Tuesday, November 8, 2016

Hood seeks to raise taxes

Attorney General Jim Hood issued the following press release: 

AG Hood Asks Supreme Court to Provide Level Playing Field For Mississippi Merchants
Attorney General Calls on Legislature to Enact Internet Sales Tax

 JACKSON— Attorney General Jim Hood announced today that Mississippi and 10 other states have asked the U.S. Supreme Court to overturn a 1992 decision that effectively prohibited states from implementing sales taxes on online purchases.

In an amicus curiae brief, Attorney General Hood and other state attorneys general encouraged the court to hear arguments in Brohl v. Direct Marketing Association and reconsider a 1992 ruling that requires a business to have a physical presence in a state before states may collect sales and use taxes from that business.  With the remarkable increase in online shopping, the physical-presence requirement has placed local retailers at a disadvantage and thwarted states from collecting revenue that could have supported important government services.

“More and more, the marketplace is moving from Main Street to the Information Superhighway, and our local merchants are at an unfortunate disadvantage,” Attorney General Hood said. “If local stores are unable to compete with out-of-state online retailers, we lose jobs, an important tax base and a critical investment in our communities. We’re asking the Supreme Court to even the playing field for merchants and to allow the states to gain the revenue that should be due to them.”

According to the U.S. Census Bureau, e-commerce sales for U.S. retailers were about $300 billion in 2014 and e-commerce accounted for nearly 7 percent of all retail sales that year. Online sales were up more than 15 percent from the previous year, a trend expected to continue since most Americans own smartphones that often come preloaded with online shopping apps.

Retailers have argued against sales taxes on goods purchased online, stating that calculating thousands of tax rates based on a consumer’s location would be too great a burden. However, the states argue in their brief there is readily available software that can easily calculate tax on any sale.

Attorney General Hood said a sales tax on online purchases would especially benefit Mississippi because ongoing budget problems have led to layoffs and service reductions across state government. Attorney General Hood called on the Legislature to enact an Internet sales tax to help balance the budget and support local merchants.

“At least 13 states now have laws to levy sales taxes on purchases through third-party affiliates like Amazon, for example,” Attorney General Hood said. “Courts in New York have upheld this type of tax, and I will be asking the Legislature to stand up for our local businesses and adopt a similar tax next year. I also remain hopeful that the brief we filed today will move the Supreme Court toward opening the door for states to collect sales tax on all Internet sales.”

Kingfish note: 

 Retailers have argued against sales taxes on goods purchased online, stating that calculating thousands of tax rates based on a consumer’s location would be too great a burden. However, the states argue in their brief there is readily available software that can easily calculate tax on any sale.

The A.G. leaves out the fact that it is the audit that matters even more.  Those same businesses will be subject to audits from all the jurisdictions that will collect the sales tax. Fine for Amazon.  Not fine for smaller businesses.  There is a reason some people call this the effort the Amazon or Big Box protection racket.  


Anonymous said...

Kingfish, if online taxes are collected, will the ABC/Dept. of Revenue/restaurant lobby/liquor store lobby, et.al. then concede online wine purchases directly from wineries??? For some reason, I thought the US Supreme Court already decided that issue holding that it violated the Commerce Clause, but the rub here in MS was that they couldn't collect the taxes on said online purchases.

Can someone shed light here, please??

Anonymous said...

He needs to go.

Anonymous said...

Mississippi residents are already required to pay sales tax on these types of purchases when they file their income tax returns.

From Form 80-100 Mississippi Individual Income Tax Return Instructions

Line 21: Consumer Use Tax
If during 2015 you made out-of-state purchases of
goods or services that you used, stored or
consumed in Mississippi and did not pay sales
taxes to any state, you are required to pay
Mississippi Consumer Use Tax at a rate of 7% of
the purchase price.
An example of such purchases includes books,
clothing, computers, electronics, furniture,
household items and downloads of digital products
such as music, movies, e-books and software.

Anonymous said...


That rub was probably with the Baptists.

Anonymous said...

Collecting the tax will mean more for government but not more for small businesses.

Anonymous said...

This state is slowly going broke with tax collections not meeting expectations. More tax revenue will have to occur from some source. This proposal does have some problems and is probably not workable. But state government will, at some point, have to raise taxes or shut down services.

Anonymous said...

As a conservative Republican, I would love to see an online sales tax replace some existing tax (maybe reduce the overall sales tax by 1% or increase the state income tax exemption up to the 2% threshold).

Anonymous said...

11:05, I hope you are not dumb enough to think any existing taxes will be reduced. Must be a politician that thinks they can blow smoke with that crazy talk.

Anonymous said...

I confess, I have not paid sales tax on my online purchases. Im sure the AG reports all his on line purchases along with deductions ffor commuting to the office he abandoned in Jackson

Anonymous said...

Misleading headline.
Local businesses have to have the ability to get on a level playing field. Shoppers will go to the trouble of coming into a store, trying on or sampling merchandise, taking our time, then they leave to go buy online.

Anonymous said...


The "1000's of tax rates" can be simplified to be (only) an EXACT 5% for ALL jurisdictions... take it or leave it.


That would also eliminate need for audits from any and all jurisdictions.


Anonymous said...

12:41, ever thought about why a person would do that? Ever think the cost difference might have something to do with it? If the costs was even close they would buy it when they were in the store. Don't blame people for buying something at a much better cost.

Anonymous said...

2:55 Don't comment if you don't know what you're talking about, and you don't. In-store and online is the same price. They simply do not have to pay tax on it, hence the need for a tax on online orders.
Oh, then there are those who order online without having previously "sampled" in-store, then bring it to the store to restock so they can avoid packing it back up and, if applicable, return shipping costs.

Anonymous said...

4:51, do you think taxes paid on something do not add to the price of that item? Online and in store can be the same price but online you do not have to pay taxes. Get it yet? Less money out of your pocket.

Anonymous said...

@4:51, Don't comment if you don't know what you're talking about, and you don't.

Please heed your own advice. When you order online from a merchant that has a physical presence in the state, that merchant is required to collect state sales tax on that online purchase per the physical presence rule. If you are ordering online from a different merchant, the in- store price at local merchant A is most likely different from online merchant B.....and due to volume and lower overhead, the online option can most likely offers savings that are much higher than just avoiding sales tax.

Smoky said...

You guys ever hear of shipping costs?

I just ordered a firewood rack that costs $49.95. Since the merchant has a Nexus in Mississippi, I have to pay sales tax (even though the Mississippi stores do not carry wood-racks and tell customers to order online).

It's rare, but shipping is free. But, if I were having to pay for UPS delivery it would cost me more at the end of this transaction, especially if I paid shipping. But, I would not to have to haul it out of the store and home - If the store had them.

Now, If Home Depot carried these wood racks, I would have to pay the same $49.95 plus sales tax and haul it home. But I would not pay shipping.

The solution to the conundrum is to install gas logs. But, my wife loves a fire.

Anonymous said...

2:49 -- damn!! Wonder why nobody else thought of that solution since it is truly SIMPLE.

But, I'd bet the folks in FL wouldn't like your solution since they don't pay any sales taxes. That new 5% probably would piss them off. And those folks in NJ would have to close down some more bridges because their losing that 4% from their 9% tax would cost them a bunch.

But, simplicity is always good. That's why it is so simple.

Anonymous said...

Oh look a squirrel!

We can't collect taxes from offshore accounts of multinational corporations and American businesses, so the average person is the squirrel.

( Hood: unless you can magically collect taxes being passed through tax havens--do not look at the populous for support on this)

I'm tired of paying MORE taxes to support their greed. This whole argument is bullshit.

Anonymous said...

Someone has to support the politicians and their lavish spending. They cannot take anymore tax money from the rich people or they will stop donating.
Guess who is left to cough up the money they want and need? People can suggest the politicians stop their reckless spending but it is a waste of time. You do not have to voluntary give them the money, they will take it by force. You are the only people they can force to give them the money. Imagine how much rich people would laugh at them if they tried to force them to give them the money.
Just shut up and hand it over.

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