A Sales Tax Solution For Online Collections?

In an Editorial by the Detroit Free Press, the author discusses the sales tax and suggests Congress institutes legislation FORCING Internet retailers without a presence in Michigan (or other states) to set up and collect sales (USE) taxes for the states that buyers live in. The states ARE owed the taxes, but the buyers are not reporting as much as 98% of the taxes owed. (according to state figures)

While I agree the state of Michigan is in dire fiscal condition, it is hardly a sufficient reason in, and of itself to add a complicated paperwork burden to retailers ANYWHERE. The states (particularly Michigan) would simply see the revenue as a reason to spend MORE in following budgets anyhow, but is by law owed to them, so how to maximize compliance without complicated legislation?

Perhaps a “clearing house” for taxes after making an online purchase. Taxpayers (even the smartest ones) still have a hard time understanding the complicated paperwork when April rolls around anyway. If AFTER an internet purchase from a retailer without a state presence, the buyer was given an option for a link to a BANK which handled sales tax for those states, the buyer could then quickly pay the (Smaller) amount and get a printable tax receipt for his/her records.

INTERNET RETAILERS would not have a hard time providing the link or code vs collecting and disbursing, BUYERS would not have to pay a large amount at once, and the State USE TAX collection would be at a much higher compliance rate.

While we may dislike taxes, the sales tax is the fairest, and most appropriate tax in existence. The author of the Free Press editorial is correct in pointing out it (collection of missing USE revenues) could offset other increases and additions to the code we have been seeing while the state tries to fill its coffers. Only we should be cautious of how we allow federal government to enforce state issues.