Slashdot Mirror
Congress Reconsiders Internet Sales Tax
FatHogByTheAss writes "The ability of local governments to collect sales and use taxes from Internet transactions was argued strenuously during a lengthy Senate hearing Wednesday, as time runs out on the existing federal moratorium on Internet taxation."
Could they get around this by taking orders through an 800#? Put items in a shopping cart, then dial a toll free number, enter your account number, punch in your credit card number, and approve the purchase.
It'd be an extra step, but it'd get you out of the headache of figuring out and keep up with taxes for each state and county.
I'm not a constitutional lawer or anything, but I think that means that Missouri can't say we shall tax everything from New York x% because we don't like them. And that the federal government can't impose a fee for transporting items between state lines. But any state still has the rights to tax purchaces, property, or use within it's bounds
As x approaches total apathy I couldn't care less.
It's like your neighbor complaining to the government you have a cow and he doesn't so they come in and shoot your cow rather than give your neighbor one as well
I like the analogy, except that it seems to imply that the government should give your neighbor a cow. In fact, the correct response from the government should be, "Yeah, he sure does have a cow. If you'd like one too, perhaps you should consider buying one."
That's not the whole story. The truth is that the use tax is a slippery way around the interstate commerce clause that is of dubious legality. It's never been really challenged in court, and many don't believe it would hold up. The closest thing (at least that I know of) to an applicable court ruling was a case where the Supreme Court ruled that nexus- the term used for a what makes a business subject to a government's tax jurisdiction- is "a permanent physical presence" until Congress says otherwise. The courts later ruled that having a website on an isp's server in a state, for example, is not a permanent physical presence. Typically it requires something like property ownership to form nexus.
Many states (not all, I believe) decided that the only way around their legal problem was to directly charge the resident the tax after the transaction. The use tax can hardly be considered part of the transaction. Generally it is an entry on your annual tax forms. The states are aware of how questionable the practice is, so it is never really enforced.
Businesses (say, involved in B2B transactions on the net) pay anyway to avoid even the slightest appearance of illegality. Fortunately for the states right now (although it hurts their arguments for an internet sales tax), businesses made up about 80% of Internet sales in the last major accounting study.
The selling company could be incorporated in the USA, but the web site taking the order could run in Europe.
The buyer could dial in to an ISP in China, live in Russia, and have the goods delivered in Finland
This is a global economy, the world is your home town... Governments will have to come up with global rules on this, and a way to globally enforce this. Until then, internet taxes are impossible to enforce.
To Terminate, or not to Terminate, that's the question - SCSIROB
Purchasing things over the internet is no different than buying something mail order. All one would have to do is just call up the place you want to order from and place an order and still skip out on the sales tax.
To the non-business consumer, E-Business is really only fancy mail order.
Bring back the old version of slashdot.
its actually 8% since 2001 started. fyi. it still sucks.
Lord Arathres
stainless steel
Don't they see, state residents HATE sales tax. McCain got it right people are trying to "escape" sales tax because they view it as a great annoyance. I personally don't see how sales tax can even be legal, it seems to me that they get to tax the same money twice (ie in PA they get 6% of a 100 purchase from me, plus they get to tax the retailer for the income). I am hoping the internet manages to completely wreck the current sales tax system, after all several states get along quite well without it. Delaware's economy is doing great, much better than neighboring PA. And even though DE income taxes are higher, when you add up income, property and sales taxes, DE is still cheaper than PA, NJ and MD to live in.
No. It refers to states creating excize taxes on goods and services from other states. At the time the US was more of a federation of *independent* states, rather than the collection of provinces it has, often in unconstitutional ways, become.
Unfortunately many (most?) judges no longer adhere to the constitution as the highest law in the land, substituting such phrases as "compelling public interest" to justify unconstitutional, but (in their minds) desirable, behavior or legislation. It would not surprise me in the least to see the same thing happen here, where such laws are passed, and permitted, in direct conflict with the constitution, the given a stamp of judicial approval after the fact out of expediency for the moment.
Historical examples of this include, but are not limted to, various definitions of obscenity, child pornography, threats against the president's life, and so on. Speach which is, strictly speaking, protected by the constitution but has nevertheless been abridged, with judicial approval, for reasons of expediency.
The Future of Human Evolution: Autonomy
It must differ from state to state, because Mass definitely considers delivery point of sale.
To even complicate matters, when my parents bought their car in Mass. and picked it up in Mass. they did not have to pay any tax. According to the Sales Manager, the State of Mass. goes by where you register your vehicle as the determing factor.
Just more proof that tax laws are complex.
"The words of the prophets are written on the Slashdot walls."
How's that for feel-good politics?
This says the state which you're exporting it from can't collect a tax on it, but the state you're importing it to still can. Say you go to NH and buy a car. 0% sales tax. But you live in MA, right across the border. Before you can register it, you have to pay MA a tax because you're importing it to use it. Technically, you're required to report and pay tax on everything you import into your state that you didn't purchase there, but for individual citizens, such amounts tend to be trivial enough to the government that they aren't pursued.
Now, what this constitutional clause does say is that if Missouri wanted to require everyone in every other state to send them their tax money when they shipped an item to a Missouri citizen, they couldn't enforce it, because: a) they don't have jurisdiction there, and b) they can't force a company which doesn't have a point of presence in their state to abide by their laws regarding import duties. That can only be the responsibility of the importer, not the exporter.
The only stuff I have bought online are airline tickets, my new PC, and stuff you can't find at the mall. If I order something online:
If I buy something at a store, I pay my sales tax, put it in the car, and drive home.
Maybe I'm just not e-nough. :)
The big issue is just in jurisdication of the tax. Do I pay Massachusettes sales tax when I live in Los Angeles and the merchant is in Boston? Or do I pay California sales tax? And, if it's California, does that mean that the merchant has to keep seperate books for all 50 states?
I believe the law is clear: you pay taxes based on where you live. Retailers have offered to provide free software to map zip codes to tax rates and so forth, so the "red tape" argument doesn't hold much water, either.
Ok. Small online businesses currenlty don't need to lay out any significant infrasturcture to sell stuff. Just because something is free doesn't mean it doesn't take effort to establish. Requiring that sort of thing, that "red tape", will cut out a large portion of (admittedly crappy) smalltime entrepreneurs.
-Andrew
There are a number of companies that sell this information in comma delimited record format. I remember buying this information for a contract I did several years ago. Go to goggle.com and search for "zip codes". If I remember right it cost me $495.00
Another day closer to redwood heaven
Either that, or I lack the self-reflection needed to hit the Preview button :-/
//Wegge
Actually, I'm pretty sure you're supposed to do this already. Its just that nobody does, and I've never heard of it being enforced.
There are zip codes that include both a town and the surrounding country -- and the town has it's own sales taxes. (Warrenton, VA is, or used to be, one example.) Also, in some jurisdictions the sales tax varies depending on the type of product, and each state (and maybe some cities) classifies the products differently, so it is going to be damned difficult to program all the combinations in and get it right.
Sales tax depending on the location of the seller would be a whole lot simpler to administer -- but that's not the way the laws have been written.
The big issue is just in jurisdication of the tax. Do I pay Massachusettes sales tax when I live in Los Angeles and the merchant is in Boston? Or do I pay California sales tax? And, if it's California, does that mean that the merchant has to keep seperate books for all 50 states?
It's worse than that. Remember, different areas have different sales taxes. LA County has a higher sales tax than Ventura County. I seem to recall that there are somewhere in the vicinity of 10,000 different sales tax authorities in the US.
General Relativity: Space-time tells matter where to go; Matter tells space-time what shape to be.
That aside, goverments who are basing a large part of their income on a sales tax need to be able to tax the internet trade. Otherwise they will simply need to find another place to get their income. One option is to raise the non-internet sales tax in order to maintain revenues, but that will quickly break down to the point where only the poorest and the dyslexic are paying taxes, which isn't exactly the biggest revenue source. Not to mention the inherent imbalance in burdens.
Another way for sales tax-dependant governments is to begin taxation on income. And trust me, you do NOT!>/B> wan't to go that way, if at all possible. I live in a country with a tax system that basically works this way: Confiscate all income, and pay out welfare to all. A significant fraction of my income is taxed at 68 percent. In addition to that comes a 25 percent sales tax and various scams as 350 percent tax on cars, but that's beside the point. The main issue is that given the choice between sales tax on internet trade and income tax, I'd happily accept the first. At least that is proportionate to my consumption, not to my income.
Any way, the bottom line is that the government money has to come from somewhere and if sales tax is the answer, I don't see why internet trade has to be treated special.
[1] English is NOT my native language.
//Wegge
If you complain that sales tax is wrong on internet transactions, then it should be equally wrong on brick-and-mortar transactions.
I completely agree; sales tax is wrong on brick-and-mortar transactions, as well.
Anytime you tax something, you discourage it. Perhaps only a little, but you do, if for no other reason than the fact that person's $100 won't buy $100 worth of merchandise, but only $94 or so, which means he's only contributed $94 back into the economy, not $100.
Since the purpose of taxes is to pay for government programs, let the government charge for the use of it's services, and stop tying that to other things to disguise it.
Let me keep 100% of my money, spend it as I like, and then tell me how much I have to spend if I want government services. I'll pick the ones I want, and pay for them.
I'll donate some of the remaining money to charity, to help those who are less fortunate than myself pull themselves up by their own bootstraps.
-
almost no taxes are constitutional, think this is would be great time for americans to stand up for their fucking rights and get some other taxes repealed if this goes well. For example income tax doesn't go towards anything useful, it's just extra money for the government to waste on expanding there alraedy grossly over extended powers of state. Do we need more taxes ? no we need less takes.. check out the link in my sig it does a much better job of explaining
Is it just me, or does this seem like a moot point now that people are realizing something important: Almost nobody orders anything online. All the online stores are going under. Etoys went, Amazon is almost out of money (Again.), CDNOW is getting there again, etc.
I mean, really, other than airline tickets, what do people buy online anymore?
What they really need to tax is ebay sales! Tax every last cent for people selling off yard-sale leftovers!
Not really. What would happen, for instance, if I bought an item from a website outside of Canada is this: to send the item to me the company I bought it from has to declare the value of the item on the package, then customs sticks on an envelope with a bill for the appropriate amount of provincial and federal sales tax before sending the item on to me. Of course, where things get hairy is when people buy things that aren't physically delivered, like a paid software download. But potentially that's not insoluble. There could be a tax treaty between Canada and the US under which each country deducts the other's sales taxes at source on purchases, avoiding this problem.
IMLO, I really think this is something they should leave alone. With laws in place already stating how state to state taxation is handled, for phone transactions and such, why make it different for the internet? Is this just one way of trying to take a few more dollars and cents away from us? I don't agree too much with the statement about people are coming into local shops, finding what they want, and buying them off the internet to escape taxes. They are more than likely buying off the internet because they can find it a HELL of a lot cheaper! So I say just leave it be, why change the horse midstream? I don't think this would do much other than put a little more money into gov't, which do we think we really need to do that anyway??
$crew u guyz i'm going....shit i already am home
so get the fuck out!!
Not that I thorougly enjoy paying the GST, but that's not really accurate. GST revenue in 1999-2000 was $22.8 billion (from the annual report, Ministry of Finance - http://www.fin.gc.ca/toce/2000/afr00_e.html). The total budget of the Canada Customs and Revenue Agency is $2.8 billion (2000-2001 Main Estimates, Treasury Board Secretariat - http://www.tbs-sct.gc.ca/tb/estimate/20002001/E_me 00.pdf)and that's for everything; customs, income tax, corporate tax and the GST. I've no idea just how much of that they spend on collecting the GST - the figures aren't broken down that way - but there's no way they spend more to collect the tax than they bring in.
First, this is just completely irrational. If it's a sports team, we expect the teams to compete based on what they bring to the table, following the same rules. As long as they do that, then we call it fair. However, we might say two teams are competing on a "level" playing field, even if one team is cheating or is favored by the referee (i.e., one is better than the other but _lack_ of fairness makes them competetive equals). Likewise, businesses are expected to compete based on what they bring to the table. That is fair. There is a difference between equal opportunity (e.g., "fair") and equal results (e.g., "level").
Second, the poster is mostly incorrect if he thinks that retail stores have a huge natural advantage over all online stores. Retail stores with store fronts have all kinds of overhead (e.g., paying for an expensive storefront, maintaince, salesmen, other employees, inventory, plowing the parking lot, etc.) Many of the retail stores that are able to offer relatively low prices only are able to do so because they've developed an enormous amount of skill, expertise, and infrastructure to make it happen; they aren't just a bunch of teenage geeks throwing together from money being thrown at them.
Third, why should E-commerce be some kind of moral imperative? If we're going to say E-commerce should be subsidized to make the competition "level", should we not also say that high end retail stores in, say, Manhattan should have negative taxes applied to their goods (or subsidies, or what have you)? No, because they also recieve an advantage for doing so. The customer decides if they'd rather pay 5 dollars more for a 15 dollar item for the covenience. The same should go for e-commerce.
Fourth, besides merely being "unfair", it's economically damaging to the greater economy insofar as it promotes inefficiency. One of the most basic tenets of capitalism is that it creates efficiency and does so naturally. This unequal taxing is an INTENTIONAL effort to foil that. What you are effectively saying is that a business should be able to compete on the same footing as the other competitors, no matter how inefficient they are. In other words, you're promoting inefficiency.
If E-commerce is valuable to the customer, then the customer should be willing to pay a premium for it. If the customer is driven by prices, then that decision should be driven by what each company can bring about, in terms of raw efficiency, without regard to the government meddling. Likewise, if the decision is more complex, if the decision is between two things that are not entirely equal, the customer can decide. e.g., If a company wants to use supermodels to sell toothpaste, the cost will be passed onto the customer. If a company wants to use any retail location, the cost will be passed onto the customer. If a company wants to use a fancy pants E-commerce method, the customer will pay (or refuse to pay) the cost differential.
This brings up several other questions, though. What if the customer's billing and shipping locations are different? Would the shipping address or billing address be the taxable location?
How would the taxes collected be distributed to each locality. Would the taxes be payable to the federal government, who would in turn distribute monies to the appropriate localities, or would the web merchant be responsible for mailing out tax revenue to hundreds of different local governments?
How would this system be integrated into existing e-commerce solutions? How much time and money would it cost to upgrade current order processing software to automatically charge and allocate local sales tax for each order?
How would the government propose to enforce that sales tax is actually being collected and paid out? What measures are in place to ensure that vendors abide by these regulations?
How would orders placed on international websites for delivery in the US be affected?
The idea is feasible, but it seems like there are quite a few questions that need be answered prior to implementation.
Slashdot: Open Source, Closed Minds.
heh...you're obvously not from California. grrr 8.25%...
Ok so if no one (or no one significant) makes purchases online due to the tax differential, then WHY should it matter if taxes are applied? As long as ACTUAL TAXES and the ACTUAL RELATED COSTS are the exact same (or near to it) for both the e-commerce and storefront retailer, I don't see how ANYONE could have a reasonable objection.
Now whether or not this can be done is another debate entirely, but let's be clear here, if taxes do not persuade the customer one way or the other (i.e., they are equal), it is FAIR; the otherway around is UNFAIR.
That said, all these people that say that today's complex tax system is too complex and too large to handle cost effectively at scale is simply ignorant. There are services and computer programs that handle these things for you, they really are not that expensive, a lot of mail order-type businesses handle them. I happen to work for one, we pay the both the city and the state, and the costs are NEGLIGIBLE. The prices of these systems would also plummet and improve if all the E-commerce companies starting purchasing them. Anyways, it's not as if any taxing of the internet necessarily means there needs to be anything so complex. For example, there could be an overhaul of the sales tax system(s). Or there could also be a federal body that would facilate all the tax transactions.....
In closing, you're kidding yourself if you think E-commerce is that big of a component of the NASDAQ, at least if you look at sales (as opposed to the relatively recent and absurd valuations on DotComs). Even if it were, if customers are merely shifting their purchases from DotComs to storefronts, then it's just that, a shift, not a net loss.
That's why your computer was made and invented here(Fairchild Semiconductor and TI invented the internet). I guess that was from our 'Ignorance'.
"History will look upon the Act of depriving a whole nation of arms as the blackest." -Ghandi
This brings up several other questions, though. What if the customer's billing and shipping locations are different? Would the shipping address or billing address be the taxable location?
I was about to say that the obvious choice is the billing, but it isn't. In fact, the shipping very easily could be.
Of course the shipping address would be used. Otherwise you'd get everyone and their brother setting up a bank account or credit card account in Timbuctoo so as not to pay any taxes on ANY purchase.
(Of course I'm assuming there is no sales tax in Timbuctoo.)
"And like that
The solution is simple, and doesn't require any constitutional wrangling: END THE SALES TAX!!
The state can try to collect the tax from it's own residents. Michigan sure tries!
Both parties already pay taxes - that's not what this is about. The manufacturer pays taxes on the materials that are shipped and on the resources that they consume wherever they're located. Likewise, I pay property tax and income tax to cover that on my end. To say that the sale and subsequent shipment uses public resources any more than usual is ridiculous. Do I pay tax when I ship a birthday present to my dad? The government is already taxing us to death; to add a tax on a transaction that doesn't consume any additional resources is irresponsible.
Of course if you buy from Barnes and Noble.com should you pay tax or not? They might not be based in your state, but they probably have a retail presence in it.
Thus, national chains like Sears had to collect the tax for your state, but if you ordered from Bob's Worms By Mail on the other side of the country, Bob didn't have to tax you.
As far as I'm concerned, Internet sales should be treated just like any other mail order. Tax based on the buyer's destination and the seller's presence (if any) in that state. Obviously, international sales go through the usual Customs/import procedures with all the tariffs and what-not that entails.
And, USA states can quit whining for more money. It's embarassing....
--
"You've crossed my Line of Death!" "What? No! Where is it?" "Here in the fine print...."
Shipping is usually higher then the tax. Local ratailers can't keep their prices down because they waste a lot of money.
Or maybe they locate the malls in NH because they can't find enough minimum wage workers in Massachusetts. You know, for some strange reason when you zone an area so that only rich people can afford to live there, the service businesses seem to have trouble hiring...
That's why congress is discussing ending the moratorium and granting permission to tax such sales. Then the states will have the consent of the Congress. At the moment no states are taxing internet based interstate transactions for just this reason.
This is the reason Microsoft bought Great Plains Software. They are behind this whole Internet tax thing!
YES, there is a McDonald's in Hanoi Square.
Of course in a perfect marketplace, the price that the market will bear tends to drop quickly to not much more than the price to make and deliver the product. You can only charge substantially more than cost if there aren't a bunch of competitors with essentially identical products who can undercut you. As a product becomes a commodity good instead of a unique one, price becomes the biggest single selling point and will tend to drop to a level that will only justify a small profit. If an online merchant can really cut their overhead cost to less than your local store, they should be able to undercut them and run them out of business unless the local store can offer enough value in the form of service to differentiate their product.
There's no point in questioning authority if you aren't going to listen to the answers.
I figure such an accountant should be able to charge.. oh, 50-70 thousand dollars per hour.
-c
I have discovered a truly remarkable proof which this margin is too small to contain.
Yes, that's correct. That clause of the Constitution refers just to goods crossing national boundaries.
The *new economy* wasn't taxed, it was a great time, markets flurished, money was everywhere. Then the market died, napster went down, I get paid less, and _________________
* I think "the internet was taxed" will fit here well.
Sadly enough, I started this out as a joke, but it's true.
This is such crap. People don't pay shipping fees to avoid sales taxes, if they are doing anything *remotely* like what he's talking about, it's because they can pay shipping and *still* get it cheaper than retail. "Main Street" retailers are whining because they can't compete on *price*, not because taxes have any significant effect on competition.
Me, I just bought a P3-933 from a retailer. Why? Because after paying for shipping, it would have cost me exactly the same online, and I would have had to wait 2 days for it to come, minimum.
--Dave Rickey
With all the B2C's going down, the govt coffers wont be as full as it could have been if they imposed it a couple of years back.
Rapid Nirvana
At 8.5% on sales tax, maybe people will start moving out of the state. I know the utterly ridiculous tax laws in Virginia were one factor in deciding me to move back to Michigan...
why anyone would think to treat this any differently than regular mail order interstate sales? If I order out of a catalog, I don't have to pay sales tax unless the seller happens to be in my state. Why should the net work any differently? But then what do I know.... btw...third post?
to govern electronic transactions? It seems to me that the cost of enforcing such a tax would exceed the revenue gained. A much more viable solution would be to cut out the tax breaks and loopholes that the top 5% of the population have.
-CrackElf
"Blake is an idealist, Jenna. He cannot afford to think." - Kerr Avon, Star One, Blakes 7
A lot of online purchases allow you to specify a billing address and a shipping address. Suppose I'm in Va. but ask that it be shipped to Az., as a gift for someone. I guess I'll pay Va. tax. But seriously, I think that if brick and mortar has a sales tax, so should their competitors. The .dot gones are not going to be worse off than they already are. I've made a lot of online purchases and the tax was not the reason, It was the fact no one local had it in stock. The online prices are not that much better! And product returns to a company that disappears overnight...well that's a friggin hassle compared to a local retailer who is more likely to be around this time next year.
What keeps Merchants who are taxed from lowering prices (this is already done some on pricwatch.com) and hiking shipping rates? Don't most companies NOT pay taxes on the shipping? It's not part of the price of the item, but a price on the service provided afterwards.
Can you imagine $1 sticks of ram with a $120 shipping fee ?
Naturally. For example, if I'm in the same state as foo.com, and I buy stuff from foo.com, I expect to pay that state's sales taxes (a lot of sites do this already). But if I'm in a different state as foo.com, I'm fairly certain that constitutional clause prevents my state from charging tax on stuff bought from foo.com.
In that case, calling it an "internet tax" seems inaccurate. It's more like a simple enforcement of existing taxation laws.
Ita erat quando hic adveni.
--
What government resources do internet merchants consume? Bricks-and-mortar merchants utilize an infrastructure that's built up by the government (roads, sewer, traffic lights, etc.) and thus should pay taxes. Internet merchants use no such infrastructure - so why tax them? If there is some value-added from the government, then it could be justified, but levying taxes on internet merchants - especially by local governments is particularly absurd. My government in Atlanta isn't providing any service for a merchant based in Seattle or California or wherever. Taxation "just because bricks-and-mortar merchants are taxed" makes no sense at all.
I mean the Intergrated Circuit...not the internet
"History will look upon the Act of depriving a whole nation of arms as the blackest." -Ghandi
Comment removed based on user account deletion
Wanna order a car online?? www.revolvolution.com and pick up a new s60/s80? Wanna pay taxes on it because of infrastructure? That's bullshit.. Everything infrastructure wise is already taxed to death.. From importing, to having things on the ground.. then you've got a metric weight system, if its a certain height, weight, smell, taste their is a tax. Yet some people are all for an internet tax.. Why? It's always been the same reason, they think they are making things "fair". Giving gov't more money to waste on investigating Bill Clinton's dick size. 100 million dollars wasted on that shit (probably more). Toilet seats made out of gold and more investigations. The gov't has always imposed a tax on the stupid and the stupid have always let them. So you can either be a fucking idiot and let them do so. Or tell em they aren't getting one more fucking dime.. Take care of our military, cutback on those goddamn investigations on peoples personal lives, and throw some of that ex-investigation money at NASA or schools or something. Damn man; its simple.. Stop letting them take and focus on more important things than taking and investigating someone new every couple of months.
AC. Typical.
But more to the point, none of these things ever work:
a) How the Republicans say
b) How the Democrats say
c) How the CBO says
d) How the IRS brass says
In actuality, they only work the way that the IRS agents and their managers say.
Since the actual tax plans apparently don't matter, let's make fun of the plan, whether or not we are accurate.
FWIW (and I'm sure you're not listening) the Clinton Healthcare plan (which was flawed) didn't work the way the Republicans (or the Democrats, for that matter) said. But I'm sure that didn't stop you from flaming it at the time.
(Of course, still being on mommy and/or daddy's plan means it doesn't matter to you, does it?)
Jesus was all right but his disciples were thick and ordinary. -John Lennon
For example, a traditional store Should maintain a showroom and have inventory in the showroom
Good lord...I don't know how many times I've gone to Sears, Best Buy, CompUSA, Circuit City, etc... to buy something and find that they are out of stock on that item - perpetually.
I bought my $1299 video camera from a small store in Ohio that I'll probably never see. Not because of sales tax, but because I could not find it at a local store, so I went and found the lowest price.
I buy DVD's at Amazon because I can "buy" a DVD months in advance at a LOW price and get it at my house when it does come out. (And until they closed the distribution center across town, I usually got it the day it was released in the stores.) That and it is "in stock" whereas going to a local store is a nightmare - sure, they have 500 copies of Stuart Little, but the only copy of Vampire Hunter D (assuming they ordered one) is gone.
We have a Federalists Systems. That means that each person residing in a state is a dual citizen of the federal governemnt and the state government. The clause refers to trade among the states. Technically..that's international trade since each state is considered its own little nation. Orginally the United States was envisioned to be more like the European Union but Supreme Court Justice Marshall was able to obtain more power for the federal government.
"History will look upon the Act of depriving a whole nation of arms as the blackest." -Ghandi
Your forgot to mention the huge black market such a move would make. People will avoid the sales tax by making underground transaction thus increasing all sorts of crime.
"History will look upon the Act of depriving a whole nation of arms as the blackest." -Ghandi
I build laptops out of ice using chainsaws. It costs a lot to buy the ice, and we have a lot of warranty problems. Furthermore, training the highly skilled artists is expensive.
Rather than using conventional shipping companies, I deliver goods by flying monkeys. Training costs are high, but I think society will find the service valuable.
Seriously, the whole point of a free market is to encourage people to do things efficiently. How does society benefit by subsidizing on-line transactions?
-Dave
Even with the "consent of the congress", the funds generated would still go straight to the US treasury. That much appears to be absolute, and would need to be altered for any cross-state tax to work.
Ita erat quando hic adveni.
They stuck me in an institution, said it was the only solution, to...protect me from the enemy, myself
That'll put a stop to the crumbling of the .COM economy!
J:P
--- Worst tagline ever.
If this passes, the computer and internet industries will follow Nasdaq. I'm not a Republican, but keep government out of the Internet.
You don't have to be a Republican to think that way -- you might be a Libertarian.
"And like that
Some of these companies are no more than a warehouse and a webserver. If this bill passes, what's to stop these companies from moving their warehouse and server out of the country. And would you still have to pay internet sales tax for a purchase made in Mexico? The company certainly wouldn't have to pay the U.S. government, since it's located in another country, would it? Just some things to think about SuperBeast
--- I think, therefore I exist, anything outside of that is uncertain.
That would apply to the person/company exporting the goods. Not the buyer, you are not exporting something you are importing
So far yet to be resolved is the question where does an internet transaction occur? This is of issue to which state gets the sales tax, which states gambling laws apply, which states pr0n laws apply. So congress would have to establish where the transaction takes place to begin to tackle the other issues
As x approaches total apathy I couldn't care less.
The 'it' I was referring to was not his proposal, but rather his depiction of what he thought would happen in the future without it (paying tax for both the seller's state AND the buyer's state.)
Don't label something "offtopic" unless you know the topic well enough to tell what's on topic.
I wish I had a tax form with me now. I do not remember the exact wording, but this is fairly close. But this year, Ohio has a section, where you calculate and report how much sales tax (6%) you owe on any purchases made via the internet in which you did not pay sales tax.
When I completed my Ohio state income taxes, there was a specific worksheet to report how much money you spent on items out of state, and after finding the total, you were supposed to multiply it out by your county tax rate and add that to your taxes. It was stated that this applied to items purchased while you were out of state, as well as to items that you bought from out of state via the internet. So basically, you would be taxed twice for anything you bought while out of state, and once to twice for any internet purchases. I'd like to have some input on if other states are doing similar things, and what /. readers think of this. Seems like a bunch of crap to me. Naturally, I claimed nothing, as I didn't buy anything from out of state... lol
If any of this appears incoherent, assume that the writer was drunk.
And if SD, NH, or whatever manages to keep the roads in good condition (an e-tailer really needs good roads), provide police protection, and so on, without imposing equally burdensome taxes in some other form, then it seems like moving businesses and jobs there is a good thing...
Nor is html,apparently.
Best Slashdot Co
That's because in the context of the article, catalog retailers are paying some tax through the point of prescence method. If you have a point of prescence in the state, you pay sales taxes in that state since your transactions are effectively intrastate, not interstate (even if the shipping warehouse is in a different state).
Personally, I think that's how internet based purchases should be handled. Same way as catalog stores. Purchasers pay only sales tax if you have an office/warehouse/outhouse in that state.
And if I go down to Chicago to buy something and bring it home, I am supposed to also pay Michigan sales tax. Never mind that I already paid Illinois sales tax because, unlike a mail order place, a walk-in store can't convince the local taxmen that it knows which customers are out of state. Nobody does, of course, but they are supposed to...
As someone mentioned, "sales tax" is a gross misnomer. It's a "use tax". As more retail sales cross state lines, use taxes become unenforceable. The system should be reformed so that it truly is a sales tax, always charged at the seller's location. Or get rid of it entirely -- a moderate state income tax like Michigan's is a lot more fair anyhow. But it is the right and role of the states to figure out their own finances...
Not necessarily. Only business that do a significant portion of there business as mail order will need to consider moving. But businesses that rely on in-store sales are safe.
Mail-order businesses can locate themselves anywhere. Frankly, I think the Federal government needs to step in here, because you're right: if only one state does it, it won't be effective. ALL the states need to adopt this policy together, otherwise it will fail.
--
And the men who hold high places must be the ones who start
To mold a new reality... closer to the heart
Also, how do you determine the seller's location? Can I just move my server to NH? Do I have to ship from there? Have my headquarters there? It's not that simple..
--
PaxTech
All movements for social change begin as missions, evolve into businesses, and end up as rackets.
Oregon also has no sales tax, and I'm sure that everyone (except the anti-growth people) would love to have big companies come here (Amazon was thinking of moving to Portland at one point...)
"Giving money and power to government is like giving whiskey and car keys to teenage boys" P. J. O'Rourke
Just see how many people manage to cheat the IRS... You can get paid in cash and report only a fraction (if any) of your income, etc, etc. But how the heck do you cheat a sales tax? No amount of fast talking will get you past even the dimmest cash register jockey without paying your full tab, which automatically includes the sales tax.
It took the IRS years and years to catch Al Capone for tax evasion, but when he sent a flunky to buy cigars you can trust he got charged sales tax. All the criminals who launder all their income and all the people who can afford really good accountants pay little or no income tax, but they go to buy their Rolls Royce and the dealer will hit them up for the sales tax.
It is a LOT easier to catch one merchant who has shady bookkeeping than to catch the thousands of citizens who patronize that merchant who might be cheating on personal income taxes.
Do away with income, cap gains, inheritance, etc taxes and have sales tax on everything with 'luxury' items taxed at a progressively higher rate. This will catch EVERYONE according to how much they use. After all, the more you consume, the more you have to use infrastructure.
Firstly, it's not unconstitutional, since he's advocating this at a federal level. The constitution requires that states cannot impose tarrifs upon one another (as you mentioned), but certainly doesn't say anything about the Federal government not being allowed to charge a sales tax. (at least, I can't remember any such language off the top of my head).
Only the selling location can have sales tax applied.
How I wish this were the case. If so, then I'd just have to pay whatever taxes are appropriate for wherever the seller is, and they'd all move to Delaware (no sales tax). But, how do you define where the seller is? Their corporate headquarters? Their servers? Their shipping point? Tough to decide there. The general rule of thumb has been that you pay sales tax only when you're located within a state in which the seller has a physical presence.
Unfortunately, this has not always been the case, and the Supreme Court, if I recall correctly, has actually allowed states to charge a "Use Tax" on items bought outside the state. Many states do this (I know for a fact that Maryland and Viriginia both do, though it's kind of hidden away). [I just did some searches at findlaw.com, looking for "interstate tax" and "interstate sales tax" and similar search terms on US Supreme Court decisions. Some interesting reading, but not anything that I can understand well enough to cite here. Check it out.....]
It is illegal for states to apply taxes to items brought in from other states, because that's a tarrif
(see previous remark). I agree with you wholeheartedly, but I know that at least some level of use tax has been approved. I'd like to figure out exactly what it was that the court said was okay, because I'd like to know how they countered the tarrif argument. I have a similar view on "commuter taxes" (taxing people who live outside a city but work within it), but I don't think there've been any rulings on that one.
Bottom line: It certainly seems like you shouldn't have to pay taxes to your local state, if you bought something out of state (either by phone, web, or even in person on a trip), but such taxes are a regular, and apparently legal, practice. A standard federal sales tax like this would go a long way to clearing up a lot of those ambiguities, and would actually generate more income, even for states with Use Taxes on the books, since reporting for Use Tax is generally voluntary.
not really, because the prices are manipulated so high that if they mark products 50% off they still make a profit. With the kind of $ big business is in, charging a few dollars less to compete with online business is not that big of a deal. The place where they get hurt is in overhead ... of course online stores have to buy bandwidth...
... oh, perhaps it is just an urban legend, but the point is still valid:
Quoth I, from a freind named wolf who heard it from
the price of a product should not be based on the cost to manufacture, but rather, should be based on what the market can bear.
-CrackElf
"Blake is an idealist, Jenna. He cannot afford to think." - Kerr Avon, Star One, Blakes 7
The current sales tax should really be called a "usage tax", because you're taxed based on the state in which you use the item, not the state from which you buy it. If I live in New York and mail-order an item from Vermont, the vendor won't charge me Vermont sales tax. Yet, I'm supposed to figure out how much New York sales tax I would pay, and then send a check to the state government. Of course, no one does that.
It would make a whole lot more sense if companies charged sales tax from the state the items were sold. It shouldn't matter where the items are being used. If we implement this system, then this whole "internet sales tax" problem will just go away.
--
And the men who hold high places must be the ones who start
To mold a new reality... closer to the heart
There is no tax on catalog orders (unless they reside in your state). The Internet is about the same as a giant catalog, so why should it be taxed and not catalog orders. I am GOB
That is exactly what they are talking about. How to enforce existing laws or even make enforcing them feasable.
As x approaches total apathy I couldn't care less.
What's the 16th ammendment? It's good to see that the US follows the constitution when it comes to money, Oh wait never mind.
Local & State governments practically have no other source of income.
Property taxes are "practically no income" for states and localities? Um, right.
[
I think this just goes to show just how foolish these taxes are getting (and yet how greedy the gov't is when they see another opportunity to sweeten their pockets!)
I would much rather favor a U.S. usage tax on all goods purchased that would REPLACE the current income tax. Face it, it's not to pretty to notice once a year on the w-2's exactly how much those bastards rape each and everyone's checkbook!
No state would be foolish enough to tax exports. If it costs 49 other states x% more to buy from such a state, thats 49 state populations that would buy elsewhere. They might as well shut all businesses down within their borders.
States are capable of taxing imports because the customer wants the product enough to pay the sales tax (unless they move).
It doesn't work the other way around. Take a look at how many export tariffs there are internationally versus import tariffs.
Given my VERY small understanding of how/why things are taxed, it seems we have things that are heavily taxed to compensate for things that are lightly taxed. If we were to create a creative and effective internet tax system that was small enough to not wreak havoc on the Internet economy we could use that revenue to lighten the burden on the heavily taxed items, therefore creating a lighter, more evenly balanced tax burden on everything. Oh well, at least it made sense in my head...
"On the Internet, nobody knows you're a dog!" - a dog
it's about the 'Main Street' retailers not being able to maintain their profit margins on items
No, it is about them not being able to compete with the on-line retailers. Local booksellers don't get the deep discount that Amazon or B&N pry's from publishers. So, US$100 worth of books will cost US$70 - US$80 on line. Tack on the US$9 in taxes for the local store, and the price difference becomes dramatic, even with the cost of shipping added. Forcing on-line retailers to collect sales taxes allows the local retailer to compete again.
If this passes, the computer and internet industries will follow Nasdaq
Ummm... the computer and internet industries ARE Nasdaq.
The welfare of the people has always been the alibi of tyrants. - Albert Camus
In South Carolina, if you buy over the Internet and are not charged tax in the retailer's state, then you have to pay a use tax in SC.
See: SC Press Release
//m
This helps explain the demise of shops such as furniture.com, pets.com, etc. Some goods are just better sold locally. Bulky items especially, because of the high shipping costs. Not all retail goods need to be, or even should be, done on the web.
Taxation should not be used as a way to level the playing field. It should be used as a method of earning revenue based on goods sold to provide services to the community in which the transaction takes place. Should that be the point of sale of the business, or the consumer? I don't know. But I agree it should occur.
In Washington state, despite record budget levels, there is a shortfall in revenue as taxpayers are issuing a tax-revolt through the intiative process because of the perceived high burden of taxes. (This in a state with no income tax!) If the state can recoup some of these problems in Internet sales taxes, and reduce property taxes or something else as a result, I have no problem with that!
Somedays it's just not worth chewing through the restraints...
Yeah. Minnesota is the same way. By law you are required at tax time to pay sales tax on all items you have purchased through out the year over the internet and through the mail.
I have yet to see how they expect to enforce this tax law. I have seen some internet companies charge sales tax though. Some "well behaved" companies may already be keeping track of tax laws in states and sending in the state sales tax on your behalf (example: Loki Games, Va Linux Systems).
The one thing that irritates me about the above article is these legislators don't seem to understand what taxes are for. Taxes are to raise revenue for a government entity. To say that you want to create a new tax to be fair is an abuse of the very purpose of taxes. If you don't need the money, what's the point of even talking about new taxes.
It's like your neighbor complaining to the government you have a cow and he doesn't so they come in and shoot your cow rather than give your neighbor one as well.
Just fed up with legistors.
Hmm, maybe CTV's numbers are a little biased... thanks for the info.
many states don't have sales tax, but believe me, they make up for it in on way or another. For example, here in Oregon, we have no sales tax. However, we do have a property tax, and they do screw you with that. You'll get something from the state that says, "you painted your cardboard box. It is now worth $2000 more." And then they raise your taxes accordingly. Sure, it's a red hot metal rod up the ass, but it offsets the taxes that we don't have.
What needs to be asked is how much will it cost to form a new government beauracracy to regulate this?
----------------------
Opportunities multiply as they are seized. --Sun-Tzu
It's even worse than that, from a logistical standpoint. It's not just a matter of having a single number for each jurisdiction. Each jurisdiction charges taxes on different items at different rates. For example, in many places groceries aren't taxed at all but snacks are, and the definition of "snack" varies from place to place. Any software for handling taxes would have to know about all the local laws regarding classification of items and tax rates for each, and it would have to be updated every time any state legislature or city council decides to change the tax law.
What an incredibly stupid F*cking idea. States with large ecommerce presence like California will get a federal share along with thier local taxs, and state, while states with a small internet presence, such as Alaska, will be paying through the nose in federal taxes, while still sending money to Californian companies who benefit the companies. This incesent need to tax is ludicris. We should be looking at why we are taxing rather than taxing because we can. And before you thingk I am beating up on Californians, the link below points to a pretty good reason not to apply internet sales taxes.
http://www.pacificresearch.org/issues/tech/intern
Really, I hate sales tax, mostly because I've lived almost my entire life in Oregon, which has no sales tax. I like getting to look at a price and knowing that is what I will actually pay. I like walking into 7-11 with $1 and getting a Supper Big Gulp and getting a penny back and not having to come up with $.03 more. Yes, it would be easier on-line because the computer will do all the math, but I still don't like the idea at all.
"Giving money and power to government is like giving whiskey and car keys to teenage boys" P. J. O'Rourke
And every e-tailer relocates to SD, NH or some other 0% sales tax state.
Not that this is necessarily good or bad, just a prediction.
--
--
E_NOSIG
I disagree. My money is my money, not the government's. Income taxes rob me of my economic freedom. (Let alone that the tax money is used to fund unconstitutional activities I don't agree with.) On the other hand, sales taxes are more fair. If I choose to exercise my freedom to buy, I pay taxes. If I choose to exercise my freedom to save/invest, I don't pay as much tax. But it's my choice.
Flamebait != Disagree
Constitutionally Correct
We're called "Non-US residents". The taxes are called "exchange", "duty", "brokerage fees", and "shipping". Sometimes it's more than the price of the item.
---
ECHELON is a government program to find words like bomb, jihad, plutonium, assassinate, and anarchy.
(Of course, this is a devil's advocate position, since I think internet based transactions should not be taxable unless the seller has a point of prescence in the buyer's state, at which point the state doesn't really have to worry about interstate commerce regulations.)
"I'm sick of online rules being different than physical rules"
Well guess what they're not the same thing. The CDA is wrong because it imposes one state's community standards on another state.
If I buy a car, the seller no longer has the car.
If I look at a web page, the author still has the page.
The message on the other side of this sig is false.
IIRC, barnesandnoble.com is a totally seperate, though afilliated company from Barnes and Noble. (the bookstore) It's certainly a tax dodge, but I can't say I mind.
-- This and all my posts are in the public domain. I am a lawyer. I am not your lawyer, and this is not legal advice.
No, I'd say that would become Billions. And so what if the computer-illiterate bozos^WLawyers in Washington decide to put up some sort of internet tax nationally. People will just move the point of purchase to another country.
This "Main Street Retailer" sob story is rubbish! It's not the internet that's closing them down, it's the Super Walmart that just opened down the street!
-rant-
My wife & I ended up paying US$34K in Federal taxes this year, and we have a fairly average income. Now Multiply my tax bill by a few million other people. Then add various sales tax for gas, beer, toys, etc. That's a pretty substantial amount. If the gov't can't run decently enough with the grand amount of money given to them, wtf makes them think that more money is gonna cause some kind of miracle.
-end rant-
/*drunk.. fix later*/
The only real problem with that is for people like me who live 6 miles away from BFE and don't own cars to get to the closest brick-and-mortar store. For me, even if the internet purchases were teaxed, I'd still be saving close to 30% over what i would have to pay if I were to go to one of the small businesses located in my town. THanks to the Internet, I get less of the "College town gouging" that is very apparent when I go home and look at how cheap many things are compared to the prices I pay for the things I need immediately and can really only get from one of the businesses here.
On Another note, I'm wondering if things like E-bay would become subject to taxes if the moratorium on internet taxes gets lifted. Any body have any clues?
> The presence of a state sales tax, in most states, serves to help even the playing field,
You mean *distort* the playing field. Shipping & handling is a legitimate cost of doing business. If S&H raises e-tailer's costs above those of brick and morter then that means that the the e-tailers are less efficient than in-store merchants. They deserve to die.
Taxation is the governments way of invoking compulsory financial support to fund the development and maintenance of societal infrastructure, i.e. roads, schools, hospitals etc. that are required to support the physical presence of brick and mortar merchants, employers, employees and customers.
Taxing online or virtual merchants would be unfair and unethical because these merchants place no such (or at best insignificant) demands upon the infrastructure.
Where is the justification for these taxes?
"A microprocessor... is a terrible thing to waste." --
"A microprocessor... is a terrible thing to waste." --
GeneralEmergency
Can't companies just move to Mexico and ship from there? Or is the additional shipping cost too large?
In general, I think states are coming at this from the wrong direction. They should get rid of their local sales taxes, and use income taxes instead.
So... lets see how they could do this:
1 - Force us to pay tax in the state we buy things.
For example, If I, living in New York, buy something in Massachusetts, I would pay 5% MA sales tax on my internet purchases. I think they could get away with this constitutionally. They could equivicate this as me driving to MA and buying something there. However, this would cause a lot of internet businesses moving to states with out sales taxes, like New Hampshire or Oregon.
2 - Force to company to collect sales taxes from the state which the customer is from.
Using the example from above, I would have to pay 7% NY sales tax on my internet purchases in MA. I don't think this one would be constitutional. Plus imagine the nightmare for the companies keeping track of all the different taxes!
3 - Force the customer to pay taxes to the state they reside in for out-of-state purchases.
What could the federal government do here? I guess they could force companies to report all purchases made to each state. Just like employers do with W-2 forms. The each customer would have to pay sales taxes each year, probably right on their state income tax forms. I can only image this being another bureaucratic nightmare.
None of these things seem to favorable, or easily inforcable. What the about big mail order houses? aren't they raising a fuss about this as well?
Quoth the Penguin, "pipe grep more!"
http://www.argusleader.com/editorial/Wednesdayfeat ure.shtml
.coms, check it out, and while your at it, use the link "send a letter to the editor." Maybe some informed opinion, versus the "OhMyGod those .coms are killing Ma and Pa in de store dere."
That paper there, the Argus Leader, is the largest paper in South Dakota, and among the largest in the upper great plains. They've been gung ho about an internet sales tax for quite sometime, and it appears to be havin an effect.
For a dose of how middle america sees these
Here's the argument:
"Those lost revenues put added burden on bricks-and-mortar businesses when catalog and cyber-retailers aren't paying a fair share. And with that 5 percent or more discount, some price-conscious buyers are abandoning local businesses."
By the way, nobody mentioned catalog retailers....just e-commerce.
No sig is worth reading.
Article at the times.
The main points are:
- It is only applied on 40% consumables creating an economic distortion.
- That it is a "double" tax, since most sales tax is paid by businesses and they pass that extra cost onto consumers through higher prices.
- The remote/local problem is bad for states. (Amazon has a huge warehouse in Nevada just over the CA border because they don't want a presence in CA.)
It is also a "hidden" tax, which lawmakers like. If you were presented with a bill on April 15 for all the sales tax you paid through the year, you'd see how insidious it is.The article is interesting, but I don't think congress will give it a second thought.
I would argue that e-tailers face similar operational costs as their brick-and-mortar counterparts.
Slashdot: Open Source, Closed Minds.
No taxation without representation.
And if this set of government is a representation then perhaps we should rescind the Declaration of Independence and rejoin the British Commonwealth. I understand Australia may be giving up their seat at that.
So long and thanks for all the fish . . . !!!
Six easy steps to figure out Internet Taxes:
1) Remove head from a$$.
2) Open eyes.
3) Go to www.k-mart.com
4) Find "Blue Light Specials"
5) Add 1 "Clue" to shopping cart
6) Check out
Repeat as often as needed.
The fact that some transactions are taxable and others based on the method of order transmission is a farce. Hopefully Congress and the states correct this.
I mean, did the telephone industry need a moritorium on taxes for orders placed by phone when it started? Of course not...
DrLunch.com The site that tells you what's for lunch!
Local retailers may not be able to compete for those who are price concerned, but very few people are. With local stores, you can simply go out and buy the item. For extremely time-critical items or for the impatient person, local retailers will always win out. The hassle of internet sales is another factor. For the average person, who finds visiting a local store easier than buying over the internet, local retailers prevail. With local versus internet retailers, "fairness" can not really be a question because customers prefer face-to-face communication. Why do you think Sears, Roebuck, and Co. became a retail store chain instead of a mail order business long ago? It was more profitable after urbanization, which is incredibly more complete than it was back then.
Comment removed based on user account deletion
>P.S. I place this idea under the GPL. Take it, :-)
>use it, extend it, print it out and use it for
>toilet paper. Hopefully this way, no one will
>patent it as a "business process.
Too late. Former Prime Minister Brian Mulroney beat you to it in Canada a decade ago with the wildly unpopular national "Goods and Services Tax", a national 7% sales tax. Within a few years, his Conservative Party (which he no longer led) went from being a majority government to being two members out of more than 300 in Parliament.
The GST has resulted in more red tape than ever imagined. It costs more to collect the tax than it brings in as revenue, and we only have to deal with 10 provinces and 3 territories. Trying to set up the beaurocracy to collect it from 50 states and then to distribute it fairly is insane.
Collective ignorance you twat..
Go rikki, go rikki
Here in Louisiana, you actually have to fill in a box on your tax return for "Total amount spent on Internet purchases" and must multiply this times 8% and pay it directly to the state! Granted, this is not going to be reported by 95% of citizens, it still would be much simpler to just be taxed on the front end for Internet purchases if you *have* to be taxed anyway... Absolute Stupidity www.13kingdoms.com/odd
Absolute Stupidity
http://www.13kingdoms.com
Does anyone know how to view this without a login? partners. doesn't seem to work anymore. And I *refuse* to have a gratuitious login for this or any site that requires one.
Do not taunt Happy Fun Ball
So, unless the internet tax is going to be a federal tax, the states cannot collect money from stuff imported from other states without amending the constitution. At least, that's how it appears to me.
Ita erat quando hic adveni.
The big issue is just in jurisdication of the tax. Do I pay Massachusettes sales tax when I live in Los Angeles and the merchant is in Boston? Or do I pay California sales tax? And, if it's California, does that mean that the merchant has to keep seperate books for all 50 states?
I believe the law is clear: you pay taxes based on where you live. Retailers have offered to provide free software to map zip codes to tax rates and so forth, so the "red tape" argument doesn't hold much water, either.
Let me see. Some Internet coompanies are having a bad time as it is. Let's drive that stake into their heart.
Most of my purchases are cheaper because the shipping is slightly under the tax. If I had to pay tax AND shipping, welcome back brick and mortar. I purchase specialized stuff (computer and hobby) locally if I don't take too much of a hit. This would only encourage my migration back to "real" stores.
Others have same/different thought?
>> Ummm... the computer and internet industries ARE Nasdaq.
haha, my fault. I feel stupid. I know that and still said that. I should have elaborated more.
"Tread softly because you tread on my dreams"
Yes, you don't care, but the state of California does. They just lost tax that they would have received had you made your purchase from a local retailer.
--
+1 Insightful, -1 Troll. What can I say, I'm an Insightful Troll.
That's up to Delaware. If Deleware is happy with all these companies moving into the state and not charging sales tax, then that's fine. However, I get the feeling that such a free ride won't last long if its abused.
--
And the men who hold high places must be the ones who start
To mold a new reality... closer to the heart
Ok. Yeah. On $100 RAM, sales tax doesn't make a squat of a difference, compared to shipping. It's like $10 (tax) vs. $10 (shipping), so nobody cares.
But the difference is when you buy a big-ticket item, like a PC or a TV, for $2000. Now, sales tax is $180, vs. $50 for shipping.
And really, the 'Main Street' businesses don't make there money on RAM. It's on big-ticket items. And with no required sales tax, they get screwed because Internet merchants get an unfair 5-10% discount of the retail price on all their wares.
The big issue is just in jurisdication of the tax. Do I pay Massachusettes sales tax when I live in Los Angeles and the merchant is in Boston? Or do I pay California sales tax? And, if it's California, does that mean that the merchant has to keep seperate books for all 50 states? That'll definately cut into entrepreneurship. So in some ways it's bad, but not because it "teaches the Main Street retailers a lesson" or some such.
-Andrew
Ignoring if, why are so many people arguing that the HOW of it is impossible. We shouldn't have to worry about the 7000 different tax jurisdictions; collect sales tax according to the retailers jurisdiction.
ie I'm in CA I buy RAM from a company in NJ. I pay NJ's x% sales tax and the great state of NJ gets its revenue.
'Main St.' companies are happy - online retailers don't have an unfair tax advantage.
States and local municipalities are happy - they get money
I don't really care, I'd get taxed if I bought it localy
Why would it need to get more complicated than that?
Well I can tell you people will drive an hour to save 5% sales tax. If you want too see this in action come visit Nashua NH. Land of no sales tax and big malls.
Erlang Developer and podcaster
I would beg to differ with you on on-line vs traditional retail. There are many expenses for traditional retail that just don't apply to online sales. For example, a traditional store must maintain a showroom and have inventory in the showroom. An Internet Retailer (IR) does not need this and can thus reduce the real-estate, utilities, and manpower required for this.
Also, a brick-and-mortar store needs to hire cashiers to be able to handle peak demand. An IR can get by with fewer cashiers since most of the work is automated and the transactions don't necessarily need to be processed in real-time.
A traditional store needs to hire employees to maintain the showroom and to keep track of inventory, check for shoplifting, install survalence cameras, etc. A IR doesn't need to worry about shoplifting, and the displays don't need to be maintained (take a photograph and you're done).
Now, there's some additional cost for on-line, such as hiring a web designer and for web hosting (which is cheap these days), but compared to the traditional store the cost is far less.
If you're counting catalog companies as traditional, they have the expense of publishing their catalogs, printing them, and mailing them. A IR doesn't have this expense, only the publishing expense.
This post is encrypted twice with ROT-13. Documenting or attempting to crack this encryption is illegal.
Like so many other things, the sales tax has become obsolete. The issue should not be how to collect sales tax on the Internet, the issue should be how to eliminate it entirely in all its forms. States relying on this money for whatever they're spending it on, need to come up with a new method of obtaining it.
This won't happen. It is unconstitutional. Only the selling location can have sales tax applied. This issue has already been dealt with once with ordering things over the phone. It is illegal for states to apply taxes to items brought in from other states, because that's a tarrif, and the Constitution forbids inter-state tarrifs.
Don't label something "offtopic" unless you know the topic well enough to tell what's on topic.
It isn't individual consumers buying off the internet to avoid sales tax that congress or "the government" are worrying about. It's wholesalers.
A local company in town started buying stuff off of the internet in bulk, paying less in shipping than they would in taxes, then sells the products to outlet stores at a little less than cost. They make a decent profit for doing almost nothing (making $0.25 per shirt once is a quarter, for a bulk of 10,000 shirts, it's $2500).
This middleman company started a year ago, employs about 5 people, and is making a killing. It hurts government funds by evading sales tax, and IS going to catch on.
I'm not a Republican, but I love the roads, clean water and safety that my government provides.
How is this going to effect international sales over the internet?
How is this going to effect purchases for items that you can download from the internet?
Who goes to the store, shops for an item, then goes home and purchases that item online for the distinct purpose of avoiding taxes?
They stuck me in an institution, said it was the only solution, to...protect me from the enemy, myself
I live in Oregon, we don't have sales tax, and I don't want to pay sales tax just because www.buysomethinghere.com is in another state that does. (then again, I also don't want all those Californian companies re-locating to Oregon to get out of paying taxes...)
"Giving money and power to government is like giving whiskey and car keys to teenage boys" P. J. O'Rourke
Good !
There's no reason to give a subsidy to Internet retail. This tax ban also has a bad side effect by encouraging an artificial split between "brick and mortar" retail and on-line retail. As long you don't have a physical presence in a state, you don't have to collect the taxes for this state. The end result is that on-line retailers refuse to team up with local retail and offer a better service to customers such as ordering on-line and picking the order at the nearest shop. Suppressing the ban is also going to be a great opportunity to clean up the local tax mess so the tax collection can automated.
Now, whether or not there should sales taxes is another matter to be dealt with your local pols.
In one word, vote !
It is an interesting dilemma, though, for states like Washington that don't charge personal income tax--all of their funding is done through sales taxes. It's a serious problem; it's not companies losing money in that case, it's state governments and anybody who depends on state government for anything.
One thing, though, and that's that McCain is totally wrong when he says that people shop online just to avoid sales tax. I mean, shipping costs can be as much or more, depending on what you buy. I only buy from Amazon, for example, if I'm going to buy more than one thing. The reason people shop online is that more often than not the PRICES ARE BETTER. Sheesh. I bought a piece of software from Amazon at Christmas for under $300; it listed for over $500 and the next-best price after Amazon was nearly $400. So I bought from Amazon, paid no sales tax (well, I declared it on my tax return, just to be nice) and got free shipping in the bargain. It's the prices, not the tax.
Taxing the internet from state to state is one thing, but what's going to happen when you buy things out of country? Are we going to be paying tarriffs online, or will it be considered duty free (like on airplanes and in some airports)? Also, does anybody know whether or not they're going to try and tax auctions/auction sites? Because I can't see a legitimate claim for taxing purchases but not auctions, and I can't see a way for enforcing auctions . . . eBay anyone?
Time flows like a river. Here's a stick, don't drown.
AFAIK, Delaware doesn't have a state sales tax. What's stopping online businesses from relocating to Delaware (and having Delaware's state government refuse to collect taxes for other states)?
Web merchants are already struggling to keep pace with brick and mortar stores in the sense that all web orders must include shipping to the customers home. This additional burden places additional pressure on Internet retailers and forces them to cut margins even further to maintain competitive pricing with local shops.
The presence of a state sales tax, in most states, serves to help even the playing field, and equalize pricing betweeen on-line, and in-store merchants. Adding sales tax to internet purchases would place an undue strain on web retailers, most of whom are already struggling to stay afloat. With the recent downslide of the stock market, and the lack of venture capital funding, many on-line companies are already struggling with an unacceptable burn rate, and would surely go bankrupt if this proposed sales tax legislation were to pass.
Sounds to me like this was someone who is selling to someone who will then be selling it to the end consumer. I hope you do understand that whether he bought it off the internet or not he isn't subjected to sales tax. He would be tax exempt and, well, what you're saying is just wrong.
The is part of software I work with every day. If I walk into a store and buy goods, tax is based on the location of the store. If call a store from PA (6%) to place an order at a store in DE (no tax) and go to pick up the order I'm not charged tax. If I had said previous order delivered to PA its 6%.
Its a little different if I go into the store and pay for goods and then have them delivered. I essentially have bought the goods and ownership is mine. Usually delivery involves an extra fee so I'm paying for an extra service. Tax will be where I pay for the goods.
"All great wisdom is contained in .signature files"
I Ill just order it from china. Or canada.
All Troll + "offtopic" mods are meta moderated as "Unfair", because you abused the system.
Wyoming Gov. Jim Gerringer, a Republican, speaking in part as an emissary from the National Governors' Association, asked the committee for cooperation and partnership, saying -- as an example -- that a state such as his own suffers immeasurably from the loss of potential revenue.
Ah yes... the immeasurable loss we suffer because we don't tax the sales of the online merchant princes of Wyoming.
Seeing as most slashdotters seem to think the US is the only country that exsists, i will concentrate on them with this comment.. If the US is going to start Taxing US companies for online transactions, couldn't the big coperations just move their business off-shore??? It seems as though this is only really going to affect the small business market..
Least it won't affect Linux right geeks??
All your base are belong to us
Bout as funny as the "I didn't do it kid"
"One World, one Web, one Program" - Microsoft promotional ad
The Anti-Blog
You read, but you do not understand.
My idea is you completely get rid of local & state taxes on Internet commerce and replace it with a single Universal tax.
Also, I don't see how your math works. I said the UT will be distributed per population, so Alaska will receive a precentage of the income equal to their precentage of the population. This is regardless of the number of Internet users in the state or how much they spend. It ain't perfect, but it's better than 7000 taxing jurisdictions.
On the other hand, why they are taxing is a very good point, but if you read the original article: they're going to do it with or without your support.
The bitter lessons of a veteran coder: http://bitterprogrammer.blogspot.com
So if a state wants to tax another state's imports and actually receive the proceeds (rather than it being funneled into the treasury), an amendment will still be required. Whether this is desirable or not is another argument. But as it stands, any true "internet tax" over cross-state goods doesn't appear to be lawful.
Ita erat quando hic adveni.
And now we know how Bush will be financing the millionaire's tax cut. Thank you for playing.
Jesus was all right but his disciples were thick and ordinary. -John Lennon
So you buy a case of your favorite BBQ sauce from Wyoming to be delivered to your home in Massachusetts. Your Wyoming webtailer charges you Wyoming sales tax and Massachusetts sales tax. Cheaper to go the Safeway, isn't it?
That's going to happen unless you deal with the fundamental issues at the bottom of this:
Local & State governments practically have no other source of income.
The Internet blows away jurisdictional elements and creates the equivalent of a tarrif between states (illegal under the U.S. Constitution)
OK, so how can you get local & state governments their income without having a jurisdictional nightmare?
A Universal sales tax. Everything ordered out of state is exempt from local & state taxes, but must pay a Federal sales tax. This includes mail order, telephone ordering, Internet, etc.
How to you distribute it? By population to all 50 states. The Universal sales tax will be aportioned to the states depending on their populations. It is then the responsibility of the state government to distribute it to their local governments.
I'm sure this will be a touch controversial, but it's sure as heck better than dealing with 7000 taxing jurisdictions.
P.S. I place this idea under the GPL. Take it, use it, extend it, print it out and use it for toilet paper. Hopefully this way, no one will patent it as a "business process. :-)
The bitter lessons of a veteran coder: http://bitterprogrammer.blogspot.com
>>"The 'Main Street' retailers have a legitimate fairness argument when they see customers come to the store to locate items they want to purchase, only to leave and order the items over the Internet just to escape the sales tax," C'mon, who buys stuff off the internet to avoid paying sales tax? go to pricewatch and you'll see incredible ram prices but with 13$ shipping charges. I've shipped ram before, and i know that it doesn't take 13$ to ship. But, even with that high shipping, it's still cheaper then stuff they sell at Best Buy. I buy stuff over the internet because I don't feel like paying the high mark-up that local stores add. The best prices that i've seen come from small businesses. This isn't about people escaping sales taxes, it's about the 'Main Street' retailers not being able to maintain their profit margins on items. If this passes, the computer and internet industries will follow Nasdaq. I'm not a Republican, but keep government out of the Internet.
"Tread softly because you tread on my dreams"