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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...
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!!"
Last I checked, the UPS guy was driving on the road that local taxes paid for...
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
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.
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"
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....
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
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.
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?
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!
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.
No, they don't. If tax breaks were about stimulating the economy, they would be directed at the low end of the income distribution--people likely to spend the extra money.
Instead, the administration gives huge tax breaks to the wealthy and introduces new sales taxes that hurt spending but make some special interests happy.
Internet's sales rising nearly exponentially each year
Of course, Internet sales are rising "exponentially"--your bank account with 0.5% interest also is "rising exponentially". Most things that grow grow exponentially, some just do it faster than others.
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**
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!
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
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?
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.
No, they don't - this is a deal with the States (maybe you've heard of them) which the liberal critics of Bush seem to forget.
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 )
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
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.
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!
As opposed to "rich" taxpayers who will put it under their mattresses?
Instead, the administration gives huge tax breaks to the wealthy
The income tax reductions actually make the system more progressive. The evil rich will get a larger reduction in absolute dollars only because they pay so much more in the first place. But you knew that.
and introduces new sales taxes
This is an agreement made with state governments. The Bush administration has nothing to do with it. But you probably knew that too.
How to solve most of our problems: 1.Lots of nuclear plants. 2.Cure aging.
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..
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
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.
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...
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.
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.
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?
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.
(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
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.
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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.
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.