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E-commerce Sites to Collect Sales Taxes Nationwide
aengblom writes "An agreement between 38 states and some of the nation's largest retailers is bringing taxes to the net, The Washington Post reports. In return for collecting taxes for all U.S. sales, the retailers would not be held liable for taxes they 'failed' to collect previously. Best quote: 'If we disclose who these companies are, it's like putting a target on their back.' The Post reports that Wal-Mart, Marshall Fields, Target, Toys R Us and Mervyn's have all 'independently' announced plans to collect taxes nation-wide." Internetnews.com has a story about the taxes and an article claiming it won't hurt online sales.
but I wont pay it cuz im a nerd!
I could either goto Toys R Us and get the product I want today, or go online, have to wait a couple extra days and pay shipping plus tax. Hrmmm, I guess they're right it's not going to hurt online sales at all.
-- taking over the world, we are.
Let's boycott the e*commerce sites involved!
Did someone say Target? And Wal-Mark? *scribbles*
Wait...why would I shop ONLINE for something that's down the street again?
Oh, right, no sales tax.
No diff anymore.
Bye bye website.
Karma: Chameleon (mostly due to the fact that you come and go).
It will hurt online sales :(
Only reason anyone buys stuff online is because it is marked down enough to cover shipping...shipping+tax means its more or as expensive as retail stores, so there is no reason to buy there...
This seems like a really bad time for this with the economy in the crapper...
Well thankfully in the UK we haven't got this kind of thing yet.. though along with all the other taxes we pay, I shouldn't imagine it will be too long before it arrives on our shores.
It wouldn't annoy me if I felt that these additional taxes, and tax rises noticably made quality of life better - but stuff like our health service and public transport continue to degrade into chaos and disorganisation.
Slightly OT I know, but I felt like ranting about taxes.
"Hey! Unless this is a nude love-in, get the hell off my property!!"
The only question is: Has it happened too soon?
Last I checked, the UPS guy was driving on the road that local taxes paid for...
Taxes taxes taxes. Add shipping charges, taxes, and whatever else some stores add in the fine print, the prices now may not look attractive online any more. Guess will be do the Ebay search thing. Oops, paypal, bidpay, shipping. Hope those fees don't add up to be more than the taxes.
Gator/Claria is Spyware.
So I can just buy from a Canadian e-retailer. Or a Mexican. Doesn't really affect me where they're based, and now they have a 7% price advantage over US-based companies. Way to go in a poor economy, US government. Now, instead of keeping the cash *in* the economy and picking it up on income taxes each time around, we throw it out to other countries. Kind of stupid. AFAIK, mail order companies are still tax-free, to show how arbitrary and lobbist-based this is.
I was wondering how long it would be from the time Bush took office (and left the Clinton/Gore approach of "fund the Internet to build it up, but keep it hands off as much as possible") to the time big companies (brick-and-mortar types) started getting their way legally.
May we never see th
It's just a leveling of the playing field. At some point I expect mandatory for all businesses, including those without a physical presence, which could be difficult for the Mom & Pop, HOWEVER(!) that doesn't prevent some sharpie from starting up a business to track it for them, if you get my drift.
A feeling of having made the same mistake before: Deja Foobar
Get ready to pay postage on every e-mail you send out.
That however could be a good thing. Spam will die off very quickly. Unless some bright legislator gets pushed the idea that every e-mail a person receives should be taxed. Kinda like how you pay for cell phone calls whether you make the call or receive it.
I read Slashdot for the
Shopping online has, for me, always been more about convenience than price. I do shop around online to find good prices for things, but when shipping costs are factored in, you often do not save that much. However, the extra cost is worth not having to go to a mall or other shopping center. The addition of tax to online purchases won't change my online shopping habits one bit.
I'm glad I just bought my enagement ring online in December... no tax.
Blue Nile
Posted anonymously to avoid the Internet Revenue Service.
The Republicans and some Democrats in Congress want to stimulate the economy by giving people a tax break. The theory is that they'll go spend the money they're given, thus stimulating the economy.
Now they want to tax Internet sales. Hmmm.
I understand local jurisdictions are under a lot of pressure, what with states and counties running huge deficits and wondering how they will pay for local police and fire departments and social services. But this just seems like a bad move to make at a time like this. With the Internet's sales rising nearly exponentially each year, it would make sense to keep shopping tax-free and hope that Internet spending can help to prop up the economy.
Still, federal proposals to cut taxes sure won't help states and municipalities deal with their budget deficits. Still seems wrong-headed to me, though.
Karma: Excellent Birds (mostly as a result of listening to Laurie Anderson)
Looks like a business oportunity for someone in a state that has low or no taxes for forwarding goods to real addresses.
"No really officer, All ten million orders last year went to the same address in Oregon"
The tinfoil hat part of me wants to say that this is only a ploy to up sales in a declining time. Everyone will rush out to purchase things from them online now to avoid paying the impending sales tax. That's the only theory I can come up with - it's just a last ditch effort - how could anyone possibly think that adding sales tax to shipping costs to something that costs the exact same for a small drive not affect sales?
Of course, it also sounds like the government folks are dicks and held it above them - "You should've been collecting all this time. We won't charge you a massive amount in back taxes if you start doing it across the board now." Bah. Fuck.
I don't understand how anyone can say that forcing online retailers to charge taxes wouldn't hurt sales. The #1 reason that I buy stuff on online is because there are no taxes! Now, it makes NO sense to buy something online when I'm going to be charged both the tax and shipping when I can get in my car and drive 20 - 30 minutes and not be charged the shipping. Once again I fear that since the government got their greedy paws into the mix, they will distroy a good thing.
My good sig is in the laundry
Great, now there is little motivation to shop online at all on the listed stores. How stupid can they get? Of course I'll just drive down the block instead of waiting days for the same product. I hope amazon.com doesn't go this route. I love buying hard-to-find books with no sales tax and lord knows Wal-Mart doesn't sell any books worth buying...
-Valiss
The US enconomy is hurting, online retailers are strugling to stay alive. Comsumer spending is down.
And they want to start taxing online purchases NOW?
What the hell business school did these idiots go to?
It's only another reason *not* to buy online, notice it's the big brick and motor guys that are all for the taxes.. If people don't buy stuff from the small company online, guess where their probably going to get it from....
What really gets me...You are taxed when you make the money and you are taxed when you spend the money. You are taxed on things yearly for items you bought...such as your automobile or home. I think the whole thing is a mess that needs to be reformed.
Once in a while you can get shown the light in the strangest of places if you look at it right. -Hunter/Garcia
Just wanted to mention that Marshall-Fields, Target and Mervyn's are all the same company - Target Corp (Formerly the Dayton-Hudson Corp until Mark Dayton became a senator).
Also, Target Corp and Toys R Us are working together with Amazon.com for online sales, so really it's only two groups - Target-ToysRUs-Amazon and Wal-Mart.
I welcome sales tax for these merchants as it will probably encourage shopping in the local economy, which is better for small business and lesser municipalities (though perhaps bad for my home city, since Target Corp is based here).
I did not design this game/I did not name the stakes/I just happen to like apples/And I am not afraid of snakes-AniD
Who has a list of the non-tax states???? This is who I will buy from....See no problem....
Got Code?
... I'm going to boycott those 38 states!
The right to offend is far more important than the right not to be offended. (Rowan Atkinson)
Remind me again, why do we have the concept of states' rights, and different laws in the various states now? Nowadays, when people and goods are so fluid, and move around so much, isn't it a huge waste of resources to have 50+ different government agencies deciding and arguing over whether to collect taxes on internet sales? Whether you are for or against these sales taxes, isn't it crazy that it would vary from state to state?
Notice that Target, Marshall Fields, and Toys R Us are all affiliated with Amazon.com's online presence. Does this mean that Amazon proper will also begin charging tax? If so, I'll resume purchasing my books at the local dealer.
Pax Digitalia
It seems to me that the Internet is being used by brick-and-mortar merchants as a smokescreen to push an agenda they have been trying to push for decades.
As for "not hurting", what are these people thinking? Not having to pay sales tax just barely makes up for the shipping costs and extra hassles of on-line ordering. If I can't even save the sales tax anymore, then I might as well go to my local electronics store. Which is, of course, why state law makers have been lobbied so hard to push this through.
Erm- the story you linked to is not a dupe- it's "Is the BSA "Grace Period" a Scam?".
graspee
Frankly, I think this is a good idea.
And the men who hold high places must be the ones who start
To mold a new reality... closer to the heart
What's with everyone mentioning Walmarts being close to their homes?
/.ers claim to live just a few minutes away from one.
I don't think I've ever even seen one of these places. Yet, many
Are they really that ubiquitous?
FYI - I'm from NY.
Am I the only one who looks for online sites that will not charge tax to buy from? Somehow that seems doubtful. The reasons for buying online were (1) Not having to set foot in a store or shopping mall and (2) No tax offset the cost of shipping. Much as I hate malls I'm not at all sure it's worth ordering online when I have to pay the 8%+ (welcome to California) additional to the state. Dammit.
"Suppose you were an idiot..... And suppose you were a member of Congress... But I repeate myself."
Free Mac Mini
How the govenment (state or federal) could ever impose a tax on internet sales?
...I think I seem to remember a line or two about something like that in one of those old pieces of paper we lead this crazy country by...
Now, B&M stores with an online presence aside, wouldn't charging me sales tax on my order from Amazon (or Buy.com or etc.) in effect be taxing interstate commerce?
I don't believe that it will hurt all online sales, but to some extent it will. Here's why: most of the stuff I buy online I do so because either I can't buy it at a local brick and mortar or because it's far cheaper online. If it is available both online and locally, I compare the final price - which is cheaper, buying locally and paying tax or buying online and paying shipping? Then I consider the time to wait for shipping. From that, I decide which is the best option, if in fact there is an option.
For places like Wal-Mart, Target, and Toys 'r Us, it will probably hurt online commerce because people will just go to the local store. But the store is still getting their money, so they aren't actually hurt. For places that aren't so physically pervasive, such as purveyors of computer components, online sales won't be hurt if they eventually have to collect taxes. If I'm looking to buy an Athlon XP2000+ and I check the local shop and find it to be, say $200 plus 7% tax for a retail box and find it on pricewatch for $115 plus tax and shipping, I'll certainly buy it from the online shop, after checking out their credibility on the BBB of course.
How are you going to keep them down on the farm once they've seen Karl Hungus?
It will hurt only online sales of large established corporate companies, it will however increase the sales of smaller mom and pop sellers!
When I find something I want online, I search for the lowest possible price, and as it turns out, i've never bought anything from a large retail outfit online.
What is to stop the people who sell(distribute) to the target's and walmarts of world, from offering their products online themself?
on the web, so site that are charging tax will just lose business to other sites.
Before online shopping, I used to mail-order everything 'cause if you bought out-of-state, there was no sales tax.
So now just look up what you want online, and call their 800 number to order instead of using the Web.
I suppose they'll plug that too though...
Sigh.
Garg
Garg
Alumnus, Xavier's School for Gifted Youngsters
First off .. we all need to keep in mind that Internet sites that do e-commerce are REQUIRED to collect sales tax if they are selling to a state which they have a Brick & Morter store located.
.. I don't have to pay sales tax on it. [although I do get taxed when I register it in my own state.]
.. they do sometimes fill a nitch. Example .. 3 weeks ago I was looking for 2 things : An Ospry Book for Eastern Front German Uniforms in WWII, and German winter gear figurines (25m) of the same timeframe.
.. and none of them had what I wanted. [I called 6 more .. getting smarter after the 5th to get the same result.] *EVERY* single shop was willing to 'special order' said product for me.
.. because I wanted to support my local stores. .. at least ONE out of 11 should have SOME representative in inventory.
.. so I ordered from an online store.
.. because its forced marketing - you see only what a seller wants you to see about their product.
.. I had what I was trying to find.
.. due to fluxing tax rates between states.] .. never happened .. and honestly .. probally never will.
So Sites like Walmart, Toys R Us, and my own Black & Decker have to pay taxes; Where sites like Crazy Aaron's Thinking Putty or Old Glory Games - do not.
That being said:
If I *DRIVE* to virginia (or deleware etc) and buy a car
If I order something over the phone, I don't have to pay tax in some states. Same if I order a magazine.
While internet stores are no replacement for a good Brick and Morter store
I went to FIVE hobby shops local to me that carry minatures
Now, I tried to buy them in a REAL store first
Granted - I was looking for some rather specalty items, but when a store CARRIES said items
All my real stores failed me
Internet shopping is only good if you know exactly what you want - its very hard to browse for something on the net
Three days later, product in hand
I guess my point is, Internet stores generally do business across state lines. [hence no income tax
Trying to regulate income tax for a NON store fronted web-store is stupid. If they had a local store, most folks prefer to go to them first. The E-Commerce-replaces-real-stores that everyone was afraid of in retail sales
--Ne auderis delere orbem rigidum meum, non erravi pernicose!
That said, if they think it won't hurt at all, they're insane, I agree. Who hasn't made sure a vendor for something online wasn't in their home state? I live in CA, and it's hard shopping for computer equipment, but given our 8.25% sales tax, is frequently worth it.
Also, doesn't it seem as if all the companies they mentioned are "clicks and mortar" stores? Since these companies have physical locations everywhere, won't this just about kill their online sites?
-Looking for a job as a materials chemist or multivariat
What amazes me is how often I'll see people club each other to get some bulky cheap thing on eBay, which common sense states the shipping cost should be the limiting factor on. e.g.
$2.00 for Coffee mug + $5.00 shipping.
(hint: always figure postage into your final bid amount, if it's a rare Webvan mug for a combined total $7.00, and you'd happily pay $10.00 go for it.)
I frequent many of my LxS (x = bike, computer, etc.) because of their advantage of Buy-it-Now-and-Have-it-Now technology and I-Can-Take-it-Back-For-Exchange-or-Refund technology, which, as opportunity cost, beat whatever discount I'd get from Pay-Now-Get-it-Later-and-Get-Screwed-on-Returns technology.
A feeling of having made the same mistake before: Deja Foobar
For years mail order has been tax free across state lines. I understood that it was partly because of which tax rate to use and which state gets it, the buyer's or the seller's.
" But if Toys R Us is all out of the product you want? Ah-ah, you just wasted traveling time/expenses [gas], and still have to wait."
Ummm...telephone.
The only justification for not charging sales taxes for online retail purchases was that the sytem was just too complicated - retailers couldn't be expected to be familiar with the rules of every taxing authority nationwide.
If a rational system for determining which sales tax applies can be put into place, there is no reason that online sites should be exempt.
BTW, I agree that the moritorium was justified - I just don't think you can reasonably expect it to last forever.
** The opinions expressed here are my own, and do not reflect those of my employers - past, present, or future**
Yeah, lucky you- no sales tax and your property taxes are 3x the national average.
The sound of Internet E-Commerce collapsing? Nope, just the sound of more money being vacuumed out of your wallets because the States have been screwed by the current administration (tell me when that trickle-down money gets down to you, I'm still waiting for it to reach me from the Reagan years).
Enough of that. If I need it, taxed or not, I buy it. If I "want" it, I'm looking for the cheapest price I can find. Economic times being what they are, I've learned to live without a lot of "wants." For the few indulgences I allow, fortunately, Delaware is very close...
Doesn't affect me. In fact Amazon.com states Hawaii, Alaska & Vermont will be exempt.
Find out about my new childrens book: SS Death Camp Criminal Batallion Go To Monte Carlo For The Massacre
After reading the article, I didn't think this was too big a deal since it was basically requiring big retailers who set up their website as a separate 'organization' to charge sales taxes for states they were in. But now, I'm thinking that the agreement said they were going to charge for every state regardless of physical presence. That would begin the slipperly slope of getting online customers 'used' to paying sales tax.
I'm concerned that the big boys are going to work it out for themselves, and the little online shops (several of whom I develop websites for) will get screwed by having to pay for 'tax tables' or 'approved software' that will run us out of business.
Since the states will be getting sales taxes now, will they be willing to refund the taxes that UPS and FedEx pay (profit, gas, employee taxes, etc.)?
online and not paying tax here in NorCal for a long time. I continue to seek out vendors that do not pay tax and will continue top do so. When I can't find one, I will start going back to the store and getting my instant satisfaction that way. Lazy am I, but more impatient am I than that.
My online purchases have tapered off as shipping costs have grown to include the 'undefined' handling as well. As for shipping, I can do it at the post office for just as cheap and have it insured against damages at the same time.
P.S. WalMart in next to SATAN, just to the left of Disney in the Underworld Academy graduation photo.
errr....umm...*whooosh* *whoosh* Is this thing on ?
I doubt the lack of sales tax is the only reason you buy from the Web.
Among other things, Web stores are open 24 hours a day and they have things in stock that you can't get at your local store.
Web stores operate out of warehouse space, which is far cheaper than retail space, especially if you live in a city. The employees don't have to deal with the public, so their time is spent more effectively.
Retail stores have many downsides. They have to deal with remainders (items that don't sell) more often, and have to choose carefully the tradeoff among items to stock. Most can't operate 24/7. The employees can be a real problem: if one person doesn't show up for work, long lines can develop at retail counters.
Shipping is expensive, but it's the only downside to web stores. They have many other economic advantages on their side, so they can continue to be a bit cheaper, and often more convenient. I buy things from Amazon that I could get from my local Borders, but that bookstore is a good 20 minutes away. Total round trip is 40 minutes. I'd buy it from Amazon even if it were a bit more expensive. Add the fact that it's generally cheaper, even with Amazon's economic model hiding the shipping cost in the price, and it's no contest: I spend far more at Amazon than retail bookstores.
Other stores offer things I can't get locally without much travel, from cake decorating supplies to obscure DVDs to Ebay's miscellania, and I live in a major metropolitan area.
Does it suck that I'm now paying 5% more for my stuff than I used to? Sure. Will it cut into some sales? A bit. But I doubt it's the Imminent Death of the Web.
states and counties running huge deficits and wondering how they will pay for local police and fire departments and social services.
Solution: Axe some of those social services.
Unfortunately:
Governments don't live in the real world. If they're running a little tight on money, they don't adjust their spending budget like a normal person or business would - they just take more.
This shouldn't surprise anyone. If you had a monopoly on legal theft and you were running low on cash, would you switch from Spago's to McDonalds? Not bloody likely. You'd just steal more.
This is a natural consequence of human nature + monopolistic power. I could draw some parallels to Microsoft here, but that's rather unneccessary.
Hi:
I am an etailer with no physical presence in any
of the sales tax states. My presence is in a non
sales tax state (Oregon). I deal exclusively over
the net and over the phone.
I don't think that this agreement will mean much
for etailers like myself. I think that all of those
in the agreement have physical presences in the
sales tax states (brick & morter sites).
Furthermore, I think that enforcement of this
type of set-up will be an interesting challenge.
I report my income to the federal income tax
forms as gross income. There is no requirement
to break it down to which state the income
comes from.
Even if I am required to furnish a state by
state breakdown, I cannot see an easy means to
verify what I report.
Buyers of my product do not send me a W2 or a
1099 or anything else to the IRS or the state.
I think that alot of people like myself will find
it easy to fall through the cracks on this one.
Mark
Cleara
Instead of trying to hassle with whether we apply taxes for the state the purchaser is in or taxes for the state the purchasee is in, or taxes the warehouse the items are sent from is in, or any of that, why don't we just have a flat tax of say 5%. It's not perfect and it may hurt a state that has a high tax rate and help one with a low one, but it cuts all the crap out.
"Not knowing when the dawn will come, I open every door." - Emily Dickinson
They have no clue. The economy is in the shitter,
so what does our government do.. tax the internet
to death.
First off, when you order over a phone, 90 percent of the time there's no tax unless you live in the state. Second off, in some cases, actually, alot of cases, the item actually costs more....especially if you buy it at the one's listed. It's the bargain bob websites that have it cheaper. CF cards recently have taken a dip and if you search, you can generally find a 1 GB card available for 200. If you buy it at Compusa's site, you pay 600. There's a little difference there and that would be worth it. Lately the online stores have taken to charging the same price as they do in the brick and mortar and rape you on the shipping on top of that! (20 bucks to overnight 1 CF card??). Online stores will have to start finding different items. Items that are hard to find. One example could be Penguin Mints. I can find both pepperment and cinnamon in my local Meijer, but I can't get any of the other flavors. Also, if I buy a case on peppermints.com, I can generally reduce my per tin cost anywhere from half the cost, to a dollar off per tin (2.99 here locally). Adding shipping makes them cost the same as the store so for cinnamon and peppermint, it's not worth it. For the chocolate mint and decaffed peppermint, it would be worth it. At least they are trying to make it automatic. In Ohio, they want you to report not just your online purchases but even the ones you make out of state too (like on vacation) on your income tax form so they can tax ya. Sometimes you's pay twice! And this is also something that they claim they can punish you for, but how? How can they keep track? They can't, so almost noone but the clueless do this. Oh well, I don't buy online anyway.
Gorkman
Gas and depreciation on your car probably makes up for the tax difference in a lot of cases.
First they charge you tax on your online purchases.
Next the USPS start charging a postage fee for e-mails.
WHAT'S NEXT?
"Cats and Dogs living together... MASS HYSTERIA!!"
its not illegal in the context of the article.
Companies that have regular Brick & Morter store locations in a state, are required by FEDERAL TRADE LAWS to charge income tax for any online sales made to said state.
[Trust me, I spent months reviewing this with our legal department before setting up our online store.]
This keeps folks from just doing all their sales 'ONLINE' by putting a kiosk in their store or whatever, and avoiding the taxes. Cheap, but if folks hadn't been doing it - no one would have had to make the law up.
What they are doing, is saying that 'We know you didn't collect taxes, However, if you promise that you will in the future (even in the states you DON'T have Brick & Morter in) we will overlook your entheusaum.
Basicaly its a call to amnesty to get leverage to PUSH for taxation on the web.
--Ne auderis delere orbem rigidum meum, non erravi pernicose!
It's barely conceivable that you're talking about importing goods into the UK, in which case you don't get charged tax by the seller (although that's nothing to do with the UK). However, you do get charged import duties by customs and excise (or a postal service on their behalf, in which case you get hit with an extra charge for the priviledge) on any single item over £18 GBP in value.
That's one reason why places like cd-wow.com are so great; they post each DVD or CD singly, with the value clearly displayed, so it all just slides through. But order something over £18 in value and you will likely get import duties levied on it (but even with that, and even being posted from Hong Kong, it's still cheaper than buying from inside the UK!)
If you were blocking sigs, you wouldn't have to read this.
We've been charged sales tax from online shops that have a physical presence here for years. Eddie Bauer, Victoria's Secret, REI, Apple Store, CompUSA, and others have all been collecting sales tax. You know what? It still works out for the consumer in some cases. Often these stores have discount shipping for large orders, flexible return policies, a larger stock of items, and easier to shop with (especially during the holidays).
Besides, why should Target care if you buy from them online or down the street as long as you buy from them? All they need to worry about is you going to "just-like-target-but-no-tax.com".
The agreement is expected to give states a new source of revenue to battle historic budget deficits.
Ok, there's this other solution that doesn't involve taking more money away from middle class people. IT'S CALLED CUTTING SPENDING!!
I live in Washington. We've been having extreme budget troubles for the past 2 years, as well as a poor economy (we've been harder hit by the recession)
During the late 90's, our state had a HUGE surplus. Gigantic, billions of dollars. You'd assume that the state would save it up for lean times, right? No, of course not! Government spending doesn't work like that! No, they spent it on worthless programs. The money was gone amazingly fast. Now, due to their short sightedness, I have to give them more money.
If you don't understand any of my sayings, come to me in private and I shall take you in my German mouth.
Here in Ontario, Canada I've always been charged tax for my online purchases. Both the 7% GST (Goods and Services Tax) and 8% PST (Provincial Sales Tax). Online stores tend to have a better selection and supply. They're also more convenient. I'd prefer to type in the name of the DVD I want and click "purchase" as opposed to searching through the mess that most DVD sections at my local Best Buy end up being. Plus, I often find online prices are cheaper than in-store ones. As long as there's a free shipping offer, I'm sold :).
- In hell, treason is the work of angels.
How can it NOT hurt online sales? Either people will see the price increase and not buy as much, or people won't care about the price increase(yeah, right) and keep buying as much, which indicates that in a tax free environment the company could have made more profit via the higher price.
This just closes a loophole that some stores were getting away with, and some stores weren't. For example Gateway computer charges sales tax for online sales to California, because they have a retail presence there. For Toys R Us not to, just because they have a different corporate entity running the website, is not fair. This is why they are talking about an amnesty for back taxes- this is not a new sales tax on e-commerce. For Amazon (not their partners) and other catalog-only stores, you'll still be sales tax free. - VoiceOfDog
Some people may dismiss this. Oh, how stupid. Of course they didn't collect it, right? They didn't have to.
That's assuming that there's any rationality to sales tax.
My father had a home business for awhile. It failed--most small businesses do. During the time he operated, he made not one sale within our state. It happens, when you're making so few sales that you don't even actually have to file income tax.
The state of Ohio now claims he owes them something along the lines of $20,000 in sales tax.
But they don't phrase it as 'we think you made enough sales that you now owe us in taxes, which we estimate to be $20,000', no. They say 'you owe us $20k, pay up'.
And there's not a damn thing you can do about it.
For a large retailer? This could be a *significant* fear. Assessmants for hundreds of thousands--hell, even millions--in taxes that you didn't collect. Or... changing your policies to start collecting them ASAP.
How many of you could really say you'd choose the nameless, faceless consumers over your own business?
Time to build a no tax merchant database ...
Got Code?
On-line and other mail-order merchants who don't have to collect sales tax have an unfair price advantage over local bricks-and-mortar stores
Yeah right.. so if this is the case, why are all the merchants they mention brick-and-mortar mainstreams. Do these folks believe that making online sales unattractive will bring customers back into their stores? Let's see Ebay and Amazon sign on to this voluntarily... Then we'll see if this doesn't hurt online sales.
I assumed that prices would be lower because the traditional bricks-and-mortar structures are not necessary in the dot-com era. Whatever happened to the advantage that e-tailers would enjoy over say, a Wal-Mart, which has to pay for 3x the employees, lighting, heat, parking, etc?
That is, why could not a warehousing operation such as Amazon charge less than Wal-Mart for the same item, even with tax included, and find profitability that way, even as the consumer enjoyed the reduced price?
Sometimes I feel like I don't understand the concept of Free Market and Supply and Demand. Or am I just being too (deliberately) idealistic?
SDMI: Finally! Music that won't rip or burn! Brought to you by the fine folks at RIAA.
I have shopped for virtually all of my non-food items online for years for two reasons: 1) Lower prices can be found online than in my local stores. 2) I haven't had to pay taxes on what I buy fron the net. Throw in the fact that many online retailers will ship for free if you spend enough, and you've got all the reason you need to wait a few extra days for your toys to arrive.
Now, throw on a tax. Add to that a poor economy where deals are harder to find, and where free shipping isn't as common as it used to be. Consider, then, that I am a huge fan of instant gratification.
I no longer have any incentive to buy online. Even with lower prices on the net, tax and shipping will now add up to more than what I would save, and I'd have to wait a few more days to receive it.
Consider, also, what kind of effect this will have on companies that deliver these products to your door.
If the goal is to drive more people into local stores, then this will work like a charm. If the powers that be are sincerely interested in developing e-commerce, they'll re-think this idea. If the States need more money, perhaps they should consider doing a better job of spending they money that they already get from my property, gas and vehicle taxes.
Placed an order with Apple a few days ago, and they charged tax. First order I've placed with them, so I don't know if this is new. But it was the first time I've seen tax added to online order I've made.
Your mind moves quicker than a nun's first curry. - A. Rimmer
I live in Oregon, where there is no sales tax. If I go to the store and buy something marked at $19.99, and hand them a $20 bill, they'll give me a penny change.
As an Oregon resident, I can drive to Washington, buy something that would normally have a sales tax, show them my Oregon driver's license, and they'll waive the tax. I believe this is because Washington decided to exempt Oregon residents from paying sales tax so Washington businesses could remain competitive; I would have to pay sales tax when visiting any other state, and I think a California resident would have to pay Washington sales taxes.
Anyway, if I'm buying online from a company based California, will I be charged taxes by the state of California?
If someone from California buys online from a company based in Oregon, will the Oregon company have to charge them California sales tax? That hardly makes sense. So if not, does this mean Oregon companies who do nationwide sales online have an advantage over their competition in other states, because there's no sales tax here but the competition will now begin charging sales tax? That sounds like a good deal to me; our local economy certainly needs the help.
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My beliefs do not require that you agree with them.
Streamlined Sales Tax Project and click on the graph.
or
States Participating
help fill in hidden movie endings @ End of the Credits
First off, IAAL. While tax law is not my field, I have a few observations.
/rr
Firstly, walmart and other national chains have already been charging taxes for online sales. They are required to because, if they have a physical store in the state (nexus), they are required to do so. This is also why when I purchased things from Mac/PCConnection while living in Ohio, they charged me tax (they have a distribution facility there) but when I order here in Maine there is no tax (no nexus). So large brick and block retailers saying that they are charging tax is, frankly, redundant.
Secondly, this issue is *just like* that faced by catalog retailers. A company like LLBean is very careful not to hire contractors from a state like NY (hard on nexus issues) because they do not what to have to charge NY customers sales tax. They, catalog retailers, only pay tax in states where there is an identifiable nexus...sales alone are not enough. Online retailers are in exactly the same position and should be treated the same. If they have a distribution center, headquarters, logistics center etc etc, then they have to charge sales tax...otherwise, they do not.
From what I have seen, the companies that are mentioned are those likely to have physical structures in most/every state. If Amazon begins charging tax for their core business, I'll be very surprised (though it raises interesting issues with their new "apparel store).
--
To announce that there must be no criticism of the president, or that we are to stand by the president right or wrong, is not only unpatriotic and servile, but is morally treasonable to the American public.
--Theodore Roosevelt
It's been stated many times that the only reason these taxes have been absent is that they were too hard to implement/figure out. I really don't see why, but it's been the consencous that there is no legal reason they shouldn't be in place.
"Not knowing when the dawn will come, I open every door." - Emily Dickinson
Depends on where you live. I just moved to quaint little town where the most high-tech store is a "Radio Shack," which sells items at twice the price of the 'Shack where I came from. There are places where it's worse than this too.
I might not shop at Walmark online, but I'm still inclined to use certain stores online for specialty items (digital cameras) that aren't easily available at local retailers. Other stores such as amazon/chapters/etc will also still continue to do business as usual.
p.s. I'm Canadian so we've being paying tax for awhile, even for ebay auctions from major merchants (which is annoying when items are used)
Last time I checked, that was taxation without representation, which is unconstitutional. I am not represented by any state outside Texas. If a company in Texas wants to tax my online order, fine. But there is no justification constitutionally for me to pay a California sales tax for example.
In SOVIET RUSSIA... erm...NSA AMERICA, the Internet logs onto YOU!
keep reloading
Ok...I'm against the tax..we have too much already. But, given this will eventually happen. Why for God's sake are they applying the tax to where you SHIPPED it instead of the billing address??? If I have to be taxed for a purchase..dammit, I want the money to come to MY state since I paid for it...
Light travels faster than sound. This is why some people appear bright until you hear them speak.........
I used to work customer service for the Target website, until we farmed it out to Amazon. Target has been charging sales tax on its website since early last year, so this is nothing new to me. I forget the reasoning behind it, but I think it amounts to the fact that the website has become a part of Target Corporation, rather than a seperate company owned by Target Corporation, and due to tax laws, they had to charge sales tax on any orders shipped to states where there is a Target store (47 of them, the ones that don't are Alaska, Hawaii, and Vermont, the freak states). That pissed off a lot of people.
This probably won't hurt online retailers who don't have brick-and-mortar stores, like Amazon, since they usually offer things you can't find in stores. It will, however, probably hurt the websites for the big retailers, like Target or Walmart, since, as someone else mentioned, people will go to the store rather than pay shipping.
It is NOT illegal. All these stores have a business presence in the states involved. Businesses that have no business presence ina state still don't have to charge taxes - but those businesses which have a store or distribution center in a state have a business presence and are required to get a sales and use tax permit in that state and charge sales taxes for anything to be sold or used in that state.
The consumer is the one paying the taxes. We're not talking about taxes being legitimate or even if they should be collected. All that is happening is that the resposibility for submitting the tax payment to the state is shifting from the consumer (as is the current situation with most mail order) to the vendor.
The myth of no taxation on mail-order is only around because most states never bothered to procescute people that skipped out on $12 worth of sales tax per year. Michigan for one has started to look into enforcing the law in hopes that they can scare most of the dodgers into paying up (at least partially).
Your take on online shopping is contrary to what most everyone else thinks. Why, really, should it cost more?
With a brick and mortar facility there are a huge number of additional expenses for the daily operation of the facility than there are for an online store. This overhead adds to the price of the products sold. This was supposed to be one of the founding principles of Amazon.com.
Amazon was supposed to be THE retail sales outlet because it would cost less. They didn't have the overhead that a brick and mortar would have and therefore, could sell the products at a significantly lower price.
An online shop avoids the overhead of multiple buildings, electricity, staff, taxes for property and staff, insurance and a whole lot more. The brick and mortar retailer is replaced by a machine. This is why banks use ATMs. It is not to give their customers convenience. It is to establish and expand the bank's presence without the expense that would be incurred by opening a branch office.
The fact is that online shopping should indeed be a lot cheaper than a retail outlet, even with paying taxes. But, for some strange reason, it doesn't look like it is going to work out that way.
That's one reason why places like cd-wow.com are so great
I believe that play.com is a similar type of set-up (i.e. no UK VAT), although I think they are based in Jersey so maybe post is quicker than from Hong Kong? Also free shipping.
It's really that simple.
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This will help all those starving mom & pops/Main street stores.
Main Street is dead, there's no parking. Mom & Pop will have to make due with a niche market and the walmarts of the world will suck up the rest. How does this help your local community?
... and was not fed
In my opinion, Scientology is a cult you should avoid.
Retailers have been required to collect sales tax for states in which they have an office. I guess some of them have been ignoring this, but that doesn't have anything to do with the internet.
Walmart has locations almost everywhere, and should have been collecting taxes all along.
I always wondered what Gateway was doing, opening stores in major markets with sales tax like California, triggering them to collect taxes on the online sales also.
I couldn't care less about the whole, "no taxation w/o representation" stuff, but I do take offense when I'm paying for goods and services I've never recieved. The argument that buying online somehow uses a state's infrastructure doesn't stick. Last I checked the constitution only allowed modest tarrifs to be collected for that. The reason is to prevent the kind of petty infighting and state level trade wars that where making it hard for the colonies to unite in the first place. What if states decide to campaign against buying online to keep tax dollars in state? I can see it now "Buy Texan, it's the Patriotic thing to do!".
What's more annoying is idiots who claim this won't have an effect on online sales. I've gotten to the checkout dozens of times on sites only to cancel my order because shipping made what I was buying cost more than buying it in town (unless I wanted to wait 3-6 weeks).
Last I check Amazon.com and most other online retailers where either not profitable or barely; being forced to slash prices and profits of compete with brick and mortor. When I buy something in a local shop I have the benefit of the shop's shipping discounts. That's why when I special order a cd locally, I don't pay extra shipping fees.
Add to that only 38 states are jumping on board leaving 12 that online retailers can jump ship to. Smaller retailers still get screwed, and have a hugh accouting hassle they didn't have before. So the cost goes up again, and they're discouraged from going online in the first place.
From a economic viewpoint widespread use of online shopping services don't make anymore since than widespread catalog sales. They're the same thing really, and I wish technically inept people would start treating them as such.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
Marshall Fields has purchased a number of catalogs formerly run to benefit Public Radio and Television: Signals and Brittania Video come to mind immediately.
I have discovered a truly marvelous sig, unfortunately the sig limit is too small to contain i
There are several significant categories that will be nearly untouched by on-line sales tax. Travel (airlines, hotels, rental cars), Books (much better selection on-line), and non-x86 computers & software (e.g., UNIX secondary markets) are the ones that immediately come to mind. Just think of those things that can't be bought at Wal-Mart, Best Buy, the local car dealer, or the grocery store, and you'll see all sorts of things that will thrive in on-line sales.
The aspects of on-line sales that will be hurt are those that probably never needed to be on-line in the first place. For example, I saw an ad for mail-order firewood a few days ago...what the hell are they thinking?!?
Healthcare article at Kuro5hin
These are the only two ecommerce sites that matter anyway.
I long thought that online retailers should push the convinience factor rather than the price factor anyway.. That being said, this sucks. I always figure 'ok, I pay shipping, but I don't pay tax, and its easier for me to shop online'. Now the equation will be more complicated.
I question its constitutionality.
// file: mice.h
#include "frickin_lasers.h"
1. Selection. I live 20 minutes from Barnes and Noble, but, more often then not, they don't have the book I want. It's worth it to me to order from Amazon and save myself the trip.
2. People. I hate crowds. Especially at Xmas time. Spending a few extra dollars for shipping, and if needed, taxes, is worth it to me. Otherwise, I'm pissed off all day long.
3. Selection. The stuff I want is usually not stocked locally here in Iowa (wish we had a Fry's or equivalent). My only option is online. That kind of convenience is worth a little extra coin.
Gee, I wonder which 12 states online retailers will be moving to.
"On-line and other mail-order merchants who don't have to collect sales tax have an unfair price advantage over local bricks-and-mortar stores," J. Craig Shearman senior director of media relations for the NRF, told internetnews.com. "We support a level playing field for all merchants, regardless of whether they sell their merchandise from a storefront, through a catalog or over the Internet. All retailers should be required to play by the same rules."
Why change this now? The local and state governments have missed out on billion$ in mail-order taxes for years. I wouldn't be surprised if the mail-order companies keep fighting this to the bloody death. This is their bread and butter, and their revenues probably outshine online sales 100 to 1.
Is it just me, or does it sound like a non-issue? The stores that are mentioned are ones that do have physical locations in every state, but they used paperwork tricks to make a company with the same name and the same products to avoid having to do sales tax.
From what I read, the summary is that those stores agreed to close the loophole voluntarily, and besides it was annoying customers anyways when they tried to return things at the local store. This won't affect Amazon or other mainly online businesses.
There's always been a sales tax on items ordered over the Internet. The only difference now is that you don't have to declare these purchases when doing your state taxes because these companies will charge the tax for you.
If you weren't paying taxes before, that was only because you were committing tax fraud.
(Not that there's anything wrong with tax fraud you get away with...)
I go to pricewatch to get the best price for a product. It's usually (to paint a blanket statement) from a guy with a thick accent in a town with a BIG port receiving product from the East.
In all cases, I've never been a return customer, so I can't tell if there's an unending cycle of small companies pricing themselves out of business (selling stuff at a loss) or if they've got enough margin in it to keep the lights on.
So. If they can STILL sell the part cheap enough with a 7% tax on it, I'll probably still buy it.
case in point: New sony laptop battery $300 ($321 after tax) at local MegaLoMart, pricewatch price: $150. Pricewatch price with tax: $160.50.
Last time I checked, $160.50 is cheaper than $321 for the _exact_same_part with a different sticker on it.
"Draco dormiens nunquam titillandus."
From the article:
61 percent do not go out of their way to find online retailers that don't charge sales tax. Thirty percent of this group sometimes looks for an online retailer that will not charge sales tax and only 9 percent always looks for a retailer that will not charge sales tax.
But most of them (OK, 49%) voted for somebody who was supposed to *cut* their taxes.
Except, of course, for that little court ruling that it isn't legal to force such tax compliance in the first place which created the "loophole."
Please note that the short list of "players" given are major retailers with a "presence" in all states.
Amazon is a pure e-tailer with a "presence" only in its home state.
This makes a big difference.
KFG
NAFTA covers a very limited range of trade. We're really only talking about automotive, textile, sporting good, and entertainment industry equipment. Even then, it is about business to business transactions, not business to consumer. If Ford Motor Company buys shocks assembled in Mexico, they don't pay an import duty. If you buy that shock from Ford and have it shipped to Canada, you will pay the duty.
The main supporters of this are the people who have Brick and Mortor stores to soak up the sales that wont be on the internet.
For christ sakes, if you want taxes on internet sales, make the taxes local to the state the server is in. If my server is in Chicago, then that's where the sale takes place. That way you will have states competing for the internet business by lowering their online sales tax. Isn't that what we want?
Sorry, I can't resist sounding like a jerk, here. Mexican products that attempt to compete with US or EU or Japanese products have (in my limited experience) proven to me to be cheap knock-offs or poorly produced versions of what we have here. You know...the Mexican Strat, the Mexican Vee-Dub, "Mexican Labor", etc. I'm not thinking that they'll be a big player in online sales in the near future, 7% knock-off and NAFTA or not.
What's that you say? You bought a Mexican book? Not English, is it? Some Mexican Hard drives? What was the last great technological innovation to come out of Mexico? I'm seriously interested. I live in a very highly Hispanic area, and have lots of Hispanic and Latino friends...they never talk about things like, "Yeah, back home, we REALLY knew how to build [insert product here]" They talk about missing the food, the people, the atmosphere, but not the products or the GNP or living standards...
I wish this didn't come off sounding so racist, but if you replace the above with Canadian and don't replace all the products with "singers", it just sounds stupid.
Any sufficiently well-organized Government is indistinguishable from bullshit.
1: Go to the web site, and find what you want.
2: Call and order by phone. It's now not an online transaction.
(doesn't work for ebay, amazon, etc.. but works fine for parts distributors, system houses, etc.)
-- I am. Therefore, I think!
Not to throw damper on thsi but theri agreement is illegal..
the only power that can grant permission to state to charge sales taxes on interstate sales(from people out of ste) is the Federal government not the states themselves!
I suggest if you purhcase onile from one of these companies to dispute the bill..the law i son your side..
Don't Tread on OpenSource
Even better are companies such as thinkgeek that mark the packages as gifts, so you dont get charged any import duty.
eBay will grow even more.....
I just went online and cancelled a pending order
with one of the taxing companies.
I can get it for the same price at the local mall,
with no shipping charge. And today.
Enjoy the pain.
Maybe not all on-line sales, but I just decided not to shop at Wal-Mart, Marshall Fields, Target, Toys R Us and Mervyn's anymore. At least not the on-line sites...
Its not Illegal .. four words .. 'Federal Trade-Law Commission' [well .. technically 3 words and a hyphen]
Any e-store that sells to a state where they have a physical retail presence, is already require to charge sales tax.
Less scroupulous (and smaller) stores were installing 'ordering kiosks' that contacted their 'web server' and took an order over the 'internet' regardless of the fact that you were standing in their store - so they wouldn't have to charge you sales-tax.
Hence, why the original law came about.
--Ne auderis delere orbem rigidum meum, non erravi pernicose!
Come on, how much are you actually going to be paying for sales tax on a lousy book or CD?
People who buy stuff online are interested in:
1) Convenience: So they don't have to run out just to get something that can wait.
2) Selection: Online retailers tends to carry a larger selection than local brick and mortor stores.
3) Experience: Some folks just don't like going to a store and be hassled by sales people.
4) Price: _Some_ online retailers have discounts deeper than any local stores, considering the sales tax or not.
Based on these three factors, people make their decisions. Sometimes I am willing to pay more to get something online and just tohave it delivered right onto my doorstep; my time is expensive. Notice how "price" is at the bottom of the list.
On the other hand, if it's something that you *really* need, say, a plunger when your toilet is clogged, you're going to go to the local store regardless and buy one. It doesn't matter if online retailers are giving away plungers all day long, if you need one, you need one.
Even with big-ticket items, like TVs, computers and such, you need to consider that the items you purchased will arrive at your residence, often with free delivery. Brick/mortor stores charges you for delivery too, you know. Besides, with shopping online, there's no heavy lifting, and pushy sales people trying to upsell me with something I don't need. Sounds like a plan to me.
The bottom line: for most folks, the few percent of sales tax is not going to make any difference.
Full Disclosure: I live in OR these days, so either way I am not paying any sales tax. But I know I didn't shop online more or less when I lived in WA...
So what's the big deal? Stores with print catalogs have been doing this for years. Ever buy something from the Sears or Penney's catalog? They collect sales tax because they have stores in the states the items are shipped too. And if you look at the speculation, those kinds of ubiquitous stores are what are mentioned. They should have been doing this a long time ago.
Where it becomes tricky is with stores like Amazon, who don't have a presence in every state (or any, really). Why should they be able to avoid what Sears can't?
There is no duty on products manufactured in North America. Canadians purchasing from the US pay only GST and sometimes the applicable province's PST (not sure the exact conditions that trigger PST).
However, the real prohibitive border expense is generally brokerage fees, which can be up to $50 on $5 purchases depending on shipping method (hint: never use UPS ground). This, combined with our pathetic artificially weak dollar, makes shopping in the US prohibitive.
I'm from Oregon (no sales tax), and this is an outrage.
Not only that, but I find it rather interesting that this comes at a time when these retailers are having a hard enough time getting business.
In California, if you buy something from out of state, you're not charged sales tax. However, at the end of the year, when you file your 540, there's a spot for paying your "Use" tax.
Anything you buy from out of state is supposed to be declared and you pay a Use Tax equal to the Sales Tax you would have paid if you bought it locally.
Other states probably have similar provisions.
Not A Sig
The companies are among the first in the nation to collect sales taxes from online shoppers across the country, not just shoppers who live in the states where the companies maintain actual stores or distribution centers.
So, that's new and dumb and just what you were expecting. Think a little about it. Why should a mom and pop online retailer have to pay out of state sales taxes? It puts a huge burden on anyone who would do business on the web to keep track of ever other state's taxes. If you take the reasoning to it's conclusion, they would have to keep track of every county, parish and municiple tax as well. Yet they recieve no benifit or services from that tax! I've seen BS about paying for roads posted by ignoramouses that don't know that most roads are funded by gasoline taxes. Local sales taxes pay for things like police, fire and other normal government functions. I'm in Louisana, taxes paid to Texas are useless to me.
No, you are not going to make money off the data"service" either. Keeping track of all of that is something only a huge business that's everywhere already, such as Walmart, can do. Don't get your hopes up that local governments will get any friendlier to your business ambitions than they are to would be cable operators. That sharpie is likely to be mom and pop's competitors and they are not going to make it easy for anyone else to get in the game.
This is just another nail in the coffin of the comercial internet. We are quickly moving away from peer machines operating on peer networks to a big stupid McScrew you advert net where your services are not welcome. It's in direct contradiction of the State of the Union promise to spur small business. Make something interesting. Want to sell it? No way, that would hurt WalMart and other importers of crap from China! I'm going to be sick.
DMCA, Hollings, Palladium. What might have sounded like paranoia is now common sense.
Is it not that simple?
How could this hurt the economy if we are going to buy stuff either way?
"Arizona, California and South Carolina are not parties to the deal"
See? This hot hellhole we call Arizona does serve a purpose.
Producer: NEXT!!
Ralph Wiggum: Chicken necks
It's like watching the Jerry Springer show in 3D with smello-vision! Just imagine what you'd have to pay to get that experience in the SIMS Online!
the preceding comment is my own and in no way reflects the opinion of the Joint Chiefs of Staff
Whether one form of trade fluorishes over another should not be due to the distortions of various tax schemes.
If your sole reason for shopping online is only due to the lack of sales tax on your online sales, then this is reason enough for online sales to be taxed.
Let trade compete on value, price, and service, not just the distorting effects of various taxing schemes.
So, that's new and dumb and just what you were expecting. Think a little about it. Why should a mom and pop online retailer have to pay out of state sales taxes? It puts a huge burden on anyone who would do business on the web to keep track of ever other state's taxes. If you take the reasoning to it's conclusion, they would have to keep track of every county, parish and municiple tax as well. Yet they recieve no benifit or services from that tax! I've seen BS about paying for roads posted by ignoramouses that don't know that most roads are funded by gasoline taxes. Local sales taxes pay for things like police, fire and other normal government functions. I'm in Louisana, taxes paid to Texas are useless to me.
No, you are not going to make money off the data"service" either. Keeping track of all of that is something only a huge business that's everywhere already, such as Walmart, can do. Don't get your hopes up that local governments will get any friendlier to your business ambitions than they are to would be cable operators. That sharpie is likely to be mom and pop's competitors and they are not going to make it easy for anyone else to get in the game.
This is just another nail in the coffin of the comercial internet. We are quickly moving away from peer machines operating on peer networks to a big stupid McScrew you advert net where your services are not welcome. It's in direct contradiction of the State of the Union promise to spur small business. Make something interesting. Want to sell it? No way, that would hurt WalMart and other importers of crap from China! I'm going to be sick. So much for the equal footing between me and Walmart that the internet promissed.
DMCA, Hollings, Palladium. What might have sounded like paranoia is now common sense.
There are a couple of reasons for this. Let's examine the basic reason taxes for online sales had a moritorium put on it; taxation without representation. When you go to the store to buy something, you use the roads, you use the lights and signs that the local government provides to safely get you to the store and back home. This is the reason that the local government charges a sales tax, so that they can recoup the funds used for these (and other) necessities. When you're shopping online, you're using an Internet service you've already paid taxes on and sitting in a house or apartment that taxes are already being paid on. When you pay for shipment for an item bought online, you're indirectly paying taxes since UPS or FedEx pays taxes for the roads they drive on. When you're forced to pay a sales tax for an online good to a retailer that doesn't have a physical presence in your state, it's an extra, unfounded tax. This kind of thing was dealt with before, and it wasn't pretty. A large amount of tea was used, it started a war. If I do purchase goods online, the sites that aren't charging a tax will get my business, unless the site has a physical presence in my state, in which case I'll probably still go to the physical location and purchase the good.
Brick-and-mortar merchants' "agenda" == trying to sell you stuff. Internet == a new way to sell you stuff. And in case you haven't noticed, many of those brick-and-mortar merchants are now selling online as well.
If merchants like Wal-Mart haven't been charging sales tax on online orders (I don't know, I haven't ordered anything online from them), they've clearly been violating the law to do so. State laws almost uniformly say that if the company has nexus (a physical presence, like an office, store or distribution center), it's responsible for charging you sales tax.
On the other hand, you are responsible, in most states, for paying "use tax" (basically a different name for sales tax) on items you buy from out-of-state retailers who did not charge you any sales tax. Betcha didn't know that one. This agreement essentially fixes the problem that almost no one pays that tax, and it catches companies who had been trying to skirt the nexus rules.
Users could submit orders as ususal over the internet, selecting a mail-order (vs an e-commerce) option. The vendor would generate a postcard containing the order details and mail it to themselves. Meanwhile the customer's order is processed and shipped. In most cases the postage for a postcard is much less than the sales tax... I suppose this would violate the 'spirit of the law', but how is that different than all of the stupid laws that violate the spirit of our liberty?
A couple of examples: DVDs are typically between 8 and 10 UKP from the supplier I use (based in the Channel Islands, which is tax-free BUT because the discs all cost under 18 UKP, they're exempt from having UK duty and VAT loaded onto them when they arrive at Customs). Shop prices are 20 UKP for the same DVDs, although if you're lucky you can find a 2-for-1 offer, which only goes to show what a rip-off the headline price is. Big online suppliers of PC components are so much cheaper than PC World stores, it's not even funny.
When I am king, you will be first against the wall.
The stores that are affected by this are NOT the mom-n-pop stores that do most of their transactions over the Internet. This deal is ONLY used to tie major retailers' brick and mortar locations to their respective websites. As a specific example, here is a quote from the article:
.com's parent company Wal-Mart has retail stores in those states.
"For example, Wal-Mart has 1,500 stores scattered across all 50 states, but WalMart.com, a separate subsidiary, has a physical presence in only nine states."
WalMart.com's presence in nine states requires them to collect taxes for those nine states. However, this deal would require them to collect in all fifty, since the
A store like mWave.com (a personal favorite), whose only presence is in California, would still be treated the same way they've always been: Purchases from outside California are tax-exempt, just like they would be from a mail-order catalog.
I imagine Dell will be affected by this. They charge no sales tax for orders from "Dell Home", but "Dell Business" charges tax to everyone. It's likely that, if they buy in to this deal, Dell Home will charge tax to everyone.
The short of it is, though, Don't Panic! If you're shopping for bargains online, you'll still find them.
Gamertag: ChrisCasey
I ordered some flash from Crucial yesterday and got charged local tax.
Just an FYI.
[RIAA] says its concern is artists. That's true, in just the sense that a cattle rancher is concerned about its cattle.
I'm from New Hampshire. We don't have sales tax. Delaware also doesn't have it. I'm not sure how many other states there are like us, but I presume there are at least a couple.
So does this mean that the only time I won't be paying tax on my online purchases will be when I'm shopping at stores in my home state? This strikes me as at least a little bit absurd. If I mail order something from a company in a state that charges sales tak I don't have to pay it; why should this be any different?
"He's more machine now than man, twisted and evil."
Wal-mart and Target have operations in all states. Ergo, they already collect sales taxes for that appropriate state and it's no big deal to include online and telephone sales, which they should have been doing anyway.
Ever notice on television advertisements for "The Osmonds Greatest Hits", you'll see the disclaimer that "residents of New York add sales tax". That's because the company pushing and fufilling the order has offices in New York. They're required to collect taxes for orders going to destinations within the state of NY. So, there's nothing terribly earth shattering about what these companies are doing nor the agreement that has been reached. I argue that Target/Wal-mart are trying to keep their respective tits out of the wringer because they haven't been collecting taxes for online/telephone sales.
In fact, I argue that this is the first step in stricter enforcement of sales tax laws directed at large corporations.
HOWEVER, you'll note that this is a voluntary program. The states can not force the guy at FixYourOwnPrinter.com to collect sales taxes for parts sold to anyone in any state other than his own. It is unconstitutional.
While this voluntary program is technically correct, I think it may be the first step at a wider attempt at regulating interstate commerce. Which of course, the states can not do per the Constitution.
Look for this one argued in the US Supreme Court soon.
...it's like putting a target on their back.' The Post reports that Wal-Mart, Marshall Fields, Target..
;-)
Now they've got a target on their back, and their front
When VPNs are outlawed, only outlaws have VPNs.
This could be a good thing in the long run. On one hand, it adds yet another layer to our already complicated network of taxation. On the other, it might be a step toward simplifying taxation overall. I would like to see us eventually replace ALL taxes with a single National Retail Sales Tax, distributed to all states and the federal government.
One scheme that was proposed several years ago (but died in committee) combined a sales tax of 20% and an annual refund of 20% of whatever the government declared was poverty level income. Every head of household would receive the same dollar amount refund, adjusted for dependents. All income tax, including corporate tax, would be abolished. People with more money would pay more tax because they spend more money. For poor people, who spend all or nearly all their income, the refund would amount to ALL the sales tax they paid, because the refund would be set at 20% of a poverty income. For wealthier people the refund would amount to only a fraction of the tax they paid.
This would accomplish the same thing as a continuously graduated income tax rate, but without the 4000 pages of IRS rules and 105,000 IRS employees we now use to collect the same amount of money. The vast army of accountants, clerks, lawyers and consultants whose careers are dedicated to paying and avoiding taxes would have to find something productive to do with their lives.
To manipulate a sales-tax-only system, Congress would have just 2 numbers to work with: the percentage rate and the refund ammount, and any changes they made would be completely out in the open. No corporate taxes would be built into the cost of everything we buy. No custom-designed loopholes would be created to pay back campaign contributions. People would pay tax according to how rich they are and how much stuff they consume, the opportunities for cheating would be far fewer than now, and everybody who would know exactly how much tax they were paying.
If we did switch to an all-sales-tax system it would be essential to enforce it on all sales, which means it would have to be collected on e-commerce. So on that basis, I think instituting the practice and getting people used to it could be a good step.
Oh,wait. I forgot you're all pussies.
BeDoper, Crapdot.org, Death Metal Music Association, Awake! and Bake
I live in Canada and the *only* time I order online is when I can't buy something locally. I have avoided ordering from the US recently because A) the exchange rate is horible B) the shipping is slow & expensive (or fast & *Expensive*) and C) there's an insane charge for handeling at the border. Last time, it was $45CDN (about $30US?) for the border to handle three t-shirts. (ThinkGeek needs to open a Canadian branch). ;)
I'd imagine the tax will apply to me when I buy from companies in the US, even if I'm ordering from outside. After the exchange, shipping and handeling-at-the-border DOUBLE the price of anything I order from the US, the tax is just kind of vaguly amusing
AZ is not a part of this. WOW. AZ actually does a good thing for once.
I wonder if it has anything to do with having a Democrat for governor.
The states are doing this because they need money, not because it's right or wrong.
Whenever you hear the word 'fairness' or 'level playing field', immediately shoot the person who said it. 'Fairness' is a word used by people that use sympathy to get what they want from someone else who has it.
Does it hurt to hear them lying? Was this the only world you had?
You've clearly never tried to call one of these places on the phone. Call Walmart and ask them if they have Tyson's Hot Wings in stock - by the time you get your answer I'm sure mine will have arrived by walmart brand carrier pidgeon.
But merchants have been doing that: if you are in the same state, they have been charging sales tax, otherwise, they haven't. This agreement seems to go beyond what mail order traditionally entailed.
It's not like they have a way to tell what I bought here and what I bought there. Sure they could have a check point at the border but they don't, and until they do, shop in Oregon I will. I do shop here as well but going to Portland for the weekend is fun and I find myself doing a lot of shopping whenever I'm there. Next month I'm going to be in Ashland, OR for two weeks and will most likely do some shopping on the way home. Sales tax doesn't seem like much but 8% adds up rather quickly.
How is it that one careless match can start a forest fire, but it takes a whole box to start a campfire?
Mexican company puts up a web site. You go there and buy a harddrive. Mexican company has Seagate USA send you a harddisk. Mexican company collects the money from you and pays Seagate.
:-)
Canada would work the same way, except that the website would be bilingual.
Dan
I've owned a couple of Mexican Strats. They are pretty hit-or-miss when it comes to quality. I had one that played great that got stolen. I replaced it with a Tex-Mex that sounded better (better pickups), but it didn't play nearly as well as the first one. After a while, the truss rod came completely loose in the neck. So, I guess it's off to Carvin for a replacement...
In Soviet Russia, Chuck Norris will still kick your ass.
Two items ...
.. [and Congress] has the right To regulate commerce with foreign nations, and among the several states, and with the Indian tribes;".
1) Where's the line about taxation without
representation in the constitution? Can't find it?
Guess what, it's not there. Try reading it
sometime, along with the amendments.
You're lucky we have the first amendment otherwise
mis-informed people like would be in those
jails like in those countries that don't have
a free press.
2) According to Article I Section 8 of the US
Constiution, "The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States
Ok, here we go, children.
Let's say the average tax rate is 20%.
Let's say the total taxable income( we can lump employers and employees into this for sake of brevity )is $100.
Let's say it's 1998 and both employment and company profits are very high. The total amount of tax paid is $20, and the total government expenditures are $19, giving a $1 surplus.
Fast-forward a few years. Profits have turned to losses, and unemployment is mounting. In addition, those who do retain jobs are being paid less. Result: Less taxable income. Income has fallen to $90 as a combination of these forces, and total tax receipts are now $18, giving a $1 deficit.
Interestingly enough, it would appear that the deficit is caused by a general slide in taxable income, not some guy who is most likely not smart enough to intentionally wreck fiscal policy.
The economy began its slide into recession in the year 2000 as pegged by most economists. Bush took office in 2001. Arguably the economy may have begin sliding much earlier but hidden by false earnings reports.
It's very easy to blame a single person for the results of complex interactions between 300 million people, but people like you seem to have no problem doing it.
you filthy socialist democrats all liked taxing the crap out of us. Less taxes is a Republican ideal.
Not only that...who benefits from no tax shopping online? Those who can afford computers and often times, broadband. Well golly...that's not fair to the poor.
Muahahah
This post lacks the narcissistic blindness and irrationality typical of Slashdot posts. Mod it down.
As it stands now, if you purchase a product from a company from another state, you are still expected to pay sales tax on it. I believe it is called a Use Tax, but it usually matches the sales tax. Of course, nobody does it, and its not feasible for the states to hunt down and prosecute individuals for violations (how would they know what their residents ordered from Amazon?)
Technically, I believe the onus has always been on the individual (and unenforced), so to me this represents a push towards holding the companies responsible. Although any future regulation on that would need to be federal in nature.
Just because none of us have ever paid taxes on out of state purchases doesn't mean we didn't owe taxes on them.
Also, where it gets fuzzy is with a company like Amazon. Their partnerships (with Borders, Target, Circuit City) blur the line between companies with Brick&Mortar in every state, and an online retailer with a physical presence in only a handful of states. They get around the Nexus issue by setting up separate companies for the partnership to avoid Nexus issues. I believe this practice (specifically for the Amazon/Borders partnership) is being challenged in California.
Dave
This is a pretty universal feature of consumption taxation. The theory is that when you purchase out of state items you can still be taxed on your use of the item in the state. It is somewhat arbitrary, agreed, but it is better than the alternative: if you were taxed based on billing address, someone in the Caymans could set up a web site and offer to buy things for you for a small percentage of the price (less than the sales tax). Of course, you might not bother to do this for a paperback, but someone buying $10,000 in office supplies for a business might.
I won't argue that it takes money to run goverment and I suppose that you could say that any responsible government would always be looking for sources of revenue to fund itself. From that perspective, perhaps taxing internet sales makes some sense.
But I will argue that internet commerce is still in it's infancy. The internet is a great new medium for commerce and it is far from realizing it's full potential. We have already seen the dot-bomb bust that caused many companies out of the medium. Some of them deserved to bomb but others probably had promise but died because of investor panic.
Commerce on the internet deserves to be incubated and allowed to grow. Taxing these sales will have the effect of slowing growth and making investment by business in the internet less attractive. This in turn will slow the maturing process. It will take longer, perhaps far longer, for internet commerce to become a mature medium.
To government, the slower growth means that the internet compaines in their communities will be less profitable, require smaller facilities, employ fewer people and make fewer local purchases. They will pay less in property taxes, pay fewer and lower salaries, and they will return far less in income taxes to the state.
Jobs in internet commerce are non-polluting, clean jobs. They are the kind of business any community loves to attract. With fewer jobs, competition by communities to attract these businesses into their towns will be far more intense. More money will be spent in the gamble to attract these businesses, Tax Increment Financing and other incentives will need to be used to "bribe" the businesses to come into a community and, in the end, it will cost government more to get less.
This is not the right time. Taxing sales on the internet will some day make sense. That day will come when the medium has matured and grown to the point where it won't stifle growth potential to impose the tax. That day is a ways down the road, it is not today, tomorrow, or next year.
First let me say I am a major anti-tax person. Taxes should not be a way for government just to grab money whenever money's present. Taxes need to be rational.
That said, I have less problem with paying taxes that actually go to improving the delivery or quality or route to whatever it is being taxed.
For example, it could be argued that sales taxes I pay on book purchases in a physical stores help the state or locality maintain the streets I use to get to the book store, and maintain a business-friendly beaurocracy that help make it easier for the bookstore to locate near where I live.
So if the states can prove that the taxes they collect for on-line purchases somehow help my state or locality enhance my online service, then fine. However, I don't see how my locality helps me with the bandwidth I buy from a company based in another state, or with the purchase I made from a company based in another state. What value do I get for paying that tax?
Give serendipity a chance.
At least in Illinois, they have reciprocal agreements with adjacent states -- and even counties -- so that the right (cough) tax gets collected for where the car will be licensed.
It's called "use tax" instead of "sales tax" -- you're supposed to pay it for items you purchase out of state already.
The issue that's coming up is that the states want the responsibility for collecting that use tax to be on the heads of the retailers, even when they have no physical presence at all in the state.
The paperwork for a momNpop.example.com store is horrendous. My wife's website does very little in-state business, and the paperwork for that is a pain already. Imaging having to mail pennies -- or even $100 -- to 40-something states (not all states have sales tax).
Figure $75/page in time and effort for every form filled out, and the states are putting an enormous burden on the little retailers.
Design for Use, not Construction!
Troll, sales taxes come from STATES and the the FEDERAL goverment. Troll, there are duties on goods bought on this level(I'm not sure about "industrial sized" purchases) that are levied against those coming into the US to stop this behavior. If you want to get something cheap from Mexico or Canada, you have to personally smuggle it across the border.
To read the comments here, it would seem that every Slashdot reader thinks that goods purchased online are subject to neither Use Tax nor Sales Tax.
This is nothing new. It's not a new tax, and it is not any less legitimate than the sales tax you pay when you go to a brick & mortar establishment. (The legitimacy of that sales tax is debatable.)
If anything, this agreement helps consumers in that we no longer have to track our out-of-state purchases in order to pay Use Tax on those items. You do pay Use Tax on those items, right? If you don't, you're breaking the law if your state has a Sales Tax.
As for curbing sales, this move will only curb online sales for sites that are already not competitive. Them's the breaks in a free market.
(not really to do with online sales)
Why oh why do they still insist on charging tax as *extra* in retail stores in the US?
When I buy something, I expect to be told on the price list how much money I will pay to have the item. Including all taxes.
Why cant the US follow the rest of the world and have prices at general retail extablishments *inclusive* tax??
Salesdroid: That costs only $99, sir.
Me: here's a $100 note..
Salesdroid: Oh it's actually $105 including tax
Me: Argh ^%$^$%@!!
In Australia, Europe, etc the price on the tag is how much you pay. In the US it's not.
Sparks:Gadget:Beer Maker
And it seems everyone else is missing the point as well. It's not that fundamentally one shouldn't pay taxes for online purchases. The problem is who should be forced to collect it. When you buy something from an online store that doesn't collect tax, you are actually legally obligated to figure out the tax you owe, and include it on your state income tax. It's just such a pain that no one does it. The real issue here is that huge companies like Walmart and Target are already set up to collect taxes from every state in the union, but if I want to buy a custom fishing lure from Raysfishinglures.com, he probably won't get enough business to make collecting tax for 50 different states, and thousands of municipalities worth his time. It means the rich diverse world of botique internet sites could shrivel and die in favor more mass market crap. And don't forget the biggest plum of all, eBay. How are you going to properly sort out who gets taxed how much on eBay? I think the best answer is implied in your post. Tax "the UPS guy that was driving on the road that local taxes paid for." Those taxes will get passed back to the shipper, and then on to the customer, and viola, the internet is taxed without the huge hassle to every mom and pop shop on the internet. If you want to collect according to value, have every mom and pop shop declare the value of what they are shipping, and collect based on that. The point is that the local mom and pop shop is only using government resources in thier locality, why should they have to collect taxes for every state in the union. UPS is the one using resources in all 50 states. Make them collect the tax, and pass it on to the customer.
Great. Oregon doesn't have sales tax. So this means that I'd have to pay an EXTRA 7% or so just for ordering online plus shipping. No this won't take away from online sales from Oregon at all.
Blood -> Turnip -> Squeeze
Why does every comment seem to target the retailer for this? Seems to me that taxing internet sales will not affect them one way or another as long as the playing field is level. The state gov'ts, on the other hand, believe they are missing out on millions of dollars in lost tax revenue. With the economy like it is, and states reporting big deficits, they need a scape goat. Looks like a win/win situation for the state gov'ts. Whether the consumers get torqued at the retailers and stop buying online, or the consumer continues to buy online, the gov't still gets their $$. Sure beats the complicated task of reducing spending and potentionally pissing off the lobbyist that got them their positions within the gov't in the first place.
On another note, I doubt it will affect my online purchases much. Most of my online purchases are for things I cannot find locally or items I am getting as gifts for family/friends who are not local. It seems easier/faster/cheaper to send items directly from the online retailer vice buying/wrapping/sending the package myself.
Bammkkkk
www.sguil.net
The Analyst Console for NSM
The key point is that these retailers have voluntarilly agreed to collect sales tax. Currently, the states cannot force an out of state retailer to collect their sales tax.
0 0_03.PD F
The Supreme Court ruled in 1992 that mail order companies cannot be forced to collect sales tax in all 7,500+ taxing jurisdictions in the US unless they have a "business presence" in that jurisdiction. For example, if you have a warehouse in Ohio and a telemarketing center in California, you would have to collect sales tax in those two states, but nowhere else.
The case that established this was Quill v. North Dakota, 504 U.S. 298.
You can read more about it here:
http://www.nbmda.org/what/govrel/pdf/LA_20
In other words, the retailers that agreed to this are wimps who are giving your money to the looters to avoid an expensive legal fight.
Its one thing to create the "Internet Tax" but do we have taxes for interstate mail-order and shopping-channel type of retail?
It's been quite some time since I've ordered anything by the more conventional methids, but I don't think so...
First it was RIAA rabid piracy enforcement.
Next rabid patent enforcement.
Now rabid tax enforcement.
I think Governments and Corporations are looking for other ways to raise revenue, either that or a vast epidemic of rabies is spreading through the world.
Now the corporate law department is an actual revenue generating center in most corporations. Who'd have thought?
Lodragan Draoidh
The more you explain it, the more I don't understand it. - Mark Twain
The reason this is so complex is the fact that we don't have a sales tax system in any state. We tax purchases. It makes as much sense to tax the business as it does to tax the consumer, and it's a lot simpler to administer. With a true sales tax, you would pay a percentage of your business income (sound familiar?), not collect an extra fee from the consumer. Of course, you would factor this percentage into your sales price, but so what? The only downside for businesses is that they can't claim a lower price than you actually pay by blaming the government.
"Don't you know you're going to shock the monkey?"- Peter Gabriel
It will hurt online sales
If I recall the last batch of "sales tax on internet purchases" articles, one of the biggest arguments *for* tax centered on how it *hurts* local merchants if someone can buy things tax-free online.
Now, perhaps silly ol' always-using-that-nasty-logic me has failed to grasp a subtlety here, but if tax-free sales online encourage people to shop online rather than in real stores, then taxing those sales removes that advantage.
So *how* will this not hurt online sales?
More importantly, I find this extremely offensive, from the perspective of, who does this "voluntary" tax money go to? For example, with Wallyworld, does the online tax go to the state in which the buyer lives (which it should, since they have a presence in every US state), or does it go to Arkansas, home of their corporate HQ? Or do they even have to give it to anyone? "Yeah, we'll voluntarily collect these taxes, but they go straight into our own coffers until the feds force us to turn it over to someone".
The only things I buy online are items that are either unavailable locally or are so much cheaper online that sales tax won't make any difference.
Chris
The same happens in Italy. Each good (or service)
which is bought with a 20% or 10% or 4% VAT tax on it. The actual value depends on the nature of the good/service and other factors. Anyway, the average VAT tax is 20%.
No matter how high taxes are raised or what new tax is created, the states are alway going to be hurting for more. The states budgets will increase, and then they'll be looking for the next cash cow.
I have heard that there is a movement to make eBay collect taxes or sellers to collect taxes. eBay should be considered an online flea market or yard sale. The items (most) have already BEEN sold and taxes collected.
Yell & scream & rant & rave... it's no use... you need a shaaaave ~ Bugs Bunny
The same happens in Italy too.
You've income taxes, then VAT tax on goods/services bought, the house taxes and so on.
On average you get 30% of your pay cut on income tax, then 20% VAT on goods....
Sad but true....
All of you seem to be forgetting a very costly part of going to the store - gas. Yes, fine if you're walking or biking, etc., since you're not incurring any additional expense over the web. Most of us have to drive to the store, and the cash spent on gas adds up quickly. It may seem negligible, but it most certainly isn't. In places like the UK, where petrol is ridiculously costly, people are more aware of it.
GL
What if this the beginning of tariffs on the net? Are we really seeing the political boundaries of the real world being cp'ed to the Internet? What is next? Will we start seeing 'countries' on the net were unless your an american in the real world you won't have access to all the sites that normal Americans have access to(excluding home censorship aka China)? Is the end of the Internet as a global community and the beginning of the segregation of the net?
There's a growing sense that even if The Future comes,
most of us won't be able to afford it.
-- Lemmy
So can someone please answer this question for me?
First and foremost, doesn't the taxation occur at the point of sale - as far as location goes? I mean, when I physically travel to a different state where they do not have sales tax for example...and buy something, the fact that I am from a state with sales tax is irrelevant, I don't pay sales tax?
So where is the distinction made when I shop online? If I am paying for something at a store in California, but I live in Texas...what tax am I paying? The California tax or Texas tax? More importantly, what if the SERVER this site is running off of is located in a state with *no* sales tax?!? I mean, sorry, but even though I am doing the shopping in Texas, the actual transaction work is happening on the server, and the tax should be based on THAT location right?
It seems to me that if this were to be done fairly, then you would have to specify the state you are shopping from at the online retailer's site (this would be way too hard to verify, I guess it could be based on billing address but still)...and even further along those lines, why not set up the server where the transaction is occurring in a low tax or tax free state?
Again, I am not a business/legal/accounting professional, so I really don't know...but this just seems stupid. The only good middle ground I see would be to make a flat tax, and lower than most state income taxes....like 1-2%. This is still a very good sized sum of money, but I guess it's pointless since distribution amongst states or what have you would be a nightmare.
I just don't understand, this whole thing seems stupid and poorly thought out in general...so I would welcome any response/answers on this.
"If we disclose who these companies are, it's like putting a target on their back," he said."
Possibly, you moron, but Slashdotters will just publish lists of retailers who add sales tax and we will BOYCOTT those retailers! No need for a target on their backs. I am all for the demise of the commercial internet. Nothing worth buying or supporting, not even the same old tired porn! Nothing. Let us burst the dotcom bubble forever.
Wait...why would I shop ONLINE for something that's down the street again?
Oh, right, no sales tax.
Typically, the shipping charges would have replaced the sales tax, negating any discount. But now, you have to pay shipping AND sales tax.
I suspect that more people are going to use the web to shop, and drive to the b&m store for an actual purchase.
Almost as good as Wal-Mart, but a whole lot cheaper.
--
"Outlook not so good." That magic 8-ball knows everything! I'll ask about Exchange Server next.
What about the small business that buys things on-line, saves money, and passes the savings on to local customers? What about the lesser municipalities who also buy things on-line, save money, and pass the savings on to those whom they govern?
A tax on one, is truly a tax on all!
Stuart Eichert
There was a surplus in the 90s. In fact, there were several. Over multiple fiscal years, the government took in more in tax revenue than it spent (technically a lot of this was payroll tax, but politicians rarely draw a distinction.)
What you're referring to was the projected continuation of those surpluses, an outcome that never actually came to pass. If I recall, the projected total of those surpluses was used as the political justification for a massive Federal tax-cut package. I mention this only because it's at least partly responsible for the bleak financial situation most states find themselves in: many states set their taxe-rates relative to Federal tax rates, and a drop in one means a drop in the other.
Nahh, prices don't affect sales.
And they have the research to prove it:
most online shoppers are either unaware of the fact that sales tax can be avoided by searching across multiple online retailers or do not see it as cause to choose one retailer over another
Let's see:
Let us assume that a person A does not know why one price is higher than another.
Let us assume that a person B does not care why one price is higher than another.
Therefore, since they do not know or care why, they will not care if one price is higher than another.
They also point out that:
The benefits of multi-channel integration overwhelmingly outweigh the importance of sales tax avoidance
Hmmm:
Let us assume that there is a good product G and a bad product B.
Let us assume that G is more expensive than B.
Let us assume that G sells better than B.
Therefore, price has no effect on sales of product G.
Q.E.D. (Quo Epso Dumbass - "See, I'm A Dumbass")
Stop-Prism.org: Opt Out of Surveillance
So what if I don't collect taxes by way of the Internet Tax Freedom Act, H.R of 1997 and Internet Fairness and Interstate Responsibility Act, S of 1998? If I remember corectly, there is also a law (adopted by a Judge during a case) that states that things in cyberspace are seprate from their physical location. Taxes are really out of hand! Take off and landing tax, death tax, good citizen tax, etc ...
I just bought a 42" Panasonic plasma flat screen display online. It's both my TV and computer monitor. I was kinda worried about making that kind of payment over the net with my credit card, but now that I have that sucker mounted on my livingroom wall (with a wall mounting bracket that swivels up to 90 degrees for optimimum positioning), I'm glad I did. $800 I saved on tax, plus the $3000 I saved by price shopping online and not buying from a retailer like Best Buy or Circuit City, far outway the $150 I spent on shipping.
1. Open an internet tax haven
2. Publicize fact that you are not going to collect taxes
3. Make a deal with 37 other states to start collecting taxes
4. Profit!!
If this is fair, then why shouldn't $19.95 TV deals apply. This really stinks of "lobbying from desperate states" - taxes on items (possibly even eBay sales) would RUIN a lot of small business. It's one way they can compete.
Yell & scream & rant & rave... it's no use... you need a shaaaave ~ Bugs Bunny
We don't have a sales tax in New Hampshire.I doubt any online sales companies based here would charge tax for other states, either.
I for one would never drive two minutes anywhere. I would walk, unless it was crappy out. Of course, I live in San Francisco, where you are lucky if you find parking within a mile of your intended destination.
- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
What about them? do they have to start charging sales tax for out of state orders too?
In fact, the feds passed a no-internet tax for 2002. Just haven't been able to renew it yet.
This particular tax is a loophole-closing agreement by the STATES. Feds not involved.
Moron.
These are state taxes, which were due anyway. If you have a business in a state, say Ohio, then you have to pay taxes on any sales you do in Ohio to Ohio residents (assuming Ohio has a state sales tax). Since Walmart and ToyRUs has business in pretty much all the states then they need to be tracking this. Any state you do business in, you have to have the licenses etc. to do business there if they require them. If you are licensed to do business there, then you pay taxes on stuff you sell to the residents of that state. Of course it is very different in every state. But Walmart should have known better.
-------------------------------------
Technically, we are beyond survival.
When GWB's "tax cuts" is going to send USA 6 trillion into debt, i think a little internet sales tax is only the start of it, cos you or your children is going to be paying it off for years to come, so much for tax cuts egh
oh and btw that trillion dollar debt isnt counting the cost of Iraq's war either, not bad for only 2 years in office
enjoy, cos your kids aint gonna
Well, they're arguing for this tax to 'level' the field with the brick and mortar companies. If I go to a store locally, buy the item and have them ship it (analogous to buying online and having them ship it)...then the sales tax is paid where I bought it...in my state...my billing address not to the state I shipped it to. If they're going to do it for the purposes they say they are..then, they should have the rules and money go the same places. My $0.02 :-)
Light travels faster than sound. This is why some people appear bright until you hear them speak.........
When GWB's "tax cuts" is going to send USA 6 trillion into debt, i think a little internet sales tax is only the start of it, cos you or your children is going to be paying it off for years to come, so much for tax cuts egh, and your worried about hurting online sales heh
oh and btw that trillion dollar debt isnt counting the cost of Iraq's war either, not bad for only 2 years in office
enjoy, cos your kids aint gonna
I live in Michigan, so the below has to do with Michigan's Tax law, but I ssume that the other states have similar law.
Technically, you are supposed to pay tax on the inport of that purchase to the state that you live in. This is done on your yearly state tax forms. Currently, you are required to pay taxes on any purchase made out of state, be it mail order or over the internet.
The problem is that people don't pay this tax, and the states have no way to inforce the payment of said taxes. Now that the internet is becoming such a popular place to purchase products, the states see the tax income slipping away and want to find a way to get that money. Unfortunatly, there isn't a very clear cut way to solve this problem.
Since the dot com bust, I really haven't ordered anything online in ages anyway. The deals really aren't there anymore.... and with shipping, it was already worth it for me to go out and buy stuff B&M. Now that I'm going to have to pay sales tax on top of that... about the only thing you'll ever catch me buying online are computer parts (no local shops are worth anything).
Those of us in dumb-ass Southern California are staring down the barrel of 9.5 sales tax, 11% income tax, 3x our yearly car tax...
if i wanted to live in fscking Europe, and have half of my money stolen from me to pay for record unemployment - i'd be a motherfscking Frenchman.. at least i woouldn't have to shower, so that would save time in the morning.
Instead, i'm living here, getting ripped off to pay for millions of Mexico's children to be educated here on my dime.... and now, you're going to pound me in the ass for sales tax when i buy my iPod from smalldog.com?
that does it. Screw you guys... i'm going to Sealand.
I think there was some kind of tea party regarding this taxation without representation... maybe its time for another one.
guns kill people like spoons make Rosie O'Donnell fat.
Labeling a tax "use" instead of sales does not mean it isn't a sales tax. If the purchase crosses state lines (and the company does not have a physical presence in you state) IT CANNOT BE TAXED BY THE STATE.
It may be taxed by the federal government. There are many MANY supreme court cases (from the 19th century) and also one from the 1930s. Interstate trade my not be regulated (read:taxed) by any state government.
Its the same reason you cannot have a toll bridge operated by one state that crosses say, the Red River between Texas and Oklahoma (that is the case I'm referring to in the 1930s.)
The only reason you are paying a "use tax" is because nobody has bothered to fight it. If you think of what a "use tax" is, they are charging a tax for you to "use" your own property.
Minus the 30% duty for import. Unpredictable and more expensive shipping would also offset any savings, even if the import duty didn't exist.
.com would. You don't find that arbitrary?
Uh, huh. I don't see UPS opening up packages to check to see what's in there and whether duty has been paid, laddie buck.
more arbitrary than the existing sales tax law that's been in place for a very long time
Oh, really? So if I'm running a mail order shoes company, and I'm based in Oregon but have a small distribution center in Birmingham, do I have to pay taxes to Alabama residents? The answer is NO. A
As for the "AFAIK" (not very far), all mail order is subject to sales tax when sales are made to any state where the mail order company has a physical presence.
I *meant* tax-free in the context of the conversation, which had nothing to do with in-state taxes and everything to do with nationwide taxes. Perhaps you had trouble grasping that.
Most mail order companies have a presence in only one state
Link please.
Saddly, as far as a few moderators know (and also didn't read the article) your post sounded insightful.
Fortunately, yours did not.
Likewise, shame on you moderators who give such clue challenged bitching about tax a +1. Just because it's bitching about paying tax doesn't make it interesting or insightful.
If you don't like the idea of a democratic mod system, find a different forum to post on. The rest of us would be most appreciative.
May we never see th
I wasn't aware it was a loophole, IIRC, that was by design. Closing it is merely changing the law, which has met with resistance, but probably finding more sympathy in state capitols as they struggle with budgets.
"Tax free internet is like a third rail, you don't want to touch that!"
"Oh? Tell a state they'll lose programs and services, and employees will face layoffs if there's no money, see which is a bigger third rail!"
A feeling of having made the same mistake before: Deja Foobar
The article claiming that it won't hurt sales online bases that conclusion on the fact that only 9% of people consider sales taxes. This misses out the fact that the majority of people *do* consider the price, and in a shocking revelation it turns out that you have to, like, *pay* the sales tax.
.com, most of the time I'll go to the store.
This is like saying that increasing profit margins won't hurt sales, because consumers don't consider profit margins when purchasing.
Yes, the internet can be more convenient, and so at times has an advantage over the physical stores, but if I have to pay the same total price at Target or Target.com, plus postage at the
{related story} I moved to the US four years ago from England, and was amazed at the problems I had convincing the car dealers to tell me how much a car would actually cost (including taxes, license etc.) as opposed to how much they charged. I DON'T CARE how much some abstract component of the transaction costs, I care how much I have to pay!
If a web server is, say, in Bermuda (tax free district), then the transaction is taking place there so no tax necessary.
The US loses local online retailers. At this point, they can't tax the company anymore either.
Real smart...
Life is the leading cause of death in America.
Amazon Paid the UPS guy shipping + tax in the city where it shipped the product. The local UPS guy that delivers it to you bought gas that had taxes on it. The Local UPS he works for pays taxes on his salary. The government has it's hand in plenty of places along the way. The method of transport is not one of them.
This space intentionally left blank.
You've clearly never tried to call one of these places on the phone.
I think the point hte other person was trying to make was that you don't risk the store being out if you order on-line.
Ooh, a sarcasm detector. Oh, that's a real useful invention.
Wal-Mart, Marshall Fields, Target, Toys R Us and Mervyn's have all 'independently' announced plans to collect taxes nation-wide. Of course these brick-and-mortar retailers wouldn't mind a nation-wide sales tax. It's an easy way to drive their internet-only competition out of business.
1) All e-commerce will move to the other 12 states.
2) The 38 states will then complain, and we'll end up with a new federal tax.
3) The states will lose because the feds will take a cut (or all, because only they know how best to distribute it).
4) Once a precedent is established they'll go for a national sales tax on everything. Never mind the legality of such a tax.
5) The states will lose revenue and control.
Greedy people keep shooting themselves in the foot. Happens every day.
IF the states would spend more TIME finding ways to be more "Efficient" instead of time finding ways to tax, everyone would be better off.
Government is the most in-efficient org ever
All they can say is tax OR cuts...when they should be looking at saying, Can we do this better?
IF the states would spend more time finding ways to be a lot more efficient, like companies in the real world do, they wouldn't have to choose between taxes or cuts.
It's either,
1. Time spent finding ways to Tax
2. Time spent finding places to Cut
3. Time spent finding ways to be more Efficient
Failed companies either choose Number 1. or Number 2.
Governments spend most of their time with Number 1 or Number 2.
Great and Successful companies choose Number 3 in tough times and easy times, (e.g. all-the-time.)
It refers to the mailorder "loophole." The so called mail order loophole doesn't apply merely to mailorder, it refers to any remote order, such as might be placed over the phone, or over the internet.
States at one point tried to levy sales tax on out of state mail order sales at the level of the seller. It went to the Supreme Court which ruled that a state cannot force compliance of its laws against someone who does not have a "presence" in the state.
This ruling applies just as much to the internet as anything else.
It isn't as simple as merely changing the law. It would require the institution of a *national* sales tax on "remote" sales, or a constitutional ammendment. A national sales tax on *anything* is still a hot button issue and it's the *states* that want the revenues from internet and mailorder sales.
KFG
There is a more fundamental question to ask?
What are taxes for?
To pay for services like Police and other administrative services.
What kind of service is the local government doing for the online company thousands of miles away?
If a road has to be built or maintained to deliver your package the money for this can be collected from a local gas tax which the UPS Driver would pay at the pump.
Dont let anyone stick their hands in your pocket and extract "tax" money unless they provide you with a breakdown of the service they are providing you and details of who is getting the money for providing this service.
If businesses have moved away then the government should also scale back because there are less businesses in the area that they have to provide services for.
Wrong. No, what it means is that online retailers are finally going to be on fair footing with traditional retailers. My retail shop pays thousands in sales tax every month, and online retailers pay next to nothing. It'll definitely be more fair to the small, local retailers.
And as far as a hassle, you know I know just the kind of device that's good at storing and calculating numbers. In fact, this device was invented for the purpose of manipulating numebrs... It's simple software. It's a cost of doing business. I have POS software for my store that I paid out the nose for. Online retailers should have to do the same.
We're finally getting rid of that "double taxation" on stock dividends.
By the same thinking, if your sole reason for shopping online is only due to the lack of sales tax on your online sales, then this is reason enough for OFFLINE sales to NOT be taxed.
Let trade compete on value, price, and service, not just the distorting effects of various taxing schemes.
Unfortunately, taxes are a part of the "price" to the end user--just as "shipping" is. What good does it do me as a consumer if a product that costs $100 down the street costs $1 online, if the online source charges $20 in taxes and $79 for shipping? Yes, the tax and shipping "disorted" the decision, but yet my final decision is based on that distortion--and fairly so.
I'm in favor of the status quo. My company charges sales tax on in-state business which, in all honesty, is a very small percentage of our sales. If we have to charge sales tax on every sale I will not complain that much as long as the sales tax is OUR STATE SALES TAX and the revenue goes to OUR STATE. I don't want to have to keep track of 50 different sales taxes around the country, forwarding payments to each state, etc. If someone from Texas comes to me personally in Colorado and purchases something, they pay Colorado sales tax. Likewise, if someone buys something online the tax--if there is going to be one--should be based on the state tax rate in the state of the business doing the selling.
Plus if out-of-state sales are subject to local state taxes, that's an incentive for local governments to reduce sales tax rates so that more businesses operate out of their state.
...this Congress bans taxing Internet sales? That is on the agenda this session.
My blog can kick your blog's ass
...since practically every major road (Interstate highway, etc.) has a tollbooth where it leaves the state, operated by the state of New Jersey.
It's all semantics. IANAL, but I would bet that New Jersey claims the toll is for use of the portion of the road that's in New Jersey, not for the interstate portion of the trip (despite the fact that I have to pay the toll to use the Delaware Memorial Bridge to DE). For the use tax, since they're not calling it a tax on interstate sales, it's perfectly constitutional. It's just the state trying to claim money that it thinks it should have been paid at purchase (at least in Virginia). Whether it's right or not is a different question entirely.
Does anyone really understand this issue?
What you just quoted is the exact reason the Supreeme Court ruled you didn't have to pay out of state sales taxes. However, these 38 states got together to simplify that tax was, so it would not be an undo burdon on you. That's the whole point!
Seriously, this was an actual case that the Supreme Court ruled on. I know because when I had (boring as hell) Oklahoma history, the Oklahoma governor at the time called out the national guard to shut the toll collection down (Texas was trying to get tolls).
The Supreme Court ruled in Oklahoma's favor.
Just roll over. Every #%&@#$*@!% time the government pisses away all their money and cries for more, just start shoveling.
Why not just give them all of it and let them send you an allowance.
STATES ARE NOT ENTITLED TO SALES TAX REVENUE ON SALES THAT TAKE PLACE OUTSIDE THEIR BORDERS, DAMMIT!!
At this rate, we'll be paying Canadian taxes by 2010. Idiots.
If they're going to tax the Internet, tax the catalog sales that have gone tax free across state lines forever! Or better yet, do away with the sales tax completely. It's regressive and a poor excuse for a tiered income tax anyway.
The Farewell Tour II
Plan and simple, don't buy from online retailers who collect taxes.
Yup, it's the same idea. cd-wow is shipping inclusive (free! ha!) as well, and they're much of a muchness. play.com is slightly faster, but cd-wow delivers within a few days and have more region 1 titles. They're both useful for UK buyers.
If you were blocking sigs, you wouldn't have to read this.
MS natural keyboards are made in Mexico.
Or the VW Beetle.
Sony used to have (still has) a production plant in Mexico where TVs were made for the worldwide market.
And so on.
Anyway, as stupid as it may sound, given the differences in costs and the addition of a differential in taxes, it is not implausiblr to set shop in the north of Mexico, ship stuff there and sell it from there. It may be cheaper since you are savin in salaries and taxes.
IANAL but write like a drunk one.
the day b4 this thread started, a friend sent me this article:
(From the N.Y. Times...)
Dreaming Out Loud: One Tiny Little Tax
By DANIEL AKST
THINK of your economic life as a highway. It's decently paved. But thanks to the tax system, there are tollbooths all over, with rates so complicated you need an expert in the car with you to figure them out. Sometimes you drive well out of your way just to get around them.
Now imagine that a sort of tax-system E-ZPass comes along, enabling you to whiz through the booths without an accountant in the back seat. Suddenly, it's smooth sailing. President Bush has proposed a controversial tax plan and has made noises about wanting to overhaul our generally abominable income tax system. In recent years, people have suggested simplifying the tax code, adopting a flat tax or taxing consumption instead of earnings. Mirror, mirror on the wall, what's the fairest plan of all?
My vote goes to the Automated Payment Transaction tax, an efficient system dreamed up by Edgar L. Feige, a retired economist from the University of Wisconsin. His plan is so appealing that after he presented it at a conference in Buenos Aires in 1989, six Latin American countries, including Argentina and Brazil, tried it. But it was never intended for developing countries, and it's supposed to replace other income taxes, which create perverse incentives and impose heavy costs. In Latin America, his plan was simply piled on top of existing taxes as a new revenue source.
Doing such a thing ignores the plan's main appeal. Basically, Dr. Feige proposes to eliminate the entire federal tax system - including corporate, excise and estate taxes - in favor of a tiny tax on all financial transactions that would be automatically deducted from special taxpayer accounts resembling those of E-ZPass holders. (Drivers with E-ZPass have a little windshield gizmo that is automatically read when passing through a toll plaza; the toll is then deducted from their E-ZPass accounts, which are replenished periodically by credit card or check.)
In a stroke, the Feige plan would sweep away the Rube Goldberg system we've come to loathe: no deductions, no income tax returns, maybe even no Internal Revenue Service. The whole thing would raise the same amount of money as today's system does while saving hundreds of billions of dollars in compliance costs, tax evasion and inefficiencies, according to Dr. Feige.
I know about all the lobbyists with their own special interests, but let's just dream for an instant. No longer would economic players contort themselves to avoid taxes - mostly it wouldn't be worth it. And no longer could the government direct the economy through the tax code, which encourages people to do things they might not otherwise do. Most of these things - like buying overweight sports utility vehicles to get a light-truck deduction - are a bad idea anyway.
Instead, Dr. Feige would levy a little toll - just 0.6 percent - on the economic highway of life. This amount - the professor's conservative calculations mean we might get away with even less - would be split by payer and payee in any transaction, meaning on average you would pay 0.3 percent whenever you spent or received money. It would all be taken care of by your bank's computers when they paid your check or you withdrew cash. You'd hardly notice it - especially since even someone spending $100,000 a year would pay just $300 in tax.
But I said the plan is "revenue neutral." So where would the bulk of the tax revenue come from? Well, most of the value of transactions in a modern economy consists of financial dealings: sales of stocks and bonds, currency trading and the like. And these would be taxed. Financial services firms would scream, but even they would get some benefit. There would be no corporate income tax, after all, and while liquidity might be slightly reduced, some economists figure a small tax on financial transactions would cut speculation and dampen volatility.
Dr. Feige's plan would be quite progressive because most of the financial dealings that would supply the bulk of revenue are conducted on behalf of corporations and rich people. The plan wouldn't eliminate Social Security taxes (probably the least progressive kind), but there's no reason a higher rate couldn't be adopted to cover this. State taxes could easily be piggybacked.
In short, the Automated Payment Transaction tax offers fairness, simplicity, and efficiency. It may not be a free lunch. But it sure smells better than the one we eat now.
...are all under the roof of Target corporation, and until February 2, 2003, their online presence and catalog companies were managed under the flag target.direct. Then, of course, it all got rolled into Target proper, so sales tax needs to be collected in every state where any of the Target brands operates - everywhere except Alaska, Vermont and DC.
This was a downsizing / realignment thing. The tax amnesty was probably just a bonus.
The only surefire protection against Microsoft infections is abstinence. - The Onion
Pennslyvania, the land of fees, taxes and more taxes on top of taxes has a law on the books. "54.1. Delivery charges" I quote: "If a vendor effects dilevery of a taxiable item to a Pennslyvania vendee through the mails, charges by the vendor for the cost of the taxible item and the POSTAGE(empasis mine) fee are subjest to the tax, even if these charges are stated separately on the invoice" I have contacted the US Postage Service numerous time, they ignor my request and could not care one iota about tax on US Postage. My PA sennators "spector (not-proven) and santorum have never asnswered to any CC sent to them when I complain ot the USP (not to be confused with United Parcel Service - A true provider of service!!!).
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What's that? DFSC?
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