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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.
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.
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...
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....
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.
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."
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?
Good grief. I know people here love to blame Bush and Republicans for all the evils in the world, but at least try to make some amount of sense when you do. This is an agreement between retailers and *states*, neither the federal government nor Bush has anything to do with it. (And I'm relieved to know Clinton kept his hands off the Internet, otherwise we might have gotten bad laws like the CDA, DMCA, and crypto restrictions. Oh wait.)
How to solve most of our problems: 1.Lots of nuclear plants. 2.Cure aging.
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**
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".
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
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
To boil NAFTA down, I have always thought it was a way to make Americans take pay cuts. More to it than that, of course. For instance, more involvement with global economy, incentive to own/buy stocks, and so forth.
The stock idea also holds true to the newest Bush plan on taxing preferred stocks and whatnot.
You're not being taxed. The company is being taxed (in a state where they are represented) and passing the cost to you. They're allowed to do that (they're a private enterprise, they can charge whatever they like). The government can do that. All constitutional. Now be quiet.
well, the US constitution has a clause that prevents taxation without representation
No, it doesn't.
If it did, no one under 18 would have to pay any kind of tax, since they can't vote. But they have to pay sales taxes, and if they have a job, income taxes as well. Just like everyone else.
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!
There was probably never a real surplus anyway. Governments use whatever numbers they feel like using - whenever they claim there's a surplus, it's usually because they want the voters to roll over and approve some ridiculous spending measure. "Oh yeah, this is chump change - look how much money we have!!!"
:)
There was never a surplus in the 90's. It was a "projected" surplus based on "estimates" from the Congressional Budget Orifice, of the "approximate" "future growth" of income taxes derived from dot-commers realizing "capital gains" on selling ther stock options.
Hello!? That surplus never materialized because the market crashed and nobody ended up making all the bazillions of dollars in income tax on the profits. So many people had overvalued stock that there were no more idiots left to buy it. Then, BOOM, it hit and here we are..
See, we as individuals can't pull this neat trick whenever our budgets get tight (and believe me, they're tight).. The gov't can either simply print more money, which will have an effect on inflation a couple of years down the line (but that's okay, blame it on whoever is in office when the inflation hits), or two, just take more of ours! GEE! I wish I could just walk up to some random stranger on the street and take money out of his wallet!
No society has ever taxed itself into prosperity. Taxes will not stimulate the economy. Taxes will not put food in anyones' mouth (except maybe the bureaucrats who run the whole dog and pony show). Taxing the internet will not increase sales.
HOWEVER, there is a legitimate issue of tax avoidance that should be addressed. This issue was never addressed in the mail-order days because mail-order sales never amounted to a significant portion of all sales. However, in the era of the Internet (which is now over), it was much easier for people to go online and buy stuff tax-free, especially big ticket items like computers that would generate $70+ in revenue for the states and localities. Making it so easy to avoid sales tax quickly started drying up state coffers. This wasn't a problem because the loss in sales tax revenue was more than made up for by the increases in income tax revenue that was the result of ultra-low unemployment and the higher wages that went along with it. Now that the income tax stream is pretty much gone, and states are instead paying out "welfare" type benefits, we have a cash flow problem.
What we have been seeing thus far is rising sales tax rates everywhere to account for tax-free sales that go on over the internet. Shifting the sales tax burden to fewer and fewer shoppers is dangerous business because it is essentially narrowing the tax base. Continuing the trend will eventually lead to the expiration of brick-and-mortar retail alltogether. We've seen this phenomenon in real-estate for decades. One school district decides it wants more money, so it raises tax rates until people start leaving. However, they can't reduce their budget, so they have to raise taxes more to offset those who leave. This cycle continues until you have New Paltz, NY, where the tax rates on my parents' $130k home are almost $10k per year, and Pottstown, PA where I was going to buy my new home until I found out that the tax on the meager $120k "estate" was over $5k per year. The same could happen in retail if there is always a tax-free solution - or as long as States refuse to cut spending.
Of course, what are the chances that any government will ever reduce spending? If they try to cut spending, some crybaby group will whine that they're going to "starve the poor".. if they try to increase spending, some other crybaby group will whine that they're going to "tax the middle class"...
I guess that's the problem, too many crybaby groups..
So maybe the states could try *gasp* making cuts in their spending?! My God! Maybe even eliminate some of the less useful government programs, such as the ones created just to insure a certain block of voters goes for a particular party every few years? Imagine that!
No, the 'shortfall' in funds is not due to a barely-implemented tax-cut, it's because the states didn't stop spending like crazed weasels when the economy started dropping several years ago. They didn't save any of the surpluses they had built up.
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
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.
Bush is not under fire for just cutting taxes, he's being criticized for who the majority of the cuts are benefiting. Many say the upper class and middle class investors get the large bulk of the savings.
Other complaints include the inappropriate timing of the cuts and whether those cuts can be afforded right now.
Officials: Government close to hitting debt ceiling
Let the children pay
Based on upvotes, Ageism is the only "-ism" Slashdotters care about and think isn't SJW
I, for one, am glad that sales taxes are totted up separately, because if they get too big, people will complain, and government will be forced to limit its leeching.
The IPCC has purposely engineered a massive scientific fraud.