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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.
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why do you think we buy stuff on the internet? Cheap prices, and no tax! Even though we have to pay shipping its still a good deal. If we have to pay shipping and tax I will never buy anything online ever again!
keanmarine.com
Unless they impose a national sales tax or VAT, I don't see how this will work with all the different sales tax "districts."
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 $.02
but why should the internet be diffent then mail order
Mail order doesn't have to pay sales tax. Ever notice that when you order something from a catalog it says something like "$STATE residents must pay $PERCENTAGE sales tax", where $STATE is the state where the busines is located?
Out of state residents pay nothing. In theory they're supposed to submit a report and pay taxes to their own state. In practice, no one ever does this.
Sales tax is levied at the state level. There is no need for any federal law on this. As it stands, if you buy something from an online store, and they have a business presence in your state, you pay sales tax to your state.
That's why I have to pay Texas sales tax on my crucial.com purchases even though they are not in Texas. If, on the other hand, I buy something from NewEgg.com, which is in California, I pay no sales tax because they do not have a business presence in Texas. California residents do pay sales tax.
Internet sales are just like mail-order catalogs, and the same tax rules apply. We have no need for new laws on this.
"It's better to keep your mouth shut and be thought a fool than to open it and remove all doubt."
Under the states' plan, online sellers would be required to purchase approved software to compute the appropriate state and local taxes or to certify with the state any in-house calculation systems already in place. E-tailers could choose to outsource tax collection to a certified third-party under the states' plan.
So far, participating states have conducted only one tax software pilot, involving four states, three technology vendors, and one online seller. Of the technology vendors participating in the pilot, just one -- Salem, Mass.-based Taxware, working in conjunction with Hewlett-Packard -- managed to get a system up and running.
I hope that the states don't go with a "trusted client" model that requires a specific piece of proprietary software in the point-of-sale system, and possibly a monopoly publisher. Write your state legislatures and ask them to consider the use of free software in this interstate catalog/internet sales tax measure should it pass.
Will I retire or break 10K?
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
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.
Living in a state that spent money like a drunken sailor in a whorehouse when the booming economy artificially boosted tax receipts, and now has a 1.7 billion dollar hangover, I might suggest that they spend less money.
Mea navis aericumbens anguillis abundat
Let's except info-only goods; otherwise,
the physical stuff is still delivered to you
via country's roads, space & stuff, and so
you have no argument.
Considered harmful.
States can tax sales within their borders, but interstate commerce is up to the federal government. States have no right to do this.
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
The reason in the past that they have not succeded in the past (and so far now) is that it's impossible for any company to follow all the rules for the 7000+ different taxing athorities in the U.S. The idea is that the 30 states will pass laws setting the sales taxes for the whole state to be the same and the same accross participating states. They would then get congress to pass a law forcing all e-tailers and mail-order houses to collect taxes when shipping to somebody living in a particpating state.
I still don't think it's fair or easy, especially since they are suggesting strict requirments on only using approved tax packages.
subsolar
Unless I'm totally missing the point of the article, this is about charging you tax on transactions with out-of-state vendors, whether or not they have a physical presence in your state.
As far as mail order goes, that's what I was wondering. would this apply to telephone or mail orders, as well?
Two random political thoughts: 1) The Jake Garn quoted here must be the son or grandson of the former Utah senator, right? It can't be the guy himself. 2) I never expected to see ultraconservative Grover Norquist worrying about the security of my purchase of sex toys...
What I'm listening to now on Pandora...
XML causes global warming.
Who are the republics? Are they a terrorist group bent on making laws "suck it?" On that note, how would you describe the act of a law "sucking it?"
I don't know if I would trust these so-called republics!
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!
It's called a lookup table.
Zipcodes are five digits long right? That's a lookup table of 100,000 tax rates. The tax rate for each cell in this lookup tables comes from one of approximately 50 entities, or about 2,000 zip codes per state.
100,000 tax rates and say 4 bytes per tax rate. That's a 400K table. Pretty small table overall.
Each state probably has at most 100 different state tax rates. That I am sure is a gross overestimate. I bet it's more like 10.
This seems like a pretty easy job of data asembling to do.
You can have each state make their own particular lookup table made available from their secretary of state, or available with their digital signature available from the state website.
Then start with one zipcode to state lookup table published by the USPS and available online, signed, at some well known URL.
The rest is a smop for the sophomore programmer.
If you're a legacy (*nix, windows) publisher, you assign an intern to call up each 50 states and get their tax rates tables and stick that into your legacy app.
OR, if you're an ASP/VSP, you can make one website surf the state urls for updates and make that available as one interface (SOAP, XML-RPC)
Pretty easy. I never understood the arguments that this was too hard to implement.
...Just tax pr0n. That would be enough to pay off national debt in a few years!
MunITioN
"A mind is a terrible thing to lose"
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...
My little website is just one of thousands of tiny little businesses that are run part-time, or just barely pay the bills for one person to run it.
It's absolutely unbelievable what a lot of companies charge for "e-commerce" software. How likely is this to be a $49.95 turbo-tax package? Nope, it'll be targeted at businesses and a few blood-sucking companies will see this as a big opportunity to rake in the dollars from every on-line merchant. We've seen lots of this mega-expensive software, and we manage to get by and make customers happy without any of it. It's unheard of to be _required_ by law to purchase some particular (extreemly expensive) software. And with some special gov't appoval/certification process, you can be sure it'll be plenty expensive...
But for the little guys (like me), that money just isn't there. We can't spend thousands on software, or just about anything else for that matter. It looks like the company these states are working with is Taxware. Go visit their site and take a wild guess at what they're going to charge for this sort of software. It ain't gonna be cheap.
The fact is that there are many thousands of very small on-line merchants. VERY small. Filing 45 tax returns is going to suck. Paying for expensive software, or consulting fees to some "approved" company will only add injury to the insult. Our accounting software budget includes a new version of Quickbooks for next year. That's about all we can afford software-wise.
And it goes against all other tax paying practice to require specific approved software. You don't need special software from a specific "approved" vendor to file taxes. You do need to know how to do it, of course. My partner is a CPA and she knows ordinary sales tax very well (even though we live in Oregon where there is no sales tax). Why should we be held hostage to purchasing special software? Why does it need to be from specially approved vendors?
If the tax can't be paid by a company with an ordinary CPA, and some special software is required, and that software is so special that vendors need to be certified by some special approval process, they certain't haven't made great strides towards making this a simple enough process. Special software isn't required for paying normal taxes, and requiring a special certification process for tax calculation software is totally unheard of. It reaks of a back-room deal between GovOne (the makers taxware) and these states... if some complicated certification process is required for anyone else trying to enter the market for this new software that every on-line merchant is compelled to buy, guess what the prices will be in the first year when Taxware is the only product available and everyone is REQUIRED to buy it?
Well, enough ranting for one day. Maybe it won't be so bad. I'm just in a bad mood because a customer refused to pay the tax/duty on a package we shipped to the UK (and now we need to do something about it, and all the options suck....)
PJRC: Electronic Projects, 8051 Microcontroller Tools
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?
Too bad it's just fiction. *sigh*
Karma: Non-Heinous
Any idea what states were particapents to this meeting? I'd like to know if I should start writting my congressperson now or not.
"Not knowing when the dawn will come, I open every door." - Emily Dickinson
No more taxes. Really, when is enough enough?
Governments continue to tax more and more and it's time the people of this country make their position known -- we won't stand for it any longer.
Make it clear to these bozos in Washington and your local state that if they vote for this, they vote their demise. And them get off yer duff to make it so by participating in _your_ government.
Basically, it is that shipping charges must be made deductible from the taxes owed. I can live with this. If I have to pay both shipping, and taxes, forget online purchases. I can find everything I purchase online locally. I wrote to TigerDirect today with this idea, emailing their CEO. I am going to contact my local computer shop that sells the vast majority of their items online, and who would probably close because of this legislation (small seller), and I am also going to contact Quill, as I buy a lot from them as well. I'll be contacting my legislators with this idea as well.
Read my post linked above, and if you think the idea is good, please help out by contacting your favorite online seller with the idea. Ask to have the email forwarded to the CEO, look at the about page for relevant email addresses. Please help out. This idea needs to be implanted into the minds of the legislators, and the online merchants who will be fighting the bill. They states may go for it if they see they won't get what they want with any other method. Please send those emails today. If you care at all about online buying, and preserving a wide choice of sellers, please help out. Thanks.
That sales tax that gets collected? Has to be, you know, actually given to the location which it is collected for. They expect you to report these things and get somewhat irate if you don't. (As my father learned when, despite the lack of internet sales tax, the state went after him for /estimated/ tax based on his completely out-of-state sales.)
Let's say you're an internet business. Do you honestly want to be writing out all those checks?
This is as accurate of a picture I can draw for you without looking at statistics and other information and I am basing all my information on my own experience and knowledge.
Several of my friends order things online via eBay, and other various sites. The recent one that has become popular is cigarettes, they raised the taxs in the state to at least a dollar per pack. This raises most packs of popular cigarettes to 5 or 6 dollars. Now my friends resort to importing cigarettes for far less money, sometimes it is between states and some of them import them internationally, and actually now prefer the international ones because they are smoother they say, but I digress. Personally I disagree with this idea to tax online sales but I guess that deals mostly with me being a libertarian and wanting peace, a small military, and a small government.
If what you are reading sounds funny, or sarcastic, lame, or stupid
it is because it is supposed to be. just laugh
This will never happen. Sales tax varies so much from city to county to state. My local govt just put a question on the ballot (and it passed) to increase the local sales tax to build a highway faster. How would this type of fundraising occur under this new "unified" system?
The Doormat
If you're not outraged, then you're not paying attention.
Small lookup table? Almost. You can purchase them right now. It's a problem that has been solved, but it's not quite as simple as you think. I once worked on an automated system that calculated sales tax for customers in several states where the company had a physical presence. First off there may be state tax. Then there may be city tax. Then there may be an Independant School District (I don't know about other states but in Texas they are independant taxing authorities.) In almost every case ZIP code is enough to uniquely identify the 3 or 4 different tax rates. Occasionally there was a ZIP code that was split by different taxing districts. In that case the full ZIP + 4 was needed, introducing a few more lookup values.
Once you've done that lookup, you have the tax rates. Add them all together and you know how much tax to charge.
Of course then you have to file the paperwork with each of those different taxing authorities and cut them their checks, usually on different schedules...
In short, it's a nightmare. But actually doing it for all 50 states wouldn't be much more complicated than for one. At least it wouldn't be too bad from a programmer's point of view. The biggest burden would be on the accountants and lawyers.
To email, do the obvious.
I think it just makes good sense to tax Internet sales. The mail-order tax loophole has always been a bit of a problem, but the Internet blew it wide open, and e-commerce is hurting states' revenues badly. (In my state, budget shortages are taken out on the education budget, and I feel it is very safe to say that Internet sales have had a noticeable though indirect negative effect on the quality of public education here.)
While it's true that the lack of sales tax has been responsible for much of the growth of mail-order and internet shops, Internet shops generally can offer things at lower prices than the local brick-and-mortar due to cost-cutting through automation and larger volumes of merchandise. In addition, while some people may find that their local shops are once again competitive for some of their in-stock items, Internet shops are able to offer a much wider variety of stock. Closing the loophole wouldn't, in and of itself, kill (or even seriously maim) e-commerce. Anybody who tells you so is just whining about the possibility of being required to actually be honest about their taxes.
The thing to worry about is the implementation. If the states can put together an implementation which can be relied on and trusted by all three sides (net shop, state gov't, consumer) and is practically faultproof, good for them. However, if they try to require a system and sysadmins can't trust it/have to make concessions to be able to run it, it makes buisnesses and consumers very nervous about privacy, or it has a noticeable incidence of error, that could kill e-commerce (and/or backfire on the states and result in an astronomical number of "under-the-table" purchases).
The reason in the past that they have not succeded in the past (and so far now) is that it's impossible for any company to follow all the rules for the 7000+ different taxing athorities in the U.S.
While it might be a little much for vlookup, I doubt it is that hard to check zip code and tax rate. The only real issue is creating a clearinghouse for the tax revenue, so you aren't writing checks to 7,000 different jurisdictions.
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.
It's interesting to see that Utah's governor is spearheading this effort somewhat. Whenever a governor starts talking about something like this, everyone should stop listening. He has no business talking about internet tax. Only congress has the power to regulate interstate commerce (Gibbons v. Ogden 1824). People need to realize their place in the hierarchy and stop trying to step out of their bounds.
"Nature doesn't care how smart you are. You can still be wrong." - Richard Feynman
I work at a catalogue company-- we get orders in the mail, mostly. At the moment, the only people that have to pay tax are those that are ordering in the same state that we're located.
Do you know how many people don't know how to figure out how to add 6.5% on an order? How many times a day I have to call confused grandmas because of short checks?!?
I'm getting aggravated already just thinking about this. This is going to be hell for us. It's no wonder there's a big jar of Advil available for everyone in the office.
New Hampshire is a 5-minute drive from my house in No. MA. New Hampshire has no sales tax. I haven't bought anything online since I moved here. I just go to Salem. It's all one big strip mall, anyway.
Just be sure to wear the gold uniform when you beam down -- you know what happens when you wear the red one.
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.
Perhaps this is a potential alternative...?
Although I don't know what duties and such might be...
Libertarianism is rich wolves and poor sheep playing gambler's ruin for dinner.
Taxation without Representation is what this breaks down to. What is to prevent your local legislature from heavily taxing all out of state transactions? Their constituents shouldn't care, the people affected are not in their districts! Then we get a war of continually raised levies on interstate goods. Then we revert back to colonial times. We might as well just print our own local currencies...
If you have a chance, contact your local and state representatives and let them know that this is the worst thing you've heard of. Otherwise, we'll all be screwed.
Unfortunately, it is a bit harder than a simple zip code based lookup since zip codes can span towns and counties. It really requires a full gis based system that uses the tax boundaries (which can change at a moments notice) to figure out how much to charge. It is possible that your next door neighbor pays a different tax rate than you.
All of that said, if the states fail in their quest, they will prob just move toward a higher property tax/income rate. (in my part of the world, the local city has a budget shortfall due to the lack of tourists spending money at local stores. a property tax would have avoided the problem, although at the expense of the local population)
I am sure you are correct about requiring zip+4, but my real point is that if the states want to tax based on zip code, it won't really wouldn't have to be a problem for the average developer/publisher to assemble the different tax rates from raw data.
The tax rates will come from the different states or the different counties based on zip code, and if the states really wanted to tax based on zip codes, then they could easily offer a mechanism whereby any developer/publisher could obtain the state specific lookup table.
As I said before it's the arguments about how difficult this is to implement that I can't figure out. I understand the controversy as to whether we should be taxing internet sales at all.
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.
Normally, you'll have to pay tariff on the goods. But if the fair retail value does not exceed $100, you could avoid the tariff by having the retailer send your goods as a gift. More info here. I guess you could negotiate with smaller website owners regarding this, but the big ones probably don't want to take the risk.
...X10 will have to cut its pop-up ad campaign on Washington Post because of the lost sales from this plan.
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.
How about a browser? Can you afford that? My off the cuff implementation would be a web service. Agree on what is taxable/nontaxable, make an XML schema with the various categories ie 0.00.10Etc. Sales Tax, ST 000122 Human readable, and easy to figure.. Furthermore, make the tax collector put up the service! Perhaps http://ZIPCODE.US.GOV/TaxRates But anyway, taxes suck, so..
The law is a weapon of the government, not a protection for the likes of you. Surely you understand that.
Yeah, lets have another sales tax! Alright! Party time!
... and more! Oh the joy!
... and so on ...
So lets enumerate a typical pay check on a typical day...
Federal Income Tax (unconstitutional BTW)
Unemployment Tax
Soc Sec. tax
medicaid tax
State Income Tax (likewise)
Gas Tax
Cigarette Tax
Excise Taxes
Sales Taxes
Personal Property Tax
Prepared meals tax
highway tolls
FCC charges
The thing I find troubling, almost ironic with almost every tax, especially sales taxes, is that I'm paying these taxes with income that has already been taxed. WTF.
And what do I get for the 50% of my income that goes to the government??
I get to wait in a long line at the supermarket while DaSheeki sorts her grocieries in 3 separate piles... one for WIC, one for Food Stamps, and one for cigarettes (which she purchases with a $100 bill). What a pleasure that can be.
I get to have my annual IRS harassment.
I get to have my annual BMV harassment.
Can anybody name one thing besides internet (mail order) sales that IS NOT taxed? Bueller?
How many of you gainfully employed lemmings actually study your pay stub every time you get paid, and identify the amount of money the government stole from you that week?
What are you going to do about it?
Skiers and Riders -- http://www.snowjournal.com
There more to it than just location, unfortunately. For example, here in Dallas, most food and medicine are not taxed if they are considered "essential." So a bag of rice won't be taxed, but a Snickers bar would be. In California (at least where my sister lives), there is no tax on services. Any attempt at a tax lookup system would have to take all these things into account, greatly increasing the size of the problem.
"People that quote themselves in their signatures bother me" - athakur999
My wife runs a small internet business selling hot sauce and other scary things. She currently pays local inventory tax, business property tax, building tax, self-employment tax, state and federal income tax and use/sales tax on equipment used to run the business and now another tax to be applied to customer on sales. It is enough to make me start thinking of a having a tea party.
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.
If your state is losing money to out of state businesses, then perhaps you should lobby your state government to lower its taxes and lower the cost of doing business there, in order to remain competitive. Just as with anything else, competition between locales is the only thing that will keep costs under control, and instill efficiency in government.
The State Governments are the greedest parts of the government. It was only a matter of time before local government dips thier little hands in. Now just wait for the feds to get involved.
Gawsh... they're right. With all of this revenue shortfall, there is no way the poor bastards can stay afloat. They REALLY NEED THE MONEY.
And here I was thinking that up to 30+% of my income including a new rate for assets (federal), slightly less than 10% of all of my purchases (State of TN), and outrageous property taxes (local) was enough to keep our precious little system working.
Yeah, they need the money. To pay for crack whore children medical bills and illegal immigrant non-English language education. To pay for a bunch of government losers that come in every day late and leave at 4:20 in the afternoon, and work hours that make a banker envious. To pay for peanut farmer subsidies. To pay for the fact that GM didn't pay any taxes last year.... not a dollar.
(INTO LARGE BULLHORN)
"Thank you all for coming to the party. To the ones that are just arriving, I'd like to say welcome, the revolt has already started without you. All are welcome. Pitchforks are to the left, torches are to the right."
It's about time New Hampshire benefitted from its lack of sales tax. I guarantee NH isn't one of the states involved in this coalition. Perhaps more online retailers will change their base of operations to NH so they can benefit from the lack of tax.
Of course, your state may try to tax you on things bought from NH sites, but I don't think that's the way this plan is designed at least.
Did I mention we have no income tax, either?
"He's more machine now than man, twisted and evil."
Yet another nail in the coffin that is e-commerce. Now I don't have any advantage to purchasing my DVDs or electronics online anymore. Why bother ordering from Amazon when its just going to cost the same or more, and then have to wait days for it to arrive.
I live about 10 minutes outside of DC. So now any advantage to buying online has disappeared. I can still see people in rural areas buying online out of necessity because they can't find an item locally. I do however understand that they don't care about the Internet as much as they do mail order catalogs though. You'd think they'd wait until the economy would start showing signs of recovery, last thing the government needs to be doing is taking money out of the economy. It's going to hurt the consumer and the business in this case.
I'll still order from ThinkGeek though out of loyality and well, I don't think Wal-Mart is going to carry caffeinated soap.
..There's a-dooin's a-transpirin'
I cannot believe you replied to this about how easy it would be to implement. Everyone agrees with you on this point.
The problem is that, with 100,000 different taxing authorities, there is 100,000 different checks to cut. Oh, and 43,000 are biweekly, 32,000 are quarterly, 15,000 are monthly, and the rest are annually. It is now _your_ job that everyone gets their check, their _individual_ paperwork is filled out, and that you have undeniable proof that everyone got their check and the paperwork is completed. Brick and mortar only have to deal with 1-3 taxing authorities. Online stores will have to deal with 100,000. Collecting the money is the easy part.
Not to mention that it is taxation without representation. If the online store is charging their state's taxes, then I am not being represented. If they are charging my state's taxes, the company is not being represented.
I try every election, but the republicrats still seem to stay in power.
"You spoony bard!" -Tellah
Yet again, much of /. fails to grasp the fact that most politicians don't see the Internet as a magical fairy land where the usual laws of society do not apply. Normally, the excuse is that all politicians are corrupt since no rational person would support DRM/defend copyright/enforce drug patents/etc without being in the pocket of some special interest group. This time, very few people are calling the politicians corrupt, which is wierd. Instead, the focus is on a legal technicality (nothing new), but I can't figure out why the politicians aren't being criticized more.
-a
How to rationalize theft.
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.
How would this affect sales from sites in Canada, U.K., and other international vendors?
Damn but we do have some bitter 'merican slashdotters...
People gripe about taxes. But then they say, "Hell, could be worse, couldn't it? I mean, we could be livin in one o' them Yuro-peein countries and paying fifty percent in taxes. Hell, I don't know how they stand it."
And I always have the same response. "I don't care how much I pay, as long as it's spent efficiently." If the State takes 100% of my paycheck, then efficient spending provides that they are able to find a way to compensate me for 100% of the value I contribute to my company.
In the 'States we're definitely burning about 92 cents on the dollar, I agree. But most of the people clamoring for "reform" really want a system that is worse at stopping them from screwing people more than they are. Flat taxers are invariably rich. Rich people are almost invariably flat taxers. Rich people that aren't flat taxers have more heart than brains, and poor folk who are flat taxers just really don't know who to trust. Let's just say there are reasons they aren't rich.
I always thought Washington state was full of peacenik hippie freaks. Turns out it is, except they keep electing Democrats who keep out a state income tax (you read that right) in favor of a single-mother-crippling 9-percent sales tax.
Microsoft pays no federal income tax. Bill Gates pays no state income tax. Why do people vote for legislators that would rather have a dollar from a working mom than ten dollars from a billionaire? I can't say, but I intend to find out. I think it has something to do with how rare it would be finding Republicans campaigning on a state income-tax platform... Ah, another fine benefit of the two-party system.
Damn. Guess I'm one of them bitter 'mericans.
Tax and spend, tax and spend.
"Only in their dreams can men truly be free 'twas always thus, and always thus will be."
--Tom Schulman
Merchants have no general obligation to accept returns unless they are at fault for damaging the merchandise, misrepresenting it, and so on. The manufacturer is the one liable for defective product. Most stores, however, accept returns as a courtesy, and the time period is up to them or their stated policy. Home Depot, for example, until recently accepted returns after any amount of time without a receipt. I miss that.
Some state laws may grant a right to return merchandise, but it is not a general rule. Just a pointer that the merchant is doing you a favor, and taking a loss, because that's typical retail practice. Also, you might be able to negotiate return beyond 30 days.
Buying locally does benefit your local economy, a non-trivial effect in some communities.
If the article is to be believed, only certain "approved software" could be used (mentions taxware is the one that's being tested), or a custom app would need to be "certified".
The point is that it costs money to pay taxes. Not the tax itself... you need to spend time and money (usually pay a CPA) to prepare the taxes. For very small businesses, it costs a few hundred a year. From the article, it appears that it will be tremendously expensive to pay all these sales taxes. They're supposedly making it "simpler", but how simple is it if you need to have "approved software" (someone pointed out that taxware is six figures!)
Furthermore, make the tax collector put up the service!
This is a fine idea, but if you read the article (imagine that), the state's plan is to supposedly simplify the process and require people to use this extreemly expensive software to make all those supposedly simplified payments.
Sure, in theory the states could do something where they bear the burden (assuming that this idea could work, which is another question altogether). But based on the article, their plan appears to be nothing like what you proposed. They're making the rules "simpler", but it's still so damn complex that specially approved software (taxware) is mandated by the plan. They know it's so expensive that they propose "sharing" a chunk of the money with merchants... which help the big boys, but for the little guys, a chunk of the collected tax isn't going to cover what seems like an enormous cost.
Then again, this is all guesswork from just a few sentences in the article. Please do read the article.
PJRC: Electronic Projects, 8051 Microcontroller Tools
I thought Republicans were *for* business. I guess its just for the businesses that pay them.
Anyone running Linux on all of their servers, using PERL/PHP/PYTHON with PostgreSQL/MySQL who is suddenly forced to run monopoly-ware by some excise-assholes, complete with Visual .NET and Win2kSp3 requirements, and maybe even a bit of MSSQL thrown in for good measure should be pissed because the monopolyware is headed right to the toilet with forced subscription licensing. And that doesn't even touch all the technical issues, like SECURITY. Depending on what it's written with and depolyed, how it accepts updates and batches or asynchronously updates to the home-office, it's going to be a pain in the ass to secure and maintain--because government will charge us for the use of the software in addition to probably having to purchase an SSL-Cert for the nasty bugger too.
If one cannot look forward enough to know how government works with regards to software deployment, then they haven't had the life-enriching experience. What will be really interesting is to see which companies in the local private sectors from each state will be awared the contract for rolling this out. We should expect still-in-college start-ups who are socially networked to family in local government with no bottom line to pitch bids and get them (government and business are nepotistic by design). It will be a damn good time to NOT be an admin for a company that actually offers something online.
Every new form of media has it's own Requirimento
Yeah, that's the way out of a recession... more taxes. Ask me for more of what I already don't have.
People already pay taxes on online purchases; they're just collected indirectly thorugh UPS.
-- Terry
When are these politians going to learn that the internet is a GLOBAL community? That if they start forcing businesses to collect tax, that these companies will move out to another country without blinking an eye?
But besides, that, why are businesses being forced to be tax collectors, and to do so without any compensation from the government? This is unfair to businesses and ends up costing business owners money, which then is passed on to the consumers.
For now, collecting tax on one state is already burdensome enough. If we're going to start forcing businesses to collect taxes for each individual state, this burden would become so overwhelming that it ends up restricting business and innovations altogether. By then only the big guys would be able to survive on this. The smaller businesses would be forced to shut down.
eTrade SUCKS
1) Fill out the online order form, print it, fax it. .
2) Fill out the online order form, print it, mail it.
3) Fill out the online order form, call the 800 number, quote the order reference number, provide payment and shipping details over the phone
Which begs the question: suppose I email an order? Is that close enough to "mail order" to escape the tax?
IANAL, but I'm sure a bunch of 'em will make $$ on answering the above question...
I had a few things to say about this on my website about six hours ago. I more or less highlighted the issue, linked to it, and stressed that all (well, most) tax proposals should be submitted to popular vote before taking effect.
I think a federal internet sales tax would be of tremendous benefit for all parties concerned.
Yes, thieves would love to get their hands on even more taxes.
There is no justification for this new tax other than "we want more money". Well, tough. I hope, if they implement this, we see a mass exodus of companies out of the country to avoid the complication and hassle of yet another immoral tax. Or, more likely, the corporate lobbyists will kill it in congress-- there is one good thing about lobbyists.
The government took over %70 of my income in direct taxes (And another %25 in indirect ones) last time I checked-- and they haven't returned squat to me-- just more laws preventing pilots from carrying guns, which caused 9/11 and a lot of hot air in congress.
But the really sad thing is so many of you enjoy being slaves-- you wouldn't have it any other way!
Too many americans are completely ignorant of economics (thanks to a public school system that didn't teach them squat) and of the intentions of the founding fathers, and thus we start to follow europe down spiraling down the socialism drain.
Yeah, and you guys panned the ipod too: http://apple.slashdot.org/article.pl?sid=01/10/23
If you pay sales tax to a state that you don't live in, in the form of Internet taxes, how can you benefit from the tax? The American Revolution started because of this!
Start here:
http://www.netcaucus.org/books/taxation200
An Interesting fact:
So where the hell does the money go?
Read this:
http://www.netcaucus.org/books/taxation200
How come you don't just do a national sales tax, like most other countries? - a nationally set sales tax level that applies across all states?
You make it sound like the gov is a business charging a use fee for foo. Where did you get that idea? Taxes can be doled out in just about anyway the gov wants, they are our elected representatives... so we have representation. All I have heard about is that we are free from taxation without representation, not freedom from taxation for the use of stuff that isn't public.
The truth is, as long as we elect people who want to tax the internet, they can.
"I'll have a Guinness, no wait, make that a Coors Light" -Grad student I work with, who shall remain anonymous...
1. WHY governments feel that they are entitled to a "cut" of everything
2. WHY people stand for this mentality!
Corporatism != Free Market
This is a good idea. I'm pretty sure this will actually result in me paying less in taxes when I buy from British Colombia.
Oh shit, they're not a state? Yet?
Well it will help me when I buy cool stuff from shops in London on the net.
What? If these places aren't states then how the hell are they allowed to put sites up on our internet. I mean come on, they are on our internet so the are going to have to obey our laws and pay our taxes, and collect our taxes too.
When are all these other wannabe countries going to wake up and realize that the U.S. Congress hasn't authorized their existance.
And if the day ever comes that we do authorize the existance of a foreign country we'll just make them another state so we can tax 'em.
Bend over brother, the tax man cometh!
. Quit playing Monopoly with Bill. Switch to one of many non-Microsoft products today.
Or it's broken, here's another one. News searching on Google is your friend.
C8H10N4O2 | Developer > Code
That is true, but if you had read the article you would have read that there are 30 states in the coalition of the 45 states that collect sales/use taxes.
subsolar
Modify the 7-11 for no tax. First put a web site in the Virgin Islands. Then put terminal at the door. You order the items you want and swipe your card. Your order is then delivered to the store front or even your car. The point of sale is the Virgin Islands right? The store is just a warehouse/delivery point. This is idea NOW copyrighted. 11/2002 Send royalties to Steven Guenther Tampa, FL
The article said nothing about mail order companies being forced to collect sales tax. How is buying over the Internet different from buying from a mail order company?
"Do I dare disturb the universe?"
(Chanting in unison)
"Its unconstitutional to regulate interstate commerce at the state level..."
"Its unconstitutional to regulate interstate commerce at the state level..."
"Its unconstitutional to regulate interstate commerce at the state level..."
Thank you for your time.
A wrinkle is also Illinois' "Fair Use" tax, which says if you buy something out of state to "escape" the tax, but use it in state, you owe Illinois the tax you should have paid, due with annual income taxes.
Almost nobody pays it, but if you're a business, blowing it off for office purchases can burn you if you get an audit.
Many states already have such a system, with poor enforcement. Travelling internationally, you can usually get a refund for the VAT in most countries when you leave the country.
Could a coalition government be far away?
:-)
We have one. It's a Democrat/Republican coalition.
This space for rent.
From the article:
Under the states' plan, online sellers would be required to purchase approved software to compute the appropriate state and local taxes or to certify with the state any in-house calculation systems already in place. E-tailers could choose to outsource tax collection to a certified third-party under the states' plan.
So, this would mean that every single business that wanted to do business on the internet in the US would have to purchase a specific piece of software, and possibly training. I see a lot of problems with that. That monopoly means they can charge as much as they want for the software, for training, for support, and for upgrades, because it would be illegal to do business on the internet without it. Complete monopoly.
I hope at the very least the software is multi-platform and open source. If I run a shop on X, and the tax software will only run on Y, that's a big issue, regardless of what X & Y are.
=Blue(23)
LITTLE GIRL: But which cookie will you eat FIRST? C. MONSTER: Me think you have misconception of cookie-eating process.
Anyone know if the tax codes apply to auctions? If so, whose responsibility is it to collect tax? eBay or the seller?
If it's eBay, that's a huge amount of work for them.
If it's the seller, does that mean everyone has to become a tax expert, fill in forms with the states, potentially buy the required tax software just to be able to sell anything at all?
=Blue(23)
LITTLE GIRL: But which cookie will you eat FIRST? C. MONSTER: Me think you have misconception of cookie-eating process.
I believe you are correct. Due to Constitutional issues, the real issue here is the state "use" taxes, where they collect the sales tax from their own residents, as if the mail order items were bought in-state.
Currently, the "use tax" laws are borderline unenforcable, because non of the out-of-state entities is currently required to report individual sales to any state government.
Notice how this little consortium includes nowhere near all 50 states. Granting them any kind of special taxing authority will simply open the floodgates in such a way that online commerce will either move offshore or dry up entirely. About the only thing that would work is some kind of Federal tax that could be collected at a flat rate and then fowarded to the states, proportional to each state's online purchases. Let the states figure out how to subdivide the revenue with municipalities and county government. This flat rate would have little or no correlation to any state's sales tax rate, but it would generate revenue as an alternative to the current arrangement, which generates $0. Since the Feds dont allocate anything to states based on their contributions, this would be quite a culture shift.
The tendency of state tax law is to overcomplicate, which is precisely what we need to avoid online taxation entirely. From what I have seen, the consortium is nowhere near asking for something that is settles the issue once-and-for-all with a plan that is simple enough to actually do.
why do you think we buy stuff on the internet? Cheap prices, and no tax!
Uh, no, the factors for most of us, I suspect, are: cheap prices and convenience. No tax is only a factor insofar as it may help cause cheap prices. But on-line merchants have plenty of other ways to keep their prices low and remain competitive.
If we have to pay shipping and tax I will never buy anything online ever again!
So, in order to avoid paying taxes, you're going to shop in ways that require you to pay taxes? (I.e. "brick-and-mortar" stores and catalogs?) You're not even going to bother to see if you can find a better deal on-line when you shop? Then you are, to quote Red Foreman, a dumbass! And you deserve to pay more. Sheesh!
Anway, you probably should visit your local "brick-and-mortar" stores more often. It's good for your local economy.
Of course, you can't always trust people to be that honest, so an IRS-like approach, but without witholding (where the merchants report the purchase price to the state to which the merchandise was shipped, but don't actually collect the taxes themselves) would be a nice compromise. The merchants don't have to calculate squat, and the purchasers still have reason to beleive that they might get caught if they don't turn in their fair share.
In states without an income tax, though (e.g., Texas), it's a bit more complicated: private citizens don't ever have any tax-related correspondence directly with the state at all. I have a friend who, just as an excercise in "doing the right thing," got in touch with the Texas state government in an attempt to pay sales tax on items he had purchased over the internet. After speaking to a wide variety of people who couldn't believe him (and getting comments like, "I don't think anyone has tried to do that before, sir."), he gave up.
Based on that experience, it seems a bit obvious that not all states are really that worried about this particular issue...
Government is a necessary service for a human in a society, just like food, shelter, transportation, clothes, laundry, etc, and taxes are how you pay for it.
So why aren't you complaining that poor people don't get discounts on food, shelter, transportation, clothes, laundry, etc.? Some people get foodstamps, but that's tax money, so he's really just getting some of his tax money back, there's no need-based discount for the food. Yes, wealthier individuals often choose to pay more for necessary services, (fancy restaurants, mercedes, dry cleaning, etc.), but there's nothing stopping a rich person from subsisting on mac&cheese and raman noodles in a tiny apartment down the street from a laundrymat.
Either it's fair to charge people equally for necessary goods and services, or it's not, but if you're going to take a position one way or another, it's essential for moral clarity to be consistent.
Perhaps the lack of moral clarity is what causes you to hide cowardly behind the veil of anonyminity?
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
But I'm not a sir. ;)
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