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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."
use the NYT archive
1 7ECOM.html
http://archive.nytimes.com/2003/02/17/technology/
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
"Clicks and mortar"? "E-tailers"? That alone was enough to keep me from reading the article.
Texas is finally getting the internet!?
... :)
Wow, I thought this day would never come. I thought all them rednecks would just be sittin' there talking about their "inner net" (inner netting on shorts), for decades
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 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.
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.
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.
I, for one, don't collect taxes when I'm running a garage sale.
--sex
Very popular slashdot journal for adul
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.
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.
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!
So there I was; 15 years old, naive and about to go on my first date where sex was involved. I went to the pharmacy and asked the man for condoms. "Here you go, that will be 5 dollars plus 70 cents for the tax." the pharmacist said. I replied "Tacks? So that's how those things are held on."
Trolling is a art,
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'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.
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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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
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
It's smoking.
Yep, another thing to blame on the smokers.
See, states have been taxing cigarettes like mad. New York, for example. Some retailers in other states were doing a rather brisk business selling cigarettes online: no tax.
They all thought the government would clamp down on internet taxing before too long, and they were right. Not only do they get to claim they're protecting the world from smokers, but they grab some extra cash for the here and now. Never mind that sales taxes always have a chilling effect on spending. Technically, though, it's just the companies that are doing bad right now. Joe Six-pack has been spending his little heart out, and the economy hasn't budged.
So is it the state's fault for raising taxes on cigarettes, or the online retailers "cheating" the states out of the money they've already spent that was supposed to come out of smoke taxes?
I don't smoke, but think it's none of the government's business.
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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