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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...
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
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"
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.
:-)
What are you on about? In the UK everyone gets evenly charged 17.5% VAT instead of local state tax. It's not like you get a tax break if you order from a company in Sussex and live in Hampshire!
The whole thing is that you can avoid sales tax in the US if you order from another state. It's basically tax evasion (I believe you are supposed to pay it at some point but nobody does). This is really closing a loophole, annoying as it is.
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
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
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.
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!
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
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.
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.
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.
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
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.
The tax you are probably supposed to be paying if you purchase from out of state is not generally called a sales tax, and you don't owe it to the other state, but rather a Use tax, which you typically owe to your state of residence.
See, California can't tax the vendor in Nevada for selling you something by mail, because the vendor is not in their jurisdiction (CA and NV chosen at random, and maybe not even correctly). But the Nevada vendor doesn't pay the tax to Nevada, because they book the sale as occuring outside the state, and the Constitution prevents states from taxing interstate commerce. So, California (probably ... most states have these laws) expects you, the California resident, to voluntarily cough up the lost sales tax revenue as a Use Tax on purchases that haven't been taxed by either California or another jurisdiction (state, in this case), except when California wouldn't charge sales tax on the item anyway. Some states go so far as to include a Use Tax schedule in their yearly state income tax returns. Unsurprisingly, since these purchases can't be tracked by the states (the vendor is outside the jurisdiction, and hasn't done anything to break the law of that jurisdiction), states have a pretty tough time enforcing their Use Tax laws. But that doesn't mean you aren't supposed to pay :-)
Not a lawyer, yada yada yada, but I have played on in a court room :-)
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.