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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."
Can't I just start ordering things from companies based in other countries? Say, a Canadian company? No tax then, right?
The Blaster Master Fighting for Truth, Justice, and Evil Pie since 1979
I would rather pay the sales tax of the state that the e-tailer is in. Then I can choose if I want taxes to go to my state or to another. If I don't like the current Governer I can shop at buy.com and let my money help their state. Why should a state hand over money when they do not depend on any resources from the state the are giving the money to.
Mike
I didn't use the preview button, so get over it!!!!
Mike
I think the little businesses just starting on the web will be hit bad if all sales were to be taxed. A lot of times, I bet the savings of sales tax is the reason for buying online. This will just reduce online sales and profits for these businesses. Everyone wants a slice of the $$$ pie...
If they ever really start bringing taxes into online purchases you can bet sales will start to drop significantly...
I mean, usually, you have to pay more just because of S&H, then add taxes to the mix and ordering online almost becomes too expensive, especially when making larger purchases.
Amazon claims "it would be too burdensome to collect and dispense them on behalf of so many different jurisdictions", but the major e-commerce engines (e.g ClearCommerce's engine) have a tax table broken down by zip code. This table is updated whenever the tax regulations change. Little companies such as Apple Computer, who is required to charge sales tax on online purchases, depend on this to keep the billing straight. It's all handled in the software, and has been for a looooong time.
Lets see.. Federal Income Tax, State Income Tax, Property Tax, Local Tax, Sales Tax, and now, Online Sales Tax.. Did I miss any? (probably missed a few) oh wait, I need to pay rent this month.. wonder if there is any money left from my paycheck.. I love this country very much, but someone needs to learn how to manage their money better and it's not me.. because I'm not the one spending it.. Could be worse I guess.. I could live in Canada.. eh?
Obama = Socialism.
Its simple really.
If you live in California & travel to Oregon to visity aunty Jill, you pay Oregan sales tax while there.
So wouldn't the simplest solution be one where you pays salestax in the state you visit vitually, IE the state the etailer resides in.
Sure it might mean some of the big etailers relocating to the state with the lowest salestax, but that sort of thing happens in regards to corporate/ business taxes anyway, so so what.
I (and possibly others) buy more things online partially on the basis that it usually isnt taxed. I buy more things online than I should (as many many others do too) more-so on the basis that I can get more for my money. I definately would purchase less if I knew I was going to be taxed. Whats the incentive to buy online (when taxes are involved)? Prices are sometimes lower than retail stores, but when I buy a $1500 laptop at Fry's ELectronics and pay $125 in tax, thats a HUGE incentive to buy from someone online from out of state!!! If the internet plans on being taxed, I would seriously have to reconsider buying expensive items online, in the long run it would put many online retails out of business, for the sole purpose of funding the Gov't. Does anyone else feel this way???
I'm lost.
/. where I saw many good arguments about states trying to tax internet/mail order sales.
There was a recent article on this on
I am still at a loss to understand why the state I'm sitting in has a right to tax something I purchased elsewhere. Is it solely the fact that I'm sitting in their jurisdiction? Really, then, they're after me, and they're using the retailer as a collector for their tax. How can my state tell some company in another state they must comply with tax laws where I sit? Doesn't this interfere with interstate commerce, the domain of the federal government?
I saw an argument that resources provided by my state are used in the transaction (things like the roads the UPS truck drives on and so forth). I just don't buy that. What am I (or the merchant) paying for shipping? We're paying a fee to a company that operates in my state which pays taxes based on its revenue which should be used to pay for those state services.
This whole internet tax thing just feels like a big attempt to get some budget revenue for states in budget crises. It's the big juicy target of today they're all hoping to nail. It seems to me they should be laying off state workers (just like so many of us were laid off from the private industry) instead of trying to cover their lack of financial prudence.
I understood this sentence at the first "it".
It was a little vague by the second "it".
By the third "it" I was confused.
At the fourth "it" in it it was a little confusing what part of it "it" was referring to
while i sympathize with local and state governments having trouble balancing their books, doing so through value added and use taxes are the worst way to go about it.
value added taxes are favored by (wealthy) tax theorists because they tax consumption and therefore cannot be avoided. however, they are highly subject to the condition of the economy. any economic slowdown and sales taxes drop along with consumer spending. also, they are popular with the wealthy because the tax is paid only when you spend money, and not on income.
which is their biggest problem. low income taxpayers are disproportionately taxed compared to wealthy. for someone making a hundred grand a year, the value added tax on a computer is nothing. but for someone making 20 grand a year or less, that tax becomes significant. because they are a tax on consumption, value added taxes are a direct drain on the economy - they slow down and reduce consumption and reduce the total number of transactions that can take place in an economy.
if states and local governments really have a problem with colecting value added taxes, then the true answer is to drop the value added taxes completely, rely on income and/or property taxes, and build up the infrastructure that will encourage internet and mail order businesses to set up shop in their own state.
when religion is no longer the opiate of the masses, governments will resort to real opiates.
The stated purpose of "use tax" is to tax the "use" of items not purchased in the state. But, since that tax isn't levied against in-state purchases in addition to sales tax, isn't that simply an underhanded attempt to regulate interstate commerce? I'm surprised these laws were not struck down by the SCOTUS in the past.
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What living bipedal organisms would ask for the government to put taxes on services rendered, that have already been taxed?
Obviously, we are not dealing with living bipedal organisms...
This is also an issue of TAXATION WITHOUT REPRESENTATION. What services are offered for paying such a "tax", why do they not recognize the contractual relationship as this "tax" being formed as an "optional" service, and who recognizes that the internet is composed of private communications networks that can't legally be taxed?
This "tax" is a violation all the way, up and down, my Constitution; me being a sovereign State.
But I'm sure you already Gnu that.
Do the states that are pushing for sales tax collection really expect all of these small-scale sellers to set aside and remit taxes to the hundreds of separate jurisdictions in the USA? Or, do they expect Amazon to collect the tax based on where the 3rd party seller says they are located?
-- Dave Aiello
Internet mail order is no different than phone or mail based mail order.
If they want to enforce sales tax on those sales, fine. But call it what it is.
Or will they actually tax mail order orders ordered over the web, but not the same orders from the same customer to the same vendor using phone??
That would be so stupid that it may just happen...
No, where it will hit the small time operator hardest is in implimentation costs.
Toys Be Us and Shit already *has* a presence in all states, and accounting services to deal with it. For them paying online taxes, while costly, isn't really as big a deal as it might appear. It's more a question of how to put it into reasonable practice.
But for the little guy it means setting up tax accounts in every state before he can even do a lick of business, and the cost of maintaining them properly may well exceed his profit margin.
It's already hard enough to deal with the paperwork and compliance issues in *one* state. Having to do it in all 50 will be enough to force many of the moms and pops of the world into tending the fryer istead of being independent business people.
Think about that for a minute and think about why the big boys might be very, very, VERY much in favor of paying all these taxes.
KFG
As an online retailer why should I spend my resources to act as a tax collector for another state of which I use no services or even visit.
This is an issue between the State's tax agency and the citizen of the that State, leave be the hell of of it.
And what if I don't. If I do not have any presence in that State of question can they really do anything. Can Florida AG enforce compliance in Idaho?
I'm a little sick of all of the "I buy my laptop online because it's $125 cheaper without taxes" argument.
Yes, you're right, it's cheaper to do that, but that's primarily because you're breaking the law. Just because you don't pay taxes at the time of purchase does not mean that your laptop is tax exempt. You should be filling out the appropriate "use tax" form for your state and sending the money to them.
I realize that hardly anyone actually obeys the use tax laws, but that doesn't make your argument any more valid. It's basically the equivilent of saying "Laptops would cost more if they stopped letting me steal money from banks!"
So, would this tax enforcement at the time of purchase hurt online sales? Maybe. But, please realize it's not a new tax, it's just forcing you to pay one you're already supposed to be paying.
Nolife: "The federal gov wants to lower taxes so you will have more money to buy more things and hopefully jump start the bad economy."
No, the Federal Gov't is in the grip of a conservative orthodoxy whose mantra demands zero tax collection. Unfortunately, it's not clear how a government is supposed to run on zero revenue.
It's been shown that tax cuts, especially those that benefit the rich, have no effect on "jumpstarting" the economy, especially when the majority of consumers are scared that their job may be axed.
"The states want to start collecting taxes to collect more revenue because the economy is bad and they are in the red."
They're in the red for many reasons, not the least of which is that the federal government mandates all sorts of programs and policies (like, um, the "Homeland Security" clusterfuck) and then helpfully decides not to fund them -- leaving the states in the hole for the costs of these programs.
Remember that a lot of states have their state income tax rates pegged to the federal tax rate -- so any time the White House starts talking about abolishing capital gains taxes, or taxes on dividends, or reducing the federal tax rate, the states start quaking because THEIR revenues go down. And, unlike the feds, state governments are not allowed to run deficits.
So, think about it: which federal, state and local taxpayer-funded programs would you like to see shitcanned? Do you like your roads to be paved? Your police officers and firemen to be trained and paid? How about your teachers?