How fair are unlimited discounts for retailers collecting the on line use tax for Alabama?
Recently I wrote about the Simplified Sellers Use Tax Remittance Program which was established in 2015 when the legislature passed SB437. The law established a uniform use tax rate of 8 % for the Simplified Sellers Use Tax Remittance Program.
For their trouble, Amazon and others collecting the tax will get to keep 2 percent of the use tax they collect from their Alabama customers. This is similar to the sales tax discount that instate retailers retain for collecting the state sales tax, a discount to compensate the retailer for the burden of collecting and remitting the sales tax and for records keeping and document storage.
But the sales tax discount is capped at $400 per year while there is no cap on the on line collections. This means on sales of $1,000,000, an instate retailer gets only $400 for his trouble while the out of state on line retailer will get $1,600 (1,000,000 x 0.08 x 0.02).
How fair is this?
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