Slashdot Mirror
Warming Battle Over Online Taxes
mackertm writes "The NYT (free registration, blah blah) has an interesting story about the fight over Internet taxation. A coalition of states and some big clicks-and-mortar retailers are leading the charge to simplify the process of collecting taxes online. Amazon, Dell, and eBay are the biggest pure e-tailers resisting this movement. It's fun to see Amazon try and talk about how difficult it would be to implement taxes for all states, when it's already doing it for Target and Toys 'R Us."
use the NYT archive
1 7ECOM.html
http://archive.nytimes.com/2003/02/17/technology/
why don't people post non-reg links to these NYT stories? http://www.nytimes.com/2003/02/17/technology/17ECO M.html?ex=1046062800&en=a7c25eb86d3b8b8b&ei=5062&p artner=GOOGLE
(I mean, people other than people like me who do it as a reply.. the ones that post the stories, or *cough*edit*cough* them).
I'm selling medical equipment online and one of the main reasons customers like to purchase from us is because they avoid paying sales tax.
It's a very interesting debate. In my eyes it comes down to lazyness versus saving a 'buck or two'.
Personally, I like the lazyness route. If I can order something and it comes to me, I think it's worth the extra wait. On the flip side, many would prefer going to the store to buy what they want (though paying a few pence extra) so that they can get it now. How much do you enjoy instant gratification?
Another issue how might this affect small companies, like the guy that makes and sells mIRC. Taxes are complicated, and it might make it difficult for people such as him to sell his product w/o having to spend a lot of time and money creating an e-commerce engine (or partnering with someone that does) that customizes the amount of taxes per-state.
Go here for teh [sic] funny.
Currently, they're subject to the same tax rule as internet, and as I'd said the last time this came up on Slashdot, they're 4-10X the size of all internet sales.
The recent changes merely clarified that, for instance, BN.com really is Barnes & Noble and subject to the same taxation where they have physical presences, i.e. everywhere.
There's lots of catalog sales out there. If they're not collecting sales tax, I shouldn't either. We collect it for Illinois, where we're based (and even that's fuzzy: my server's in Connecticut).
Always collecting for the 'home' state tax is a bad idea too: It'll just force businesses to incorporate in states such as Alaska without sales tax. But on $130K sales on our little company, a monthly check to 47 states is a huge burden.
Design for Use, not Construction!
It would be on the price the item sold at. The ebay fees would be considered a service and would not be taxable. The responsibility theoretically falls on the seller but I can see someone like Paypal offering tax services. As for garage sales, as long as you are only selling small ticket items (under $1000) you should be ok. The state has better things to do then to come after every garage sale.
Of course big "brick n mortar" retailers support it - they sell more junk at their "local" stores where tax is mandatory. So by supporting Internet taxes they would be one up over "e-tailers" - there would be no advantage to buy something over Internet 2,000 miles away and STILL pay local taxes. People would mostly shop at brick 'n click stores if this comes to pass - at least you would be able to return stuff locally, even if you purchased it through their "portal" :) You can't return the merchandise after you "try it out" and most people are STILL embarrassed to shop at their local purveyors of pornography and sexual aides :)
This would NOT affect "specialty" on-line stores...like sextoyszone
You actually can get a tax refund for any taxes paid in the state of Oregon while you are visiting as long as you then pay the Use tax in California. You will also notice that if you buy something like furniture the store will ask you what state you live in so that they charge you the proper sales tax. I recently bought a dining room set in Connecticut but they charged me NY taxes.
It does. Congress will have to pass legislation specifically allowing it. Such legislation has not yet been introduced, but unfortunately they're working on it. I've already written my congresscritters asking them to oppose it. (Not that I think it does a lot of good, but it doesn't cost me very much to do it.)
Federal Income Tax, State Income Tax, Property Tax, Local Tax, Sales Tax, and now, Online Sales Tax.. Did I miss any?
Yep. Dividend tax, corporate taxes on profits, payroll tax, FICA, Medicare Tax, Workman's Compensation Tax, Car Registration Taxes, Use Tax, Capital Gains Tax, Gas Taxes, Telephone Line Taxes, State Franchise Fees (actually a tax), Alternative Minimum Tax, Cable Television Taxes, Recyclable Redemption Taxes
Then, we can start on all the taxes specific to businesses... Inventory Tax, Asset Appreciation Tax...
Oh, and people still say we aren't "contributing" enough.
you need to readjust the lenses on your perspective goggles.
Apple is a *huge* comapany with a world wide presence and sales in the billions of dollars.
"Small" business is generally considered to be one with gross annual sales of 3 million or less. Even that's really pretty big.
A *little* company is my mom trying to broaden the market for her handmade jewelry by offering it online. Having to handle sales taxes for every jurisdiction would simply kill that. Dead.
KFG
As the law stands now, it would be up to each seller to file a sales tax form in each state where s/he has made a sale. So, if you have five auctions this year and each winner is in a different state from you, you now have to file sales tax returns in those five states.
At an average H&R Block rate of ~$75 per state return, you'd be looking at some massive auction fees. In short, quite possibly the end of online auctions by small players.
Viv
Gmail invites for ip
Target and Toys 'R Us should have been collecting sales tax all along. Since they have stores nation-wide, they have nexus in all of the states. By 'agreeing' to collect sales tax, they're just agreeing to start doing what they should have been doing already.
Behind the scenes, they probably made a deal to agree to these taxes in exchange for the states not going after them for past taxes on their Internet business.
The spin that the stores have put on this is pretty clever. By agreeing to the tax, they put pressure on Internet sites without nexus (like Amazon and eBay) to pay sales taxes on their business. They know full well that Amazon and eBay (without a network of stores) will have a difficult time figuring out how to collect all these taxes. Target and Toys 'R Us already have it figured out. This gives the chains with physical locations an advantage.
Also, this is just the beginning. Once sales tax is collected on online purchases (which won't add up to much money), what to stop a whole new wave of taxes on online sales? It's going to get expensive and complex very quickly.
Worse of all, big sites like Amazon and eBay will find a way to cope, but Mom 'n Pop Internet stores likely won't survive. Less competition, higher prices, less innovation. As is the case with most taxes, the consumer loses in the end...
The Christian ideal has not been tried and found wanting; it has been found difficult and left untried. -G.K. Chesterton
Most states enforce it only for large ticket items, like expensive jewelry, boats, and other items. They know you've made the purchase by looking at credit card records, but it is only worthwhile for them to go after the big purchases.
Cars, of course, are easiest to enforce sales tax on since in general they have to be registered in the state in which you live.
If I can be modded down for being a troll, can I be modded up for being an orc, or a balrog?