19 Pages Posted: 4 Jun 2013
Date Written: May 12, 2013
This Essay proposes that Congress adopt a national sales tax at one national rate for interstate sales, but with a credit for each transaction in which an out-of-state vendor remits state sales tax. For states without sales taxes, remote vendors can still choose the state rate of zero percent. For states with sales taxes, the national rate should be set to exceed every state’s sales tax rate. Vendors would no longer be able to avoid sales tax by moving overseas. The proposal further provides numerous incentives for Congress to act now rather than delay, including a new source of national revenue, increased market efficiency, and more equal treatment of final sales in the United States of foreign-made goods that currently escape any consumption tax. Finally, to avoid duplicate enforcement, state authorities should take primary enforcement responsibility because they have the largest financial stake and the most expertise in sales tax issues.
Keywords: remote sales tax, national tax, income tax, consumption tax, international tax, Quill Corp. v. North Dakota, 2013 Marketplace Fairness Bill, Amazon Laws
Suggested Citation: Suggested Citation
Li, Timothy Q., Proposal for a National Sales Tax to Incentivize the Collection of Remote Sales Tax (May 12, 2013). Available at SSRN: https://ssrn.com/abstract=2273318 or http://dx.doi.org/10.2139/ssrn.2273318