November 30, 2001

You'll also want to see this...

You'll also want to see: Bush makes it official: Net tax ban extended, from E-Commerce Times

President Bush has signed the extension of the ban on new taxes on Internet access services. The earlier ban lapsed October 21st and the new ban was not signed into law until this week - however, no new Internet taxes were passed during that time. The ban does not include sales taxes. However, a 1992 Supreme Court decision bars states from taxing cross-border sales unless the seller has a physical presence in a state. States are complaining about lost revenue, but as the story points out online retail sales account for less than 1 percent of all retail activity, so any tax revenue losses because of online shopping have been trivial.

The Myth of the Level Playing Field

An essay on Internet sales taxes by Aaron Lukas, trade analyst at the Cato Institute's Center for Trade Policy Studies, is must reading. The essay exposes the rampant hypocrisy in the arguments of those who favor allowing states to collude on a multi-state online sales tax system.

Also, Bond Buyer, a daily newspaper covering public finance, reported Thursday that ecommerce is having negligble impact on state tax revenue collections, with comments from a director at bond rating service Standard & Poors an a vice chairman at Fitch both rejecting the notion that e-commerce is having reducing state tax collections in a significant way.

Lukas's essay says that even though ecommerce is a tiny component of consumer spending, "its mere existence serves to inhibit excessive taxation" because politicians "fear that if they raise tax rates too much, consumers can take advantage of low tax rates elsewhere," so online shopping free of new sales taxes will encourage state and local governments to keep overall tax rates at a more reasonable level.

As Lukas points out, the states want sellers to collect online sales taxes based on the location of the buyer, which is the reverse of the way things are in the offline world, where sales taxes are collected for the jurisdiction in which the seller is located - in other words, where the sale originates. "To truly level the playing field, states should instruct Internet-based businesses to collect the local sales tax regardless of where their customers reside," Lukas says, adding that under that type of system, retailers would have only one tax to collect and one revenue agency to deal with, lowering administrative costs. "More importantly, the de facto tax advantage for online sellers would vanish, while healthy tax competition among the states would be strengthened," he adds, commenting, "the latter, of course, is why states immediately dismiss any origin-based proposal as unworkable."

The Bond Buyer article, "Analysts Downplay E-Commerce's Threat to State, Local Taxes," notes that some analysts have predicted ecommerce would wreak havoc on state and local budgets. Last month, economists at the University of Tennessee issued yet another report predicting state and local governments across the nation will forego billions of dollars in revenues if online transactions continue to be mostly untaxed. But so far, those large revenue losses predicted by UT and other organizations "have not come to pass."

"I haven't heard one state treasurer say that Internet sales are a basis for a downturn," said David Hitchcock, a director at Standard & Poor's, saying states with slumping sales tax revenues have no reason to believe online sales are the reason why. And Claire G. Cohen, vice chairman of Fitch, says, "It would appear that ecommerce is not as widely threatening at this point as some people thought it would be."

That after the U.S. Commerce Department reported that ecommerce constituted a miniscule 0.95 percent of total retail sales nationwide in the third quarter - just $7.472 billion out of $786.581 billion in total retail sales.

November 1, 2001

About the Editor

I am currently the communications director for the Tennessee Republican Party, and have been since Oct. 29, 2007. I love this job - it gives me the opportunity to mesh three things that I love: journalism, blogging and politics.

For the Tennessee GOP I do traditional media relations work - press releases and media appearances - and also am building an extensive online communications strategy as part of the overall campaign to win a majority in both houses of the state legislature this year. Politically, I'm a libertarian conservative and a foreign policy/defense hawk - a Reaganite, essentially.

I also continue to do media relations work for a select group of other clients and consult with large corporations on the use of blogs as public relations tools via Mesh Media Strategies, which I began in 2006.

With my extensive and widely varied experience in journalism, online media, and media relations, I have a deep understanding of media, media relations and the dynamics of the interactive web and how to leverage it for public relations and media impact.

I created and author one of the most influential political blogs focused on Tennessee politics, government and public policy, BillHobbs.com, which I launched in November 2001.

I was a media relations specialist and blogging coach at Belmont University, where I worked from January 2003 through April 2006, doing a variety of traditional media relations work and spurring the University's efforts to connect with the world via blogs.

While at Belmont I revamped the University's approach to media relations, using more targeted methods that lead to a doubling of the university's press coverage, and implemented a blog-based public relations campaign including assisting faculty members in setting up and publishing blogs that raised the University's profile online. I coached the director of the Center of Entrepreneurship, Dr. Jeff Cornwall, on the creation and publication of his blog, The Entrepreneurial Mind, which raised the profile of the University's new Entrepreneurship program, helping make it the fastest-growing major on campus in its first three years in existence.

Also while at Belmont I worked with Robert Cox of the Media Bloggers Association to organized the BlogNashville conference, which brought 250-300 bloggers from around the country to Nashville in May 2005 for a three-day conference focused on blogging and journalism, training bloggers in computer-assisted research and reporting, and other facets of the new grassroots interactive journalism. I am a founding board member of the Media Bloggers Association.

I often speak to business and professional groups about the interaction of weblogs, public relations and media.

Before working at Belmont, I worked in journalism in a multi-faceted career that included full-time, part-time and freelance work for newspapers and magazines, covering a wide variety of stories from the business beat to country music to health care. I have written news or commentary for a variety of general-interest and niche newspapers, magazines and online publications, worked as a press secretary for a mayoral candidate, edited three business books, and helped launch an online news database company

Since September 2003 I have done the following: extensive editing work on three business books; freelance articles for business publications and newspapers; research, writing and weblog consulting for corporate clients, served as a contributing editor of Corante.com; done policy research and op-ed writing for the now-defunct Tennessee Institute for Public Policy, a conservative/libertarian think tank focused on economic issues; written a weekly column for Nashville City Paper on business, public policy and economic issues and made numerous radio and television appearances in connection with the column; written business analysis and commentary pieces for In Review, a now-defunct Nashville weekly newspaper; written extensively for Business Nashville magazine, covering topics ranging from health care, transportation and economic development to technology, ecommerce, real estate and the music industry; written and served as assistant editor for a monthly entertainment magazine ; worked as a regional general assignments reporter for The Tennessean; served as a press assistant for a mayoral candidate in the 1999 Nashville mayoral campaign; authored two comprehensive guides to Nashville for the Nashville Area Chamber of Commerce; and been a contributing writer to two country music-related reference books.

I helped launch NetContent Inc., which provides electronic news feeds for business and organization web sites, and research tools and information services to businesses and consumers.

I was a staff writer for the Nashville Business Journal in the early 1990s, writing about real estate, transportation and economic development.

Earlier in my career I was a reported for the Leaf-Chronicle in Clarksville, Tennessee, and before that the Avalanche-Journal in Lubbock, Texas.

I was born and raised in the suburbs of Philadelphia, Pa., and attended K-12 public schools on an accelerated college-prep track. I studied American history and political science for three years at Lipscomb University in Nashville, and served as a legislative aide during the 1985 session of the Tennessee General Assembly. I transferred to Abilene Christian University in Texas in the fall of 1985, where I was an edition editor of twice-a-week student newspaper The Optimist, the student newspaper, and completed my B.A. degree in mass communication, emphasis in print journalism, in 1987.

I live in the suburbs of Nashville. My wife is the most beautiful woman on earth and my children are the smartest and best-looking.

You may contact me by email at bill@billhobbs.com