What is the single modern
invention most responsible for enhancing peoples' freedom and standard
of living across the world? Arguably, it is the Internet. Yet,
Democrats from revenue-starved states and Congress are proposing to
make it less free by taxing Internet commerce. (Content regulation
should be coming soon to a screen near you.) This should not come as a
terrible surprise. After all, the Internet was just too good, too free,
too easy, too innovative, and too favorable to small businesses for
government to stay away. So now, several states, and Congress, are
considering laws that would require online retailers to collect state
and local taxes from online consumers. New York was the first state to
pass such a law last year in defiance of the 1992 U.S. Supreme Court
decision, Quill v. North Dakota, which held that retailers must have a
physical presence within a state for that state to require sales tax
collection. The decision, which was based upon the dormant commerce
clause doctrine — which essentially says that Congress’s power to
regulate interstate commerce implicitly denies such power to the states
— upheld a bright line physical presence test. It also held that only
Congress, through legislation, could delegate broader powers to the
states. New York's legislation attempted to end run around Quill by
requiring online retailers to collect state and local sales tax if they
had affiliate advertisers within the state. …Here Comes the Internet Tax
