.

 

In recent years, some states have tried to define “nexus” more broadly so as to be able to demand the collection of tax. Illinois was one such state. They passed what has aptly become known as the “Amazon Law.” It declared so-called in-state “agents” to in effect be Amazon employees, creating nexus. Amazon has such “agents” all across the country. These are people who run their own websites and send leads to Amazon in return for a commission. They are not Amazon employees, not what one might traditionally think closely enough related to Amazon to create a “nexus.”

 

The Illinois Supreme Court struck down the “Amazon Law,” though interestingly enough, not on constitutional grounds. The Illinois Court cited the relatively recent Internet Tax Freedom Act of 2000 for its decision. That act prohibits discriminatory taxation on electronic commerce. Requiring taxes be collected because of advertising posted online by “agents,” but not because of advertising placed on television or in print, it ruled was internet discriminatory. The agent/nexus issue was left to be decided another day.

 

The last time the U.S. Supreme Court visited this issue, it lay down a route to states requiring out-of-state retailers to collect sales taxes on all transactions with customers located within their state. Since the federal government has the constitutional authority to regulate commerce, it could pass a law requiring out-of-state retailers to collect sales taxes all across the country. That, they implied, would pass constitutional muster. Naturally, a coalition of state governments and “Main Street” retailers immediately came together to induce Congress to pass such a bill. They helped to write it, now known as the Marketplace Fairness Act of 2013. Oddly enough, one of its supporters is the company whose existence, and repeated fight not to be compelled to collect sales taxes, led to this whole situation – Amazon. As Amazon has grown, it has opened warehouses in many states across the country to save time and money. It is already forced by the old “nexus” standard to collect sales taxes in many states. It now finds itself at the same competitive disadvantage as “Main Street” retailers versus internet companies with a presence in just one state.

 

The Marketplace Fairness Act of 2013 has already passed the Senate handily, on a 69-27 vote. One might think anti-tax conservatives would oppose the bill, but it drew a wide, nonpartisan coalition. Pressure from local, “Main Street” retailers, who believe they are at a competitive disadvantage, swayed a lot of votes. Technically, it isn't a new tax anyway, as each sales tax state also has a use tax, which states you are supposed to assess yourself and pay a “use tax” in the same amount as your local sales tax when you buy from a retailer who does not collect the sales tax. However, very few people actually pay this tax. Maybe even you.

 

The President has pledged to sign the bill. That leaves the House of Representatives, where the bill is currently attempting to work its way through the morass which is their bureaucracy. Sometimes bills that would pass if voted up or down never make it to the floor. What happens with this one remains uncertain. Interestingly, polls have shown a majority oppose the bill, with a particular concentration of young people, who undoubtedly are prime internet consumers. “Main Street” may be a foreign country to many of them. We will have to wait to determine the outcome, but estimates are that $24 billion in revenue for the states hangs in the balance.

Rare Book Monthly

  • <b>Bonhams, Mar 12:</b> Walt Whitman. <i>Leaves of Grass.</i> First edition, first issue, SIGNED in block letters by Whitman. 1855. $200,000 to $300,000
    <b>Bonhams, Mar 12:</b> Isaac Newton's copy of John Greave's <i>Pyramidographia,</i> London, 1646. $50,000 to $70,000
    <b>Bonhams, Mar 12:</b> Colonel John Mosby. Robert E. Lee's autograph letter to Samuel Cooper reporting on Mosby's exploits, with Cooper's autograph note ordering his appointment to Major.
    <b>Bonhams, Mar 12:</b> Gyula Halasz Brassai. Large archive of autograph and typed letters, over 260, to his family including his wife Gilberte, 1947-1978. $40,000 to $60,000
    <b>Bonhams, Mar 12:</b> Archive of drawings and letters from Harper Lee to Charles Carruth, including an inscribed first edition of <i>To Kill a Mockingbird.</i> $20,000 to $30,000
    <b>Bonhams, Mar 11:</b> VESALIUS, ANDREAS. 1514-1564. <i>De humani corporis fabrica libri septem.</i> Basel: Johannes Oporinus, June 1543. $300,000 to $500,000
    <b>Bonhams, Mar 11:</b> HARVEY, WILLIAM. 1578-1657. <i>De motu cordis & sanguinis in animalibus Anatomica Exercitatio.</i> Leiden: Joannis Maire, 1639. $25,000 to $35,000
    <b>Bonhams, Mar 11:</b> BERENGARIO DA CARPI, GIACOMO. 1460-1530. <i>Isagogae breves perlucide ac uberrimae in Anatomiam humani corporis.</i> Bologna: Benedictus Hectoris, 15 July 1523. $15,000 to $25,000
    <b>Bonhams NY, Mar 11:</b> FRANKLIN, BENJAMIN. 1706-1790. <i>Experiments and Observations on Electricity, made at Philadelphia in America…</i> London, 1769. $10,000 to $15,000
    <b>Bonhams NY, Mar 11:</b> BENIVIENI, ANTONIO. 1443-1502. <i>De abditis nonnullis ac mirandis morborum et sanationum causis.</i>Florence: Filippo Giunta, 1507. $8,000 to $12,000
  • <b>Swann Auction Galleries, Mar 7:</b> Miguel de Cervantes Saavedra, <i>El Ingenioso Hildalgo Don Quixote de la Mancha . . . Nueva Edición,</i> first Ibarra edition, Madrid, 1780. $8,000 to $12,000.
    <b>Swann Auction Galleries, Mar 7:</b> Illuminated Prayer Book in Latin and French, France, 1530-40s. $20,000 to $30,000.
    <b>Swann Auction Galleries, Mar 7:</b> Illuminated Book of Hours in Latin, France, mid-15th century. $15,000 to $20,000.
    <b>Swann Auction Galleries, Mar 7:</b><br><i>Die Ernsthaffte Christenpflicht,</i> earliest known edition of the first complete Mennonite prayer book, 1708. $300 to $500.
    <b>Swann Auction Galleries, Mar 7:</b> Georg Agricola, <i>De ortu & causis subterraneorum Lib V.,</i> first edition, Basel, 1546. $6,000 to $9,000.
    <b>Swann Auction Galleries, Mar 7:</b> Frederick Ruysch, <i>Icon durae matris in concava [convexa] superficie visae,</i> with 2 mezzotints by Jan Ladmiral, first edition, Amsterdam, 1737. $4,000 to $6,000.
    <b>Swann Auction Galleries, Mar 7:</b> Wilhelm Conrad Röntgen, <i>Eine Neue Art von Strahlen,</i> Würzburg, 1895. $3,000 to $5,000.
    <b>Swann Auction Galleries, Mar 7:</b> Pietro Carrera, <i>Il Gioco de gli Scacchi,</i> first edition, Militello, 1617. $4,000 to $6,000.
    <b>Swann Auction Galleries, Mar 7:</b> William Lithgow, <i>The Totall Discourse, of the Rare Adventures</i> [etc.], London, 1632. $2,000 to $3,000.
    <b>Swann Auction Galleries, Mar 7:</b> Michel de Nostradamus, <i>The True Prophecies or Prognostications,</i> first complete edition in English, London, 1672. $2,500 to $3,500.
    <b>Swann Auction Galleries, Mar 7:</b> Pseudo-Methodius, <i>De revelatione facta . . . beato Methodio,</i> Basel, 1504. $2,500 to $3,500.
    <b>Swann Auction Galleries, Mar 7:</b> Hrabanus Maurus, <i>De laudibus sancte crucis opus,</i> Pforzheim, 1503. $1,000 to $2,000.
  • <b>Chiswick Auctions: Autographs & Memorabilia. February 28, 2019</b>
    <b>Chiswick Auctions, Feb 28:</b> Autograph album featuring signatures by prominent actors, politicians, musicians and authors, including Rudolph Valentino. £1,000 to £1,500
    <b>Chiswick Auctions, Feb 28:</b> An extremely rare working radio script for Crazy People No 29, the first series of <i>The Goon Show.</i> £600 to £800
    <b>Chiswick Auctions, Feb 28:</b> Manuscript prayer book, in German. 8vo, 1755 £800 to £1,200
    <b>Chiswick Auctions, Feb 28:</b> Italian Manuscript on Geometry, with diagrams, 18th century. £500 to £700
    <b>Chiswick Auctions: Ornithology, Zoology & Voyages. February 27, 2019</b>
    <b>Chiswick Auctions, Feb 27:</b> Thorburn (Archibald). Sparrowhawk, original watercolour & gouache, signed & dated lower right, 1917. £1,500 to £2,000
    <b>Chiswick Auctions, Feb 27:</b> Burton (Sir Richard Francis). <i>Personal Narrative of a Pilgrimage to El-Medinah and Meccah.</i> 3 vol., FIRST EDITION, 1855-56. £1,000 to £1,500
    <b>Chiswick Auctions, Feb 27:</b> [Mount (Richard) & Page (Thomas)]. <i>The English Pilot. Describing the Sea-Coasts…</i> 31 engraved maps, W. & J. Mount, T. Page, 1756 £4000 to £6000
    <b>Chiswick Auctions: Ornithology, Zoology & Voyages. February 27, 2019</b>
    <b>Chiswick Auctions, Feb 27:</b> D’apres De Mannevillette (Jean-Baptiste Nicolas Denis). <i>Le Neptune Oriental.</i> Paris & Brest, [1775 – 1781]. £10,000 to £15,000
    <b>Chiswick Auctions, Feb 27:</b> Loring (Josiah). Terrestrial Globe Containing all the Late Discoveries and Geographical Improvements. Boston, Gilman Joslin, 1846, £800 to £1,200
    <b>Chiswick Auctions, Feb 27:</b> Shelley (G. E., Capt.). <i>A Monograph of the Nectariniidae, or Family of Sun-birds,</i> FIRST EDITION, by the Author, 1876-80. £4,000 to £6,000
  • <b>Bonhams: Treasures from the Eric C. Caren Collection: How History Unfolds on Paper, Part VII (Online). March 6-14, 2019</b>
    <b>Bonhams, Mar 6-14:</b> Albert Einstein A remarkable letter on God in English, one of his most eloquent and quoted, 1 p, July 2, 1945. $100,000 to $150,000.
    <b>Bonhams, Mar 6-14:</b> Benjamin Lincoln's commission as Major General in the Continental Army, February 19th, 1777. $60,000 to $90,000.
    <b>Bonhams, Mar 6-14:</b> Broadside. A Poem Upon the Bloody Engagement That Was Fought on Bunker's-Hill. 1775. $15,000 to $25,000.
    <b>Bonhams, Mar 6-14:</b> Early, full printing of the Star-Spangled Banner in The Yankee, October 7, 1814. $8,000 to $12,000.
    <b>Bonhams, Mar 6-14:</b> Paul Revere. Engraving, “The Boston Massacre Perpetrated on March 5, 1770," in <i>Massachusett's Calendar 1772.</i> $8,000 to $12,000.
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    <b>Bonhams, Mar 6-14:</b> Earliest known newspaper coverage of Babe Ruth, "a St Mary's schoolboy," Baltimore, April 4, 1914. $6,000 to $9,000
    <b>Bonhams, Mar 6-14:</b> Franklin, Benjamin. <i>The Independent Whig.</i> First Magazine Published in America, Philadelphia: Keimer, 1723-4. $15,000 to $20,000
    <b>Bonhams, Mar 6-14:</b> Smith, Joseph. <i>The Book of Mormon.</i> Palmyra: Printed by E.B. Grandin for the Author, 1830. First printing. $40,000 to $60,000
    <b>Bonhams, Mar 6-14:</b> Last Words of Joseph Smith. Autograph Letter Signed from a Mormon disciple, conveying a contemporary account of the Prophet's final words, Nauvoo, July 27, 1844. $10,000 to $15,000
    <b>Bonhams, Mar 6-14:</b> John Brown's Body. Autograph Letter Signed from the daughter of John Brown attempting to arrange the return of her father's body, North Elba, Essex Co, NY, November 29, 1859. $4,000 to $6,000
    <b>Bonhams, Mar 6-14:</b> Powell Expedition. Autograph diary of Rhodes C. Allen kept during the Powell Expedition of 1868, June 29, 1868 - November 16, 1868. $20,000 to $40,000

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