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Ban On Internet Sales Tax Ends Saturday
donnyspi writes "As reported in the Rocky Mountain News, among other places, the 5 year ban on collecting sales tax on purchases over the internet is scheduled to end Saturday. 'The original moratorium was established in 1998, renewed in 2001 and is set to expire Saturday. The U.S. House of Representatives passed a bill in September that would expand the ban and make it permanent. Similar legislation hasn't yet been voted on in the Senate.'
When mail order business was getting started, the traditional businesses and the government moaned and groaned about the lack of tax return... However, today nobody is looking to tax mail order. Why not?
Mail order is been around far longer than the internet.
The internet is a wonderful business model and vector. Let us not soil it with taxes just yet.
Davak
I see no reason why Internet sales should be treated any differently than catalog or telephone sales.
If I buy a widget from Company X via a catalog when I live in a different state than Company X, I'm not charged Company X's state's sales tax. But when this moratorium expires, I could be charged state sales tax if the purchase were over the Internet. And then, which state's sales tax would I have to pay?
Why should the medium of the purchase dictate the taxation rules? I, for one, would like to see sales tax laws universally applied for interstate commerce.
Anyhow this probably won't be a big deal for most internet businesses except for the paperwork. It might not hurt them at all if there is a provision made for the expense of collection. It will hurt those that were only in business because they were a tax dodge.
You'd be surprised how much a little extra paperwork can cripple a sole proprietorship (I'm not allowed to have employees unless I change my business status and incur another whole world of complications), already being run in combination with a second job, like me. Collecting and remitting state sales taxes, along with regular accounting, and reconciling that with federal income taxes and piles of extra forms is already a huge hassle and confusing as Hell. The ONLY way internet sales tax will work is if they establish a tax system outside of the existing tax codes and districts... like if I no longer remit TX state sales tax and just collect (for example) a "national internet sales tax" of X% that's divided between the states or something.
If you ever looked at the tax districts, codes, what goes to states, city and metro jurisdiction... well, it's forked up. If they try to dump a convoluted national internet sales tax thing ON TOP of that, I think it would force a lot of small internet businesses like me to just throw their hands in the air and give up entirely.
My Webcomic: Asylum on 5th Street
What about the possibility of forming a Non-Profit organization that one could be part of and through which one could bypass sales tax? Would there be any advantage to making it religous based? Political party?
In this neck of the woods, 10% of businesses avoid taxes this way, but we still need to extend this privlege to the common man. Any suggestions on how to achieve this?
Each member runs there own division?
Warning: This is slightly offtopic but applicable to internet taxation nonetheless.
One of the biggest complaints about sales tax is that (in brick and mortar outlets) you never know exactly how much you're going to pay for something. For example, I run over to Walmart and I want to buy a can of Spaghetti O's. The label reads $0.79/can. If I have $5.00 in my pocket, I can buy 6 cans... or can I?
If I'm in an area with a different sales tax as the one I'm familiar with (in Louisiana sales tax varies from parish to parish where parish is the rough equivalent of a county), I may miscalculate the tax and I might not have enough at checkout.
I REALLY wish the government would pass a law that all taxes must be included in the labeled sale price. The seller should take into account the appropriate sales tax when deciding how much to sell an item for and the state should just take a percentage out of the seller's gross sales. It would take an unneccessary burden of the consumer.
If they did this and got rid of the penny, think of how much easier shopping would be. Keeping track of $0.50 for this, $0.35 for that, $20.50 for something else would be a lot easier than $0.39 for this, $1.99 for that, $19.99 for something else plus tax.
They should do the same thing for the internet if they levy an interstate sales tax on items bought on the internet. Granted, it's a lot easier to hit "cancel" on a web checkout form than to put things back at a grocery but it would set a nice precident.
P.S. -- VERY OT, has anyone else been getting lots of Server 500 errors when browsing Slashdot over the past week? I used to never get any and now I'm getting them in roughly one out every five page views... weird.
In good old ohio we are sopost to pay tax on all mag and internet out of state sales. I dont have a problem paying taxes. What I dont get is why i have to pay ohio. I mean i consider a mag or internet sale as the same as getting into my car and driving there. I think I should have to pay right then and there, at the place of purchase. Why should ohio get money when they dont support the business nor do they promote new businesses to come.
I say have all internet sales tax tax right there as if i was there in person. You wanta buy from ca instead of your own state, fine, but pay ca taxes. This would make states WANT to have internet business instate, or else loose money to other states that are supporting the business.
"Government's view of the economy could be summed up in a few short phrases:
If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it."
-- Ronald Reagan
We need to put an end to this aweful cycle.