We're getting hit with a $40 million sales tax increase next month | Eastern North Carolina Now

    Publisher's Note: This article originally appeared in the Beaufort Observer, as well as the print version of The County Compass.

    Republicans like to boast about "cutting taxes." That's well and good, but take note: Many of us have just been hit with a $43 million sales tax increase.

    Republicans like to boast about "cutting taxes." That's well and good, but take note: Many of us have just been hit with a $43 million sales tax increase. Under pressure from the Department of Revenue (both under Democrats and Republicans), Amazon, arguably the largest online merchant serving the needs of people in North Carolina, has agreed to collect sales taxes from North Carolinians who buy products from Amazon.

    WRAL has the story. Click here to go to the original source to read the story.

    If our lead to this story appeared cynical, it was intentional. This, we believe, is an unconstitutional rip-off, no matter whether from the Democrats or Republicans. Here's why:

    There is no national sales tax. Such taxes would require a constitutional amendment. So all sales taxes are state taxes. Never mind the illegal Federal gas sales tax. But no state has the legitimate authority to levy a tax on sales in other states. Note here now, that a sales tax is a tax on a business transaction. It is not a tax on the buyer or the seller. It is a tax on the transaction. So if you go online and order something from Amazon and the order is taken and filled in another state, what right does North Carolina have to tax the transaction? If you say, "but the product is shipped to North Carolina" then that would make the tax an illegal import tariff on interstate commerce  -  one of the most hotly debated issues in the original Constitutional Convention.

    The Southern states would never have joined the union if the such taxes were allowed. It gets a bit complicated  -  and is certainly not as simple as we just made it  -  but the fundamental idea is very simple. The national government does not have the authority to tax the sale of products. No state has the authority to tax a transaction that was made in another state, whether the buyer was physically present in that state or not. The issue is where the transaction took place. And just because you mail an order, call it in on the phone or do it online is immaterial. Simply stated a state has the authority to levy a sales tax only on sales transactions within that state.

    For the state to argue otherwise is simply to gouge an illegal tax out of your people contrary to the original intent of the framers of the Constitution.

    This is a rip-off.

    We predict that this money grab by North Carolina will end up spawning "proxy businesses" in those states that do not try to confiscate a tax on transactions in that state. North Carolinians will simply make their purchases through a third party who will get a much smaller commission for handling the transaction than the 7% state sales tax. And we may as well get used to checking for other vendors who do not collect North Carolina sales tax on items bought from them. Competition on the internet has already resulted in many companies not charging shipping fees, and we suspect the same will apply to sales tax.

    And what you can bet you last dollar on is that this increase in sales tax revenue North Carolina will be getting will not be used to provide North Carolinians with a reduction in their other taxes.