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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.
Will this put US online sellers at a disadvantage to, say, Canadian ones for importing? For example an amazon.com order plus the taxes verses an amazon.ca order with shipping and the exchange rate differences?
Trolling is a art,
They are trying to turn internet shopping into something similar to ordering out of a magazine...
I like ordering things online because you know your getting what you order(if you go to the right place) and its almost always cheaper, even if you include shipping costs.
This will wreck havoc on all of that though, take away the main advantage of online sellers...
Sigh, net may turn into place to buy specialty items, Best Buy or whatever for non obscure things. I find that kind of depressing really
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?
Obviously, current tax rates are too high. The last 100 years has brought tax rates vastly greater than at any point in history.
Does anyone make estimates on what portion of our tax money goes to absolute waste, kickbacks, bribes, and war?
Bring your servers.
Bring your jobs.
Well, seeing as how I already pay 8% sales tax online in California (since most online retailers are based in CA), this might have the effect of LOWERING the tax I pay. It depends, of course, on the tax rate they choose for this "Unified" system. If the rate is lower, will CA join up seeing as most places sell from CA and the state already gets a ton of money?
IANAL, but I play one on
Politicians spend money so much more wisely than the average person.
This tagline is copyrighted material. Please send $10 for an affordable replacement.
This is a pet peeve:
"This will wreck havoc "
wreak, goddamnit, it is WREAK FUCKING HAVOC
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.
So, the online vendors will simply stop selling online, and you will only "prepare" your order online. Then the customer will call over the phone to finalize the order, and the sale will be just another phone order.
a no-tax system would the internet an unfair advantage over business who use mail-order catalogs for example. AFAIK, all businesses (online and offline) currently have to charge sales tax for purchases within their state. if this legislation passes, it seems that the pendulum would swing the other way, giving a distinct disadvantage to internet retailers.
whatever is decided - it should be the same for all types of business, online or not.
What happened to interference with interstate commerce?
Paizurishitetai desu ka?
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?
Just after reading the CNet article, this looks as though it could cause real headaches for small business owners.
Let's see. Small scale businesses would be collecting sales taxes for virtually every jurisdiction in the country, dealing with the choking amounts of spam, fending off people who want to steal the domain or commit other mayhem, paying the self-emplyment tax, and contending with all the other paperwork. Where's the incentive to keep going (much less the time to devote to the actual goods or services)?
We could probably save a bundle by doing away entirely with the Small Business Administration. At this rate, they won't have much to administer.
DUCT TAPE: The Election Supervisors' Secret Weapon
"No Tax or Duty shall be laid on Articles exported from any State."
That about wraps it up.
In a globalized economy, taxing e-commerce isn't going to work well. For the sake of fairness, traditional brick-and-mortar retailers shouldn't have to suffer from sales tax either. Time to move to a totally different tax system; I'd propose to tax energy consumption and nothing else (not even income tax); calibrate it so that the total tax burden remains unchanged.
welcome to your national debt, enjoy your 25 years of paying it back, iam sure you childrens chlidren will enjoy paying it too
The Sales Tax would not go to the federal budget, and so would not help the federal defict. Haliburton is paid by the federal government, no the state governments. Internet sales tax will do 0 to pay for the defict or rebuilding Iraq. These are (mostly) unrelated issues (they only relate in lowering the amount of money the states go begging the federal government for... which is good, let the states take care of themselves).
Sarcasm and hyperbole are the final refuges for weak minds
So what is to stop internet sellers from simply putting up a printable order form? If you have to snail mail in your order, it is mail ordered and exempt. No different from the situation now, but it takes a little longer. Certainly worth the effort on bigger ticket items.
But how is it that mail order would be exempt and internet sales would not be exempt in the first place? I'd love to know how they are going to just explain away
"No tax or duty shall be laid on articles exported from any state."
"No preference shall be given by any regulation of commerce or revenue to the ports of one state over those of another: nor shall vessels bound to, or from, one state, be obliged to enter, clear or pay duties in another." (Article I, Section 9 of the US Constitution)
I think that speaks for itself, or shall we have the revisionist telling us that 'vessels' meant spaceships, just like 'the people' means the National Guard in the Second Amendment? Maybe some of our fine lawmakers should have taken the time to read our Constitution at it's recent unveiling.
I asked about this in the previous thread, but got no explanation, so I'll try again... how can such a law be reconciled with what is explicitly specified in the U.S. Constitution?
"No tax or duty shall be laid on articles exported from any state." (Article I, Section 9.5)
That is, after all, exactly what these laws mandate, for merchants to collect a tax on some State's behalf on goods that they are exporting out of the state. How is this legal?
AnotherBlackHat also pointed out another relevant provision:
"No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing it's inspection Laws: and the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States; and all such Laws shall be subject to the Revision and Controul of the Congress." (Article I, Section 10.2)
I am genuinely bewindered as to how proponents of such a law can think it would pass Constitutional muster. If anyone could explain the legal rationale behind such legislation, I'd really appreciate it.
Just let him know that everybody knows that principals are principals becase they're too stupid to make it in the business world.
Blar.
I for one welcome our new taxing government overlords/
We're taxed WAAAY beyond reasonable proportions already... it seems like every week now, governments are inventing new ways to steal our heard earned money. In this case, I say "let 'em do it". Go ahead states, and tax internet sales. Do it. Why? Because there will be at least a few states (NH) that choose not to rape and pillage their people and guess where the business will go? If businesses are smart, as they usually are in a "free market", they'll move to the states that offer them the best advantages. More business in a state = more jobs. More jobs = more income. More income = more tax revenue. See... it's not a secret that lower taxes will bring in more revenue than higher taxes. AT least this time, it'll be going to states that support individual fiscal freedom. I'll take freedom over tax tyranny any day.
Skiers and Riders -- http://www.snowjournal.com
Reading through the replies, I see that this is almost universally seen as a bad idea, motivated by little more than greed. So I say, do something about it. This is still being drafted, it hasn't even come up for vote yet. So much the better time to contact your representative and kill this thing preemptively. Read over the replies above and below, since many of them make good points about this idea. Include these ideas when you contact your rep.
If we make enough noise, they will listen.
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.
Read about it and get involved. This solves this type of problem and many many others. This is the only thing that will help the USA out of the hole we have dug for ourselves. Lean about it and help get it passed.
I buy something from a Company in california, my credit card company is in south carolia, and the server is in New York. Can someone explain to me why MAryland, my home state, expects a cut of the deal? Unless they are going to set up border check points, and search cars for shoppinb bags form out of state, id say they can go fuck themselves. Sigh. Time to start buying from other countries. HELLO NEXT AMERICAN DEPRESSION!!!
All Troll + "offtopic" mods are meta moderated as "Unfair", because you abused the system.
I know this is ./, but geesh!
The bill doesn't talk about taxing internet sales, it talks about taxing remote sales. Sales includes mail order, phone order, internet order, any order.
The bill only applies to states that agree on a unified, simplified tax system. The same items will be taxed in every state that agrees.
Let's see. I have a computer. I input the zip code of the person who has placed the order and it tells me the tax. Hasn't anyone reading slashdot heard of computers? They sometimes can be used to do computations for people.
Once a quarter, I fill out at most 50 forms and send 50 checks. A burden? Yes, but not that great. If the system is truly simplified, my computer should be able to fill out the 50 identical forms for me for the 50 different states.
The bill as introduced only applies to those with more that $5,000,000 in "gross remote taxable sales." Note it does not include local sales or sales of non-taxable items.
I don't know about your mom and pop, but mine don't take in more than $5,000,000.
Shout outs to my peeps in Oregon and New Hampshire too! :)
In the later case, wouldn't it then become a self-correcting situation?
Those states that want to tax such online corporations will either collect the money and lose the company or not tax the company and get money that filters into their economy. As long as there's at least one state willing to bet that the latter is better than the former, the companies will have a reason to move, and if the states want them, they too will have to barter in taxation to keep them.
Kind of a free-market equation for taxation.
What will force e-tailers in foreign nations to collect a tax and send it our way? Either they won't collect or they may happily collect it but never send it to the US. Really, what can happen to you for breaking US tax law in China? Either way, it will be real incentive for e-tailers to leave the US for foreign nations since most of the crap we buy is made over there anyway. Are we going to have provisions in this law to abide by local taxes globally? A 'we collect for you if you collect for us' kind of arrangement? Nope, just shortsighted greedy state legislators I'm sure.
That's just bad economic sense. The effect of higher sales taxes is to penalize spending and encourage savings; the rich who save and invest their money instead of frittering it away pay less tax than the ones with expensive tastes, and same goes for the less rich. 20% of a $300,000 sports car is enough for even the rich to notice.
You know, Flamebait usually isn't this well-reasoned or lengthy. While I admittedly did not include citations, everything I say is based in fact. If you disagree with my conclusions, please post a rebuttal.
Bush: He's Liberal in all the wrong ways.
It is too complex, one more huge database that simply has to be kept up to date. The states aren't losing money, they are seeing a stream of money that they haven't attached their tenticles to. You can't lose something you never had.
Now let's use this extra tax revenue so we can cut taxes for the rich again! :-)
How did you vote in the last election? Did you stick with the usual two choices of republicrat or democan? Well then you brought this upon yourself. Did you not vote at all? Further sauce to say you brought this on yourself. You voted in these nimwit tax and spend politicians who want to take your money away. Cerainly I don't argue for anarchy. But I don't think all this pork barrel tax shit is good for us either. When individuals or even businesses find themselves with less money they usually have to tighten their belts and spend less. Why do our stupid governments decide instead to tax more? Are they above us? Since when did for the people, by the people become for the stupids who don't know any better for themselves? Want to put a shock into the system? Vote some libertarians in next time. You know libertarians who advocate legal drugs and less taxes. No one says we have to turn the entire government into libertarian. Just stick enough in that you shock the remaning losers into realizing this is what we want. We don't want a fricking tax and spend nanny state! Figure it out now or forget about it later.
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.
Basically the buyer is responsible for paying the sales tax in the state he lives in if he buys something out of state. This excludes the obvious states which don't have sales tax. Normally the state in which you live in will discount the tax you have already paid. So you paid 6% tax in state X and you live in state Y. If state Y has a 6% sales tax they don't bother. If state Y has an 8% sales tax you are responsible for the remaining 2%. In this case no sales tax is being charged so the buyer must remit the sales tax to their state treasury. This is sometimes called use tax. Basically this is shifting the burden of paying the tax from the individual buyer to the business regardless of his/her state. A very unreasonable burden at that.
Well, as greedy states will most likely base collection on the destination address (all legalize on where the purchase is taking place aside), it means that mail forwarding services in No Sales Tax states will get busy. You get yourself a nice forwarding address, and buy and ship your next SLR Camera there. It gets forwarded to your home, but hey, that's not a purchace at this point.
:)
No sales tax. Insignificant shipping difference. Savings for consumers. Angry tax people.
Perhaps there will be even "one time forwarder" companies, for those, who just wanted to buy something nice and expensive every once in a while...
Hyperom.com
Exactly. I don't know why articles on this topic are labeled "internet tax" -- this is really an attempt by the states to tax out of state sales (which dwarf "internet sales"). Typically the tax proponents try to argue that the internet has some sort of exception (which it doesn't -- mail order companies taking orders through the internet pay the same taxes as any other mail order companies).
Requiring small businesses to compute and file sales taxes with every single state is absurd. Even if they unify the tax rates, that's still 50 sets of paperwork to generate, send off, and manage.
If the states really want to collect sales tax, they should set up a single set of taxes for mail order purchases, and implement a single system for reporting sales so that merchants could generate one set of paperwork to a central office, and that office could deal with all of the processing, tracking, and routing to deal with the 50 states. That's far more efficient than making millions of small business perform duplicate paperwork.
Enable 3D printed prosthetics!
Read the posts, dude. Dozens (hundreds? thousands? millions?) of eCommerce sites charge sales tax. It is a fact of life. There is nothing fundamental about the net that precludes the paying of sales tax. If the buyer and the seller are in the same state, sales tax is charged. That's it. No rocket science. No abstract mathematical concepts. No need to invoke spiritual entities or evil demons. This shit has been going on for millenia, nothing new here.
Sheezis...
Canadian incomes are, on average, 30% lower. Because of that, many items are priced less in Canada.
Another factor is that direct consumer advertising is illegal in Canada. (US is one of the few countries where it is legal). So the marketing is done only to doctors and gov't beaurocrats, not consumers.
As for cost shifting, Medicare/Medicaid only pay for 50-70% of the actual cost. The other 30-50% is paid for by higher rates for paying (insured) people. There's no explicit tax raising the cost of pills.
Do you even lift?
These aren't the 'roids you're looking for.
If this were the case, wouldn't it be possible to host the website offshore, so that the entire transaction occurs offshore?
If the Point Of Sales occurs in an offshore jurisdiction, then theoretically the sales is not part of the US. Sure, the shipping may occur anywhere, but theoretically wouldn't this be a way around this "internet" tax?
**FREE** Track and view your phone's via CellID and/or WIFI and/or GPS
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.
Anybody want to volunteer to defy any such law in order to be the good samaritan to pay out the nose in legal costs to get the courts to strike down the law? Please apply at www.irs.gov. *grin*
So, grandma's pie site, my dad's cd-rom site, the guy down the hall selling Kava... unless they are wildly sucessful, they Don't Have To Play. No extra recordkeeping, no lost revenue.
If you're worried about the camel's nose under the tent flap, that's another discussion, but it doesn't look like most of the posters are thinking that far.
Luke, help me take this mask off
There is not a one-to-one correspondence between ZIP codes and taxing jurisdictions. It's a really ugly problem to solve.
Mea navis aericumbens anguillis abundat
Haven't we talked about this before?
This tax is unlikely to be set up in a fashion simple enough for small businesses to easily deal with it. There should not be 7500 different sets of rules for 7500 different taxing regions.
If it must be done, then online retailers should be required to register with one state, and that state would collect a tax from the retailer based on a nationwide rate.
Tax revenues should be pooled and aportioned amongst the states based on population. States should then be required to further divide the revenues among all taxing regions, again based on population.
You can't always figure out the sales tax rate based on the zip code.
Many of those who do charge sales taxes depend on the zip code to determine how much to charge. I hate having to argue with them every time I buy something.
For example, the Texas sales tax rate at my office is 8.25%. But at home, it is 6.25%. Both are in the same zip code, but my office is in town and I live 20 miles out in the country.
The odd thing is that if Fed Ex drops off my package at the office because they don't have the foggiest idea how to get to the house, the sales tax rate is still 6.25% since the official delivery destination has no local sales tax component.
Additionally, if your total Nationwide sales are $5 mill, you are by no means a big business.
That's right, eBay would be like your parent company in the eyes of the government.
Take a look at this story in the Washington Post
relevant quotes: Amazon wants the bill to exempt online merchants if they bring in less than $25,000 per year.
Amazon has built the infrastructure to collect sales taxes for most of the 160 retailers that sell items through its Web site, and believes its competitors should do the same for their merchants, said Paul Misener, Amazon's vice president of global public policy. "It makes no sense to us for certain large entities doing billions of dollars in business and with extremely sophisticated computer systems to not be able to provide this kind of service," Misener said. "If the system the states have put in place is in fact simplified, and we think it is, it shouldn't cost businesses anything to collect." Amazon's efforts to change the legislation could doom the states' sales tax plans, said an official with eBay who is familiar with the negotiations.
"The fundamental problem with Amazon's proposal is that it treats someone who sells through one channel online differently than a person who sells through another," said the official, speaking on condition of anonymity. "To discriminate against online aggregators is a guaranteed way to stop any distance sales tax plan for at least 10 years, and we'll go to the mat on that one."
A sig?!? I don't think so.....
This bill isn't the answer. The state sales tax situation is a complete and utter mess, and local sales taxes make things even worse.
How does this propose to handle county or city sales taxes? It doesn't.
F'rinstance: in Blount County, TN, purchasers at local stores are subjected to a 6% state sales tax and a 2-3/4% local (county, IIRC) sales tax. Purchases made on the Internet, or via mail order, from outside of the state are not subject to sales tax, either county or state. This bill would subject said purchases to state sales tax, but the county still gets shafted (or the buyer gets lucky, whichever way you want to look at it).
Michigan's state 1040 has a "use tax" line where you can (if you kept receipts) enter 6% (the state tax rate) of the total amount of out-of-state purchases made in that tax year and pay your state sales tax that way, or if you (intelligently) didn't keep receipts, you can "estimate" it using a formula they give (which will usually save you a bundle if you do much out-of-state purchasing) based on your AGI.
What if I'm on vacation in Oregon and buy a backpack, or some other non-consumable item, for use in Illinois? Oregon gets the sales tax money, but clearly, the purchase is intended for use in Illinois, so Illinois is getting screwed here. People who live in states adjoining those where there is no state sales tax whatsoever have the benefit of being able to cross the state line and purchase whatever they want tax-free. Obviously, the bordering states don't like this.
Sales taxes need to be abolished, and the federal government should implement a national sales tax (hereafter abbreviated "NST"), akin to the UK's VAT or Canada's GST. When a remote purchase is made, the state to which the purchase is billed gets that portion of the NST. The state can then let the local governments do their own fighting over whatever scraps are left. I can't say as I particularly like local taxes anyway, and VAT and GST work extremely well in the UK, Canada, Australia, etc., so perhaps these folks are trying to solve a problem by reinventing the wheel...
p
In Korea, long hair is for old people!
I, for one, want to shoot some fucking state politicians in the face. If these states think this will save them from their deficits due to THEIR mismanagement of funds, they've got another thing coming. Sales will dry up faster than the dust bowl and these suckers will find themselves with LESS commerce than before. Don't FUCK with a good thing!
Read it. Memorize it. Quit whining.
Just pay your fucking taxes
Let me guess you are from California. No?
Get a clue.
What's fundamental is that when someone sells stuff for delivery out of their taxing jurisdiction (i.e. to another State), they cannot collect Sales Tax unless they also do business in the buyer's State. The recipient of the goods is usually liable, though, for paying Use Tax to his own State, but that's such a tough thing to get a handle on that it's usually only enforced against large organizations with auditable records. Use Tax is the mirror image of Sales Tax, but instead of the responsibility being placed on the seller, it is placed on the buyer. In either case the State imposing the tax has to have jurisdiction over the taxed party. No jurisdiction, no tax.
The cases of websites charging Sales Tax to buyers taking delivery in other States is usually based on the fact that the seller has a "business presence" in the other State and thus is under the taxing jurisdiction of the buyer's State. IBM, for instance, does business in all 50 States and therefore charges sales tax on all its sales to anyone in the U.S. Anyone else who charges Sales Tax on interstate sales is A) committing fraud, B) stupid, or C) loves taxes so much that they voluntarily collect and pay over what they don't have to. Long before the Internet, Daytimer used to do exactly (C), which was why I stopped doing business with them.
There is no power granted in the Constitution to the federal government that allows it to "authorize" one State to collect taxes for another State or for some extralegal "group" of "member" States. If you knew anything about our system of government you would know that the States are so separate that to reach agreements with each other they have to enter into treaties, just like sovereign nations.
Personally, I think there's something wrong with people who tell other people that an abuse or extraction or punishment is inevitable, so just "get used to it."
Look at the bright side: there's always seppuku.
2.5% Colorado Springs (as of January 1, 2002 through present)
2.9% State of Colorado
1.0% El Paso County
6.4% Combined Sales and Use Tax
Wow that was hard to figure out....now where does it go? Well to Colorado of course. Mail order taxes and similar should go to the point of delivery. Which would be in Colorado Springs. That may not be the official rules though-I don't live in Colorado....thank god.....
No state sales tax in Alaska, or Montana.
Can anyone explain to me how North Carolina can claim it is losing $680m in revenue that it isn't even legally entitled to collect? That isn't a "loss" as much as it is "diabolical plotting."
I seem to launch into an uncontrollable rage whenever I hear about how unfair it is for competition that mail order and Internet sales have no sales tax applied. The *only* solution these money-grubbers can come up with is--you guessed it--MORE FREAKING TAXES!!!! Hello? How about repealing the state sales taxes that are the root of the "competition" problem to begin with?
And what of the interstate commerce clause in our now outdated and largely ignored US Constitution? Does it mean anything anymore?
The government breaks your legs, then hands you a pair of crutches and says: "See? Without me, you couldn't walk!"
I don't buy mail order just because it's cheaper, it's because of everything else I don't have to do. No crowds, selection, price, no driving (it's 45minutes to the mall each way), and no BS. The no tax is a bonus. For some odd reason I don't like paying (8.25%) money to the Liberal Scum that run California like it was their own little private business. If they would do something other than squander it, I might be more inclined to pitch in. Even if they manage to start collecting taxes from stuff I buy out of state, I will still make it a point to avoid spending any money locally. Screw this state and screw the criminals (politians) that run it. Being military helps out in that department. No state sales or fuel tax can be collected on base. The fuel tax is one of my biggest pet peaves. They collect four times ($16 billion) what they actually spend on the roads and then gripe about not having enough money to do upgrades or repairs. Let's not mention my $300 license plate renewal fee. Arrrrrrggggggggghhhhhhhhhhh!!!!!!! I'm going to bed before I get myself worked up into a very long rant.
Using this as an oportunity, someone could start pitching a national sales tax. As much as the states will try, there won't be a law making it legal to tax items purchased in another state. I know that here in Wisconsin we are technically supposed to pay sales tax on out of state purchases via our personal income tax. Anyway, back to my point.
While cash strapped states might not like the idea, the federal government could impose a federal sales tax on ALL items. I would find this ideal over our current tax structure and now would be the perfect time to pitch this federally.
The only fears I have is congress (Money grubbing freaks on both sides of the spectrum) will want to use it as an income suppliment rather than a replacement for our current tax structure.
I'm going to stop short of preaching and trying to sell the idea of National tax and say that States will try, and may even pass laws but in no way be able to enforce such laws.
Proofreading and spelling checking is for losers
I'm a small business owner: an Apple reseller with a storefront. We sell stuff the same price as the mailorder/internet stores, but we just get killed by unfair sales tax policies. Our local rate is 8.3%, which is an enormous competitive disadvantage.
Picture this: somebody comes into the store holding a catalogue, askes a bunch of questions about various products, and compares prices. I just tell'em that they're holding my catalogue.
"Really??" they say, somewhat amazed.
"Look" I explain, those guys aren't giving stuff away, they just act like it! Same price here and we know the products, we'll support you on it far better than they can, and we have it in stock right here"
INVARIABLY, the next comment is about sales tax:
"But you charge me sales taxes"
My reply:
"No, the state, the county, the city, the goddam jail district, the community college, and the public schools all charge you sales taxes AND force me to collect them, and explain all this to you for ZERO compensation. If you purchase these goods from out of state and you do not pay the use taxes you owe on the purchase (and a miniscule fraction do pay it), you are cheating your local community and your neighbors. Those taxes pay for the streets you drive on, for fire and police protection, for the zoning department, for the library, for the schools, and more. If you evade the tax, you are sending your money out of state, out of your local community, to the profit of mega corporate interests. If you don't support your local reseller, we won't be here to answer questions, fix your broken stuff, and provide warranty support. Further, by evading the tax, you force local government to raise tax rates further."
This little lecture does surprise most people. I can and do make all these points nicely, not intending to offend, only to educate. Most folks have no idea.
I don't like taxes either. However, basic fairness between business competitors demands a level playing field. If the damn taxes were zero everywhere, that would be good and fair. Short of that impossible dream, the taxes should be equitable. I'll compete on the basis of product knowledge, availablilty, price, and service, and I'll do very well thanks. And so will my customers.
The selfish, shortsighted attitude expressed by most of the posters on this topic is an embarrassment.
Businesses could just not ship to addresses in states the collect the tax. Or just just charge a tax hassle fee of $20 to compensate for the paperwork time. Just my 12.5%
One more thing... if you are NOT in favour of legalization of drugs, what is your proposal? Are you supporting the status quo (and indirectly the "war" on drugs)? Or do you have another idea? I'm open to suggestions...
BTW, I hold a similar view with prostitution (it should be legalized). But I would want input from feminists because some of them consider prostitution (which mostly affects women) to be exploitation (similar to how capitalists exploit workers). If that is indeed true, then I wouldn't support prostitution.
Sivaram Velauthapillai
Sivaram Velauthapillai
Seeking the meaning of life... @slashdot of all places
When elections come up, all the bobbing heads say how hard they are gonna "fight" for us. NOW is the time to see this and note whether that bobbing head should see another term, or be replaced by someone else who WILL.
"Prove all things; hold fast that which is good." [KJV: I Thessalonians 5:21]
Other than Hong Kong and a smattering of other holes in the wall, most nations selling anything you're interested in have a VAT that hits even harder than just about anything Stateside. If that doesn't deter you, it'll be the wait while your package sits in Customs. Collecting duty on imports is the oldest form of taxation on the books.
Luke, help me take this mask off
A big issue not well addressed in all this is the role of foreign E-Commerce sites and portals. Will they need to collect US sales taxes on sales to US addresses? If so, how can it be enforced? Could we expect the rise of foreign E-Commerce sites targeting US residents, as has happened with gambling sites, and pharmaceuticals?
This is where I like Bush: any bill to create a broad new tax is likely to get vetoed. Bush is still haunted by his dad's "read my lips no new taxes" comment.
Be very concerned if you are an online retailer, or make your money from ecommerce development if Bush looses in 2004. Most democrats wouldn't hesitate to tax the snot out of us.
-- $G
B&M stores believe that they're losing business to internet stores because of they have to enforce taxes while the internet stores don't.
While that is a plausible story, I just don't think that is the reason for people shopping on the internet.
If I want a DVD that is available at Circuit City, I'm not going to order it online just because I don't want to pay tax (especially if they're the same price).
But if I find some equipment for $100+ LESS on the internet... well obviously I'm going to buy that.
B&M stores need to become more competitive with internet stores, not try to rally for sales tax online.
the byproduct of years of oppression by the white man
Even as an end user, if this goes into effect I'll happily pay the exchange rate and overseas shipping just to avoid having to figure out the damn tax implications for buying $300 from one state and $200 from another. We're already taxed on income, the seller is already taxed for the sale as their income... wasn't one of the main reasons we declared independance from England double-taxation???
The article mentions taxing orange juice as a drink but it would be exempt if it were classified a fruit. This got me thinking... This unified system is looking real bad and here's why:
I live in MA and work in CT. In those two states there are 5% and 6% sales taxes respectively, but in both of them, all food (non-restaraunt/meals) is exempt, and all clothing items under a certain $ amount (I forget the amount, but it's like individual items over $100 or something) are exempt.
I'm wondering how the new unified system will handle those kind of things, or are they saying that states that adopt this agreement will change their policies.
I'm bothered by the idea that this "remote tax grab" would mean that items essential to living (ie. basic food and clothing) that have traditionally been exempt from taxation in some states would lose that exemption. I traditionally lean Right in my political opinions, but this strikes me as a rather regressive tax policy.
The Digital Sorceress
If this is truly unconstitutional, then support a lawsuit, and count me on your side. This is not taxation without representation, slavery, or an irreversible abuse of power. Your dreaming if you think our bankrupt (in more ways than one) state governments are going to overlook the taxation of online sales.
I've moved to Canada, all the rest of my family is in the United States. I like Amazon because I can order from amazon.com to have things sent there and they can order from amazon.ca to have things sent to me. I had things shipped there in my name for Christmas last year so they'd be all ready when I got there.
It means I don't have to:
1) Explain every single thing to the assorted (and generally cranky around the holidays) border guards and airline security people.
2) Worry about needing to pay duties on anything.
3) Worry about what the weight limit is for my flight.
4) Worry about delivery. It gets delivered a heck of a lot faster than if I had something sent to the US from Canada. The post office's "next day" service to the US guarantees it'll be there in a week... or so.
I could care less about sales tax, for the most part. The ability to order things cross-border will keep ecommerce a useful option for me.
~ Leilah