Slashdot Mirror
State Coalition Approves Internet Sales Tax Plan
An anonymous reader submits this story about the U.S. states banding together to figure out a way to tax mail-order transactions.
← Back to Stories (view on slashdot.org)
← Back to Stories (view on slashdot.org)
all they will do is chase E-commerce out of the country completely, or into the states that didn't sign up.
the only draw that has kept mail order and now the internet alive is the fact that you can offset the shipping costs by bypassing the sales tax (Illegal I know, you are supposed to pay it yourself in april..... prove I bought that armani sofa mister secretary of the state!)
most of the time if I find something online for cheap, I can find it within a 1 hour drive of my home for the same price. the lack of sales tax offsets the shipping (most items) and makes the buyer happy with waiting for delivery.
any state that adopts or joins this will kill the Ecommerce in their state.
Do not look at laser with remaining good eye.
I see no reason why online shopping should be taxed any differently than catalog shopping. IIRC, taxes are charged on in-state sales only. States that wish to tax differently than this should also look into taxing catalog sales.
Of course you could just buy everything from "off shore" sites and Canadian ones. But I am sure they will have a way to tax that as well.
[n8.r0n] http://petesweb.spymac.net/
This article skims over one very important fact, what is to become of the money earmarked from local option taxes?
I personally hate the fact that each city can have its own different tax, and would love to see a consistent sales tax everywhere I go.
However...the reason that most of these local option taxes exist is to fund a specialized project that otherwise would not happen. Several area towns have used this to direct money toward schools, rec centers, etc.
All in all, seems as though the government is trying to stuff their large, greedy paws in the cookie jar, and they may not even come away with anything except crumbs. The administration of the plan, and the sharing of profits with vendors that is mentioned in the article may in fact eat up most of the profits that the government thinks they would see.
My $.02
The states banding together for a common based law? isn't that called the Federal Government? I'm not a historian, but i thought that it was the Federal government's duty to create nationwide laws and regulations...
The U.S. General Accounting Office has estimated states lose nearly $13 billion each year on untaxed Internet transactions.
Yeah, and I lose several grand a year by not skimming funds off a local company's treasury. "Lose" is too misleading. It's like buying a can of beans with a coupon and saving 49 whole cents.
I'm not sure what the point is - here in Minnesota you pay Use tax when you buy it out of state. If you bought it over the net or used a postcard, buy over $770 of hardware as an individual you (should) pay Use tax...
I'm sure every state is different - thus the proposal. But as a customer, now I need to know if the other state is charging taxes, what the rate is so I can get credit, blah... It just puts the burden right back on my sholders.
+++ UGUCAUCGUAUUUCU
Hey! I know... lets form another TASK FORCE to investigate this problem. Then they will take a 5 year period to basically tell us either what we all already know or simply say, "we need more time" but either way nothing will change. YAY! Self perpetuating machine that goes against EVERYTHING our country was founded on! YAY!
I did hear about this news story on Marketplace/NPR at work tonight. I already have to collect state sales taxes for stuff I ship within Texas, and it's complicated enough keeping track of and filing monthly for the little tax zone that I'm in. I understand that's the cost of doing business, but for someone who does an extremely small volume in a sole proprietorship this is quite frustrating. This just adds another (probably) half-inch thick stack of paperwork I have to deal with at tax time and year-round, more forms I have to fill out and more opportunities for me to get confused, screw something up, be audited and be fined or worse. I can't afford to hire an accountant or a tax attourney, so I have to learn all this myself.
Not to mention the fact that people are not going to want to pay sales tax for something after they're already paying $10-20 plus for shipping costs. Unless they plan on making sales tax an even amount for all counties, cities and metro areas across the country, I don't even see how this is possible -- nor can I see how it will serve any purpose except to hurt online sales that are already hurting to begin with. This just seems so unwise and poorly considered to me, both from the point of view of a small online business owner and as a person who orders many things online myself.
My Webcomic: Asylum on 5th Street
the whole economy is going down the crapper because of it
Lemme get this straight: the entire freaking economy depends upon how much money state governments can spend?
Do you have any idea how screwed up that is?
Hmmm...If online retailers want to levy a 10% fee for me, I'll gladly give them 9% back.
- James
Might be about time for another Boston tea party. If the states can't operate on their current budgets, should we just be forced to pay more to make ends meet? I think not. Maybe their breadth is already a little too inflated.
Adding sales tax would suck, but it wouldn't prevent me from shopping online.
Yes, and the phone company pays for that land and it's associated taxes. Is it right to collect taxes on something twice?
----------------------------
Esobofh - Currently drinking fresh mango juice.
Hey, chief, the Internet isn't different from mail order. There's a little thing called the US Constitution which specifically prohibits states taxing interstate commerce. The idea was to avoid having each state do exactly what the US as a whole does, i.e., use tarifs to implement protectionist policy.
No preference shall be given by any regulation of commerce or revenue to the ports of one state over those of another: nor shall vessels bound to, or from, one state, be obliged to enter, clear or pay duties in another
Not quite. Buying at the local store has the advantage of being a local return when it does not work or breaks within 30 days. It also dumps money into your local economy.
Further, shipping is often no more than tax anyway.
XML causes global warming.
Why is everyone forgetting that WE the people make the rules. If we don't want to pay taxes we don't have too.
People act like its inevitable. Its not. Quit being so damn powerless.
It's definitely waaaay too early to begin taxing Internet business. Most e-commerce sites are barely clinging to life after the dot-com bombs. The government needs to wait a little longer before they start taxing these transactions when the companies can afford to lose some sales. Otherwise, we're going to see another mass closing spree.
I'll form my OWN solar system! With blackjack! And hookers!
Why would the "republics" kill this tax?
This is mainly a tax on working class families.
Republicans only care about tax cuts to the wealthy families and corporations.
You do realize the republicans hand out more money in corporate welfare in one year than all the welfare moms get in probably 10 years?
Remember the last bush? "Read my lips no new taxes" haha and then we had many new taxes. haha, he didn't get reelected.
Anyways you think the extra 50 billion to defense spending and the deptartment of homeland security and the war in iraq are just gonna pay for themselves??
Well they can always take money of the public schools and spend it on bombs instead of rasing taxes.
Do you think exxon-mobile and haliburton corp are gonna be paying for the war in iraq? no, that'll be our tax dollars getting pissed down the toilet. But who will profit, oh ya thats right exxon-mobile and haliburton.
Wouldn't it be easier and cost a lot less human lives to just take our taxes and put them directly in dick cheneys pocket instead of having to do this whole war in iraq production...sheesh...
I see some complications here. Aside from the constitutional problems, there are matters such as 'which state gets the revenue?', 'should actual internet access be taxed to make up for the revenue that we know is being lost?' and on and on.
Other problems are collections. It's easy to say that retailers will just collect it at the time of purchase, but consider the case where you as a shopper live in a place where you have to pay state sales tax, county sales tax and city sales tax. The permutations are surely too much to reasonably expect retailers to be able to support. Now, I didn't think this would be a problem until I moved to Georgia last year. I know better now.
Technically, this would also affect auctions as well. Imaging trying to unload your wife's stash of rubber stamps and having to try to collect the tax and send it off to the proper collector. My head hurts...
One final thought... if all the other problems are resolved, what will happen if micropayments and microcharges ever get off the ground? You have to pay 3% of $.0005?
In my opinion, states are already making money off catalog and Internet sales. These items have to be delivered, typically by a national shipping company. States tax the delivery company's profits, tax the fuel for their vehicles, and tax the wages of the employees. That's got to be more than a few $. I'm also willing to be you'll find a tax-paying e-commerce company in every state in the country, and probably catalog companies as well.
So what it comes down to, the greedy state governments want more...big surprise.
That's just an example. I know there are other taxes besides sales tax and income tax. But, in the end, the government will get money from you one way or another. They skim it from everywhere.
Nothing is certain but death and taxes.
The voluntary program would take effect when at least 10 states representing 20 percent of the U.S. population have amended their laws to implement the program. Participating states would then be free to ask Congress to approve a mandatory, nationwide online sales tax regime. It's unclear, however, if Congress would go along with any online sales tax proposal.
The federal government gives representation to each person in each state in these matters and can thus make decisions to enact or reject legislation like this. However, given which party is likely to influence this decision most (GOP), I find it hard to believe they'd push for a federal tax cut and enforce new local taxes. And what about those whacky states out there that find no reason to impose a sales tax. Is there some reason I am missing they wouldn't be opposed to this?
This will not just affect dot com retailers. It will effect a larger group of retailers that includes traditional stores that have taken advantage of internet opportunities. The political motivations to enforce such measures locally seem like they will be heavily outweighed by special interests that have a larger impact in more than one state - jobs, existing tax revenue, political support for candidates and so on.
Given this information, it seems likely that the states wouldn't succeed with this effort. Even if state goverments did manage to work together successfully, Congress and the Supreme Court have the opportunity to shoot it down at the federal level. And this is just what our economy needs, more unoriginal ideas about how to spend taxpayer money to increase their taxes.
That guy thought a lot of things, not least that stagnation could never occur at the same time as inflation. The seventies showed how wrong an idea that was...
You're right I don't want the job of writing out all those checks. So if the states want this to happen, then I will be able to:
A) Send each state a check
B) Send each state a check and a table of how
to split that up.
C) Send my CPA one check and a table of how
to split that up.
D) Send paypal instructions to charge
sales tax and send that to the states
E) Send some company one check and a table of
how to split that up.
F) Have accounting software send each state
a check and a table of how to split that up
G) Have accounting software use XML-RPC/SOAP
to send each check their funds and
information on how to split that up.
Unfortunately, I would expect that I need to keep proper records in case someone decides to audit me. Unfortunately, I would expect some state treasurer to become a dipshit and audit way too many people.
So no, I don't want the job of writing out those checks. Luckily, I can't imagine that in a world of
free enterprise that I couldn't pay someone
a very small amount to take that job off my
hands.
The only way a consumerist economy will work is by putting discretionary income in the hands of the consumer. The government actually needs to tax us LESS, so we have more money to spend. If there's more money actually working in the economic system (and not lining some politician's pockets) then consumers will buy more goods. More goods will be produced because people can afford them and demand is high. And *gasp* Then you have MORE JOBS because more of this wonderful stuff that consumers consume is affordable to them, and they want it now!
Taxing people just reduces how much money they can spend in our economic system...It keeps them from going out to McDonalds and instead keeps them inside cooking $1.50 TV Dinners.
Do you know what happens when you over-tax people? You piss them off. Do you know what happens when those you're taxing realise that they're pissed and they don't like your taxes? They throw all your fucking tea into the harbor and do a happy dance because your regime is about to crumble.
Reinvent the wheel only at either a lower cost, greater effectiveness, or your own personal enrichment and satisfaction.
Let me get this straight...
You work hard to earn money. The government then tells you you have to pay them for everything you buy in your state, so you "shop around" looking for someplace to buy the good that doesn't make that silly requirement. And then the "honorable" thing is to pay that money to the state anyway? You've been listening to tax-and-spend Democrats too long, I think. It's scary that anyone would actually believe what you just outlined.
I hate taxes, but they are a necessary evil, within reason. But we need to get a clue: 1) Tax sales *OR* 2) Tax income. Taxing both *IS* dishonorable and reprehensible, so don't depend on MY honor to support a dishonorable system.
Give me a fair taxation system and I'll think of going out of my way to do the "honorable" thing. In the meantime, believe me, I will pay the absolute minimum I can get away with legally or practically.
The list of what is taxable and what is not is very complicated. You've got your "sin" taxes on alcohol and cigarettes, which can also vary by ZIP+4 code. Another example (from New York) is that large marshmallows are taxable because they're considered candy, but small marshmallows are non-taxable because they're baking ingredients (it's been a while since I was in retail, I might have gotten it backwards). So you need another lookup table for that.
Your lookup table might be good enough for 99.9% of the items out there. But you'll have some angry customers and zealous prosecutors to remind you when you're wrong.
Perhaps a better idea would be to simply allow the end user to enter the amount of tax due. Give them an online calculator to help them with the math. This is what mail-order houses sometimes do. Yes, it's voluntary, and subject to abuse, and people will get it wrong. However, it is much easier to implement. A bonus feature is that you can start a pool for the date of the first Slashdot story about a site getting hacked by someone entering a negative tax.
Ya know both sides can make arguments and good ones as to why we should or should not have sales tax on internet bought items, but I'm sick and tired of taxes and we don't need anymore. I wish that when I wanted more money I could just take it, but that would be called stealing. I wish my pay check was bigger but I have to live on a budget like everyone else. Taxes are getting rediculous. Here in N.Carolina we pay tax on everything and all we ever hear is "We're broke, we've got to raises taxes, we've got to make new taxes...." even though we already pay taxes on every thing you can imagine like owning a cat or dog and you pay a yearly tax, owning a car a yearly tax, and if you want window tint at all on your car windows that's an extra separate tax, etc etc. It's time the government stops reaching into our pockets over and over and over for anything and everything they can find to tax.
Do you honestly want to be writing out all those checks?
My partner and I are incorporated, and I can tell you that the administrative workload increases very quickly when you start doing things in other states, and writing checks is the very least of the load. Have a half-day-a-week employee in the neighboring state? Great...don't forget to open a tax account in that state, deposit witholding taxes there every month, pay unemployment taxes every quarter, and file a tax return every quarter. Client wants you to visit sites in five different states? Super....each of those states expects you to pay income tax on the 12 hours of work you did there. They may have a "neighboring state" agreement with your state, or they may allow you to declare those twelve hours in your home state, but it's totally up to them.
Collecting taxes for every jurisdiction in which you make a sale would be a nightmare for small operators.
Evil is the money of root.
The fifth amendment will never let an effective use tax law ever work against individuals. There's no way the government can make you tell your state what you bought, and then allow that be used against you to collect taxes. Most people, by not filling out the obscure state use tax form are basically pleading the fifth. Your home state also can't pry the infomation out of online stores located out of state. They have no ablity to do anything to them if they don't comply, since all of their assets are outside of your state's jurisdiction.
If we have to pay shipping and tax I will never buy anything online ever again!
What's more likely to happen is that you will pay tax but you'll be able to pick the item up at a local store. Right now online companies are reluctant to open up lots of pickup locations, cause once they open one up they now have a nexus to be taxed in that state.
I think your 50% is way too low.
Last year, I grossed $58,624, of which I paid $39,675 (67.7%) in taxes. I tracked and accumulated totals for the following taxes:
Federal Income Tax
Pennsylvania State Income Tax
Social Security Tax
Unemployment Tax
Medicare Tax
PA State Sales Tax
PA State Gasoline Tax
Gasoline Taxes in Other States (Maryland, Delaware, Ohio, Michigan, Virginia, North Carolina, South Carolina, Georgia, New Jersey, New York)
Home Heating Oil Tax
Federal Gasoline Tax
Federal, State, and Local Utility Taxes
FCC Line Charges on my Phone
Taxes on my Cell Phones
Taxes on my DSL Line
Excise taxes on Electricity, Gas, and Water
Upper Dublin Township Wage Tax
Sales Taxes in other States (Michigan, Virginia, Maryland, New Jersey, New York, Ohio, Georgia, South Carolina, North Carolina)
PA State Turnpike Tax (Tolls)
Tolls in other states (Maryland, New Jersey, New York, Delaware, Ohio)
Georgia Automobile Ad Valorem Tax (Property Tax)
PA Automobile Lease Tax
These reflect itemized taxes that I was made aware of on receipts or was able to find explicit information on. This list does NOT include hidden taxes rolled into the cost of items purchased, leased, or rented, by the merchant (like the property tax on the house I'm renting).
We're all being taxed into oblivion, and nobody cares enough to do anything about it. Of course, part of the problem is that there are no checks and balances in government. We have a government that is completely out of control - there are too many layers of abstraction - too many levels of government (Federal, State, County, Township, Locale) that have the authority to levy fees and taxes. We've basically been suckered into communism without even realizing it.
Voters need to understand the most politicians are lawyers, and therefore liars, and will not do anything that is not self-serving of the government from which they derive their power.