Jack TenneyExtra Point

by Jack Tenney, Publisher

September 2010

I know it’s someone else’s job to come up with revenue-producing ideas for the state but, you know, I really have an itch.

Here’s the genesis of the idea. Many, many moons ago (like maybe 1971) a company owed my then new Vermont employer a few thousand bucks. Because my experience had been with a  Massachusetts company that made the paper the Continental Congress printed the first dollars on, I knew you couldn’t keep a paper mill going by letting folks stiff you. Therefore, I recommended suing.

Lawsuit was brought; next thing that happened, said lawsuit was lost!

What the heck was that all about? It seems that Denver Dry Goods, the name of the stiff, had purchased goods that had been briefly stored in a public warehouse in Denver. My company was in Vermont but was a New York corporation (which is kind of odd because most New York corporations were Delaware corporations) suing in the state of Colorado.

The defendant didn’t argue that the money wasn’t owed or that the goods were crappy. The defendant claimed we had no standing in the Colorado court because we hadn’t registered to do business in that state.

It’s true, we hadn’t, but soon did, in any state where we stored goods in a public warehouse awaiting shipment. And we went through all the usual income tax allocation and apportionment stuff state by state, but we never again got poofed quite like good old Denver Dry Goods did.

Here’s my bright idea. Vermont has a sales tax. Sales taxes are regressive, I know, but visitors contribute a lot through the general sales tax, and we don’t tax lots of stuff.  Trouble is, evading payment of sales taxes is what lots of online merchants and folks from the wrong side of the Connecticut River do as a key part of their unique selling propositions.

So ... what I propose is the passage of a bill that prevents credit card companies from using our courts to collect bills unless the sales tax on the charged goods was collected and paid. 

Win-win?