The following is cross-posted at www.stopetaxes.com.
An etax on all goods purchased online has been roped into the Rhode Island House Budget and is slated for a vote tomorrow.
The "affiliate nexus tax" was previously under consideration by the House Finance Committee, who also drafts the state budget. At the time, Stop eTaxes reported that the Committee pegged the tax hike at roughly $100 million.
However, since including the etax in the state budget, the House Finance Committee Budget Report has downgraded the tax hike from $100 million to zero. This is likely the result of the tax being unconstitutional and thus unenforceable by the state.
In addition to leaving a law inviting costly legal challenge on the state’s books, the etax inadvertently punishes in-state advertisers and other businesses. To circumvent federal interstate commerce law, it expands the definition of doing to business to include an out-of-state retailer that advertises through a Rhode Island based website. This means retailers could simply end advertising agreements with in-state advertisers to avoid paying the unconstitutional tax.
CLICK HERE NOW to write your Rhode Island legislator in opposition to the etax included in the budget package.
Click here for ATR’s letter opposing the affiliate nexus tax. Also, click here for ATR’s letter opposing the entire budget, which includes a massive 12% spending increase, as well as higher gas and capital gains taxes.
(photo by J. Stephen Conn)