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Ban on Internet Taxes to Expire
slacknet writes: "Well, it looks like the government could be lifting the ban on taxes related to the Internet, CNN reports here. While the House of Representatives has already passed a two-year extension on the ban, the Senate has not. Newsbytes.com also has an article on this matter here. I'm sure I'm not the only one who thinks this probably isn't the best time economically to be discussing any sort of additional taxes." I think Newsbytes has it right - the federal ban is likely to be reinstated soon, they just didn't get around to it this week.
Nolo.com has a nice short primer on Internet taxation issues, with plenty of additional links for more breadth.
As this NYT article suggests, the taxation ban expiring will have little effect in the short to medium term, as the ban itself was really very limited in scope, and no local politician wants to increase taxes, especially to affluent voters who would be primarily affected.
evanchik.net
If you want to kill whats left of "dot coms" and online commerce, begin taxing it nationwide. I usually can find certain things online cheaper than in a store even with shipping figured in, however if you add tax it's going to be nearly the same, or more. So it'll just be worth going and getting it and having it "now", so yeah, they need to get their act together and instate the extension.
..There's a-dooin's a-transpirin'
A bad idea right now to be sure, but for the long haul, having exemptions for net trading is maybe not such a good idea. It does penalize local merchants, and gives rise to a whole lot of unnecessary transports. Some framework is needed so that local governments can decide on this without creating scewed markets (just deciding whether taxes should be paid at the salesman's or customer's jurisdiction would go a long way).
OK, I'm ready to get flamed...
/Janne
Trust the Computer. The Computer is your friend.
If localities start imposing internet taxes on anything bought within their juridictions I think we'll see a migration to other states. We should start seeing localities try to entice .com's to move with tax breaks, zoning law breaks, and everything else that governments use to lure businesses into their borders.
The Senate did not pass the extention because they want to setup a method to tax internet based sales while still banning internet access taxes.
They are changing the rules because many states want a cut of the money that the few successful on-line businesses make.
If on-line businesses must pay sales tax on every sale, then mail-order companies should have to do the same. But I agree that there should be no new internet taxes of any kind. No taxes on sales or Internet access. It is too soon.
Contact your congressperson at Congress.org or via the site of your choice.
Although we bash the house a lot, it is quite significant here. In terms of Federal taxes, what the house says goes. After all, all tax bills must originate in the house, so if the Federal government was planning on taxing the internet, we needn't worry. "All bills raising revenue shall originate in the House of Representives..." (Article I, section 7)
If people are worried about State Taxes, which could theoretically be passed if no Federal law prohibits them, they should also relax. As you know, states can only tax intra-state commerce. THey can't tax anythinhg at the comes in at thier borders under any circumstances. So, very few internet transactions are at risk here. Also, considering it would probably be difficult to argue that anything you do over the internet is entirely within one state. (Did you use a router in another state?)
FInally, in the current economic climate, I can't imagine any government would ever want to pass a law discouraging commerce.
I don't thing we have to worry about this,
--Alex Fishman
Ohio has already passed a taxation law based on what you purchase over the internet. I don't remember the name of the law exactly, but essentially you are required to put down on your taxes the amount of goods you purchased over the internet. Last year I entered in about $100. They take you on your word, but I have a feeling if a person was ever audited about this 'voluntary' tax, that they could possibly find themselves in state tax hell.
:-)
I could see many other states following Ohio's example, simply because this sort of thing would be very difficult to track on the state level- that is unless carnivore is a *lot* better than I suspect it really is
You are free to add 5%, 10%, 15% to you tax return in April 15th, if you feel you haven't paid enough. I doubt you'll be doing that.
Lowering taxes helps stimulate more purchases, increase tax revenues. Ask JFK. He did it during his term, much to his party's chagrin.
In programming, how many "temporary fixes" truly are? You're foolish to think there are such things are "temporary taxes".
First things first. We're not at war. Countries that have truly been at war (US years ago, Europe years ago, etc) were at war - this is little more than an exercise right now. Yes we were attacked, but we're not at war.
Second - 'no medicine'? Every case on anthrax detected has been treated (except for one and I think that was more due to timing than availability of medicine). We're prepared as we can be short of everyone stopping their lives. People who claim otherwise have other agendas - such as gaining more control over our everyday lives and/or money.
As someone else pointed out, there's nothing stopping you from paying more in taxes. I'm sure you could simply send an extra check every few weeks to the IRS "just because" and they'll be happy to cash it.
*IF* one could specify where this extra money would be spent, I'm sure some people might be inclined to do this. However, it all goes in one big pot, and gets spent on everything - porkbarrel projects, etc. PERHAPS, if the government trimmed it's spending more, there'd be more money to pay for this 'defense' which you claim we don't have. I think we're spending something like $200 *billion* dollars a year already on 'defense', but apparently we aren't. You must know something we don't know.
If everyone who's calling for 'raising' taxes or 'reversing the tax cut' would simply pay more, I'm sure that would make SOME impact. Honestly. It seems there are a substantial number of people who feel this way. If there's only a hundred thousand around the country who feel this way, and each one of them sent in $100 to the IRS next week, that's $10 MILLION dollars. Use that to help 'defend' things. Wow. $10 mil would actually get something done somewhere.
Come on HanzoSan - get moving! Perhaps you could use that money to run TV adverts to convince everyone else to push congress to raise taxes. That's probably the most effective use. No, wait - the networks should simply donate air time to such a worthy cause (some would argue they already have!).
But seriously - you should be able to rally 100,000 people via the web to pay an extra $100 in taxes to the IRS in one month. Think of what that $10 million would buy. Why, you could even fund a tech company with it...
creation science book
Maybe for the likes of eToys and Furniture.com. Look at the money going through eBay. Or the volume of visitors that PriceWatch.com gets. E-commerce is well-suited to several types of businesses (computers, electronics), but obviously not so well-suited to others (toys, furniture).
Perl - $Just @when->$you ${thought} s/yn/tax/ &couldn\'t %get $worse;
I replied to you in another thread, but you have popped up here as well.
Do you know what the U.S. government taxes? If you say 'money', 'wealth' or 'income', you're wrong.
The U.S. government taxes *activity*. I buy something from you, the *transaction* is taxed. If you go stuff that money in your mattress and don't touch it for 10 years, it's effectively out of circulation. The moment you use it to buy anything, that *transaction* is taxed.
If people have less money because the IRS is taking it, they have less money to create transactions with. The fewer transactions there are, the less revenue the government has.
It's pretty basic, really. If the government takes more money, short term (1 year? 2 years?) it'll have "more" money, but people will be able to create fewer transactions, leading to less tax revenue.
creation science book
Pooh.
The House just has to sit on their hands and they will. On one hand, the constitutional argument is inapplicable as the previous poster said. Neither house is trying to impose new taxes technically. And 45 of 50 states are in a budget crisis.
But on state taxes, the previous poster does not quite realize that the goods end up in a particular state where they may then be taxed. In the state of Washington, we have had something called a use tax on the books for years. This obligates me to pay sales tax on stuff I buy out of state. Except they call it a use tax. I bet most states with sales tax have something similar. The trick is that the use tax is very hard to enforce on private individuals. They do try to enforce it on businesses as part of their sales tax audits.My take again is that given the state revenue crisus, we will see the ban lapse. And for politiicians, dot-coms are a bucket of warm spit these days, IMO. So right now, the dot-com effect is a non-issue.
What we are seeing is a little manuvering towards a workable interstate sales tax system. We will get a little chaos, and the pain will move this forward, IMO.
True enough.
In a formal war, there are certain things that happen, certain laws that get passed "for the duration" - but since we are not at war, laws passed tend to be NOT for the duration. Which means that they will be more permanent.
We need to be alert for this. This is not always a good thing.
For example, the airlines all want a bail out, which i can see. but now everyone else wants a bail out, a subsidy, etc. as much as it hurts, the US cannot be the defacto insurance company of last resort for the country. Isn't that why we have insurance companies?
"It is a greater offense to steal men's labor, than their clothes"
Constant attacks? There was a single day of terrorist attacks 40 days ago. There have been a few isolated incidents involving Anthrax spores targeted towards tabloid media and Congress. I think the majority of us are safe.
Our airports aren't safe. Despite the changes already made, several journalists and inspectors have successfully boarded commercial flights carrying metal weapons since 9/11. The security people are too busy arresting passengers for bringing their personal stash aboard.
Sorry to burst your feel-good bubble, but nearly 40% of every dollar paid in federal taxes goes toward the military and intelligence agencies, as it has for years. If that can't protect us from terrorism, I don't see what can. Maybe we should focus on prevention; for example, we could stop choosing sides in other peoples' conflicts and making new enemies in the process. We could retire from the business of being the #1 wholesaler of weapons to the ROTW. We could stop going to war for cheap oil. We could stop selling the pesticides to other countries that are banned for use here because they are carcinogenic. We could stop subsidizing businesses who get third-world countries addicted to cigarettes and cola. We could steer clear of Free Trade agreements that solidify the gap between rich and poor worldwide.
Raising taxes is kinda stupid when Bush is giving over $100,000,000,000 US to elite business owners.
If we want our country to be safe, perhaps we should start practicing some of the philosophy of Jesus of Nazareth, whom a majority of theistic Americans claim for a saviour.
"What is the sound of one belly slapping?"
This is nothing new, except for the technology.
My in-laws in northern Mass. regularly go into New Hampshire to buy appliances and other large items in order to avoid the Massachusutts sales tax.
It happens everywhere a state is bordered by one with lower sales taxes, gas taxes, liquor taxes, what have you. E-commerce is just a new variation on that theme.
E-commerce would be a serious concern if it could truly take the place of brick and mortar, but it can't and it won't. It's a little dent. It's more of the same.
You are obviously ignorant as to how government raises money.
When Congress experiences a shortfall of money they go to the always willing Federal Reserve to sell bonds, and the Fed always buys them. Why? Because the Fed has a license to print money.
Did you know that the Federal Reserve is a private corporation? Do yourself a favor and read "Creature From Jekyll Island" it will open your eyes w.r.t. money in the US.
Now, I'm not saying that it is right, it's not. But that's how it currently is.
And I could argue that SS, healthcare are not Federal issues!
One of the shitty things about Democracy is that you can vote yourself money and entitlements, at the expense of others.
If we returned to a republic, with a Federal government providing for "Common Defence" and not namby-pamby BS liberal handouts, maybe we would have more money for military intellegence and medicine production.
I can call a catalog, say PC Connection, and buy something without being charged any taxes.
I wonder if this could be used to get around Internet sales taxes. I could add things to my shopping cart, receive a "pin code", call a toll-free number, punch in my credit card number and my sale is now a telephone sale and not an Internet sale.
"Dont give me this "you can pay more money if you want" because you know no one ever does this. Not in this world. People have to be forced to pay more".
Tell that to the Red Cross - how many millions did they receive because people wanted to help? When people know where their money is going, and there's a genuine need, people give in DROVES. Just through Amazon's site there was something like $10 million collected for the Red Cross. People don't have to be forced into ANYTHING.
creation science book
The best government is always the minimal government
Amen, Citizen. No need to hide yourself though, log in and be Patriotic!
If online stores start charging taxes nation wide, then there will probably be a decrease in sales for them.
This would not be good for companies like UPS, Fedex, Airborne Express, and the USPS. They would start losing business because they will have less to ship.
UPS has already reported that their earnings are down 19 percent. If people quit buying merchandise online, then UPS will lose some more business and their earnings will fall even more.
"the fax machine is nothing but a waffle iron with a phone attached to it." - Grandpa Simpson
"To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;" (Article I, Section 8)
"Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances." (Amendment I)
"The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized." (Amendment IV)
I think it's important to be realistic with respect to taxing the Internet. Internet businesses are no different than stores in the mall in that they can be regulated and taxed by the government. Congress chose to ban taxes on the Internet out of a desire to help support net commerce. Because the economy is currently on a downturn, Congress and the states are unlikely to enstate any sort of new tax structure on the Internet in the near future. (It would be political suicide to do so.) But, it's only a matter of time until the Internet is taxed because that's how our economy works...You buy something and then pay a tax on that item to the government. If you don't have a problem paying a tax on an item in a store why should it be any different online? The only way to get out of taxes forever is to buy everything on the black market.
Actually, the thing that stimulates a sagging economy is increased government spending. Been proven time and time again.
...is over here
;-)
Go sign it, and don't forget to write snail mail to your representatives too.
PS: do not put white powder in the envelopes. That will result in them not being read.
Yes, but the government is punishing one behaviour (purchasing from the retailer) and rewarding the other. This tilts the playing field.
The reason why internet tax was thought up is because tons of people can wait for what they want, so retailers were losing money.
No, the tax was thought up, because it's inconsistent to have items taxed when they're purchased locally but not taxed if they're purchased by mail order.
If the balance between internet and retail store is broken, it would screw over everything.
It already is broken, because one behaviour is taxed, and the other isn't.
If buying over the internet costed more money AND time than retail stores, it would screw over the world.
No it wouldn't. It just wouldn't be very good for the internet stores.
If those people who normally order stuff at home went out to retail stores, traffic would be a mess, gas prices would go up since the demand would be greater, stores would be overcrowded, global warming will happen faster and we'll all die.
Not at all. Obviously, traffic levels, gas prices etc are an obstruction to travelling, and consequently an incentive to buy mail-order.Instead of causing us all to die, the result would be that it would cause us to consider buying mail order, even though the items were taxed.
In fact, no taxation without representation!
I'm a foreign national residing in the US. Are you telling me I shouldn't have to pay any taxes in the US ? And would you argue that someone who produces a NY drivers license shouldn't have to pay sales tax in NJ ?
On the first point, that the house has the power of the purse, it doesn't mean squat. All it means is that bills must originiate in the house. The normal rules of bills matter. So if the Senate drags its heels than it doesn't matter. The bill does not be come law. Don't you remember your School House Rock.
And on the second point, all items must have sales tax collected. If you buy mail-order dog food from California and you live in Kansas, you are still legally required to pay Kansas sales tax on the item. With mail-order it is the responsiblity of the purchaser and not the seller to pay the tax. This has been generally ignored and not enforced by the states because its not worth it and in the end it all pretty much evens out. With the Internet, the ban was extened to include e-transactions into mail order. Taxes were still required to be paid, although no one did it. Now the times is up, the states have simplified the system between themselves to ease the collection and they are going to do so. They are losing quite a bit of money on transactions and they want their cut back. Some states like, Tennessee need the money badly.
So yes, you are going to be taxed. You are going to be taxed soon, and there is nothing to either worry about or prevent it.
Have a nice day.
Please take the following statement as a mantra, and pass it along to your local CongressGoon:
Internet commerce should be taxed exactly the same as phone sales and mail orders.
No more, no less; no sooner, no later.
so will the main reason people are willing to buy over the Internet -- saving on taxes. Once taxes are factored in with shipping costs it's hard to have a low enough price to beat the guy down the street.
-- @rjamestaylor on Ello
Specially by Soviets.
They went from a virtual 3rd world country to a world superpower in about 2 decades. So yeah.
"I think Newsbytes has it right - the federal ban is likely to be reinstated soon, they just didn't get around to it this week."
Oh, well that's just fine then. I'm sure Congress won't mind when I send them a bill for the sales tax some greedy official in Greater Podunk will stick me with the next time I try to buy something online.
Way to go, guys. Way to show you REALLY care about getting out of this recession. Pffft.
-Kasreyn
Kasreyn: Cheerfully playing the part of Devil's Advocate to hairtrigger
For instance, in MD and PA, you need to periodically (quarterly in MD, monthly in PA) send in use taxes (equal in percentage to sales tax) for any out-of-state purchases, whether the purchases are over the phone, by mail catalog, Internet or I think even when physically visiting another state and bringing the goods back (but in this last case, one can subtract the sales tax one paid in the other state from what is owing, and presumably, one can seek a refund from the other state if one paid a higher rate there; so, if a MD resident buys goods in VA, then since the VA sales tax is 0.5% lower than the MD one, the MD resident owes his state 0.5% of the purchase price).
The "ban" on Internet taxes only meant that the states couldn't ENFORCE this in the case of Internet sales, so that this was an honor-system tax: i.e., a tax on the honest.
ARP
Mail-order stores only use the local infrastructure in those jurisdictions where they have a physical presence. Ergo, the current law (requiring sales tax to be collected in jurisdicitons of physical presence) is the correct approach. Collecting sales taxes outside areas of physical presence is simply pandering to politicians' greed.
/. If the government wants us to respect the law, it should set a better example.
How are they going to get this money without raising taxes?
By doing the same thing you and I do if we have unanticipated emergency expenses: cut back on lower-priority spending.
/. If the government wants us to respect the law, it should set a better example.
I bought a book from BAMM.com and was charged Illinois sales tax even though I don't live in Illinois. I questioned it and was told that was just the way it was. This was a few weeks ago.
My last purchase from BAMM, BTW.
--- Jump!! Fire!! Bullet time!! - Lego version of the Matrix
This coming from a country whose government ORDERS foreign companies to collect its GST.
Why the heck should an American company charge and collect GST for the Canadian government when something gets sent to Canada?
That's why many companies won't sell to Canada. They don't need the business. And the tax paperwork and hassle is too expensive, besides.
Think before you mouth off. Engage brain, then speak.
--- Jump!! Fire!! Bullet time!! - Lego version of the Matrix