The majority of Wyoming’s online shoppers have been breaking the law.

Sen. Mike Enzi, R-Wyo, wants to change that.

Shoppers haven’t been paying state sales tax on the items they buy online, which sidesteps Wyoming law and keeps millions of dollars out of the state’s coffers. The senator doesn’t want to chastise Wyomingites for not paying. He wants states to collect more money so they can afford to pay for sewer, police, roads and other functions of local government, and he authored a bill to do so, the Marketplace Fairness Act. It passed the Senate by a vote of 75-24 on March 22 and is awaiting a vote in the House.

Enzi’s bill aims to close a loophole that shields out-of-state retailers from collecting retail sales tax. Retailers don’t have to collect it, thanks to the 1992 Supreme Court decision in Quill vs. North Dakota, which gave sellers the choice to collect and put the onus on shoppers to pay the sales tax. When a Wyoming consumer buys a CD from an online vendor in California, they should be asking the Wyoming Department of Revenue for a sales tax form. But they’re not, said Dan Noble, administer of the Excise Tax Division with the Department of Revenue.

“I think there are three people in Wyoming who send it in every year,” Enzi said with a laugh. “It’s hard for people to keep track of. You need a collection method.”

Employees in the department of revenue fill out the form, Noble said. “But we don’t see a steady stream of people coming in and asking for them,” he said.

The state would have to audit taxpayers to enforce the sales tax law, Noble said. “The taxpayer isn’t expecting that,” he said.

Wyoming businesses often get slammed at tax time because out-of-state vendors don’t tell them that the goods they are purchasing are being charged without sales tax. If the state does an audit assessment on a company’s out-of-state transactions, the company will owe — all at once —what they haven’t paid the state, Noble said.

Only three Wyoming businesses will have to comply with the new law if it passes the House, Enzi said. Businesses making less than $1 million per year will not be obliged to charge sales tax under the law.

Supporters of the bill say it puts online retailers on the same playing field with brick-and-mortar retailers. Online retailers have many advantages, said Howard Gleckman, a resident fellow at the Tax Policy Center. They don’t have to pay rent. They can do it all from a warehouse, and many don’t even have to house the inventory, having the product shipped directly from the manufacturer to the buyer, Gleckman said.

“Why should a state decide to subsidize companies like Amazon to the detriment of local retailers?” he said.

Stores such as Wal-Mart and Best Buy have lobbied hard for the bill. Consumers are increasingly using showrooms in big-box stores to peruse merchandise. But they’re not buying the goods they seek at the brick-and-mortar stores. They are using their cell phones to take pictures of the bar codes, going online and buying the goods from an online retailer who sells for less, Enzi said.

“Particularly with large items, the difference between the item in the store and online is the amount of sales tax,” Enzi said.

The changing landscape of retail shopping has critics of Enzi’s bill questioning whether the law is a way for big-box stores to kill their online competition.

“It’s clearly one motivation,” said Pete Sepp, executive vice president of the National Taxpayers Union. “Businesses often go to the government to try to erase a competitive advantage or saddle a disadvantage on other firms.”

Advocates for small businesses say there will be large costs for compliance and liability that stores such as Wal-Mart already have in place.

With nearly 10,000 tax jurisdictions in the country, businesses will have to comply with every single tax code in the nation if they want to sell their goods everywhere. Noncompliance could mean a costly audit from the states where sellers are sending their products, said Bartlett Cleland, policy counsel for the Institute for Policy Innovation, a Texas-based free-market think tank. With every zip code, tax codes can vary, Cleland said. If a business is selling candy, for example, some tax jurisdictions consider it a confection, others a food and others a food item. The tax code changes with the description of goods in each state and will force businesses to hire more accountants and lawyers, he said.

“It’s easy to sit in the Wal-Mart ivory tower in Arkansas and say, ‘This is simple to do,’” Cleland said.

Enzi said compliance for all businesses will be simple. All businesses will need is a zip code and the state-provided program to collect the sales tax from all jurisdictions.

“With the program, there’s no extra knowledge you have to have,” Enzi said.

If the collection mechanism isn’t functioning, businesses will not be liable to collect the tax, Enzi said.

States can choose whether to adopt the law, Enzi said. It’s unknown how much Wyoming would expect in revenues. Nationwide, Enzi and other supporters of the bill expect around $23 billion in revenues from the legislation.

(19) comments

ers
ers

This shows how utterly stupid Enzi can be....if u figure how many jobs are created in the shipping industry, it far out weighs the lost sales tax. Besides, customers who have any sense will add in the shipping cost finding it is like sales tax.....

carlover
carlover

its time to retire this guy too, you know is there no end to the greed by these guys. and yet another agancy and more government jobs created. grow that government enzi. thats all you seem to know how to really do....

rigrat
rigrat

Isn't it amazing how so many RINO's can pi$$ and moan about free spending taxaholic Liberals,yet turn the other cheek and do the very same thing.For a stooge who pretends to be a "conservative" Enzi sure acts like a Liberal at times,but then no politician is trustworthy anymore.

supercalifragilistic
supercalifragilistic

When I read "The majority of Wyoming’s online shoppers have been breaking the law.
Sen. Mike Enzi, R-Wyo, wants to change that.
in this story.
I realized just how much a RINO Enzi really is.
Mr Enzi, there is only one way Wyoming shoppers are breaking the law in your eyes, its called legislation that has not become law, yet. Wyoming law makers at the state level, ?

Are the people of Wyoming paying enough in taxes or should Wyomingites welcome Obama to make that decision along side with Mr Enzi?
Late President Ronald Reagan said it right, "I've never met a liberal that didn't like a new tax for spending purposes." I'm actually surprised that so-called-GOP-member-of-the-US-Senate, would think this way.

I appeal to all Wyomingites to replace this RINO talk with conservative values, as I don't believe Mr Enzi is willing to share the thoughts of most Wyomingites. Simply said, Wyomingites are taxed enough already.
Why else would Enzi see Wyomingites as law-breakers for not paying a tax to Caesar Obama? But yet, the county that surrounds DC is said to be the wealthiest county in the nation. Either that or, Emzi has been in DC too long, out of touch.

Opie
Opie

The tax "not being paid" is to the great state of Wyoming, and her counties, not to the federal government (much less to any President). Fact is, the feds send us a lot more money than we ever pay to them. Facts are so limiting.

odddportal
odddportal

When North Carolina passed pushed this Amazon legislation they could not get it past the House Finance Committee and it was never brought up for vote. Instead our legislators went behind a closed door and hid it in the our 2009 budget... They promised us 350 million dollars a year but the NC Merchants Assoc is claiming only about 12 million collected.

This shut down the small locally owned website industry and now our large cities like Charlotte, and Raleigh are only producing a few private blogpost a week promoting our cities and state. As you know our North Carolina has spent millions of tax dollars to build robust state owned tourism websites.

Basically your legislation is to little to late and forgets that many small locally owned websites from the nine states which adopted this legislation moved their business location to Wyoming to hide from the Nexus requirements which was in the "Cookie Cutter" Walmart written "Amazon tax law"... Your state benefited from our stupidity.

Our state also used the excuse NO ONE PAYS THE USE TAX but we spend millions of dollars to attract tourist and we spend even more to get people to buy lottery tickets but have made no effort to explain the use tax to consumers even though Online purchasing is only twelve years old.

You can do what you want but the "Main Street America" federal law will become law around the time your state action happens which means you have wasted time which should have been spent serving the people of your state....

OH... Our Amazon tax law was hidden in our 2009 budget by the biggest spending and taxing progressive liberals our state ever had. the South Carolina Tea Party guys flirted with this legislation but dropped it the night before the vote because the law benefited Walmart who sells cheap products made by enslaved workers making pennies and hour who had taken the jobs of so many South Carolina textile and furniture workers....

jc45
jc45

An interesting article: http://money.msn.com/taxes/10-states-with-low-tax-burdens?gt1=33005

supercalifragilistic
supercalifragilistic

When you have the lowest tax burdens on individuals and corporately, you get the success Wyoming has had for years, now. Wyoming needs to remain business friendly and not political friendly.

stupidisasstupiddoes
stupidisasstupiddoes

right, this isn't a new tax, but closing loopholes and asking the rich to pay their fair share is a new tax. how is that Mike? I know you'd like to have it both ways, but leveraging a tax that's already on the books by closing loopholes isn't a new tax. however, in this case, it IS a new tax because this law/rule is NOT on the books - yet. but you apparently think it should be, so man up and call a tax a tax!

Sassy
Sassy

Stupid Crazy...

brianvmax
brianvmax

i know this average midlle aged dude is getting tired of getting squeezed from every angle, beer tax low-raise it, fuel tax low-raise it, not to mention the extra being taken out of social security now, but every one of these tax and spend guys say the same thing-it's only a little bit of money a week-adds up in a hurry.

Jello Beyonce
Jello Beyonce

"When you have the lowest tax burdens on individuals and corporately, you get the success Wyoming has had for years, now."

WRONG! When your state receives more federal money than any other state in the U.S. you get "success"....much like a spoiled trust fund baby who's handed everything to them from daddy. Wyoming should try working an honest day for a change and stop relying on big daddy fed.

supercalifragilistic
supercalifragilistic

Jello, if I may?
The monies received by the Federal Government, is the same money Generated in Wyoming, by Wyoming residents through employment by companies mining, exploring for energy and thus such.
This money is not the Federal Government's except through managing lands and those costs the Feds incur during that management time.. Wyoming gets the other half and is entitled to it for the reuse of it's citizens and corporations who pay for it in the first place.

I'd suggest a little research before calling my statement "Wrong", as you suggest.
Therefore, making your last sentence not only ludicrous but, it adds insult to a wrong by the Federal Government.

brianvmax
brianvmax

so you are saying the fed's make money?

stickalose
stickalose

As much as I hate to cut Enzi any slack at all, you can't lay this one on him. It's a STATE statute, the system hasn't kept up on internet sales. Local merchants have to collect and remit sales tax. When you buy online as it is the locals have a 5 or 6 percent price disadvantage. It's a question of fairness.

Salty Dawg
Salty Dawg

Maybe so,but when all we have heard since Obama was elected the first time,is moaning about tax and spend Democrats.Now that Wyoming is losing a few revenue bucks,and the RINO's don't like to lose any money,the carping about taxes comes out.Either be a conservative or stop pretending to be,like the majority of Wyomingites do.

Wyomingsportsman
Wyomingsportsman

Looks like old Enzi doesn't want to be re-elected next year.

Getagripofreality
Getagripofreality

"Particularly with large items, the difference between the item in the store and online is the amount of sales tax,” Enzi said
If you buy a membership with Consumer Reports they will tell you that it is usually more economical to buy large items from a retailer than paying for shipping the item. Many times this is more costly than paying the taxes. Consumer Reports: $30.00 One year membership.
No surprise Walmart is pushing this. Enzi should know better. This is a TAX on the average person who tries to save a few bucks on smaller items on the internet.

supercalifragilistic
supercalifragilistic

Getagripofreality, if I may?
I agree, when you're forced to pay more by the government that is called a tax increase. Mr. Enzi can't say (without double talk) that, internet tax evens up the playing field. Who's playing field? I'll tell you who - the wealthiest county in the nation that surrounds DC, that's who.
As it is not the people whom do not pay enough in taxes but, the government that has a real bad habit of spending money it doesn't have. Mr. Enzi, sir, be part of the solution not, part of the problem when leading Wyoming.

I'm sure the Wyoming TEA Party folks are carefully watching your words with actions. Just as the rest of Wyoming's conservative voters, as your internet tax support could easily replace you. - Are you sure that's what you want?

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