Thursday, April 4, 2019

Fuzzy Logicians Are Writing Our Tax Laws

Fuzzy logic is a form of many-valued logic in which the truth values of variables may be any real number between 0 and 1 inclusive. It is employed to handle the concept of partial truth, where the truth value may range between completely true and completely false.[1] By contrast, in Boolean logic, the truth values of variables may only be the integer values 0 or 1.
The term fuzzy logic was introduced with the 1965 proposal of fuzzy set theory by Lotfi Zadeh.[2][3] Fuzzy logic had however been studied since the 1920s, as infinite-valued logic—notably by Łukasiewicz and Tarski.[4] It is based on the observation that people make decisions based on imprecise and non-numerical information, fuzzy models or sets are mathematical means of representing vagueness and imprecise information, hence the term fuzzy. These models have the capability of recognising, representing, manipulating, interpreting, and utilising data and information that are vague and lack certainty.[5] Fuzzy logic has been applied to many fields, from control theory to artificial intelligence.

Cropped photo. Original by Jaycek Dylag
(@dylu) on Unsplash.com
Just a note. The original photo came up
when I put in the search term 'crazy.' Fitting.
You may now be accepting that fuzzy logic has been governing our tax system for decades and it looks like it's going nowhere fast.

If you have been reading the recent posts related to the implementation of use taxes around the country and the problems facing both brick and mortar businesses, many of whom also sell online, and the challenges faced by online-only retailers, you will already have realized that our sales and use-tax laws are being written by proponents of fuzzy logic. The end result? The laws governing American businesses and consumers are certainly "fuzzy" although not "logical."

This picture best depicts the condition of my brain after only a few days of thinking about use taxes and the horror they represent for business people. Tonight, the mental feathering began on the subject of origin states and destination states, and whether one is a state-based business or a "remote seller," or both, and the question of whether if I am a seller living in an origin state and selling to someone in a destination state what taxes should I or should I not charge the buyer? Heaven forbid that I want to sell to someone in California, which is, according to taxjar.com, "unique" because "it is a modified origin state where state, county, and city taxes are based on the origin, but district taxes are based on the destination." That  uniqueness creates an entirely different conundrum for brick and mortar and online-only retailers there, because . . . well, they're on their own. I'm not even going there, physically or virtually.

From the fuzzy forest of use taxes I ran across a question regarding the legalization of marijuana. They're distantly related. You already know where I stand on that subject. It's an idiotic move. And, if you have read other posts I'm sure you can sense the annoyance I feel as a Missouri citizen that our state has crawled into bed with marijuana growers, essentially making us a drug state that will eventually make us all the benefactors of a whole litany of new evils. But let's put that aside for the moment. Let's talk about the burgeoning entrepreneurs in the marijuana market. They're going to have to deal with this issue of use taxes, too. Or, are they?

They might be able to grow their product, but are they limited to selling it within states where it's legal? Or, can they sell it across state lines via the Internet? If yes, to the first question, then they have only their state, county, and local taxes to worry about. If yes to the second, well then they're in the same boat as the rest of us with regard to state, county, and city use taxes. 

And, there is that issue of whether the marijuana has to be consumed in the state where it was purchased. Can, say, someone who bought it online from another state go and pick it up and bring it home? As far as taxes, I think that would constitute actual 'delivery' by the seller and there are some laws on that as well. If the person picking it up does have to consume it in the state where it's purchased, and is afterward driving back to their state where it's illegal, hoping the effects wear off before they cross the state line, can the original seller charge a shipping fee? I mean, I believe it's still illegal to transport the drug across state lines, anyway, but my logic is kinda fuzzy on that. I hope it's still illegal. I hope it's still a felony. 

And, what about the mile-high skies? Do these 'delivery' conditions apply only to the earthly plane of highways and bi-ways, and waterways, or will the 'friendly skies' get a lot friendlier to growers who want to ship their product, that is legal in one state, via the airways to another state where it's also legal? Even if they could get it on an airplane without being arrested, the pilot and copilot are going to have to be very good, because at some point they're going to be flying that stuff over states where the product is illegal, thus making them drug traffickers, albeit potentially unwilling ones. I see flight patterns becoming very erratic. Will the state tax laws regarding 'delivery' extend into the airspace? I'm pretty sure they will, because if they don't and the purchased product never lands anywhere then the seller better be collecting and remitting taxes in every state, county, and city that plane passes over. It's ridiculous, I know, but that's the direction our laws are headed anyway, so why not go there?

Thinking about today's issues, regardless of what you're selling, when, where, or how the product is being delivered, or not delivered, is stressful, and the messes we're creating for ourselves would all be laughable, if the monetary stakes weren't so high. No pun intended. Or maybe it was. I'm a bit fuzzy on that. 


black and white dog with disguise eyeglasses
Original photo by Braydon Anderson (@braydona)
on Unsplash.com

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