Naperville Chamber members talk Internet taxes, medical marijuana

A tax on Internet sales and the legalization of medical marijuana may be in the future for Illinois. Monday, the Naperville Area Chamber of Commerce took up both issues at its Legislative Luncheon.  By an almost unanimous voice vote, with only one abstention, the members present at the Hotel Arista voted to recommend the Chamber’s Board of Directors take a position against the push to legalize marijuana for medical purposes.  But the consensus was to continue to examine the issue of taxing Internet sales. “We need to have a streamlined way to collect the (sales) tax on the Internet,” Dan Wagner, vice president of Inland Real Estate, told the audience of about 50 local business and community leaders.  Wagner spoke on behalf of legislation proposed by U.S. Sen. Dick Durbin (D-Ill.) that would permit states to force retailers making sales to their residents to collect and remit the appropriate sales taxes.  Currently, consumers are technically required to pay the local or state sales taxes for online purchases, but with no mechanism for enforcement, they aren’t rushing to comply.

Wagner estimated that the nationwide loss in tax revenue is $23 billion. Illinois alone would stand to gain another $1 billion in revenue if the Internet sales tax revenues were collected.  Durbin’s proposal, the Main Street Fairness Act, would allow states to enforce their sales tax laws by closing a loophole created by a 1992 Supreme Court decision.  The case of Quill Corp. vs. North Dakota established the precedent that a business had to have a “nexus,” or physical presence in the state before it could be required to collect and remit sales taxes.  Illinois recently passed its own version of the Main Street Fairness Act, but proponents of collecting the tax feel that national legislation is needed to provide for streamlining the system.  Wagner spoke for many in the retail industry when he spoke of the unfair advantage online retailers now have over traditional brick-and mortar businesses.   And he stressed the problems created for the real estate industry and local property taxpayers who might have to shoulder a heavier burden with the loss of commercial real estate value.  “This is a problem,” he said.Wagner also pointed out that in addition to the loss of local sales tax revenue, retail jobs were lost to online sales, having a disproportionate effect on young people who depend on retailers like Best Buy, Borders and Barnes and Noble for employment.

Wagner appealed to considerations beyond the bottom line, pointing out the number of retail and commercial spaces standing empty.  “That doesn’t add to our quality of life at all,” he said.  With Amazon making good on its threat to suspend business in Illinois if the state passed its version of the legislation, some in the room were a little nervous about the loss of online-related jobs that could result from the move.  Sean Sebold, of Sebold Capital, asked, “Isn’t it going to cost jobs?”Naperville City Councilman Kenn Miller cautioned against brick-and-mortar businesses relying too heavily on remaining competitive by closing the sales tax advantage.   “Be careful,” he said, “in some cases you do pay sales taxes (for online purchases).  ”State Rep. Michael Connelly (R-Lisle) wasn’t opposed to the legislation, but said the issue needed to be addressed at the national level.  “It should be dealt with federally,” he said.  Wagner conceded that the move might cost some jobs, but took a shot at Amazon.   “This shows you what type of company Amazon is,” he said of their decision to suspend operations in Illinois.

But Wagner also conceded that even if Durbin’s legislation passed, any attempt by states to enforce it would be in violation of the Quill decision and would likely result in a court challenge from online businesses.  As for the medical marijuana issue, if there was any support for it in the room, it was well hidden.  Peter Bensinger, who served at different times as administrator of the United States Drug Enforcement Administration and director of the Illinois Department of Corrections, spoke bluntly about the possible consequences of legalizing medical marijuana.  “It is a bill that should not be passed in this state,” Bensinger said of the legislation, noting that legislation to legalize medical marijuana had been defeated in the state legislature three times in the last year.  Bensinger pointed out that in California, where medical marijuana is legal, marijuana abuse was the major cause of those admitted to public treatment centers.  Bensinger also said that although the act, called House Bill 30, contained language claiming that nothing in the act would prevent employers from enforcing a drug-free workplace, the bill’s language left serious doubts.

For instance, one section of the act reads that there would be no limit to an employee being disciplined for failing a drug test if failing to do so would put the employer in violation of federal law or cause it to lose a federal contract or funding.  Bensinger argued that this language could be interpreted to mean an employee couldn’t be punished unless there was a violation of federal law or contract.  “It doesn’t allow an employer to take someone off the job if they are smoking pot,” Bensinger said.   “They would have to prove impairment.”  Bensinger didn’t have to work hard to convince his audience.  “This is the most misguided piece of legislation,” Naperville School District 203 Superintendent Mark Mitrovich said.   “It would put an additional burden on an already overburdened system.”

via : Suntimes

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