Slashdot Mirror
States To Try Taxation Of The Net Again
kimbermatic writes "From the Denver Post comes this article that the states are ready to try and tax the internet sales once more. The poor economy is sending the 'hounds' sniffing for more money. An interesting, and alarming read if your interested in protecting online merchants from this taxation plan." 'though it's not really online sales that are the big ones people want -- it's catalog mail order sales, which are still much bigger then online sales.
Collecting this tax will cost more than the tax can produce itself. They at least need to settle the New World Order and implement the 1 World Government under "W" first. After which implementing this will be much simpler...
Remember, you are supposed to be paying state tax on all of your catalog orders anyway. So this will not be a new law, just a new enforcement technique...
Can you imagine having to try to figure out what sales tax to charge and who to forward the payment on to if local/state governments are allowed to tax online sales? Not only do you have to contend with different rates for different localities, but you have to mess with different exemptions and ways of classifying products for tax purposes. This will kill the small online merchants in a heartbeat.
What's next - taxing garage sales?
This means the only time I buy at Fry's is when I either need it *fast* (which happens) or when it's so little it's not worth ordering (which also happens). I mean, the CA taxes on anything in the $50+ range makes it worthwhile to always buy online and pay shipping.
This, on the other hand, could change all that, couldn't it? I think this will just drive more people away from online business, sink a sector of the economy and drive prices up for the consumer (which means they'll probably spend less, which is a Bad Thing, especially when you're in a recession).
But hey -- if that happens, I'll start selling motherboards on the street in SF right next to the guy selling the fake Rolexes.
Every year during my review, I just pray the words "slashdot.org" aren't mentioned.
In any case, I see taxes as one of the prices one pays for living in a civilized society, so I see no problem taxing online folk at an equitable level.
That is all.
What politicians fail to understand is that the major draw to e-tailing is the lack of taxes. Sure, shopping online a huge convenience, but people today would still choose to drive to their local retailer and actually touch and try out a product before making a purchase, and forcing taxes on e-tailing would take away any incentive for consumers to use the services of the fledging new industry.
With huge competition with prices and selection from traditional real-life retailiers such as Walmart and Best Buy, e-tailers are already having enough trouble trying to grow their new industry. Slapping taxes and removing incentives for consumers to use online services would only impair progress. We're already seeing the effects of fees on online services and its related decrease in usage (MSN, Yahoo, Hotmail), taxes would further the disincentive campaign that seems to be propagating through the online world.------
Amadaeus
The last bastion of Mathie-ism
If you order a CD from Amazon and don't pay your use tax, you're cheating your state out of more money than the artist would lose if you downloaded the CD from Napster.
Don't try to rationalize. You're all thieves. Bow your heads in shame.
(I have to make myself stop here. It's just too fun to spew out righteous indignation.)
every other economic transaction is taxed. there is no logical explanation why these should be exempt.
My word, when will these overbearing government goofballs learn that having LOW taxes while surrounded by HIGH tax areas drives business AND revenues up for the low tax area?
Also, don't think that if there is no visible sales tax that you are buying anything tax free. The politicians conveniently forget all of the inventory, property, business income and other tax streams that they are already getting BEFORE they jack up/create a sales tax.
A perfect example of that was Washington, DC. They exempted "not for profit" organizations and had the highest sales tax in the area. This only resulted in the few businesses that were paying taxes to loose business to Maryland and Virginia.
Tennessee is now on their way to driving every bit of retail business near it's borders into the surrounding States with their 9.5% (or is it 10%?) sales tax. That is on top of their invintory taxes, "licensing" taxes, etc.
Solution? A small group of States make it inviting for internet business to locate their warehousing, data centers, etc. there and reap the benefits of elevated employment and higher volume of money due to a lower % of taxation.
Eve Fairbanks says I drive a hybrid!LOL
From the article: Twenty-nine states will vote on a tax proposal next month that could be pivotal in their effort to tax all online sales.
... To regulate commerce with foreign nations, and among the several states
Section 8 of the Constitution: Section 8. The Congress shall have power to lay and collect taxes, duties, imposts and excises
But then, who cares about the constitution? Certainly not the United States.
The theory of relativity doesn't work right in Arkansas.
But the US needs free trade more than anybody to soften the risk of entering foreign markets. Most of the 'free trade' agreements in place (at least with Canada and Mexico) were the brainchildren of US business men in order to make it easy to get into other markets (well, really, to make it difficult for local governments to protect domestic markets - same thing) .. I'm not sure setting up tarrifs would go over well at this point.
It'd seem pretty hypocritical of the US, and it'd probably be difficult to get away with, given the amount of trade agreements in place that purpot to provide free trade with various foreign markets.
"Old man yells at systemd"
I do so enjoy it, when people comment without reading the articles first.
It QUTIE clearly says, that in order to get on board with this plan, states have to harmonize their sales tax regimes. So that the state, and local taxes are the same.
"Politicians are interested in people. Not that this is always a virtue. Fleas are interested in dogs." P.J. O'Rourke
I know this is a long shot, but instead of raising taxes, how about we cut wasteful spending such tattoo removal programs in san jose, and then lower taxes so people can spend more of the money they earned. And how about we legalize drugs and tax the hell out of them. And how about ditching the income and going to a sales tax on non-essential goods and services so that people can choose when they will and when they won't pay a tax.
Man, in a perfect world...
Derek Greene
After years of disagreement, I no longer believe that Internet sales should be free of taxation as a class unto itself. I argued in the mid- to late-90s that the shipping cost was a barrier to the then dozen-or-so e-commerce sites, and we needed to not throw up more barriers to prevent the economic success of the Internet. The Internet has now had that development time, and I am no longer convinced that an exemption is necessary.
.com (and there are lots of them) would likely find having to file in so many different manners at different deadlines on different paperwork to be a significant problem.
My remaining concerns are not sufficient to convince me that Internet taxation should not occur, but they are significant. The biggest one is the logistical nightmare of paying sales taxes to 50 different states, should that be the nature of the changed laws. Though the software end of calculating the fees surely wouldn't be difficult, the average mom-and-pop
JM2C.
-Waldo Jaquith
The governments shouldn't need to create any new laws to tax internet sales, because they should already do so.
Performing an age old activity like sending packages through the mail in exchange for money transmitted by credit card should be equally taxable regardless of whether the customer places her order via phone, email, paper mail, http, fax, or the trusty old carrier pigeon.
We've seen it again and again- government regulators/lawmakers/busybodies get tricked into thinking that activities are somehow inherently different when computers and internet are involved. This gives us special laws to prohibit computer intrusion (we've had wire fraud statutes since 1910) and special patents for "carrying out traditional business XYZ, but over http".
I can understand the argument that to support budding e-commerce, you want to give them a temporary reprieve from some normal costs of business. But the expiration of such grace periods shouldn't be newsworthy, it should just be expected.
Its about time this happened.
Can anyone put forward a well-reasoned argument why the Internet should be exempt to sales tax? Every other method of interaction in the world - from face-to-face transactions to mail order to telephone sales - is governed by state statues which tax that commerce. Is the Internet exempt simply because it is 'too cool' or 'over the head of stuffy old lawmakers'?
Perhaps taxation laws are merely over the heads of overexcited teenagers.
Dr. Joseph Hairston
Superintendent, CCBC
To be a REAL retailer with inventory, rent to pay, etc. and have to compete with 12 year olds with online stores that don't have to pay sales tax. Why, exactly shouldn't online retailers be taxed like everybody else?
Democratic businessman Rollie Heath, Owens' challenger in November's gubernatorial election, is pushing for Colorado to join the tax project.
He said that not taxing online sales puts local businesses at a competitive disadvantage.
"I just have a strong bias against having our own business having to compete unfairly with somebody who can send the same product in here from out of state," Heath said.
Sure, some businesses have suffered quite a loss due to the internet, but many businesses rely upon the internet to order items for themselves. Restaurants for wine, bike shops for parts, used book stores that buy, sell, and trade on the internet. All of these types of stores and shops would be hit by this tax as well as Joe consumer. And on top of this point, would this not increase the amount of items ordered directly from countries such as Canada and Mexico?
Yeah, but "the long run" when you're talking about the negative effects of tariffs on trade is, like, five years. Tariff wars were among the main causes of the Great Depression. I'd rather not see us go down that road again, thanks. The few countries that have success with big tariffs (e.g. China) tend to be developing countries that can sell their exports so cheap that when richer countries (e.g. the US) slap retaliatory tariffs on the poor countries' exported goods, those goods are still so cheap that the people in the richer countries will buy them. In cases where the economic situations are more nearly equal (e.g., the US and Japan) tariffs end up hurting both sides, and revenue goes down pretty fast because everyone's out of work, and bums don't pay taxes.
...
The other issue, of course, is that US States can't enact foreign policy. I think that there may have been a couple of times when state governments have tried to enact tariffs on foreign goods and have been shot down, though I'm not sure. And since we're talking state revenue, not federal
The correlation between ignorance of statistics and using "correlation is not causation" as an argument is close to 1.
Remote merchants use FAR less resources than local ones. The SFPD rarely has to respond to problems at the Amazon offices in Seattle, etc. Any wear and tear to roads, etc caused by delivery trucks should be borne by the freight handlers, and passed onto the merchants that way. By and large, a remote vendor will use basically no local resources.
"Politicians are interested in people. Not that this is always a virtue. Fleas are interested in dogs." P.J. O'Rourke
Why would you love to see import taxes? You do realize that means no more cheap TV's and other consumer electronics. Any tax on imports gets passed onto you, the consumer. Taxes on imports have little to do with generating revenue. They are more about encouraging people to buy American (which in turn increases tax revenue).
Why not move your 'online store' to Montana? I'm sure some enterprising geek can setup an 'offshore' ISP for all those who don't want to deal with our money-grubbing, mismanaging Congresswores.
I'm sure there is a hole in my plan, but I just like saying "Congresswhores".
"Most states are running budget deficits, and they're looking ever more aggressively for ways to stem the erosion of their tax bases."
Like hell they are trying to stem the "Erosion" of their tax base, they're looking to create a new tax. Rather than just tighten up their states respective budget's, maybe spend less, the politician's natural instinct is to create or raise a new tax.
Internet sales will be taxed, now that the politicians understand that the business cycle wasn't eliminated, and that the internet is not some magical money machine for the economy, not to be trifled with.
I'm surprised it took this long, but then, these are politicians.
"Inattention makes clowns of us all" -Bean
I was taxed by a company on eBay a couple of weeks ago and brought this subject up with a state investigator about these matters. Here's the rundown from what I understand.
A company doesn't have to charge you sales tax if they are located out of state. They CAN if they have an agreement with the state you are in if it's different from the state the company. Even if that company doesn't have a branch or whatever in your state. If the company does NOT charge you tax it's YOUR responsibility to go the the local department of whatever and tell them that you bought whatever item at whatever cost from whatever company and you will then pay the tax.
Obviously a lot of people do not follow this course. And most mail order companies don't charge tax because it's apparently a giant pain in the ass for them to keep track of it all. So they don't charge across the board.
So it looks to me that they aren't trying to tax something that's not taxed. They're trying to collect what's suppose to be.
Abiit, excessit, evasit, erupit.
THink about it. If all a e-tailer offers, is an online version of a retail store. Then he truly does have to worry about things like salestaxes making the "experience" the same as retail, and thus not worth doing.
However, a smart businessman, will actually differentiate his store, be it online of offline, so that there's a compelling reason to shop with him.
I'm not in favor of more taxes, certainly. But arguing this strictly on the basis of "it'll kill generic online storefronts" doesn't sell with me at all. The government should NEVER be in the business of favoring one segment over another. If the online merchants have a reason to exist they will. But an artificial government subsidy shouldn't be in place.
"Politicians are interested in people. Not that this is always a virtue. Fleas are interested in dogs." P.J. O'Rourke
...how do some states get away without it? I just came from Montana, which has no sales tax. Do they raise other taxes to compensate? If some states can not have a sales tax, why can't the internet also? Can it be looked upon as a virtual state?
Besides, if internet sales were taxed, shouldn't it be by the feds? They're the ones who created the internet in the first place.
c-hack.com |
Welcome to North Carolina, USA folks. There is a nice little worksheet on our state tax form to report online and mail order purchases and pay state sales tax on them. So if this is offloaded to the companies selling the products, the prices will just go up. Simple economics.
Since when is it the job of government to make certain sectors of the economy profitable? ok, since the early 20th century, propping up farmers and steel producers.
But the end result of not allowing taxes of online commerce is that there will be government subsidies to states that have online businesses.
That's ridiculous.
drive prices up for the consumer
Now, you're not even trying to see the state's side of this. They don't look at it as increasing prices, but rather, increasing tax revenue to increase services to the state's inhabitants.
Can you really justify not giving the poor people of California, Massachusetts, and Virginia the food stamps and Section 8 housing checks they so richly deserve?
-nd
Products "Made in the USA" outnumbers products at least 100-1 in China. Products "Made in China" outnumbers products at least 100-1 in the USA. Putting further import taxes would actually INCREASE the prices of general products overall because import tariffs would give FURTHER dis-incentives to investors from importing products into the USA, and since there is less foriegn competition, domestic producers would be free to increase prices because they have a virtual domestic monopoly. Increasing import tariffs would actually be worse off for both the consumer and the long-term economic outlook. Sure, GDP will rise, but at the expense of worker livelihood and domestic morale. One more thing: China has a extremely high GDP not because of economic tariffs, but because of the political circumstances surrounding its tradidional isolationalist thinking of "Motherland products are best".
------
Amadaeus
The last bastion of Mathie-ism
I'm not defending it, I'm just stating why it happens. World politics is all about kissing the ass of people you don't want to kiss the ass of. War sucks.
Mail order houses don't pay sales tax either, typically. Unless they have a physical presence in your state.
While this article is pitching the target as e-commerce. I'm positive that they will attempt to aim the taxes at catalog sales as well.
"Politicians are interested in people. Not that this is always a virtue. Fleas are interested in dogs." P.J. O'Rourke
So I wonder who exactly has tax jurisdiction over a purchase made by an individual in one state from a company in another state. Certainly if I buy something from a company in my own state, then the sales tax is only collected once. (At least, in theory.) If I buy something from another state, then my state will insist that I pay it taxes on the money I spent, and the other state will insist that the company I'm buying from pay sales tax on the merchandise it sold.
Since sales taxes are generally levied on the merchant (and the merchant passes that tax right on to the customer), it seems like the "logical" solution is that a company doing business in a state has to pay sales tax on every item it sells in that state, regardless of who it sells to or what state they're in. The person buying the item only pays sales tax insofar as they compensate the merchant for the sales tax that the merchant is legally required to pay.
Someone else pointed out that the Constitution says that Congress has the power to levy taxes. However the Constitution does not say that the states cannot also have that power in some form. Can anyone shed some light on this?
"Destroy science and religion. Science would re-emerge exactly the same; but not religion." - Penn Jillette, paraphrased
The article clearly states that the tax is charged to the retailer based on his location. It says nothing of the customers location.
Comment removed based on user account deletion
There are software tools already to figure out the sales tax by every zip code in the country, and which goverment level gets which slice. The zip code would be taken from the recipient's delivery address. Perhaps the post-office or UPS may be require to collect the actual tax.
This will certainly create a competitive relationship between states. Local communities are already being pimped by sports teams and corporations for tax breaks and new stadiums. This will create a competitive atmosphere where one state will undertax the next, and in the end, unless they all have similar tax levels, merchants will simple go to the location with the cheapest tax. Remember internet companies are easy to move.
Same for many agricultural products. The undisputed leader of agriculture subsidies in ADM, supermarket to the world. Europe subsidizes its agriculture industry, just like the US.
Bush just slapped tariffs on steel, tariffs on lumber from Canada, and gave cash and loan subsidies to the airlines. All the Republican administrations - Reagan, Bush I, all believed in a large central government that centralized economic power, and redistributed wealth from the middle class to the rich. So did Clinton. Free markets are like a free lunch - ain't no such thing.
When the US says other countries should open their market and lower trade barriers, they mean just that - OTHER COUNTRIES. Not the US. We play by our own set of rules.
When other countries subsidize their industries and protect their local businesses, we call that SOCIALISM. When the US subsidizes our industries and protect our local business, we call that CAPITALISM. See how it works?
There are two types of people; those who divide people into two types of people, and those who don't.
The report estimates that all 50 states could collectively lose more than $45 billion in Internet sales tax revenue in 2006.
Hmm, states can lose money that they don't currently collect? Isn't this a bit like saying, "Microsoft could lose more than $10 billion in annual revenue in 2006 if the government switched to Linux"? [Note: No, not a gratuitous MS swipe - I don't think MS would be so obnoxious as to use this phrasing.]
How about, "All 50 states stand to gain more than $45 billion in revenue by imposing a new tax they are not currently in a position to impose"? Seems like a more accurate rendering of the situation, although still somewhat hyperbolic since all 50 states are not considering this proposal. Some states don't have sales tax, period.
Michael
"No live organism can continue for long to exist sanely under conditions of absolute reality;..."
In the long run, I'm dead but my heirs aren't. When my daughter is elected President in 2046, I don't want her to have to deal with the economic collapse caused by silly isolationist policies.
Logically, where does it stop? We tax their imports, they tax our exports at a higher rate. Inflation skyrockets, black markets are created, we try to force them to lower tariffs by raising ours, they raise theirs in response.
That first line in your post is hilarious. :P No tarrifs == sharing of wealth? Laugh.
.. lets see, privatization, liberalized trade .. for business for all of which, for some odd reason, seems to go to american multinationals!
.. and they wouldn't give a flying fuck how anybody sees the US, so long as they can start selling Pillsbury to Venezualans.
.. cause tarrif wars make it exeedingly difficult to gain access to foreign markets. The inevitable tarrifs that would go up in other countries as soon as the US started using them more would have the effect of making it more difficult to exploit foreign markets.
More likely it would piss off the world because multilateral free trade is how american multinationals get into foreign markets (b/c it weakens the foreign governments' ability to protect industries.) Consider all the conditions of IMF aid
The US doesn't _need_ tarrifs, which is why it doesn't have any. You don't really suppose American international trade policy has anything to do with whats nice, do you? I mean, the trading policies in place are pretty much what heads of multinationals want them to be
So no, its not foreign countries that would be pissed if tarrifs increased. It'd be heads of US corps that would freak
Just look at some of the prominant trade agreements in place. NAFTA was dreampt up by american corperate heads, and then pitched to Canada and Mexico through 'figure heads' inside those countries. The biggest opponants to increasing tarrifs would be growth-minded CEOs inside the US's border fearing a tarrif war with markets they're trying to expand in.
"Old man yells at systemd"
IMO the only real advantage to buying online would be not paying tax. I can usually get the same items at a local store for the same price, and not pay shipping. Nothing beats that instant gratification.
It's great to see that the internet has succeeded to the point that government wants to tax it. What's too bad is that many ecommerce businesses see their only advantage to be price. And if 4.5-9% in sales tax will cut into your orders that much, you are already among the living dead. Those that live by price, die by price. You can't make money selling $.99 for $1.00. For that matter, it's damn hard to make profit selling $1.00 for $1.10.
$G
-- $G
Why don't we just try taxing imports? Works well for the Chinese and every other country that has positive GDP growth this year.
Both the US and China are members of the WTO, which makes it very difficult to put new tariffs in place. While China certainly has more trade restrictions than the US, the main reason for the trade imbalance is that the China has something to offer that the US wants (cheap, simple goods like toys and Halloween decorations) but there are few american goods that are affordable to the Chinese (this has little to do with tariffs, but rather with the fact that the average Chinese has a monthly salary that is one tenth the average American's).
The suggestion that tariffs are essential for growth and prosperity is ridiculous, the US and other of the worlds richest countries all have long-standing free-trading policies. The fact that China has higher GDP growth than the US should be attributed to the enormous opportunities that have become available during the last 20 years as the country has opened up economically. It is also much easier to have a high GDP growth if your current GDP is one tenth of the most modern countries (like the US).
Tor
I posted somewhere above that this was the case for michigan. I got moderated as flamebait...I question why?
The tax in place [that you speak of] is for the consumer. The article is speaking of retailer tax based on retailer location. People don't seem to read far enough to understand this..
Am I alone in thinking the US economy is not so bad ? Yes companies are dropping like flies and people are losing their jobs. However I also see plenty of success within families and small companies. Looks to me like this unrealistic fantasy has burst for the large corps and their employees. We have simply come back to reality. The US is one of the most well to do countries, so I can hardly feel bad about the overall situation.
I listen to same drivel about why the US economy is bad and wonder who's economy they are talking about ! It bears no resemblence to economics I studied during school.
They neatly separate everything into consumers/spenders and sellers. If the consumers are not throwing down money on frivolous junk but rather save for more important things to improve their lives all of a sudden the economy is bad. Seems to me the economy they talk about is where the rich get richer and poor get poorer.
This net taxation is just another money grab with a convenient excuse. Unjustified and unrepresented. Hell if it has anything to do with the economy hurting state governments. Rather more of a result of the mismanaged bureaucracy that they are. Throwing more money at mismangement never helps.
Ahh Im done ranting..
First, everything on the net is computerized and leaves a digital trail. Much easier to trace than face-to-face transactions.
Second, the choke point are the delvieray services. There only a few of them. They could be forced to collect the tax as postage. Much like the charges on your local phone bill for taxes added by any telco service you use.
I bought a new G4 a couple weeks ago from the online Apple store and they charged me tax anyway. Is it because they are shipping from California (probably some goofy CA law) or did they forward this on to my state?
I don't know which but I do know that I did have to pay tax and wasn't too happy about it either.
--Won't that be grand? Computers and the programs will start thinking and the people will stop. - Dr. Walter Gibbs
If local businesses are charged taxes and mail order businesses aren't, this is a non-level playing ground, which is in inefficiency in the system, which is bad for the consumer.
Many people have mentioned that they bought over the internet because they didn't have to pay tax, but they otherwise would have purchased locally. Purchasing locally you get to visually inspect the merchandise, which is a benefit to you, but one that you are not willing to pay X% for.
But somebody has to pay that tax anyways. Basically you all are saying, "let's take that tax out of the pockets of the technically incompetent instead." Why not just lobby for a special tax break for Slashdot readers and get it over with?
Of course, you Slashdot people also like it because it's a special subsidy for web merchants. Of course, you're free to whine when your tax money is going to any other special interest business. How about a subsidy for Microsoft? It may well be the most successful racket anybody has going to transfer money from the rest of the world to the United States. Surely that's a worthy cause?
The internet has been great for lowering prices: it reduces the cost of information. It'll continue to do so in the future even if a few borderline dot coms go under and a few more bricks and mortar shops do well. pricewatchSanFransisco.com may become more useful than pricewatch, but that's about it. The market for computer hardware is one of the most cutthroat around, and it'll stay that way.
Bryan
OK, you ARE supposed to be paying local state tax on all of your across the border orders. The new tax is however a tax on the RETAILER not the customer as most seem to be missing.
The tax we are required to pay today that most ignore is based on customer location, this proposed tax is based on retailer location.
Tax the UPS and Fedex trucks at the state line.
--
E_NOSIG
Yep, that was somewhat hypocritical.
But only somewhat, as I realize Canada may have been selling the lumber at a loss. This wasn't a situation where the tarrifs were simply designed to protect domestic business at any cost; just to even out the disadvantage they had of losing money if they matched Canadian prices.
I guess it really comes down to whether you feel selling at a loss to gain market access is fair game under free trade? My interpretation is that if you're a true 'laissez faire' kind guy, then you have to accept other markets may try things like this and that its still no justification for imposing duties. Thats why the US sometimes comes off as hypocritical sometimes with respect to trading policies. They seem to be for free trade, so long as they are able to remain the leader in markets. When some of our own industries have all but caved to the American invasion (retail, in this case), American industries which feel the threat of international competition sometimes go running off to seek protection via duties. If that isn't shades of hypocracy, I'm not sure what is?
"Old man yells at systemd"
There's been a lot of comments on interstate internet purchases, and hwo the buyer has to pay their own state's "use tax", but what about buyers from other countries? I'm specifically wondering about Canada. Usually when I buy a DVD or CD it's just mailed through the postal service. Are tariffs built-in to the cost of shipping to another country?
(Offtopic, but I'd just like to say that the Canada/US exchange rate royally sucks. After shipping and exchange, that nice ebay bargain you've just found usually doubles in price.)
The article states:
...
But the Supreme Court has ruled that states can't tax sales from electronic retailers that do not have a physical presence within their jurisdiction.
The court decided the requirement would put an inappropriate burden on e-tailers, especially with some 7,500 sales tax jurisdictions in the country that each have different collections procedures.
The Streamlined Sales Tax proposal, on which delegates from the 29 states will vote on Nov. 13 in Chicago, would simplify tax collection procedures. If passed, it would become effective after at least 10 states meet the provisions of the agreement, which include requiring states and its local jurisdictions to have the same tax rate.
"The end game is to go to Congress and say 'We have now simplified this enough so that it's no longer an inappropriate burden on interstate commerce and we would like you to tell retailers that they have to collect sales tax for states who have joined the agreement,"' he said.
In other words, if the states agree on this proposal, they will then go to Congress and ask that it become law, in line with the constitutional requirements. The state is not taxing the business across the states anyway, they are taxing you, a resident of their state. They're just making the business help.
Hey, I have a fabulous idea to solve the evils of internet business creating deficits and starving the children:
/rant off, but still, sheesh, how can you people put up with that kind of fiscal management? We elected the right people, passed a non-revokable law that said "No budget deficits, ever, for any reason", and that was that. The question isn't why shouldn't you tax IC, but why do you have the need to?
Try balancing your budget!
I mean, sheesh, really, how hard a concept is that? Now, before you charge for that reply button saying that it's impossible, I point out that I live in Alberta. We used to have a multibillion-$ deficit and no end in sight, but we voted in competent financial leadership, and turned it around. Now we routinely post a $1B surplus, have a $17B trust fund for "rainy days", and will have the entire deficit paid off in a few more years. Add to that our free health care, 0% (yes, ZERO) provincial tax, copius social programs (school, welfare, etc), and somehow i fail to feel sympathy for states running $600 billion dollar deficits every year. I wouldn't be asking what we could tax next, I'd be asking why these jackasses were still in office.
And yes, to answer your next question, it was kinda hard... we lost or had cutbacks in alot of programs that we'd gotten used to having for free.. and it's still going on. But the money we save from interest payments on our debt means that we'll be able to reinvest in a few years. And with 1/10 of the entire country living here, yes, we have lost our fair share of business to internet commerce.
Ok,
Also, if you bothered to RTFA, take the budget deficits for the state, and subtract the "claimed" losses from IC. Doesn't balance out to 0, eh?
If I knew the wedgies I gave you back in 6th grade would have resulted in this . . . I might have taken a moments pause.
tariffs raise prices for both domestic and foreign products.
take this (hypothetical) example:
Honda produces a car that can retail in the US for 15,000. Ford, GM, and Chrysler can't produce a car for that cheap. Their cheapest car is 17,000.
Now the US steps in and artificially raises the price of foreign cars by a third, making the Honda 20,000. Now Ford, GM, and Chrysler can raise the prices of their cars to 19,999, and still beat out Honda.
Read up on the Tariff of Abominations in US history to see how this contributed to the Civil War (yes, there were other reasons besides slavery).
Your/you're and then/than is not that difficult to master. It is pretty sad when both are the span of a few sentence submittal.
Because they don't use the states resources.
A local shop or store uses the states resources. It relies on the state's police officers to ensure that it isn't vandalized, and to prosecute anyone who steals. It relies on state money which supports and repairs the streets which give access to that shop or store.
Online businesses don't rely on state resources, or if so only very very rarely and in minor regard. Thus, they shouldn't be taxed.
The other problem with online taxation is that its taxation without representation. If a company is based in NY, it is only represented (in terms of state law) in NY. But lets say that the servers for its products which it sells online are in California. Thus, the company would be taxed in California, without representation. The same thing occurs for us citizens.
Those are some good reasons why online taxation shouldn't be allowed. Here's another one -- its called the will of the people.
How many people can you find (anywhere) that want to be taxed online, so they have to pay online taxes in addition to shipping and handling? Has anyone asked the people about this, or even mentioned it in an election? No. My guess, 99.99% of the people in America don't want online taxation. So we shouldn't have it. Its called Democracy.
"Most states are running budget deficits, and they're looking ever more aggressively for ways to stem the erosion of their tax bases."
Here's a suggestion: fire some of those useless paper-pushers. Get rid of obsolete programs and organizations. Stop letting greedy fucking politicians vote to raise their pay every year. The states have a money problem -- that's their problem. They mismanaged the money we gave them with our taxes. Now they want to punish us by adding more taxes (this very cowardly way to do it, add new taxes, instead of raising existing ones). Probably upwards of 80% of the money you give the state in taxes is wasted anyways. Try cutting off some fat first.
In any other facet of life, people are held financially responsible for their money-management. Where else in the US can you keep on fucking up with money and always get more precisely because you fucked up? Where else do you get to run enormous budget deficits without the plug being pulled on you?
I get really sick and tired of hearing about how the states don't have enough money. Taxes are raised at a much faster rate than inflation devalues money, and they always need more money. Apparently, the government is like God. All-powerful, all-knowing, all-wise, but just can't handle money.
social sciences can never use experience to verify their statemen
"Projected Sales-Tax-Revenue Losses in 2006" heads the chart in the Denver Post article.
A "Revenue Loss." What a crock.
But what's REALLY profitable these days is to be a Canadian manufacturer or pre-drilled studs. (that's a kind of lumber you pervs). US manufacturers have to deal with increased costs, (because they make the studs out of lumber which is more expensive in the US due to the tariffs), while Canadian manfacturers get costs reduced because the tarrifs in the US means cheaper lumber in Canada. Then they ship down to the US, and pre-drilled studs don't have a tariff on them. So US manufacturers are getting the crap kicked out of them. Just goes to show that if you meddle in the free market, you get unintended consequences.
And then there's the US protectionists on Steel...
. --- If you're looking for free e-mail you won't find it here! http://www.noemailhere.com
Part of my point was they would mind because the US has been so pro-free-trade that to have them selectively go protectionist would not be a popular move.
Yes, duties go up, industries in other markets will complain. Thats fairly natural and should happen when you impose virtually any duty on a product you're importing.
But a bigger issue which most people would base their reaction off of (ie, if they weren't the ones on the receiving end of the duty-increase) is simply the gains the US has been able to make from free-trade policy and how infuriating it would be for the US to be selectively protectionist whenever it suits its whim. That'd be the larger picture attitude that would get industries worried or frusterated even if they wern't specifically on the receiving end of a specific increase in duties.
"Old man yells at systemd"
"The US doesn't _need_ tarrifs, which is why it doesn't have any. "
That is a bald-faced lie (you might also want to find out what the US is doing in regards to steel, it's the same back-stabbing).
The US government is very happy to force tarrifs, taxes, etc, on imports. They don't like it when an unrefined resource producing country like Canada has a competitive advantage, even though it makes more sense economically for both parties (as you pointed out: the US gets the resources it wants, Canada gets the refined goods it wants, companies make the money they want).
If you wonder why this situation exists, it is because the US government continues to pander to special interest groups. Why do they do this? Because, as the most recent election showed, voting for a republocrat is throwing away your vote -- only a few people, the special interest groups, get to decide the entire fate of the country.
--
Internet Explorer (n): Another bug -- that is, a feature that can't be turned off -- in Windows.
Just a correction on your Greek. That should read, "It is only fair that we contribute our share towards running it and take some of the crushing burden off of hoi WalMart-shopping, non-SUV-driving, non-alternative-remedy-using polloi."
Karma: Good (despite my invention of the Karma: sig)
"Can you really justify not giving the poor people of California, Massachusetts, and Virginia the food stamps and Section 8 housing checks they so richly deserve?"
Tongue in cheek here, methinks. Yet, the states are approaching this with a completely straight face; they would say you are exactly right. Having squandered their huge surpluses during the boom years on pork barrel spending, they are now looking to save their own jobs by attacking a sector that has no political voice in their locale.
Most online merchants are not profitable, investors have stopped buying their stock, and the economy is in recession. It's both stupid and crazy to levy new taxes right now, and unfortunately it's all too likely to pass, if the Demos can get their way. Of course they'll then find a way to blame the resulting destruction of tech businesses and related tech infrastructure companies on GW Bush.
it's = "it is"; its = possessive. E.g., it's flapping its wings.
At the risk of being redundant, many states have "use taxes" on the books to cover this. If I cross state borders to another state that has a lower sales tax rate than my home state, use tax laws require me to declare the item and pay sales tax (or the balance of the difference) to my home state. This is the case for anything purchased over the phone/internet/mail. The problem is that this kind of tax law is impractical to enforce, so the money hungry state governments are looking for ways to get thier piece of the action.
..."
What's really funny about this is the "paper loss" mentality many people have about this kind of commerce. From the article:
Colorado is projected to lose $686.4 million in revenue in 2006 if it does not tax interstate e-commerce, according to a study released last year by the University of Tennessee for the Institute for State Studies.
The article should read "Colorado is projected to gain $686.4 million in additional revenue in 2006 if it finds a way to enforce existing tax law regarding interstate [e-]commerce
Simply because they estimate a dollar amount leaving the state doesn't mean that the money can magically be had for additional government spending. Once they find a way to do this, the e-conomy will adapt accordingly.
I'd be afraid for my wallet if they actually do figure out a way to do this, because it would be an additional incentive for states to have a higher tax rates relative to thier neighbors. If state A has lower use taxes than state B, then it won't get any additional revenue from its citizens buying out-of-state products. Even better (the constitution be damned), they could start setting up checkpoints at the state borders.
If you read the article it states:
(quote)"Online companies don't use state services," he said. "If you're going to the store to buy something, you're going to be driving on the roads and the store will be using police protection or fire protection and other state services for which it would be appropriate that they charge a tax."(endquote)
And theoretically the consumer "never" legally gets out of paying sales tax as most states have a "Use" tax equal to the sales tax. But of course everyone scoffs at the use tax and don't pay.
Two things about this bother me. First of all, these provisions are only addressing "Internet" stores. This leaves traditional phone-in mail order services exempt from sales tax (as they currently are as well). I'm seeing a huge loop-hole here. Place your order online, call a number, press a button to confirm your order, and all of a sudden it's not an internet sale anymore. Tax free!
Second, this is simply unfair to mail order companies in general. Having worked for one the better part of my life, I see the costs that go into such a business. Not only does the warehouse pay all of its traditional taxes -- property, employee taxes, and whatever else you have, they have several high expenses on top of their costs. Since accepting cash is not practical, they pay an additional 3-4% of EVERY DOLLAR that passes to them in credit card fees. I'm not sure exactly how the credit card companies pay their taxes, but I'm certain they do. Also, you have shipping fees on top of all that, in two places -- receiving product and sending out product. These shipping companies are definitely taxed -- the gas they use in their trucks, the employees, their infrastructure, everything. So, point being, a mail order business of any kind, internet or not, is already paying 10-15% of its goods' value in various expenses that directly translate into a tax revenue at some point for governments.
Adding yet another tax on these companies will certainly make them struggle, reduce sales, and greatly affect revenues collected from the other sources. And since online merchants margins are generally very low, we're talking less than 10% in some cases, this extra burden could very easy put a lot of them out of business. Now, we can't tax someone who's out of business, now can we?
The government should be supporting commerce, not stifling it with extra taxes that really don't have any return value for the merchant. How is paying 5% to a box I ship to colorado from florida going to benefit me? It can't! At least local sales taxes have a direct, tangible effect on our daily lives, which makes them somewhat tolerable.
States plan to use the extra revenue to try and buy Slashdot editors a copy of Strunk and White, so they're grammar will be better then it is now.
They Said:
Monday, October 28, 2002 - Tax-free Internet purchases could be dot-gone within a year or two as states search for ways to lower budget deficits
I Say:
Has it ever occurred to them to curb spending?
They Said:
Colorado is projected to lose $686.4 million in revenue in 2006 if it does not tax interstate e-commerce, according to a study released last year by the University of Tennessee for the Institute for State Studies.
I say:
Most families don't spend more than they earn, why don't "They" quit spending money they don't have?
They Say:
The report estimates that all 50 states could collectively lose more than $45 billion in Internet sales tax revenue in 2006.
I say:
You can't lose what you didn't have in the first place. It isn't their money it's OUR MONEY!
They Say:
The Streamlined Sales Tax proposal, on which delegates from the 29 states will vote on Nov. 13 in Chicago, would simplify tax collection procedures.
I say:
The US Constitution is around 10 pages long. The US tax laws total over 2 million pages. You cannot simplify the beast by adding MORE laws.
They Say:
"It's my hope that we reach that level next year," said project committee member Bruce Johnson, who is a Utah tax commissioner.
I say:
There is a man with few friends.
They say:
Gov. Bill Owens, who has put high-tech development at the top of his agenda since taking office in 1999, firmly opposes any sales tax on the Internet
"He feels it's really taxation without representation," said Dan Hopkins, a spokesman for the Republican governor.
I say:
There's someone to vote for!
They say:
Democratic businessman Rollie Heath, Owens' challenger in November's gubernatorial election, is pushing for Colorado to join the tax project.
I say:
This is why I will NEVER VOTE DEMOCRATE. All they want to do is STEAL my money and spend it on things I don't want. They're Socialists now, quit calling them Democrats.
They say:
If Colorado joins the project, the state would have to make significant changes to its tax procedures.
I say:
See the earlier comment on the 2 million pages of tax law!
They say:
But states have the authority to tax sales from online vendors who have a physical presence in their jurisdictions.
I say:
Pass the laws and watch them move their servers to Non-US locations. That will mean more money flowing out of the US economy.
They say:
In Colorado, if a company maintains an office or warehouse in the state or regularly sends a sales staff here, it has a physical presence.
States don't have the authority to tax sales from online companies who don't have a physical presence in the state.
I say:
Ok, I have a warehouse in CA, Offices in NY, and my servers in MN. Who gets to tax me?
They say:
But even when an online sale isn't subject to a levy, Colorado law requires residents to pay a use tax on the purchase.
Few are aware of this requirement.
I say:
Democracy is rule by the people. If the people don't know about the law, how legitimate can the law be without the support of the people?
They say:
But the consumer still must pay use taxes, he said.
I say:
Remember your citizens are armed Big Brother, and there will be a point we won't take it anymore. We rebelled once against taxes, and overthrew an invincible power, and we can do it again. Don't push you luck. Be thankful we vote you out of office for pulling shit like this.
-=[ Who Is John Galt? ]=-
-Begin Extended SiG for the Sake of Technology Please Ignore when moderating and reading-
P.S. Damn what is with the Lameness and text per line filter now. I tried 30 times to post. I had to strip out all the blank lines just to get the post done. Is this a recent feature change? I cannot space a post with any logical grouping with this feature. This is a bizzare form of censorship if you ask me. Only Big Chunks of hard to read text please. Oh no don't format anything so it's easy to read just clump it all together. Utterly useless.
-=[ Who Is John Galt? ]=-
Seriously. . . I've read today more childish arguments from people who are basically saying, "Well, if I have to pay tax, then so should everybody!" --Which stems in part from the barely legitimate fear of losing the precarious toe-hold on their own income through a Bricks & Mortar business, which won't happen unless they are nincompoops who don't know how to run a business in the first place, (Why not set up your own internet order department and get one of your clerks to manage it? DUH!), and from a rabid sense of unfairness which has precisely nothing to do with what is good for the nation and everything about, "MOMMM! BILLY GOT MORE ICE CREAM THAN ME!!!"
As for more new & wonderful taxes. .
Bullshit. Greed and nothing else. For one thing, the economy is mostly a make-believe game anyway, and for another, if you want to live in the 'good little consumer' head-space and play the make-believe 3rd edition rules to the letter, well then if the government would just, say, tax Microsoft properly, punish corporate criminals, (like Bush), and stop plans to drop a billion dollars worth of bombs on Iraq every week, then MAYBE we could dispense with all this other nonsense.
Internet Tax? Fuck off. When the net is taxed, it'll also be so tightly controled that a pipsqueek like me won't be able to speak his mind. And wouldn't that just make for a bad day?
-Fantastic Lad
P.S. Is it just me, or has Slashdot been particularly 'careful' these days to steer clear of political and social topics which actually 'matter'? I've asked it before and been modded to shit for it, but I'll keep on asking until my Karma is dead and gone. . . "Who is whispering into the ears of the Slashdot Editorial staff these days?" I notice the story about the story about implantable microchips broke several days ago and hasn't shown up here. . . Hmm.
If they use virtually no local resources, why is it they should pay local taxes of any sort?
"Politicians are interested in people. Not that this is always a virtue. Fleas are interested in dogs." P.J. O'Rourke
Basic economics.. higher taxes = less money to spend, thus lower overall tax revenue..
Here in my state they are pulling the stunt of raising sales tax an additional 1% because tax revenue is low. Just in time to ruin the shopping season. ( oh and after voting themselves a pay raise, and better insurance benefits.. but canceling all non-political state workers raises for the next 2 years because of the poor revenue )
Will they ever realize that lower taxes is what stimulates the economy? Or do they just have to take it all and keep the populace down until the next, WAY overdue revolution happens when everyone has had enough.
---- Booth was a patriot ----
"Can anyone put forward a well-reasoned argument why the Internet should be exempt to sales tax?"
The complexity of current systems of sales tax in the US are so complex that only larger retailers would be able to justify the use of online sales. Smaller retailers would be forced out of the market. In the event of some sort of simplified "internet tax" system, there still is the problem of submitting the taxes to the various states, no small headache.
Because, many of the most interesting, innovative, and creative products offered online are from small businesses, including mom & pop internet retailers, those products would disappear from the internet in the event of internet taxation of the sort mention in the original post.
An example:
I'm very into bass fishing. Fisherman often develop a preference for certain lures that have become their favorites. New lures are introduced to the market, and become the hot bait of that year, season, etc.. It's not uncommon that the new hot lure, or an old favorite will not be available from local tackle shops. Local tackle shops have limited space, indeed even the biggest names in the mail order fishing tackle such as Bass Pro Shops, and Cabela's don't have the space to carry ever model, of lure, in every size, and color. (1k of models, 10 different colors on average, and lets say 5 sizes on average yields 50,000 different lures, and this is a conservative estimate.) Thus, I have on many occasions ordered lures direct from small manufactures, though, I prefer to do business with local tackle shops. Often these manufactures are ran out of a garage, or the shed in the back 40. As such they are quite capable of selling online to anyone in the US give the current tax structure. However, if these small manufactures were to be subjected to the complexity of having to determine, charge, and submit sales taxes to umpteen different taxing authorities in 50 different states the paperwork would overwhelm them. Even under a simplified system they would still have to submit taxes to 50 different states. Thus, in either case they would then only be able to sell wholesale, and/or retail only within their local taxation district.
Not being able to sell to the fisherman directly would deprive such companies of the ability to be profitable, and the consumer of a broader choice of merchandise.
Ergo, the consumer is harmed, and both local economies, and the national economy is diminished.
I would also point out that catalog sales have always been "tax free" as the purchaser was responsible for state, and local taxes. So this sort of tax "problem" has been around for quite a while. I've been ordering from Bass Pro Shops, Cabela's, L.L. Bean etc. since at least 1976. I clearly recall that in the early 80's there were calls for taxing catalog sales. Such calls occurred with a fair amount of frequency for 15 years, or more. With the advent of the internet such calls morphed from "tax catalog sales" to "tax internet sales." This whole thing is nothing new, not unlike the push to prevent music, and video coping. First it was cassette decks, then VCRs, and now it's mp3 etc.. Same song, somewhat different lyrics.
"Oh drat these computers, they're so naughty and so complex, I could pinch them." --Marvin the Martian
*stands on soap box and prepares to shield himself from tomatoes*
I think that taxation of goods on the net is a good thing. I think we need it. Now, let me explain why.
If you buy a good or service on the net there is no tax (usually) that you are forced to pay. Yes, you do end up paying the equivalent of or possibly even more than the cost of tax in shipping.
The biggest problem with taxing products on the internet is the number of tax zones that there are in the US. I forget the number, but it's not 50. It gets down to the county, and then to the city, and then finally down to the actual product sometimes (it is not uncommon for food, or prepared food, to have a different rate of income tax, or for their to be an extra penny tax on certain goods). The problem is with all of these tax zones and the diversity of locations where shoppers and businesses are located is that keeping track of this data tends to be a pain, plus it means that while one person from Maryland may have to pay 30.00 for a product plus 5% tax, the person buying it from Florida might have to pay 7%.
Enter the net tax: What I WOULD be willing to support is a broad, internet-wide sales tax, say, all products bought on the internet have a set tax rate of 4% (or 6%) but something low. This would be divided in some way where each entity (city, county, state) from both the region where the buyer and the region where the seller are located.
Here's WHY I would be willing to support a sales tax on tangebile goods bought on the internet. Think of where that money from sales tax goes. Yes, some of it does go into silly programs, and into the pockets of city and state officials, but most sales tax money is used for programs such as education, fire departments, and other local services that you may use on a daily basis and not even think of. In reality your local city government provides more services to you, and effects you more than the national government in most situations.
I do however REFUSE to support any tax on things such as access, hosting, online payment systems, or other SERVICE related items on the internet. I am STRONGLY against any sort of 'internet access' tax.
In closing, let me say that before you speak violently out against taxes, think about what it would be like without them. Think about how much money could be lost to your city and state if more and more people start purchasing things online, maybe even purchasing online and then being able to pick up at a local retailer. Yes, I hate paying taxes just as much as the next person, I'd like to be able to hold onto as much of my money as I can, but I also am able to see the money being used in the community around me. As long as I can still see that the money is being put to good use, I feel that I can support taxation. If placing a tax on goods purchased on the internet means that I can continue to see this money being used in the community around me and in education, then yes, I'll support it. But in closing, they have to make it easy, if the tax is not just a 'general' tax that you are required to pay (a nation-wide tax that is divided between the different state/local governments) then it will end up being even more of a pain in the neck.
[Something witty and intelligent should have appeared here.]
{Traicovn}
Most states that carry a sales tax require you to report and pay tax on all untaxed sales from out of state exceeding a certain dollar amount. So if you've ever bought a computer over the net, you've most likely met the threshold and could be guilty of tax evasion if you didn't report the purchase and pay tax on it. Since this is all on the honor system and there's no means to track it, states see only a negligable income from this.
Not only do you have to contend with different rates for different localities, but you have to mess with different exemptions and ways of classifying products for tax purposes
This is why out of state taxes have to this point not been forced on sellers. Also, states lack jurisdiction to force outstate merchants to report taxes. Sales tax is always linked to the buyer because taxing the seller would put them at a competative disadvantage in national markets, hurting the state's overall tax by reducing sales and income. (And really pissing off your constituents)
Of course, any economics professor will tell you that a sales tax is fundamentally regressive. Makes me wonder why we have a sales tax at all. Oh, wait, I know, politicians are dumb. In any given heirarchy, people will rise to their own level of incompitance.
bance.net
Just think of how much business FedEx, UPS, Airborne Express, DHL, and other small courier companies make off of internet commerce. These packages that people are purchasing need to get from point A to point B somehow. If online sales end up taxed, there will no longer be any point to buying online because you'll be hit with tax *and* shipping & handling. People will just buy stuff locally (unless the local vs online price has a huge difference) and shippers will suffer in the long run.
taxes are already too high. i don't oppose national sales tax (in fact, i think it would be more fair than the current national income tax). the problem is when new taxes are created in addition to existing ones.
many people (many of them in washington, unfortunately) believe that nothing else changes when taxes change. if a tax hike is proposed, we see predictions of how much extra revenue will be generated. if a tax reduction is proposed, we hear about how much it's going to "cost" the government.
the fact is, many people buy online because of this tax break. if a tax is added, people will buy less stuff--not good for an economy. in the end, lower taxes actually lead to higher tax revenues through a stronger economy.
critics are fast to point the finger at reagan's tax cuts for national debt. the truth is that tax revenues doubled during his presidency--it's just that spending rates increased even faster. determining whether that blame should go to congress for social program spending or reagan for military spending is an exercise for the reader. i'm just talking about revenues here.
char *mySig;
What politicians fail to understand is that the major draw to e-tailing is the lack of taxes. ...which only matters until the consumer places an order and realizes that, special offers notwithstanding, shipping charges usually outweigh anything the state tax system could or would impose.
No, it's the convenience that people like, of having the selection of a warehouse combined with the convenience of an instantly-searchable catalog. Any boloney about people going online just to dodge taxes is exactly that.
A troll moderated to 4, who'd have thought it?
Which cultures have you been "giving" money to then? Go on, name them...
If we were to tax imports
You already are. Just because you aren't aware of it, that doesn't mean you aren't doing it already. These kind of taxes, levies, restrictions or whatever they get called this week are a large part of international trade and diplomacy. Bought any Cuban cigars lately?
America is not alone in this, a lot of countries have done it many times over the years. And wars have been fought over it, e.g. the US civil war.
To say that the mailorder/ecommerce firm does not have any impact on local infrastructure is a bit decptive. All of the roads and other delivery infrastructure does need to be in place.
It doesn't say in the article, but if they are doing this fairly then there needs to be a split between the sending and the recieving state of the revenues.
But even more than that there needs to be a single reporting form and system (which seems like they are proposing from the limited information in the article). Just filling out the sales tax form for California is a big pain in the butt for our small business. If we had to obtain a resale number and fill out a separate form for every one of the 50 states, some of which might want monthly, others quarterly, and others annual reports on different deadlines...and that is not even starting on all the various city and county jurisdictions.
Most people simply don't pay them.
If you order something from a company outside of your taxing body, your taxing body can charge you taxes on it, and in fact, generally do.
If the state you are ordering from decides to charge you sales tax also, then you can get hit twice.
The problem for the states is that they don't have an efficient way to track those purchases, and don't have the where-with-all to go after you for money.
You are suppose to report any purchases out of state to the tax franchise board, and pay CA tax on your purchases to them. Every time you buy something and don't pay a tax to the CA franchise board, you are commiting tax fraud.
The Kruger Dunning explains most post on
Or rather, it would be a good argument if the states were not offering to provide, for free, a simple piece of computer code that would translate a customer's address into an appropriate tax rate. I am sure they are also willing to provide a clearing house to collect the payments and then redistribute them to the states.
Your argument was a good one in the days before computers, which is why out-of-state catalog sales did not have to withhold taxes. Now, the complexity argument is easily overcome.
It is a fundamental notion of economics that taxes ought to distort behavior as little as possible. The current tax regime favors catalog sales over on-site retail sales, for no good reason, and that ought to change.
Online merchants don't win customers on lack of sales tax. Any savings there would usually be lost to shipping charges anyway. People shop online or from catalogs because of better selection, service, and overwhelming savings due to things other than tax. So quit yer complaining. If you want to compete, do it on selection, quality, service.
If a state government can't keep the cost of doing business low, they get what they deserve. Hopefully, their constituents will do something about it, vote them out of office, and vote in leaders who can keep their state competitive.
All fine and good except for the fact that the Constitution states in Article 1, Section 9 that taxes are not to be levied against goods "exported" from the States. Essentially any goods sold from an entity in one State to an entity in another State is tax-exempt.
States can't make an end-run around this just because they lose money.
For them to try and force this taxation would be tantamount to several States getting together and saying "We know the Bill of Rights protects the right to Free Speech, but we don't like that and want Congress to enforce our newly-passed restrictions on speech." Just because a State wants it and passes a law to that effect, doesn't make it right, legal, or binding.
That is why the normalization of rates and of procedures is so key to this whole thing, because it reduces the primary objection to it.
We MUST check that EVERY vendor has a state reseller's number (fortunately that is free in CA) and every vendor supposedly has to report and pay sales tax on their sales (whether they do or not is their business).
The state does check us and if we are allowing vendors to sell there without resale permits then they would fine us $1000 per vendor per week.
Actually there is an exception in the CA sales tax law for limited face-to-face sales of used personal property but since we can't check on what everybody is selling we have to insist on a resale number from everybody.
The internet is merely continuing the tax benefits that have been enjoyed by telephone and mail-order sales for decades, and for the same reasons.
So your statement is bogus, and nobody is presuming that the internet should be taxed any different than interstate transactions of mail-order or telephone sales.
The real question is whether these interstate sales should be treated any different than intra-state sales, not whether the internet deserves any preference over those other forms of inter-state sales.
You call that person a moron and then you go on to espouse this tribal mentality. Rather intolerant, aren't we now. Fine, so move to a nice little tribal society, perhaps in some part of Africa, and stick your head in the sand and the rest of us won't have to carry the burden of defending your right to speak freely. You'll be happier too. Meanwhile, the rest of us can get on with the business of living in the modern world and, perhaps, attempting to improve it a bit.
it's = "it is"; its = possessive. E.g., it's flapping its wings.
(quote)"Online companies don't use state services," he said. "If you're going to the store to buy something, you're going to be driving on the roads and the store will be using police protection or fire protection and other state services for which it would be appropriate that they charge a tax."(endquote)
What a load of crap!
Do the UPS trucks not run on public roads, and do the online stores not get billed for that? Or the trucks which bring goods to the warehouse? Speaking of the warehouse, does it not require police and fire protection?
This space intentionally left blank
What a misleading alarmist title.
This is not about taxing the internet. It's about taxing sales, as you mention, regardless of whether the order came via phone or internet. Calling it an internet tax is dishonest - it's analogous to calling the existing sales tax for mail order a tax on telephones, based on the screwy argument that the telephone was used to place the order therefore it's a telephone tax.
Don't label something "offtopic" unless you know the topic well enough to tell what's on topic.
Let's throw forward another scenario:
I'm a legal resident of Pinellas County, Florida. I live in Montgomery, Alabama, as a consequence of being stationed at Maxwell Air Force Base. So, can someone tell me why I should owe the state of Florida a use tax on a product that I order from, say, Maryland?
!#@%*)anks for hanging up the phone, dear.
"This pushes oil consumption down"
Taxing oil will not push oil consumption down, it will just stop people from purchasing things beside oil, because you have to be able to get to work. Oil is a pretty inflexable resource, I'd say more than Insulin.
What do you think would happen if you taxed insulin 200%? People would be almost as mad as if you taxed Oil 10-20%.
| - | - |
One could also look at this another way:
The states are trying to maximize their tax revenue.
By taxing online purchases, they're raising the final cost to the consumer of the product. There will be a certain number of consumers (the marginal consumers, if you will) who will determine the total price to them too high, and thus will not make the purchase.
Granted, one cannot calculate out the total numbers, but it's likely that the revenues these states expect to gain from this additional taxation may not be at the levels they estimated, and we may be better off as a nation in a time of economic recovery to be stimulating the economy through these additional purchases.
Just a thought.
Chris -- http://www.bitter.net/
Whatis it about the word "NO" that they don't understand?
Hello, I have REALITY on Line 1, will you take the call?
-----
PGP Key ID 0xCB8FF658
So I suggest that all brick and mortar stores install some terminals where customers can make an " on-line" order while being in the store. After that they can instantly pick up their "on-line" order and avoid paying tax.
Did I say anything against roads? Did I say anything against environmental protections? No. I speak out against the MASSIVELY overfunded military, and the woefully ineffective police force. The job of the police is not to protect us, but to punish criminals and clean up the mess afterwards. If a cop sees you being stabbed to death on the sidewalk he is not legally obligated to help you. His job is only to arrest the guy stabbing you.
Kintanon
Check out JoshJitsu.info for Brazilian Ji
Yeah, that's right, 'cause building a fucking HUGE military and propping up small dictators so you can knock them down later when they turn on you is REALLY making life better for everyone!
Massive centralization of power is not an improvement over localized self government. Some ignorant jackass in washington, or california, or canada, or sweden is going to be even less effective than an ignorant jackass who lives in the area when it comes to making decisions about the area. Devoting 30% of your national budget to building more weapons is not good.
Kintanon
Check out JoshJitsu.info for Brazilian Ji
Let's face it, making internet purchases has its plusses and its minuses. Sure, you don't have as much brick and mortar, but you have shipping costs. So why don't huge companies like Amazon simply open up distribution sites in every state? Even better they could open up pick-up locations and offer completely free shipping...
The reason they don't do this. The only reason, is because if they open up a pick-up site in my state, New Jersey, they'd have to pay sales tax every time someone from New Jersey buys a book. So instead they open up a huge warehouse in Deleware, and have New Jerseyites pay shipping instead of sales tax.
Makes it sound pretty damn inefficient, doesn't it? In fact, if you're at all an environmentalist, you should be strongly in favor of the states succeeding in passing these laws. If you don't like sales tax, move to a state that doesn't have it. Don't steal from the government by committing use tax evasion.
There is obviously a point where it does not apply, but over all when you increase taxes the spending power of the people is reduced, and lowers the volume of taxes recovered so that the net result is lower revenue ( and a pissed off populace )
I was speaking of principles, not the actual number value for the ceiling, or floor of functional rates. ( yes i do feel that SOME taxes are ok, as a national entity that provides protection and other related items is a good thing.. )
What is the lowest taxation point that would still achieve a reasonable governmental revenue due to increased volume? I have no idea, as I've been over taxed for my entire lifetime. I dont expect to ever see that change.
---- Booth was a patriot ----
I think this will just drive more people away from online business, sink a sector of the economy and drive prices up for the consumer (which means they'll probably spend less, which is a Bad Thing, especially when you're in a recession).
On the other hand, it might provide incentive to online businesses to open up retail locations where people can pick up their items. The decreased shipping costs will then drive prices down for the consumer, which means they'll probably spend more, which is a Good Thing, especially when you're in a recession. The increased revenues can then be used to lower the sales tax even further. So instead of having honest people pay taxes and criminals avoid taxes, you get everyone to pay, at a lower rate.
With the reduced number of trucks on the road you'll see fewer traffic jams, less need to build new roads (which means more lowered taxes). About the only loser will be the mail order shipping industry, which is probably that "sector of the economy" you were talking about sinking...
I find it highly amusing that we (in most parts of the US) have to pay an income tax when we get the money in the first place, and then a sales tax when we spend it.
Wasn't this kind of double-taxation one of the reasons the colonies broke ties with England and fought a war for independance?
So now, I can buy something overseas and am supposed to pay taxes to my government for... ummm... hmmmm. Well, it can't be for the goods or services, since those come from outside the country. It can't be for me, because I already paid my income tax. It can't be for my internet connection, because my ISP already pays taxes for their earnings (which come from me). I'd say it was for import duties, but oh yeah, those are seperate fees that get levied by the federal government, this is a state tax.
I give up, why do I need to pay this (other than because the state has guys with jackboots and guns telling me to do so)?
I said it back in 2000, but you all said that Net firms would rule, would spend too much money, would be so successful that politicians could not oppose them.
It's not 2000 anymore - it's 2002. Net firms are weak, state budgets are in crisis, politicians can't let up to one-sixth of commerce go untaxed anymore, not when they're bleeding red ink all over.
You can fight them on fairness, but Net transactions will be taxed. Choose your battles - and remember that you have few allies left, and your forces are decimated and in disarray as you take on the bricks and mortar firms with blood in their eyes, as they eye the Net firms weak and wounded before them.
Will in Seattle