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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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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 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.