Currently, state law requires all of us to pay that fee on online sales — it's called a "use tax," for reasons that escape me — and there's space on the state income-tax form to include it with your annual payment. According to documents I haven't bothered to review, last year approximately 11 people complied with that statute, sending in $304.67.
Needless to say, Culpepper wasn't one of them. I'm not sure about the Maine Heritage Policy Center.
If everyone was as honest as those suckers who paid, the state treasury would, according to a couple of studies, be fatter to the tune of somewhere between $15 million and $28 million. (Since these studies were conducted by the sorts of economists who regularly miscalculate the state budget, I assume the actual amount is going to be more like $609.34, but that's still twice what we take in now.)
Universal compliance with the use-tax law could have another positive economic benefit, namely that if there's no significant difference between the price at your local store and that of the online retailer, you might be more inclined to make the purchase in the real world, thereby keeping the profits in Maine.
The problem with that argument is that those of us in rural parts of the state have few shopping options (the general store, Culpepper), which is why we were doing so much online purchasing in the first place. But even if we were willing to drive an hour or more to patronize a bricks-and-mortar shopping center, we'd likely end up sending the dollars we would have squandered at BestBuy.com or VictoriasSecret.com at a big box Best Buy or a Victoria's Secret in a mall. Which would make an imperceptible difference in the local economy.
And reduce taxes not at all.
Even though Culpepper does most of his business on a cash or barter basis, he remains staunchly opposed to taxing Internet transactions. When I asked him why, he looked at me like I was crazy.
"Porn," he said. "It would make porn 5 percent more expensive." ^
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