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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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What can you expect the states to do? They're fucked budget-wise and need to get back in black as soon as possible. This is just one of the lousy things that'll probably pass siimply because of the horendous budget situation the entire country is currently in.
I think it's only a matter of time before this occurs; there's just too much money at stake. As a consumer, I'm against it though.
CB
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Amazon.com is crazy to even consider voluntarily collecting sales taxes for online purchases. That would negate the reason I purchase most of my expensive >= $100 goods online. Since many companies now offer free shipping for >= $50 purchases it typically saves me 10% or more compared to what I would pay at the local store. Start taxing online sales and I would not bother purchasing from Amazon or most other online companies. Of course, states would love to get their grubby little hands on my wallet, but they always do.
Yes, I know one is supposed to declare those purchases on your state's income tax form but I prefer to chuckle and enjoy the thought of screwing the state even if only a little. I am tired of taxes, taxes, taxes and more taxes on everything and anything. Pretty soon they will tax the fact one exhales CO2.
It is no secret state budgest have been in the hole for a number of years. But guess what? That is the fault of the states for being irresponsible. Now they want to dip further into the wallets of their citizens because they were spending money in the 90s as if the Roaring 20s were back in style. Here is a simple solution for all those states who want to put a tax on everything: Spend less money. Yep, you heard me right. If I go into debt, I don't go to my employer and demand more money -- I cut back on my expenses. No matter the rhetoric of the tax and spend supporters, its clear that most people want to keep their money instead of having the state spend it for them. We've seen this everywhere from the most conservative backward regions in the South to the mythically liberal Californians.
If you want to force companies to relocate to a state that doesn't charge sales taxes on internet purchases, this is the way to go! I hope that most of the states pass this, then all the companies will relocate to Oregon, where we have no sales tax, period.
"Freedom means freedom for everybody" -- Dick Cheney
I don't believe their should be taxes on things sold on the internet.. that's one of the only advantages the internet has (other than shopping from home). If taxes were there, I would imagine most internet stores would have to close.. thing's would just be too expensive to buy online, then have shipped to your house. Then you run into problems.. think of Amazon.com. Which state gets the taxes? Is it a federal tax? What about people buying things internationally, will they be taxed too?
No, I just believe it isn't time for internet sales taxes. Our economy is hurt enough, we don't need extra taxes on one of the best performing markets. State taxes are bad enough (and I say this hailing from Kentucky.. 6% isn't that bad.. but being a college student, every penny counts.....)
"Victory means exit strategy, and it's important for the President to explain to us what the exit strategy is." G.W.Bush
Mail-order businesses have avoided cross-state sales taxes forever and a day, and no one makes a peep. Start taking the orders via 'net instead of via phone, and suddenly it's "me too" field day time for states? Feh. They can all bite me.
"A great democracy must be progressive or it will soon cease to be a great democracy." --Theodore Roosevelt
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?
How about the states/feds start doing what most normal people do when they have less money coming in.
STOP SPENDING SO MUCH FSCKING MONEY.
Just look at the budget for you state and see how much money they waste.
If I know that I am going to be charged an extra tax for buying stuff online, i'll buy from Canadian or other foreign vendors.
If I pay tax for selling stuff online, i'll try to sell from another country, such as Canadia.
it's that simple, nobody likes useless taxes, look at the german tax system, everybody hates that, and they have taxes on drinks, cigarettes, damn near everything.
The key to keeping taxes low and within reason, is to not spend so much on other unnecessary things! *cough*war, welfare, politicians paychecks */cough*
Error 407 - No creative sig found
I find it interesting that when a business experiences tight finances, they must improve efficiency and trim costs in order to stay afloat. Heaven forbid a government entity have to do the same thing! Cut one penny from a bloated government program (or even cut the rate of growth!), and suddenly the headlines scream about no school lunches and seniors losing social security.
Sickening.
Can someone explain how this is "informative"? It looks to me more like "trolling": Bush's tax cuts have nothing to do with the states vastly overestimating their future revenue by planning on a the late 90's bubble never bursting.
Personally, I'd like to see the states look less for new taxes and new revenue and more for ways to cut their bloated budgets. Enumerate all the programs that were added since 1995, cut them all out of the budget, and then see how far into the hole you are!
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Or...
You could see that Mr. Bush is trying to stop the $pending $pree that states are on. Don't blame him for 'forcing' states to do anything. States have been relying on the federal tit for way too long.
States are refusing to accept that they must cut fat in their budgets in order to meet them. This means auditing the books and eliminating unnecessary services. Every penny of the 'surplus', i.e. the excess cash from federal/state taxes that happened during the internet bubble, should not have been spent. When you plan your budget on an economy that was continuously warned as overvalued, then shit your pants and refuse to roll back the increases when the economy finally re-balances itself, well, you have no right to complain.
Mr. Bush is not responsible for the economy. The economy is the results of millions of business transactions every day by businesses, individuals, and groups. It *generally* increases in the long run, with ebbs and flows in between. Planning on a good three or eight years of economy is just plain stupid. And that's what the states and governments did, and now their paying for it. Or not paying for it, as the case may be.
Reason, free market capitalism, and individualism
No no no! Internet sales taxes are bad, but not for the reason people think. Well, not quite. In truth ALL sales tax is inherently bad.
Sales tax is inherently regressive. A loaf of bred (or book from Amazon) costs the same regardless of whether I make 10k a year or 500k a year. Put simply, the cost of living does not scale with income.
Increasing the cost of the bread/book via sales tax increases it for everyone, but that's not equal taxation. A difference of $1 extra in taxes is a larger percentage of the disposable income of a person making 10k per year than it is for someone making 500k a year. So in fact, a sales tax hurts the poor and middle class MORE than it hurts the rich.
No wonder so many rich people like it.
Conversely, even a flat income tax scales the burden with income, so that higher income brackets also pay for increases in taxes. A progressive income tax is better still because then it scales the rate so that the burden of taxation is felt equally by everyone, but that's another discussion.
So no, don't put a sales tax on the Internet. Don't put a sales tax on traditional stores, either. STOP CUTTING MY INCOME TAXES AND CUT MY SALES TAX INSTEAD!!!
With an all-income-tax system, everyone bears the burden of taxation equally. Sales tax makes the poor bear the burden more than the rich.
(And by "burden of taxation", I mean whatever the tax rate happens to be and whatever it's used for. Those are separate issues.)
--GrouchoMarx
Card-carrying member of the EFF, FSF, and ACLU. Are you?
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.
More taxes, less liberty, more gun grabbing, more DMCA enforcement, a bigger drug war, more jackbooted thugs, more affirmative racism, bigger welfare checks for Israel, more foreign wars, less jobs, and more certainly more slavery.
Welcome to the police state, pay your taxes and do as you're told. The constitution has long been obsolete.
Remember, the drop in the economy, unwillingness of the state governments to cut back on politically expedient expeditures (whether for the people as a whole or just the ones who finance the campaigns of current officeholders), and the laws passed immediately following 09/11 are putting the crunch on states. State governments are forced to pay for things like more security at airports, transit stations, etc. Kentucky is not releasing 600 prisoners because they feel generous. Federal laws are mandating implementations that states would have had difficulty funding before 09/11, but now states are stretched to the breaking point to do so. Federal fiscal responsibility is at an all-time low under the Bush administration, thus they have no money to spare and are using their resources to beg for what little cash may prove available to rebuild Iraq.
Sales taxes are one of the primary means of state government fundraising. In such a crunch time, they justifiably fear losing much of "their" income to retailers and possibly looking at struggling brick-and-mortar businesses disappear because someone can sell the same product for less while still making a profit because they can avoid sales tax. Thus the revenue lost is two-fold: tax from the item itself and from property, purchase, and income from any and all businesses that fail as a result of interstate competitors. In a free market this is just how life works, but this country is a regulated capitalist system, hence why MS can be prosecuted on anti-trust charges and slowed from trying to monopolize multiple Internet markets. How can we solve the problem?
The logical solution IMO would be to have the sales tax of the state in which the vendor is located applied to the item if purchased domestically and the sales tax of the state of the recipient applied if the items was purchased internationally. Does anyone have any thoughts on how to actually implement a (potentially) workable sales tax on internet items?
As long as there is a Second Amendment, there will always be a First Amendment.
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
Gmail invites for ip
On the way to work, I saw state-contracted workers pressure washing the center divider.
That's just one example that is repeated throughout government, as it becomes more and more of a jobs program.
Most US states already have clauses which allow them to tax goods purchased from vendors outside of that state for primary consumption/use within it, specifically applicable to catalogue and mail-order purchases. This is a natural extension of the same, and in fact several states already have open-ended clauses on those catalogue use/purchase laws that encompass internet purchases as well.
These burdens currently rest on the consumer, who must report the gross amount of goods purchased on their year-end taxes to be assessed accordingly.
An additional thought is that mail-order and catalogue goods still count for several times more business than internet sales, though this obviously won't remain the case. I can't see this as too "unfair" if the regulatory bodies are adapting to the new methods of business transactions just as those businesses are.
Any spoon would be too big.
I am a Democrat, and I know that Tax cuts do not hurt the economy.
you are not taking money out of the budget when you cut next year's taxs, you are reducing the money available FROM INCOME TAX. but you end up gaining money from better economic growth, the problem here is that we were headed into a recession at the tail end of Clinton's years (growth was falling and hit the negative side a few months after Bush took office...BEFORE the tax cuts)
anyway, the size of the money taken out of the budget for the next year was 10s of billions and well under 50 billion. that is Chump Change when you look at the total losses taken during the recession and stagnation periods. it made more sence to cut taxes, because more economic stimulation happend from that than would have if it filtered through to special programs, of which it would have made little impact.
blame the deficet spending, which would have only been 50 billion less without the tax cuts (recall, it is 2 trillion over 10 YEARS)
I am the Alpha and the Omega-3
Just last week, my father got a bill, and a fine, from the state of Connecticut, for purchasing cigarettes online. The bill was for exactly two purchases, of maybe a total of a dozen cartons, from the same company. The fine was for not accounting for the unpaid CT Sales Tax on last years tax return. With the fine, the total bill was $400.00.
Just wait until States get the brass balls to audit Amazon.com, to get the purchasing history of State residents.
Not only is everyone, and I mean EVERYONE, going to pay fines and taxes out the ass - their purchasing histories will also likely be disclosed.
Not only is there potential to charge EVERYONE with tax evasion, there is also the same privacy concern as in monitoring people's liberary activities.
The REAL jabber has the user id: 13196
What you do today will cost you a day of your life
the trillion dollors was over 10 years. this year was only 50 billion. there is no way 50 billion would have help all the states, mabye the small states, but the big 20 where all teh people live, NO WAY would it have helped.
I am the Alpha and the Omega-3
You know how we all snickered when the Terrorist Rainbo-meter kept going up and down like a Yo-Yo? Every time it went into Orange, that was millions more spent by the state every day in complying with the Federal demands. (depending a lot, obviously, on the size of the state. Here in Texas we got borked by this but hard since we have loads of cities, the 3rd biggest Int'l Airport in the country, and a HUGE foreign border)
So, at the same time Bush was making such a big deal about Tax Cuts! Tax Cuts! WHEEEE!, he was virtually guaranteeing that the States would be forced to raise THEIR taxes to compensate. And, needless to say, of all that money he's asked for lately to send over to Iraq, not a penny goes to the states, where the ACTUAL Homeland Security is being performed.
And, of course, failure to comply with a Federal Mandate, even unfunded, means risking losing even more Federal money. (for things like highway repair)
So, intentional or not, the situation has been set up where the States are the ones getting screwed at both ends. Either they let themselves go completely bankrupt, or they are forced to implement policies which any rational economist would find horrifying in a recession. (and all of y'all complaining about government being a "work program," full of jobs that can be cut, please explain to me how laying off more workers when there's already rising unemployment is a good idea)
Maybe this will get passed, maybe not. The states are utterly screwed either way. But if you want to get angry, get angry at the Feds.
Bush: He's Liberal in all the wrong ways.
anyway, the size of the money taken out of the budget for the next year was 10s of billions and well under 50 billion. that is Chump Change when you look at the total losses taken during the recession and stagnation periods. it made more sence to cut taxes, because more economic stimulation happend from that than would have if it filtered through to special programs, of which it would have made little impact.
The long term economic stimulation from tax cuts is negligible, if it even occurs at all. Notice the latest spin from the Bush team: the tax cuts helped shallow the recession.
The Bush tax cuts went to the rich. Unlike a lot of poor people, the rich don't piss away every extra dollar they make. They lock their dollars away in banks or stocks or real estate.
Look, Bush probably doesn't even know why he's cutting taxes. Go read about Grover Norquist and see the real reasons taxes are going down. The extreme right wingers are trying to starve the federal goverment as a way to cut "social" spending programs. Y'know, all that good stuff from the New Deal and other social reforms of the last 50 years.
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.
There is one tiny point you are confused about. US debt is in the form of US government securities. There is absolutely no credit risk in US government securities. None.
He hates these cans!!!
I already pay taxes on both "real" and electronic goods purchased in the US.
The taxes on "real" items are simply charged when the product ordered in the US enters the country. The postal service will deliver it and charge me both VAT (19%) and import.
When I buy electronic goods I fill in my credit card billing address and the database will calculate the appropriate VAT. This is in place for all EU countries.
They could simply link the billing address to a state and make 48 entries with state salestax.
It's not full-proof, but how many people will get a credit card in a state without salestax to avoid this?