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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.
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!!"
I once had a nice book shipped to my mom as a gift. I was surprised that Wal-Mart.com carried it, and more surprised that their price was well below the other online retailers for that book.
It arrived damaged, and my mom tried to return it to the local Wal-Mart, but they did not carry that book at the store. But Wal-Mart.com did a good job handling the return.
In any case, here in California, we already pay sales tax when we order from most online vendors, because they have a business presence in California. Now the rest of you get to join in the fun.
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
>But I know when Canadians buy from the US they pay some rediculous ass ramming tax.
It's called 'duty'. Its meant to discourage the very mentality posed by the parent poster; namely that shopping outside of your economy is bad for your economy.
The US likely has import duties as well, but you would have to check with your customs agency in order to confirm whether duty applies to the specific products you are interested in importing.
"Old man yells at systemd"
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!
The only thing Walmart.com is really good for is printing digital photos. You can upload your photos there, and have them delivered to any Walmart in the country when they're done, and their prices are the cheapest online. The sales tax will suck, but with no shipping fees it'll still be better than overpriced places like ofoto.
Just taking your photos to the local Walmart isn't an option since there's no ubiquitous read/writeable removable data storage format other than useless floppy disks.
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).
Ok, I'll call your troll.
. xl s
The previous tax cut, and the currently proposed tax cut, are both sweeping cuts that benefit ALL classes of income-earners.
As it stands now, the wealthiest 50% of the population bears 96% of the tax burden so it's natural that an across-the-board tax cut would free more dollars up for the top 50% than the bottom 50% in absolute terms( by a ratio of roughly 24:1 ), but the amounts retained on a percentage basis are actually higher for the lower 50% than the upper 50%. Your troll is ridiculous and unfounded.
Here are the numbers to back up my claims:
http://www.irs.ustreas.gov/pub/irs-soi/00in01rt
( Excel file, although it opens fine in OpenOffice )
It's hard to direct tax breaks at the low end of the economy, since hardly anybody at the low end of the income distribution actually pays income tax to begin with (incomes less than $30K pay 5.8% of all income tax - see here for more details).
The upper 10% of the income bracket pays 50% of all income taxes (same source). Maybe those who actually pay taxes might appreciate it.
Not to mention that Bush is under fire for cutting taxes!
Even better are companies such as thinkgeek that mark the packages as gifts, so you dont get charged any import duty.
It would go to the state where the buyer resides. Sales tax is, essentially, a 'use tax'. That's why when you buy a car accross state lines, you don't pay sales tax at the time of purchase. You pay the tax when you register the car at the location where it will be used.
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'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."
This agreement only covers sales that are made in states where the retailers have a physical presence.
They're absolution from "failure to collect prior taxes" is to give them amnesty for not collecting tax on sales that they SHOULD have collected in the past (i.e. when they first went online and for some reason didn't collect it)..
There is still nothing allowing them to collect sales tax on interstate sales to states in which they have no physical presence...
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.
The online Apple Store has charged local sales tax from day one, back in 1997 or so. I don't know if they had the Apple Retail Stores in mind back then, but now that they have brick-&-mortar retail presences in some states, they *have* to charge sales tax in those states.
IIRC, people who live in NJ have always had to pay sales tax on Micro/MacWarehouse merchandise because that's where Micro/MacWarehouse's physical HQ is based. I stopped buying stuff from them when I got a job in Princeton, because I couldn't have stuff shipped to my home in Pennsylvania during the day since nobody was there, and if the stuff shipped to my office they dinged me for the sales tax on it.
~Philly
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.
You mean Wal*Merde , don't you? The lines are too long, the help is surly[1], other shoppers are clueless and the pricing isn't all that competitive when you look at the quality of some of the crap on their shelves.
[1]From being forced to work unpaid overtime.
I'm not really a web designer, I just play one on the Internet.
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.