Taxpayer group blasts Virginia Governor\’s plan to tax Internet.
WASHINGTON – As part of his plan to overhaul the Virginia tax code, Gov. Mark R. Warner (D) asked Republican lawmakers to consider imposing taxes on Internet retail sales and higher taxes on wealthy individuals and corporations. Americans for Tax Reform, (ATR) the nations leading taxpayer advocacy organization, strongly opposes any and all efforts to raise taxes and believes that Gov. Warner\’s attempt to call tax increases on the Internet and other entities tax reform is disingenuous and absurd.
"Clearly Gov. Warner is spending to much time in Richmond, his plan to tax the Internet would cripple the technology sector of Northern Virginia," said Grover Norquist, President of ATR. "The Governor should just tell the truth, that he wants to impose a tax harmonization plan to tax Internet and other types of interstate commerce to fund his spending agenda."
Under the guise of tax simplification, Gov. Warner wants to override a Supreme Court decision that prevents states from taxing interstate commerce without explicit Congressional permission. In addition, the Governor has clearly not taken into consideration the negative impact of extending sales taxes to include many currently untaxed online transactions. Since Internet sales only comprise 1.5% of all sales, a new tax will harm small online retailers and severely impact online economic growth and productivity. In short, the Governor\’s plan taxes a very small sector of the retail market and applies a regressive, overly punitive tax on online sellers and buyers.
"While Gov. Warner claims that it \’is not fair when citizens pay tax on purchases in stores but not on purchases through catalogues or over the Internet," said Norquist. "Unfortunately, he is not being honest by refusing to state that the stores receive services, such as police and fire protection, for collecting a local sales tax on the goods that it sells. Therefore, it is blatantly unfair for Gov. Warner to suggest that the government force online retailers to collect a sales tax for services that they will never receive."
By ensuring that the Internet has remained tax free individuals and small businesses that could not afford access to the Internet have begun to share in the wealth of opportunities that the World Wide Web has offered. Main Street business and merchants have set up shops online to expanded their businesses to a universe of customers far beyond their current geographic locations.
This represents just one of the many positive outcomes of a tax free Internet. To institute a new tax on Internet commerce would severely harm the economy and lead to further loss of jobs. It is unfortunate that Gov. Warner supports that view.