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New U.S. Sales Tax Regime For Internet Sellers?
morganew writes "As reported last week on Slashdot, States are pushing for new sales tax rules that would force Internet sellers to collect taxes for up to 7500 jurisdictions. Legislation has been introduced. The House Judiciary Committee held hearings today; here's CNet news on the bill, and here's a report (PDF link) on what it could mean to internet sellers."
...well, not exactly. But once the price advantage of no sales tax goes away, goods that incur a shipping charge will be better bought locally, all things being equal.
They would have better luck legalizing and taxing drugs (and it would be more moral) than trying to enforce crazy e-commerce regualtions across state lines. Seriously, the money gets taxed once as income in the state is is spent from and once as income in the state it gets spent in. Isn't that good enough? Why try to put a brake on the great whell of e-commerce that is just starting to get our economy spinning again?
Legalize and tax drugs, don't tax e-commerce. Are you listening, Dean?
When I (in North Carolina) buy something on the Internet from, say, Oregon, where does the sale actually take place? I would certainly say Oregon. Add to that the concept that any extra tax on it by North Carolina certainly is an unconstitutional infringement on Interstate trade. The state provided no benefits to such a sale (one can argue, although lamely, that they provide things like police and fire protection to "real" stores), their only claim on taxing the sale is greed.
I'm an American. I love this country and the freedoms that we used to have.
It seems there's some controversy in how this thing would be implemented. The authors wanted stores with annual sales of less than about $5 million to be exempt from the tax, since keeping track of sales tax for fifty different states is incredibly cumbersome. Amazon, however, wants a much lower limit. They're trying to force businesses who take in at least 25 or 50 grand each year to pay sales tax.
I think it would be a real shame if this thing goes through, with taxes kicking in at sales in the tens of thousands of dollars. As Amazon must well know, setting up sales tax collection and payment for 50 states would be an absolute nightmare for small sites.
I mean, what a disaster. You're running a site with $55,000 in sales, and now you've got to administrate collecting and routing sales tax for 50 different states, even though you only take in 1500 orders a year. Think of all the paperwork and hours lost, all for the sake of, say, $60 tax per state.
That explains why sites like Amazon.com would be willing to endorse a proposal that cuts into their profits. It's obviously worth losing a few percentage points on the bottom line, if doing so creates new barriers of entry to tiny upstarts.
I'm generally "Interesting," "Insightful," and even "Funny" here. What the hell happens to me at parties?
Along those same lines - is california making a killing in taxes because most of the buisness online is located there? What about the state that a lot of companies register for incorporation in (is that meriland? (sp))?
If the taxes are "leaving" one state, someones' making up for it somewhere. Either you're in for globalization, or you're not. Creating new taxes just because globalization doesnt fit your model of buisness is rather short-sighted. Same thing happens when countries start adding tarrifs because they cant compete with the imports.
If money is leaving the state (or country), its because something outside is better than whats inside.
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The sale tax situation for internet sales is no different than for mail-order catalogs. They are the same. So things are already equal for them.
All small business owners need is something else to burden their time. Where's the hue and cry against all the "evil-non-tax-paying" mail order companies? Internet businesses are simply mail-order companies. The main difference is only the media of the catalog.
You need to define taxes. If you look at history, they way they have taxed things in this country has changed over the years. Income and sales taxes are relatively recent inventions. But before them, there tended to be outrageous duties on imported goods. Or look at American history. Read about the excise, poll, and property taxes of the revolutionary era. The revolution was based on outrageous taxes on legal documents, aka the Stamp Act, and the more famous tea tax.
The logic behind this is that the state where the person lives is generally the one that's losing revenue, since it's assumed that without the online/catalog option people would simply buy from vendors in their own states. Most of the services which sales taxes pay for, education, health, welfare, etc, go to individuals rather than businesses, so it seems reasonable to tax based on your population's spending rather than your business' sales. (though actually it's a lot more complicated than that...)
Of course in a lot of cases states may actually be getting sales tax income they don't deserve, for example in small states like Rhode Island that may not have a lot of stores of their own (when I was living there, at least half of my non-necessity purchases were from Massachusetts) or in a large and high-tax city like NYC or Chicago (almost 9% in each) that's near the border to a state with lower taxes. Those places have the most to benefit from this, since they may potentially be recovering taxes that they wouldn't be earning anyway, while "strip mall" states like New Jersey will be less happy about this.
The small, independent, one and two man ecommerce sites are the ones that will be hit the hardest with a new tax system. They really won't have the resources to figure out the tax system. It will pretty much wipe out those silly little independently coded ecommerce web sites that you see here and there.
This is a loss for Linux, as it is easy to talk these small sites into using unsupported ecommerce software running on Linux. Gearing up for a big nex tax will require a type of support the free software business will not be able to deliver.
It is also interesting to see that the government is talking about big increases in taxes at this point of the business cycle.
Greenspan has been pursuing massively inflationary monetary policy for awhile, there's been a gradual devaluation of the dollar. Just about every part of the market is really geared for a big spurt of inflation...except, of course, wages.
Workers and small businesses should be prepared for some very serious belt tightening in the years to come.
This was not a weird tax at all. Peter wanted to move ancient, ossified and bound with old customs Russian society toward much more modern and agile West. As part of that, he wanted to promote Western ideas - clothes, language, customs. Western men usually didn't wear beards then, and in their eyes a beard was probably a sign of a savage.