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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
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.
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.
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
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.
Specially by Soviets.
They went from a virtual 3rd world country to a world superpower in about 2 decades. So yeah.