BEAM: Congress Now Targets Internet Sales For Taxes

Internet sales taxes and the Affordable Care Act are subjects of major interest here and elsewhere. Congress came closer than ever last week to requiring online merchants to collect state sales taxes. The ACA, often referred to as Obamacare, was the topic of a bill introduced by a Louisiana congressman.

The U.S Senate took two votes on Internet sales. It voted 74-20 Monday to take up the issue of requiring online merchants to collect state and local sales taxes. On Thursday, it voted 63-30 to advance the legislation. However, the final vote won’t come until May 6, after senators come back from a week-long vacation.

Why does it take three votes to get something out of the Senate? Members of the upper chamber apparently need to give themselves an out if what they are doing doesn’t go over well with the folks back home.

Senators who oppose the online sales tax bill hope their colleagues who voted for it will come back to Washington with second thoughts. A number of those represent five states with no sales taxes — Alaska, Delaware, Montana, New Hampshire and Oregon. Delaware’s two senators support the legislation.

“I think it’s going to be interesting for senators to get a response from constituents over this upcoming week…,” said Sen. Ron Wyden, D-Ore.

Even if the bill eventually gets out of the Senate, it may have a tough time in the House. Some Republicans there consider the measure to be a tax increase. However, supporters of the proposed law say it isn’t a new tax. And U.S. Sen. Mike Enzi, a conservative Republican from Wyoming, is the bill’s main sponsor.

State and local governments are missing out on a considerable amount of revenue. The National Conference of State Legislatures estimates states lost $23 billion last year. The U.S. Commerce Department estimates Internet sales totaled $226 billion in 2012, up nearly 16 percent from 2011.

Some states like Louisiana require their taxpayers to list their Internet purchases on their state income tax forms and pay the required sales taxes. Governors of those states say it’s a difficult law to enforce.

The law would require online businesses to provide states with the software they need to help them calculate the taxes. Businesses with less than $1 million a year in online sales would be exempt. States would have to create one entity to receive the sales taxes so that retailers wouldn’t have to send them to individual states, counties (parishes in Louisiana) and cities.

Those who love to skirt this kind of tax requirement will be following developments closely. Taxpayers take extreme pleasure in getting around paying taxes, if the loopholes are big enough. And Internet sales have been an easy way to do it.

Speaking of getting around the law, a Louisiana congressman introduced legislation last week that would require President Obama and members of his Cabinet to use the health care exchanges being set up by the Affordable Care Act. They are currently exempt. U.S. Rep. Bill Cassidy, R-Baton Rouge, wants to change that.

U.S. Sen. David Vitter, R-La., is trying to do the same thing. He wants to amend the online sales tax bill to also require Obama administration officials to participate in the health care law.

Some say Cassidy sees the exemption as a valid campaign issue when he opposes U.S. Sen. Mary Landrieu, D-La., next year. Landrieu voted for Obamacare, and Louisiana’s Republican congressmen have been vocal opponents from the start.

Members of Congress and their staffs aren’t exempt from using those insurance exchanges, but Cassidy said there is a movement behind the scenes to give them an out.

The Times-Picayune reported that Eric Schultz, a White House spokesman, denied the report.

“Members of Congress won’t receive anything that isn’t available to the public,” Schultz said. “They are going to get insurance on the market place, just like individuals, the uninsured and small businesses.”

If the law is good enough for the rest of us, it should apply to every public official, without exception. Cassidy calls his proposal the “In It All Together Act.”

U.S. Rep. Charles Boustany, RLafayette, who represents this area, also got into the anti-Obamacare picture. He complained about the expansion of the Internal Revenue Service in order to collect penalties levied under the act. A report in The Advocate said the IRS wants an additional $1 billion in order to enhance its digital facilities and add more than 6,000 employees.

“The significant demand for new personnel arises in part from the fact the IRS has been given two competing responsibilities — revenue collector and social program administrator,” Boustany said.

IRS Commissioner Steve Miller said without more funding Americans will see an erosion of services and the government will get fewer receipts from its enforcement activities.

Supporters of Obamacare say the extras are needed “to deliver hundreds of billions of tax credits to American families next year.”

The more one reads about the Affordable Care Act, the less affordable it sounds.

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