Monday, February 27, 2017

Reeves: Internet tax is unconstitutional

Leftenant Governor Tate Reeves issued the following statement.


INTERNET SALES TAX BILL UNCONSTITUTIONAL, SENATE LEADERSHIP SAYS

JACKSON – The Mississippi Senate will not consider a proposal to tax Internet sales because the measure violates the U.S Constitution, Senate leadership said today.

House Bill 480, which mandates a tax on Internet sales, is in the Senate Finance Committee where Chairman Joey Fillingane, R-Sumrall, and Lt. Gov. Tate Reeves each said the bill will not survive Tuesday’s deadline for committee action.

“Because the Supreme Court made it clear 25 years ago that states do not have the authority to tax Internet sales, this bill is unconstitutional and any promised new revenue is simply fake money,” Lt. Gov. Reeves said.

The U.S. Supreme Court decided in 1992 that only sales from companies with a physical presence in a state can be subject to state sales or use taxes. Ultimately, Congress must act to allow states to collects sales taxes from online purchases.

“While this bill is well intentioned, it does not accomplish what it sets out to fix,” Sen. Fillingane said. “Also, the Senate Finance Committee generally looks for ways to lower taxes and grow our economy, not raise taxes.”

According to the Department of Revenue, about $40 million is paid by Mississippians as a use tax for online purchases under current law. House Bill 480 could reduce General Fund collections by as much as $40 million in Fiscal 2018.

41 comments:

Anonymous said...

So was HB 1523, but that didn't stop the mush-mouthed chucklehead from voting for it.

Anonymous said...

Funny how internet merchants keep applying sales tax to my online purchase, then. I wonder where that money is going?

Anonymous said...

Since when has the constitutionality of legislation been a roadblock to passage in MS?

Anonymous said...

@6:02- if the merchant has a building in this state, they are required to collect sales tax from you. If they don't, they can voluntarily submit the tax to the state.

Anonymous said...

This is rich. His mentor tried in vain to get this through, and now that Mr. Reeves is so close to his own gubernatorial campaign, he flops a press release expressing his indignation. I am wholly unsurprised.

Anonymous said...

And he'll call Herb to tell him to send all of the Amazon collections back at half past NEVER.

Anonymous said...

This is funny, considering how many facially unconstitutional bills have been signed into law in this great state.

Anonymous said...

As far as I know, Amazon has no physical facility in the state of MS... yet they charge me sales tax. (?)

Anonymous said...

Thank you Mr. Lt. Gov. for leading the only group of adults at the Capitol. It's sad that Gunn can't guide his chamber with the generous GOP margins he was given, but we're grateful that the Senate can conduct its business with maturity and foresight. We are sorry that you must carry the intellectual burden for the entirety of state government.

Anonymous said...

When has the constitution EVER stopped Mississippi's government? Nope, never.

Anonymous said...

480 was the only means to get funding to the crumbling infrastructure this year. Herb is still going to go after internet sales tax, but the money now will go to the general fund. The tea baggers still lose. Business leaders across the state including the truckers, have listen to Tate say he's going to do something about infrastructure for years, and he once again he caved to the out of state funded AFP. AFP wants the government out of our business, but how are they going to do business without infrastructure?

The next time you see a bridge with a weight limit sign, stop and look under it before you cross! When you do cross with your family in your car, just believe that all the trucks have heeded the posted weight limit like you surely do the speed limit sign.

Anonymous said...

9:38, our iinfrustructure needs help, I agree, but 480 wasn't the way to do it. You raise the gas tax. Pure and simple. Sales tax should go to the general fund. Gunn's rhetoric of having a plan for roads of bridges via 480 is a joke. And everyone knows it. Gunn and Reeves and Bryant's lack of leadership on true transportation funding is an even bigger joke. Amazing how a lame duck Governor can avoid leading every chance he is given.

Anonymous said...

@ 10:57, we already pay $.42 per gallon for state and federal fuel taxes. We even pay a small amount to a "cleanup fund" that the average person doesn't know about. Hell, it shows everything on my invoice I receive from my fuel supplier.

Anonymous said...

So I guess the Lottery is a done deal now

Anonymous said...

10:57, 480 was something that could lesson the burden of a gas tax, but I agree that a gas tax should be the vehicle to fund infrastructure. You are also correct that Bryant is not leading and it baffles me as to why he will not step up? He has nothing to lose. There are many representatives and senators that would follow his lead if only he would lead. Reeves wants to be Governor, Gunn doesn't want his republican house to mad at him.

Anonymous said...

Jim Hood won't win.

Anonymous said...

@8:43. Amazon volunteered to collect the sales tax for you. At least you don't have to pay the tax when you file your income tax. Remember, Mississippi requires you the taxpayer to disclose what you purchased from out of state and pay sales tax on those purchases.

Anonymous said...

What are some of these 'unconstitutional bills' you melon-heads (or one of you, repetitively) keep chortling about? Or is your rainbow still just chapped over the wedding-cake bill?

Plain ol' Catfish said...

I can honestly say I was in favor of the sales tax for this reason and this reason only - to help local businesses.

Amazon has a super duper advantage in Mississippi, no sales tax, cheap prices, and the shipping cost that are next to nil.

If the legislature wants to benefit local businesses - remove the damn sales tax on a majority of consumer goods.

But that won't happen because the Tax Foundation came in and told them (The Mississippi GOP) that they needed MORE consumer taxes and less income taxes.

They (The Mississippi GOP) has painted this state into a corner financially, with the fiscal policies they started rolling out back in the days of Barbour. They've given out hefty tax credits to corporations - where our unemployment is still high and no improvements in regards to standards of living; while at the same token the contiguous states of Tennessee and Alabama are performing decently, while Louisiana is on the rebound.

They (The Mississippi GOP) does not have anything tangible to stand on while running all the offices across the state. Everything is trending downward while they've had control of the till.

Mississippi needs to improve in roads, bridges, education, employment, wages, and overall quality of life.

Why do we keep electing people who drop the ball, regardless of party, in those areas!? But we are certainly worried about people having the right to deny someone services because of their religious beliefs!?

We need to get our priorities in order, fast!

Anonymous said...

A couple of comments:

1. A lottery would generate a lot less money (maybe less than half) of what collecting internet sales tax would bring in.

2. MEC had scheduled a 2 p.m. news conference yesterday to urge the Senate pass H.B. 480. Tate, through their lobbyist, sent M.E.C. word to put it off; that he wanted to discuss it with them first, at 3:15. At 3:00, 15 minutes before he had agreed to meet with M.E.C., Tate called the media in and made his announcement that he would kill the bill. The M.E.C. was back stabbed, their lobbyist was naive, and everyone is pissed at Tate for doing it the way he did. The lobbyist may get fired over it (and probably should). Tate continues to burn bridges at a rapid rate. Still, there is NO Senate plan at all for to repair roads and bridges. People who matter notice where the problem lies, and it isn't in the House. "Republicans for Hood" is becoming more of a probability every day.

Anonymous said...

I'm just worried that the state will collect the funds and spend them, then we will have to pay that money back!

Anonymous said...

Well, of course we should believe that renowned Constitutional scholar, Tate Reeves!
ROFL
How have so many states gotten by with violating the Constitution since 1992?
Does he really not know that the Supreme Court has changed rulings over the years and those changes begins in state legislatures and state courts? Does he think the ruling in " Plessy vs Ferguson" in the 1800's is still law and wasn't overturned by " Brown vs Board of Education"?
What an idiot!
If he doesn't understand what he's doing any better than this, we need to get him the hell out of government!

Anonymous said...

Plain Ole Catfish - Please understand that 'we' have no obligation to 'help local businesses'. Government isn't supposed to work that way. Government is expected to produce and maintain a legal environment in which a local business can operate. That's where government needs to get out of the way. When a business falters or fails, it is not the responsibility of government to raise or collect taxes to help them stay in business.

Anonymous said...

6:38 is what is wrong with our state. Go back and read the court opinions on HB 1523 and 1390, if you know how to find them. I bet you won't because you're lazy and afraid to read contrary thoughts.

Tate is a populist. He's intellectually dishonest by hiding behind supreme court precedent only when it suits him. He's taken a calculated risk here siding with the Chris McDaniels right wing nuts and betting that sensible republicans won't get so mad at him as to hold it against him.

DO THE MATH said...

I can honestly say I was in favor of the sales tax for this reason and this reason only - to help local businesses.

Charging sales tax for online purchases won't help local businesses a lick when they are selling the same products for far north of the actual tax bite.

Anonymous said...

Only an ignoramus would believe that Reeves is siding with McDaniels supporters.

Public trough feeding, tax, borrow and spend RINOs are not "sensible republicans".

Anonymous said...

Internet commerce has changed quite a bit since this decision was rendered. My understanding of the bill and the angle of those desiring the bill was that there is a fundamental understanding that the bill would not mesh well with the decision from 1992...they knew there would be a law suit as a result...and they felt strongly that this law may be the vehicle to have that ruling overturned.

In short, the belief is that in 1992, Amazon and the like did not exist and their respective presence within states could not have been known.

I understand Tate's argument, but I also believe that he knew the real, aforementioned purpose behind the bill to be a vehicle to change the law of the land. AFP made a call and he was worried he might lose in stellar rating with them. Like all things with Tate, it is about him and not about the state.

He doesn't care about the roads because he is being carried around in a tricked out Suburban on tax payer dime. Who cares if the potholes knock the wheels out of alignment...he'll use your money to fix your truck he gets to use.

Anonymous said...

The present tax structure punishes local businesses. These local businesses pay property tax and income tax while hiring Mississipians. they also buy supplies etc from local vendors. Our state must cease giving out of state businesses favorable tax breaks that are not available to our local businesses. Those that fil to see this are just blind. We continue to be our own worst enemy in Mississippi.

Anonymous said...

The bill will increase tax receipts for the state.

The state needs money.

Tate made a decision and his decision is based on existing law.

Best solution is to figure a way around his argument....don't shoot him...yet.

Plain ol' Catfish said...

@ Do the Math

I disagree, because if the tax was there, then there's no advantage of purchasing online as opposed to purchasing from a local brick and mortar vendor.

@ 7:48am - you said, "Please understand that 'we' have no obligation to 'help local businesses'. Government isn't supposed to work that way. Government is expected to produce and maintain a legal environment in which a local business can operate."

and I agree with you. But when Tate Reeves and Phil Bryant are giving out tax credits to out of state corporations, who is looking out for the people that are conducting business within our own backyard and local economy's?

The best thing to do, would be to eliminate a good percentage of consumer taxes; to increase spending in state with local vendors. Hell, we even have people purchasing cars at a high rate out of state.

Anonymous said...

If the State of MS can find a way to monetize all of Jackson's water leaks all of our budget problems will be solved.

That is Why You Bite Hooks said...

I disagree, because if the tax was there, then there's no advantage of purchasing online as opposed to purchasing from a local brick and mortar vendor.

The advantage isn't the tax, or lack of tax, the online advantage is the significantly lower price.

Should have known in advance that you are unable to understand.

Anonymous said...

TATER is correct this bill would have been in litigation before the ink dried. There fore costing the state money it doesn't have. Where do we go from here? A lottery, increased taxes on cigarettes and gas or a combination of the 3? Something has to happen or the rainy day fun is going to be overdrawn before we know it.

Anonymous said...

Plain Ole Catfish seems to think that this (internet taxes to help the local little guy out) would be just hunky dorey since 'Phil and Tate are giving out tax credits to out of state corporations'. WHAT?

Where's our fallacy expert when we need him? Fish's logic fits perfectly into one of the categories.

Plain ol' Catfish said...

@ That is Why You Bite Hooks

"the online advantage is the significantly lower price."

Wow, you are worse than my ol' lady

Just keep sticking your head in the got'damn sand, believing you are the only one that understand how this sh*t works!

This is why Mississippi can't have nice things, because idiots like you are continue to elect people like Feel and Triple Cheese Tater Thot!

Anonymous said...

Why not shut down ABC warehouse but leave the current tax on alcohol with no related costs for an unnecessary inefficient, ineffective, and corrupt state distribution system. 100% of the tax could then be used for state needs. ohhhh goodness, that will not work because it actually makes sense.

Anonymous said...

I'm in agreement with those who supported the internet tax in support of locally owned businesses, franchises and national brands that open locations here. Shoppers come in to view, handle, try on merchandise in our stores, and then go order it on the internet at the same price, minus the tax. Then, in the case of national brands, will return it to the stores when they decide they don't want it to avoid paying return shipping.
Don't fire back 9:42. I do understand.

Anonymous said...

7:48 has no clue. it is not a matter of helping local businesses, it is a matter of not punishing local businesses. I am a conservative, but some of the conservatives fighting this have come across as real dumb bunnies.

Plain ol' Catfish said...

@ 12:38pm

I'll do you one better, eliminate ABC altogether and let the 7% sales tax speak for itself. Let the liquor store owners dictate the market.The mark-up on alcohol is hefty.

let me add that the state make all counties "wet" and we allow Sunday sales.

We can start taking money back from Louisiana and for once capitalize on a border state like Alabama, who has the most expensive liquor in the union. Our border cities would be able to recoup some much needed revenues.

But that kind of mindset is way too progressive for people like Rep. Andy "Crewcut" Gipson.

Anonymous said...

Ok ok. Cool. Then give me my money back. I have been forced to pay taxes to the ms dept of revenue for internet purchases. We have a state law on this. Also I'm telling my cpa zero when she ask me how much I spent online for my state income tax payment. Cause after all, fried sweat Tater said so!

Anonymous said...

Businesses do NOT charge sales tax. Businesses merely collect sales tax for the state and remit them. Under age old rules, companies with no presence here don't have to collect. Those are pre-Internet rules (mail order). I would argue that with the Internet, there is now a "presence" here.

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