This week Rebecca Madigan, executive director of the Performance Marketing Association, authored an op-ed piece in The Orange County Register sharing why states considering implementing an online nexus tax won’t be seeing any additional revenue as a result of the laws:
“The online ‘nexus tax’ scheme has become akin to the legend of the unicorn. State legislators want to believe that by supporting bills such as Assembly Bill 153 (authored by Assemblywoman Nancy Skinner, D-Berkeley) and Senate Bill 234 (by Sen. Loni Hancock, D-Berkeley), the result will help relieve some of the state’s overwhelming budget deficit. The truth is that legislators have a better chance of seeing a unicorn than they do of collecting additional sales taxes through an Internet nexus tax.
Let’s put the premise of the legislation into the context of reality.
First, the Constitution’s commerce clause protects interstate commerce and states if a business doesn’t have a physical presence – a nexus – it doesn’t have to collect sales tax for that state. Why? Because if a business isn’t located in California, it has no electoral voice in California elections, and it gets no benefit from those collected tax dollars. The founders called this ‘taxation without representation.'”
Rebecca Madigan / Performance Marketing Association