Yesterday a U.S. District Court in Seattle handed down a decision that Amazon.com does not have to turn over information of sales to the Department of Revenue. The Department of Revenue had been seeking more detailed information about who purchases on-line so that they can collect sales tax on those purchases. This is a messy work-around necessary because of an antiquated revenue system; one that no longer keeps pace with economic growth or is capable of capturing where transactions are increasingly likely to occur, that is, on-line.
There are a whole host of reasons that North Carolina should want to see this changed. It provides on-line retailers with a competitive advantage over Main Street businesses. It requires those with the least ability to pay to commit more of their income to the purchase of goods. It reduces the resources available for the public structures that support on-line AND brick-and-mortar business in the state.
The best opportunity to require on-line and remote retailers to collect sales tax would be through passage of the Main Street Fairness Act. A bill that N.C.’s federal delegation should support. But this case also is emblematic of just how badly our state needs to modernize its revenue collection. North Carolina policymakers must take up comprehensive revenue reform if the state is to ensure it can continue to collect revenues that support economic growth.
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