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Some companies, like Amazon and Travelocity, are doing quite well making money via the internet. Not surprisingly, cash starved states are eager to get their “fair share” of this money. While most states do not require Amazon to collect local sales taxes, four of them have passed laws requiring Amazon to do just that. No doubt other states are looking at how this will turn out.
Montana has decided that it needs to get a slice of Travelocity and other such services. The justification for this is that these travel sites dodge the “bed tax”-a charge the state adds to the cost of a hotel room. Montana charges 8%, which is a decent slice of change.
While the lawyers and politicians will be hashing such matters out with the corporations, this does raise some interesting questions.
For those who believe that sales taxes and the “bed tax” are acceptable (that is, the state is morally entitled to a piece of the action in such cases), then extending these to companies like Amazon and the travel sites would seems reasonable enough. After all, one might argue, these companies should not get away with not paying simply because they are doing business via the web rather than in a physical business located in a specific state.
The sales tax idea does, I suppose, seem to be acceptable. Of course, this cannot be based on the state being entitled to a slice of whatever a resident buys-then states would be entitled to collect taxes on purchases residents make when in other states. It most likely must be based on the notion that the purchase is made in a specific state (albeit using a computer) and the transaction is completed by delivery of the item in the state in question.
I am not a big fan of sales taxes-after all, I get taxed on what I earn and then I get taxed on what I spend. If I save it, I get taxed on that as well. Of course, going into the ethics of taxes would go beyond the scope of this specific blog, but one might wonder why the state is entitled to a slice of each transaction. Perhaps the most plausible reason would be if the sales tax where used to provide needed state services that relate to business, the consumer or the product (like having a tax on tobacco to raise money to treat illnesses caused by tobacco).
As far as the bed tax goes, it does seem a bit of a stretch to extend this tax to travel sites. After all, the tax is paid on the room and the travel sites do not provide the room-they provide a matching service. As such, the tax seems to be unjustified.
A democratic government is the only one in which those who vote for a tax can escape the obligation to pay it. — Alexis de Tocqueville
Well, since both state and federal government are representational, and our representatives agreed to tax us, the ethical basis for all of our taxation (bed tax included) is that we agreed by proxy to tax ourselves.
It doesn’t need ethical justification beyond that, though that fact doesn’t absolve it from the need for pragmatic justification…which I think is pretty dicey in some cases, bed tax included.
Maybe Montana wants to discourage tourism, or people visiting neighboring towns and villages?
The ever entertaining Carl Hiassen has a few things to say today about hotel-motel taxes. http://www.miamiherald.com/2011/01/09/2007727/stadium-plan-a-bifurcated-rip.html
Bed taxes are used to fund a variety of goofy projects, most notably arenas for millionaire athletes to perform. I find it amusing that schools and infrastructure are underfunded, while luxury domed stadiums get the money.
“Bed taxes are used to fund a variety of goofy projects, most notably arenas for millionaire athletes to perform. I find it amusing that schools and infrastructure are underfunded, while luxury domed stadiums get the money.”
Agreed. Does being concerned about these things make us socialists?
“Does being concerned about these things make us socialists?”
Hardly. You are wandering onto Tea Party turf.
I don’t see how being opposed to having the government take money from travelers (many if not most of whom are business travelers) to use it in a manner that the government sees as a more worthy use of that money would make one a socialist.
On the other hand, to use schools and infrastructure as an endless excuse for an ever increasing revenue stream might. Contrast and compare the schools and infrastructure of non-socialist countries with socialist countries. Honestly. Taking the entire country in question into account, not in some sort of Michael Moore, cherry-picking manner. And I mean real infrastructure. Not bridges to nowhere or trains no one will ever ride.
Or how about this. If we can tax a business just because it is a hotel or such why not a special tax on sports and entertainment to fund the schools? How about making sport complexes provide free tickets to the schools to provide incentive for students to get good grades? Not that I approve of such, but you would think the politicos who approve of this economic abuse would try to get something in return.
I am not opposed to funding our schools and infrastructure as needed. I’m as sick of seeing them show up as items on the bubble as you are. But there are other issues concerning quality of education and most specifically, quality of teachers that get glossed over too.
“But there are other issues concerning quality of education and most specifically, quality of teachers that get glossed over too.”
So true.
I think the most important factors up to and through high school are class size and the motivation level of the teachers.
Speaking of financing education, I went to HS in Florida and I remember the FL state lottery was designed so that the net profit went into the education budget. Sounds great, right? Buy lottery tickets and help your kids get better educations. Except that the state education budget was then adjusted down in proportion to the lottery profit going into it, and those monies distributed to other programs.
So, the state kept its promise that all lottery profit went to education, but it magically had no net effect. I’m not sure how it is now or in other states, but stuff like that is deeply frustrating.
I went to public and private schools in FL, myself. Had a 5th grade teacher who did practically nothing all day. Oh, he taught us maps and math (surprisingly, no music) and that was about it. He spent most of the day reading the newspaper and drinking coffee. Our recesses were longer than the other classes and sometimes we had recess twice a day. We saw every film in the Broward County School system library collection. Some of them more than once. There was a “documentary” about the Bermuda Triangle that I think of as my own private Rocky Horror Picture Show. This was before the Lottery, but I’m quite certain more money wasn’t going to light a fire under Mr. Hudson. Frustrating? 6th grade English class, that was deeply frustrating.
Of course.
Those who have more shall receive more. Those who have little shall continue to lack.
If you take the consonants b and d, you can put all five vowels between them, and have usable words.
In the case of a hotel motel tax, all five of these words can be used.