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.

Comments

IMHO

[aliens]

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.

Re:IMHO

[garcia]

they are counting on the inherent laziness of Americans. People think that it is just easier to go online for most items.

*I* for one, would NEVER goto walmart.com when I could drive the two minutes to go there.

I also refuse to buy anything computer related from retailers (aside from display models that have been marked down to like $30 from 100 at Best Buy).

I would MUCH prefer to shop BB online just so I don't have to demand that another little rat doesn't bother me while I am in the store.

Re:IMHO

[Grishnakh]

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.

Re:IMHO

[Lemmy Caution]

The big savings from Internet distribution aren't from not paying taxes, they are from avoiding the labor and facility and related overhead of running a retail storefront operation.

Re:IMHO

[Vainglorious Coward]

...the inherent laziness of Americans

...*I* ...drive the two minutes to go there.

Pot, meet kettle.

Target?

[numbski]

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.

Fair Enough

[endoboy]

If (big if...) one accepts the proposition that sales taxes are legitimate, then there's no reason Amazon should be any less taxed than the bookstore down the street....

Last I checked, the UPS guy was driving on the road that local taxes paid for...

Re:Fair Enough

[meowmonster]

Yes but UPS is paying taxes on that road because for them to operate in your state they are being taxed. Their vehicle tax paid for the road along with your vehicle tax. You paid their vehicle tax as part of the shipping fees.

But then again sales taxes are not legitimate, it's double taxation. You are taxed for earning and you are taxed for spending and you are taxed for saving (unless you put it in your mattress, but sooner or later the IRS is going to wonder and you'll be audited anyway). You are constantly being punished for being a productive member of society. If you decide not to be a productive member of society then the income of those that are productive is redistributed to you, therefore you are rewarded.

Yes we need a tax but don't double tax. Make it an income tax or a sales tax but not both.

That started to get a bit off topic, but by paying sales tax for goods and services out of your state you are being taxed for services you do not use. If I buy something at my local target I am driving on the roads, burning fuel and participating in commerce within my own state. That (although arguably) takes resources that the state collects taxes on.

If I buy something out of state, that business does pay taxes on their income in their state so the "cost of commerce" is covered. The truck that picks the packages up and brings them to UPS facility paid taxes to be licensed so that is covered. If it is a ground shipment, most states have regulations taxing the trucks that go through them in the form of licensing or fuel costs (or both) so that is covered as well. I didn't make my money in that state so they are not entitled to my income (that of course leaving out the argument that govt is entitled to any of your money or we would be arguing our own state's taxation again). And the truck that brings it to my door is licensed in my state and the income they earn for bringing that package to me is taxed so my state is already getting their share. Seems to me that any additional taxation is unfounded, not to mention that I have NO say in the state's gov't that I bought the package from so me paying them any kind of tax (directly, as apposed to indirectly like the portion of my money that is income tax for the store) is taxation without representation which is unconstitutional. Isn't that what was behind the revolutionary war (among other things - not I don't need a history lesson), just on a MUCH smaller level?

Abolishing the income tax on ALL levels and going to a national sales tax would of course solve these issues (but create others), then the feds can ration out money to the states based on their population. And when everyone is paying 50% sales tax they will get a better idea how badly goverment is bloated and maybe change their voting habbits...

Legislative stupidity

[0x0d0a]

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.

Re:Legislative stupidity

[bnenning]

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.

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.)

Re:Legislative stupidity

[SirSlud]

>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.

Some already have been

[ackthpt]

Internet retailers who have a physical presence in California have charged me sales tax, last year. It's not like there's any secret, you get to see your total before submitting payment. A few sites are forthright, displaying the tax policy on their home page.

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.

Re:Sigh...

[Dr_LHA]

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.

That would be three confirmed companies...

[lindsayt]

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).

Use the phone.

[Garg]

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

Hmm .. stupid

[RembrandtX]

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.

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 .. I don't have to pay sales tax on it. [although I do get taxed when I register it in my own state.]

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 .. 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.

I went to FIVE hobby shops local to me that carry minatures .. 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.

Now, I tried to buy them in a REAL store first .. because I wanted to support my local stores.
Granted - I was looking for some rather specalty items, but when a store CARRIES said items .. at least ONE out of 11 should have SOME representative in inventory.

All my real stores failed me .. so I ordered from an online store.

Internet shopping is only good if you know exactly what you want - its very hard to browse for something on the net .. because its forced marketing - you see only what a seller wants you to see about their product.

Three days later, product in hand .. I had what I was trying to find.

I guess my point is, Internet stores generally do business across state lines. [hence no income tax .. due to fluxing tax rates between states.]
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 .. never happened .. and honestly .. probally never will.

No difference in Michigan

[Christopher Bibbs]

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".

Not a new internet tax

[VoiceOfDog]

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

This article is misunderstood!

[purple]

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:

"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 .com's parent company Wal-Mart has retail stores in those states.

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.

Come on, people!

[beagle]

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.