Wednesday, December 26, 2012

The Use Tax: The Phantom Tariff

The Use Tax – An Unconstitutional Tax:

I assert that the Use Tax (RCW 82.12.020) violates The US Constitution Article 1, Section 9.

1)      Art. 1 Sect. 9 States that “No Tax or Duty shall be laid on Articles exported from any State.”
a.       The USE tax, as defined by RCW 82.12.020 applies a tax against goods purchased from outside the state for use within the state.  While the stated purpose is to permit use within the state borders, I assert that the tax acts as a protectionist tariff to dissuade purchasing of goods and services outside the borders of Washington State
b.      A definition of a tariff is tax or excise which is levied against a good for the express purposes of permitting import into a nation or jurisdiction.  Art 1, Sect. 9 of the US Constitution prohibits taxes on goods imported from other states.  I assert that regardless of it being an individual or a company or local government, the USE tax violates this statute.
c.       Furthermore, The Washington State Legislature does not have the jurisdictional authority to compel companies residing outside the state without a physical presence within the state which sell goods and services to collect any taxes from residents or businesses.  Such an act of compulsion violates the sovereignty of another state’s jurisdiction.
d.      Further, The US Constitution, Article 1, Section 9’s language infers that articles being exported from a state would also be imported to another state, and would also not be subject to tax.  As the relationship between export and import are indistinguishable and inseparable.  Hence forth, the statute also infers that where there is an export, there is also an import to some other destination within the United States, and also established per “The Federalist, No. 42.”  I, therefore, assert that the tax referred to by Article 1, Section 9, applies to importation to a state as well as export from a state.
2)      The state has used the phrase “There is levied and collected from every person in this state a tax or excise for the privilege of using within this state as a consumer any (the subsections of this law list the specific conditions) whereby inference, the law is designed to usurp the Constitutional mandate of Article 1, Section 9, prohibiting taxation of goods imported from one state to another.  It is, by definition and practice, a duty, tariff, and/or tax as defined even though, by name, a tax on the use of all goods in the state. 
a.      Further, this is a proper inference to make, citing Chief Justice John Roberts in NATIONAL FEDERATION OF INDEPENDENT BUSINESS vs.  SEBELIUS, SECRETARY OF HEALTH AND HUMAN SERVICES.  Justice Roberts used similar reasoning to assert in Section III, P. 15

“§§860(h)(1), 6324A(a), 6601(e)(1)(2), 6602, 7122(b). There would, for example, be no need for §6671(a) to deem tax to refer to certain assessable penalties if the Code already included all such penalties in the term tax.  Indeed, amicus’s earlier observation that the Code requires assessable penalties to be assessed and collected in the same manner as taxes makes little sense if assess able penalties are themselves taxes. In light of the Codes consistent distinction between the terms tax and assessable penalty, we must accept the Government’s interpretation: §6201(a) instructs the Secretary that his authority to assess taxes includes the authority to assess penalties, but it does not equate assessable penalties to taxes for other purposes. The Affordable Care Act does not require that the penalty for failing to comply with the individual mandate be treated as a tax for purposes of the Anti-Injunction Act. The Anti-Injunction Act therefore does not apply to this suit, and we may proceed to the merits.
                                                                          i.      We see in the above passage that the Chief Justice is using inductive reasoning to assert that regardless of the name, it’s function (the individual mandate enforced by the IRS, even though called a “penalty” is still a tax by function.) 
3)      Therefore, following this same form of reasoning, I assert that the USE TAX is indeed a form of import tax for engaging in commerce outside the state. 
a.       In RCW 82.12.020(2), which states
                                                                          i.      The provisions of this chapter do not apply in respect to the use of any article of tangible personal property, extended warranty, digital good, digital code, digital automated service, or service taxable under RCW 82.04.050 (2)(a) or (g), (3)(a), or (6)(b), if the sale to, or the use by, the present user or the present user's bailor or donor has already been subjected to the tax under chapter 82.08 RCW or this chapter and the tax has been paid by the present user or by the present user's bailor or donor.”
4)      I further assert, that because the USE TAX’s application would only apply to out-of-state purchases for consumers, and to businesses for use of goods purchased in-state, for business use in which RCW 82.12 would not apply, that the USE TAX’s function is indeed, a tariff, duty, or tax on out-of-state goods brought into the state for consumption.
a.       Further, The Federalist, No. 42 discussed the justification of this statute of The Constitution by writing in length about the consequences of inter-state taxation.  That such taxation is harmful to the population, and unfair to the neighboring states.
                                                                          i.      The defect of power in the existing Confederacy to regulate the commerce between its several members, is in the number of those which have been clearly pointed out by experience. To the proofs and remarks which former papers have brought into view on this subject, it may be added that without this supplemental provision, the great and essential power of regulating foreign commerce would have been incomplete and ineffectual. A very material object of this power was the relief of the States which import and export through other States, from the improper contributions levied on them by the latter. Were these at liberty to regulate the trade between State and State, it must be foreseen that ways would be found out to load the articles of import and export, during the passage through their jurisdiction, with duties which would fall on the makers of the latter and the consumers of the former. We may be assured by past experience, that such a practice would be introduced by future contrivances; and both by that and a common knowledge of human affairs, that it would nourish unceasing animosities, and not improbably terminate in serious interruptions of the public tranquillity. To those who do not view the question through the medium of passion or of interest, the desire of the commercial States to collect, in any form, an indirect revenue from their uncommercial neighbors, must appear not less impolitic than it is unfair; since it would stimulate the injured party, by resentment as well as interest, to resort to less convenient channels for their foreign trade. But the mild voice of reason, pleading the cause of an enlarged and permanent interest, is but too often drowned, before public bodies as well as individuals, by the clamors of an impatient avidity for immediate and immoderate gain.
b.      In this line of reasoning also, we must conclude that the USE TAX violates The US Constitution, Article 1, Section 9, on the grounds that the USE TAX is being used as an import tax by function.


1)      The relief I am seeking is that the USE TAX be declared an unconstitutional tax on the grounds that it unfairly, immorally and illegally taxes goods from other states, as would a duty, tariff, and by function, the kind of tax as described by “The Federalist No. 42, and by definition The US Constitution, Article 1, Section 9.
2)      That all USE TAXES paid in the previous Seven Years (7) or per the mandated statute of limitation as prescribed by Federal Law be refunded to their respective businesses and individual tax payers.
3)      That the USE TAX be removed from the RCW as a valid source of taxation.
4)      That the State Department of Revenue conspicuously declare to the entire nation and its businesses that it is neither mandated, nor required to render to The State of Washington, any taxes from its citizens which do not reside within the State of Washington’s territorial borders by way of physical presence of any kind.
5)      Reasonable Attorney fees as prescribed by Law.

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