Is state sales tax on interstate commerce allowed?

Did you know that individual States cannot tax interstate commerce, as a general rule? There are some very specific exceptions, and California (and other States) have been trying to exploit extremely loose interpretations of those exceptions. Interstate commerce is any transaction, transit or business that is conducted across State borders. This includes mail order, Internet, and physically going to another State to purchase an item to bring back to your home State. Many States have taxes on their books that attempt to circumvent this law. Recently, States have been trying to exploit what they think is a loophole in the Quill Corp. v. North Dakota (91-0194), 504 U.S. 298 (1992) (backup link) Supreme Court ruling that solidified the limitations on taxation by States. In this ruling, the Supreme Court declares that States may only attempt to levy an interstate commerce tax against businesses that have a presence within their State, known as a substantial nexus. Leave it to judges to come up with a term like that. It basically means a business must have a physical presence within the State in order for its transactions to be taxed by that State. California is now ready to pass a law that will try to specifically impose the collection of taxes from consumers on sales by online retailers, even when the retailer has no physical presence within the State. They are trying to expand on a similar law passed by New York recently. The idea behind the bill is that marketing itself counts as some sort of physical presence. If that doesn’t scare everyone, I don’t know what will. It basically means that anyone with a website that is accessible within California’s territory (i.e., any website on the Internet) is subject to California taxes and law, even if they’ve never set foot in the State. This substantially contradicts the body of Quill v ND, but hey, it’s a taxation party right now! Now, the common mistake is to assume “oh, the States are just strapped for cash and are trying to find ways to soak us dry.” That might be true if politicians actual wrote the bills that become laws. As a general rule, they do not (backup link). You know who does, as a general rule? Corporate lawyers of companies that lobby our legislative bodies. Hmmm, what corporate lawyers would be in favor of raising taxes on businesses? The corporate lawyers that work for companies who would not be substantially hurt by those taxes, but whose competitors would be. Let this excerpt from a recent letter from Amazon.com tell the story.

For well over a decade, the Amazon Associates Program has worked with thousands of California residents. Unfortunately, a potential new law that may be signed by Governor Brown compels us to terminate this program for California-based participants. It specifically imposes the collection of taxes from consumers on sales by online retailers – including but not limited to those referred by California-based marketing affiliates like you – even if those retailers have no physical presence in the state. We oppose this bill because it is unconstitutional and counterproductive. It is supported by big-box retailers, most of which are based outside California, that seek to harm the affiliate advertising programs of their competitors. Similar legislation in other states has led to job and income losses, and little, if any, new tax revenue.

Big-box retailers are companies like Target and Walmart. According to Amazon.com, companies like these seek to protect their businesses by fooling State governments into thinking the State will increase revenue with expanded scope on their sales taxes. Instead, this new tax (like any other tax) has a negative impact on the economy. I’m not against all taxation, but I am against any laws (taxes or otherwise) where one industry attempts to screw over another without providing any new benefit to the consumer. My website is just like any other. It does generate an extremely small amount of income from referrals (upon which I already pay income tax) via affiliate links with Amazon (please see the FTC 16 CRF Part 255 notice in the right column). Now, this law wouldn’t require me to pay any more taxes direclty, but as a customer of Amazon and other online sites, I would be forced to pay sales tax from a law that is probably unconstitutional. Laws that see to “tax the Internet” erode everyone’s rights, and threaten to hold anyone with a website accountable to the individual laws of over six thousand different taxing jurisdictions in America, according the Quill v ND ruling (linked above). Oddly enough, I no longer live in California. But, how long will it be before more States try to pass similar laws? Congress needs to act on this issue soon to prevent this economic nighmare from growing any further. I’m not making this a call to action because each person much act on their own. As such, I am going to be contacting my *new* Congress representitives about this issue very shortly. For additional reading, please see The Problems of State Taxation of Interstate Commerce and Why Congress Should Act (backup link)

States I have visited (USA, Canada, Mexico)

As of today, the maps above represent the states and provinces that which I have visited. On the world map (not shown here), I also add Bahamas and Hong Kong to my list. My ultimate goal is to set foot on all seven continents. As of right now, I don't really have a goal about any specific number of states or countries. I do eventually want to visit particular places that would naturally add states, provinces and countries to my list of visited areas.

Not counted in my list are places where I had never left the airport in between legs of multiple flights. However, it wouldn't change the maps all that much if I had.

Video of St. Louis Gateway Arch (road trip)

Video from my recent road trip across the USA, day 4, at the Gateway Arch in St. Louis.

4th Annual Taste of Downtown Marlborough (and 1st Annual Brewfest)

I was driving to a Diary Queen near downtown Marlborough yesternight when I saw a rather small and unimposing sign that advertized something called 4th Annual Taste of Downtown Marlborough. Yesterday was Sunday, so I thought I had just missed an interesting event. No so. This event was held this evening (Monday). It seems a little unusual to have an event like this on a Monday night (and bad timing to have it the same night as game 6 of the Stanley Cup finals in which the Bruins must win or lose completely), but it didn't seem to deter the crowds from coming.

I'm very new to the area, so this was the perfect event to see tons of restaurants in the Marlborough Olde Town area at one time, all for only $20. Overall, I think I was able to sample tastes from a couple dozen places. Some places I might come back to later this year. Other places I might not consider again. To each their own.

The 1st Annual Brewfest portion of this event cost an extra $5. There were a couple dozen beer vendors giving out 1oz samples of their offerings. Some of the beers just aren't suited to my taste. I had one that tasted like I was sucking on a 10 week old lemon, and not in a good way (if a good way could even be imagined). Other beers were good. I enjoyed some of the beers from Brooklyn Brewery. It was impressive that a New York company would show its face at a Massachusetts event.

There were lots of long lines to sample the various restaurants. Later in the evening, it was a little easier to get samples, but some places had run out by then.


There was also various live acts, ranging from the classic to the drum beat based. One rock group played Turning Japanese and then She Bop right after. I couldn't help but grin when I saw parents dancing with their kids to those particular songs. Sometimes you have to wonder if people know what those songs are supposedly about.


There are also some interesting old buildings.

It was interesting to see what this town of Marlborough has to offer. I have some ideas of which places to visit in the near future.

Ran over a bird (dang!)

Many birds have flown into the path of my car over the years, yet always seem to get out of the way. Many others have been in my path already (chillin out on the road or something), and have also flown out of my way. They generally respond quickly enough that I've rarely have to react as I drive at them. Well, that all changed on my recent cross-country trip. Easily, hundreds of birds flew into and out of the path of my car on this trip, with no incident.

One bird in Missouri, this stupid Red Winged Blackbird, did not. In fact, it flew right into my path so quickly that I could not respond in time to avoid it. Although I quickly applied my brakes, I heard it bump against some portion from under my car. I don't think I actually ran over it, per se, because I didn't see any remnant left on my car. It likely just bumped into my car, and got knocked about. I didn't see it on the road behind, so I'm guessing it was able to fly off.

Still, it was very annoying. It's bad enough having all these birds rush in front of you all the time, but actually hitting them just sucks.

Cross-country trip photo (Flickr)

Cross-country trip, a set on Flickr.

I've uploaded all of the photos (many shown here) from my recent cross-country trip to a Flickr set. There's a few of my car, and many others taken from my car. I didn't get a chance to stop at many interesting places (for various reasons discussed in earlier articles), but there are still some interesting shots. Enjoy!