Route Fifty: The Fighting Over Online Sales Taxes Isn’t Finished
For years, a handful of lucky communities have benefited from sales tax windfalls: They get all the sales taxes generated off sales of products produced by companies in their borders, even though the customers live all over the U.S. Companies like the arrangement because local jurisdictions sometimes provided significant sales tax rebates – sometimes totaling millions of dollars.
Two years ago, the Texas Comptroller’s office changed that practice in the state. Instead of the sales tax going to where the business is located, it goes to where the buyer lives. A half-dozen cities are suing over the change.
“This is an example of how when you put the power of controlling money over a large number of years in the hands of a few people…it’s a recipe for corruption,” Greg LeRoy, executive director of the tax break transparency organization Good Jobs First, told Route Fifty, referring to some of the worst-structured deals. “You could be diverting huge amounts of money for a very long time from one government away to others.”
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