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States Push for Net Sales Taxes
Marnhinn writes "Lawmakers in several states are asking Congress for the right to begin collecting sales tax on interstate internet purchases. CNN has the scoop."
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One of the main reasons I buy goods on the internet is that I don't want my state to recieve sales taxes. They did nothing to deserve that money. The state divisions at this point are arbitrary, meaningless, and unhelpful. EVERYTHING particularly interesting happens at either the national or the local level.
I think internet sales tax is a bad idea and will discourage on-line purchasing.
But I wonder if this could be good for Oregon if we decide not to do it. We don't have sales tax in Oregon. I don't know of any other state that doesn't have sales tax and whenever someone stops by to visit they are always surprised to get 1 cent back when they pay a dollar for something that costs 99 cents. Every time some politician tries to start up a sales tax it gets defeated. (so far). I don't know if we are one of the 45 states that require taxes on internet sales but hasn't been enforcing it that are mentioned in the article.
There are other things that could come of internet sales tax if its not enforced uniformly by all states. Encouraging on-line business to open up shops in their states could be done by lowering or removing state internet sales taxes for those companies.
Amazon is located in Washington State. However when someone orders a book from them its often shipped from Eugene Oregon. Does that mean they could avoid the internet sales tax through some loophole if Oregon doesn't start an internet sales tax?
...as long as the money went to expanding public Internet infrastructure. Just like our taxes go to funding the freeways. Taxes do me much more good than anything I pay for from a corporation.
There is no valid reason why this shouldn't be done. Before the internet age it would've been impossible due to the constantly changing sales tax rates all over the United States. Now it's time for a change. I think along with this there should be some mandates for cities/counties/states to keep their sales tax info in some central database that vendors can access to find out exactly how much sales tax they must charge.
As I recall, States were not allowed to levy tariffs and such against each other. Doesn't imposing taxes on a particular method of transaction fly in the face of the rules that define us as a union and have been tested in the past in courts?
This is the price we must pay for the mess the Iraqi war caused budget-wise. Otherwise there would be the possibility that the federal government could assist the states, and businesses would not have to be so conservative because of the uncertainty lurking over the horizon. Instead we must bend the rules to work around this serious lack of funds.
How will this be enforced? If I buy something from Dealware, and the company ships it to me...how would California collect the tax? How would they even know?
Is every vendor going to have to start keeping tax records for every state they do business with?
And if Vendor X in Delaware decides to tell California 'screw you' - what can California do? (realistically I mean). Issue a warrant? File a civil suit?
Chaos, panic, disorder...my work here is done.
Colorado's Governor Owens is seeking a moratorium on the grounds of "taxation without representation" I am no fan of Owens but he is on the right track here. Best
Disclaimer: I am not a CPA, but my wife is and holds a Masters in Taxation. We talk about this subject often.
With the state tax systems being the way they are, it would be impossible for a small seller on the internet to comply with the laws. Forty-seven states have sales taxes (or is it 48?) and each one is different. A seller on eBay would need to compute that tax for the buyer (state, county, city, in most cases) and then file quarterly with that state. Oh, and to file, you need to apply for a tax id number in that state which may require a business license depending on local laws. Say goodbye to all the small businesses who sell anything on the web.
Or, you could always have a store on the web and have an order form printed that needs to be faxed. That would make you a mail order business which no one seems to be talking about taxing.
Viv
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Oregon is going to have to raise more money somehow. Already they've had to resort to closing schools three weeks early, and I suspect that the amount of dererred maintainance of critical infrastructure has reached dangerous levels.
Also, Oregon has relatively high property and income taxes, which any companies moving there will have to pay. Of course, there's the trick of living in Washington State (no state income tax) and shopping in Oregon, thus freeloading on the other citizens of two states.
Actually that makes me wonder what qualifies as an online purchase. I mean I can get a catalog in the mail and order an item by sending a check. Now if I contact the vendor online via email and send them the check, is that an "online" purchase, or a mail based purchase? How about if I call them on the phone and email them my address and such? How about if I order a program on the phone and they email it to me? As soon as you get away from the financial transactions online, the type of purchase gets pretty ambiguous rather quick.
I'd like to see some numbers on that before you claim it as simple fact. Because, quite frankly, I haven't even heard this claim broadcast by even the most tax-averse think-tanks in the country. If it were at all supportable, I think we would have heard it shouted from the rooftops by now.
And yes, food is taxed-- heavily. You might live in one of the states where it isn't, but the majority of us pay taxes at the supermarket, restaurants and so on, in addition to the built-in costs from gas tax, energy, etc, etc.
And income tax is quite a bit more equal than you would imagine, due to the massive number of exemptions claimed by the very wealthy, low capital-gains tax rates, and-- most of all-- the fact that payroll taxes like Social Security (which are not set aside solely for use in that program) cut off at around $88,000. This last means that the average Joe is being taxed about 15% of his income (7.5% on his side, and an additional 7.5% to his company) on top of anything he pays in income tax, while a millionare is paying about 1.3% of his income (or less) to SS.
This may sound frivolous but I'm being serious. Everyone's answer is, "Whatever benefits me the most."
To the consumer this means, "No taxes." To the state politicians this means, "Tax everything, but I'll exempt myself from paying." And finally to the businessman this means, "Tax everyone else's sales so that I'll have an edge.""Fair" really doesn't enter into it really, although the term "fair" will be used by everyone to justify their favorite plan. "Greed" is the operative word, here.
What? Me cynical?You were 80% angel, 10% demon. The rest was hard to explain. - Over The Rhine
"Math in a song is good."-Linford