Should Arizona Enact Internet Tax
From time to time, various state legislatures have considered collecting state sales tax on goods purchased via the Internet from sources such as Amazon.com, eBay, and Lands’ End, arguing that state governments lose much-needed revenue by letting such transactions go untaxed and that it is unfair to brick-and-mortar stores to impose sales tax on them while online merchants pay nothing.

Several states, including Texas and Illinois, have enacted laws imposing such taxes. Arizona was late in joining them, but Arizona now taxes Internet purchases as well. Yet, some members of the state legislature seek to repeal that tax, arguing that because Internet transactions occur outside Arizona (in the case of Amazon, for example, in Washington), they should not be subject to taxation by the state government.

Proponents, meanwhile, reply that if the order is placed from a computer located within, say, Tucson, then the sale does indeed take place in Arizona—and is therefore subject to state tax.

You are the economic advisor to a local company that has some influence in the legislature. The CEO of the company seeks your advice: Should she lobby in favor of retaining the tax on Internet sales, or should she lobby against it? She wishes to base her position on sound economic thinking—and, in particular, to be able to cite an economic concept that supports her argument.

The CEO is making a speech before an audience of shareholders, legislators, and others with a stake in her decision. Your job: to write a 500-word speech for her, aimed at that audience, on the Internet tax and whether Arizona should or should not repeal its law taxing online sales.

A winning argument, as I have said, will unfold from an economic concept. A winning argument will also show that you have done some research on the question. What have the courts had to say about the issue? What is the legal basis for the online sales tax in the first place? (A hint: It lies in a Supreme Court decision.) Have the states that have imposed a tax in fact increased their revenues? What have the big online retailers done in response?

Should Arizona Enact Internet Tax
From time to time, various state legislatures have considered collecting state sales tax on goods purchased via the Internet from sources such as Amazon.com, eBay, and Lands’ End, arguing that state governments lose much-needed revenue by letting such transactions go untaxed and that it is unfair to brick-and-mortar stores to impose sales tax on them while online merchants pay nothing.

Several states, including Texas and Illinois, have enacted laws imposing such taxes. Arizona was late in joining them, but Arizona now taxes Internet purchases as well. Yet, some members of the state legislature seek to repeal that tax, arguing that because Internet transactions occur outside Arizona (in the case of Amazon, for example, in Washington), they should not be subject to taxation by the state government.

Proponents, meanwhile, reply that if the order is placed from a computer located within, say, Tucson, then the sale does indeed take place in Arizona—and is therefore subject to state tax.

You are the economic advisor to a local company that has some influence in the legislature. The CEO of the company seeks your advice: Should she lobby in favor of retaining the tax on Internet sales, or should she lobby against it? She wishes to base her position on sound economic thinking—and, in particular, to be able to cite an economic concept that supports her argument.

The CEO is making a speech before an audience of shareholders, legislators, and others with a stake in her decision. Your job: to write a 500-word speech for her, aimed at that audience, on the Internet tax and whether Arizona should or should not repeal its law taxing online sales.

A winning argument, as I have said, will unfold from an economic concept. A winning argument will also show that you have done some research on the question. What have the courts had to say about the issue? What is the legal basis for the online sales tax in the first place? (A hint: It lies in a Supreme Court decision.) Have the states that have imposed a tax in fact increased their revenues? What have the big online retailers done in response?

Should Arizona Enact Internet Tax
From time to time, various state legislatures have considered collecting state sales tax on goods purchased via the Internet from sources such as Amazon.com, eBay, and Lands’ End, arguing that state governments lose much-needed revenue by letting such transactions go untaxed and that it is unfair to brick-and-mortar stores to impose sales tax on them while online merchants pay nothing.

Several states, including Texas and Illinois, have enacted laws imposing such taxes. Arizona was late in joining them, but Arizona now taxes Internet purchases as well. Yet, some members of the state legislature seek to repeal that tax, arguing that because Internet transactions occur outside Arizona (in the case of Amazon, for example, in Washington), they should not be subject to taxation by the state government.

Proponents, meanwhile, reply that if the order is placed from a computer located within, say, Tucson, then the sale does indeed take place in Arizona—and is therefore subject to state tax.

You are the economic advisor to a local company that has some influence in the legislature. The CEO of the company seeks your advice: Should she lobby in favor of retaining the tax on Internet sales, or should she lobby against it? She wishes to base her position on sound economic thinking—and, in particular, to be able to cite an economic concept that supports her argument.

The CEO is making a speech before an audience of shareholders, legislators, and others with a stake in her decision. Your job: to write a 500-word speech for her, aimed at that audience, on the Internet tax and whether Arizona should or should not repeal its law taxing online sales.

A winning argument, as I have said, will unfold from an economic concept. A winning argument will also show that you have done some research on the question. What have the courts had to say about the issue? What is the legal basis for the online sales tax in the first place? (A hint: It lies in a Supreme Court decision.) Have the states that have imposed a tax in fact increased their revenues? What have the big online retailers done in response?