The Internet Has No Geography

These past two weeks, the Internet appears sprayed with various articles about the IRS of the USA going after US citizens' spending without proper sales/use tax payments. It is exasperating to see the USA politicians not grasp technology in a variety of ways. These knuckledragging neanderthals do not realize that the Internet has no geography. We can shop just as easily in India as we can in Texas with nothing more than a couple clicks. By enforcing sales tax laws on the Internet, it is self-defeating. Citizens will simply shop in areas out of reach by USA laws. We can shop on the other side of the planet without leaving our homes.

In the past, governments took advantage of the geography issue. They realized that citizens would be willing to pay a small tax in a given geography simply because it cost more and consumed more time to go somewhere else. Therefore, they could ensure taxes were paid. In the present, however, online purchases have no geographical restrictions and our politicians around the world should recognize this.

Meanwhile, governments should not be involved in introducing complex tax laws to the Internet. To introduce tougher, more complex restrictions would merely bungle a fragile, growing world of opportunity. In the USA, it is usually accepted that the only taxes that must be collected are for when an online business has its nexus in a given state and a citizen lives in the same state. For out of state sales, it is up to the citizen to pay such tax on their state and federal income tax returns. When they make an out of state online purchase, the kind thing to do is to inform them of the potential dollar amount of that tax. This merely requires a minimum of tax laws and tax tables. It is easily programmed by perhaps even a high school student, which makes it all the more alluring, helping entrepreneurships get off the ground. It's a small price to pay, and even not having to worry about collecting sales tax is even better, but if this is the best the USA can do, so be it.

Should we be concerned that our communities are losing local sales tax revenue to online sales, thereby impacting services to its citizens? Yes, but we should not kill the goose that lays the golden eggs. We need to think of smarter alternatives, such as encouraging more local businesses to utilize online purchasing and online sales, for if a business is more successful, it has more opportunity to pay normal revenue. There are thinktanks today that are brimming with ideas to help in this arena, should they have a government receptive to hear it.

However, if you believe in what I'm saying here, and want to change things, call up your state or province government in your part of the globe and I'm sure you'll get the same thing. (With the exception being India, which has a government that seems to grasp technology.) The politican or his associate will allow you to say your peace for 20 minutes, perhaps over tea or a lunch. When you are finished, he will say, "I appreciate you coming out like this. I don't really understand this technology, but we need to hear from our constituents. Say, you're one of those PC geeks, right? I've been told I've got this terrible spyware problem with my Windows, and I don't know what that means. My whole office has it. If I pay you something like $200, will you fix it for me?" Ugh. It is exasperating. Don't believe me? Try this test and see.