Bloomberg Politics reports on a recent SCOTUS decision not to hear a taxation case:
The U.S. Supreme Court let stand a Colorado law that imposes reporting requirements on internet retailers in an effort to get customers to pay the sales taxes they owe.
The justices Monday turned away an appeal by a retail-industry trade group that challenged the measure as violating the U.S. Constitution.
The case raised questions about a 1992 Supreme Court ruling that bars states from requiring merchants to collect taxes unless they have a physical presence in the state. States lose $23 billion every year in uncollected sales taxes from web and catalog purchases, according to a 2012 estimate by the National Conference of State Legislatures, the most recent figures available.
Although consumers are supposed to pay the taxes themselves, few do unless the seller collects the money.
The Colorado law requires internet retailers to turn over customers’ names, addresses and purchase amounts to tax authorities. Merchants also must notify consumers of their obligation to pay taxes and provide a purchase summary to people who spend more than $500 in a year.
This is the fundamental disconnect between what began as a federation of nations and an economic engine that completely disregards the political structure. Can the political system enforce its inchoate will on the economic engine, perhaps through some centralized technological engine of their own, that automatically assesses the proper state sales tax based on the location of the consumer? Or will the economic engine actually force the State structure to its own will, perhaps by simply obviating sales taxes, or, more radically, causing States to merge into multi-States with more power to enforce taxation? Or, even, the final retirement of the States’ right to tax commerce?
