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Amazon To Comply With Kansas Sales Tax Law
theodp writes "Online retailer Amazon.com will begin collecting sales tax on Kansans' Internet purchases in April, company officials told legislators Tuesday. Kansas' new destination-based sales tax law took effect last July."
I live in Oregon, one of the few states without sales tax. So it is already pretty much that way for me. On Amazon I might purchase the hard to find items, but if you can find it local it is usually better. It's not only the extra shipping that you have to pay, it is also having to wait a few days to get your item. Plus their prices aren't all that great, they just have a huge selection.
What people miss is that, if the store does not collect tax (no tax) then the buy still needs to pay the tax.
Interstate shipping is viewed more as wholesaler transfer. When you buy out state, you are importing goods to your state. If you "consume" them then you pay the local tax on the "consumation" based on your price. If you sell them retail, you collect the tax and pay that.
This is what business have done for years.
It is what you should be doing today.
Amazon has a distribution center in Kansas. Other companies that don't have a presence can safly ignore Kansas law.
Moneyed corporations, non-working 'poor' and criminal prisoners are turning productive citizens into tax-slaves.
Sales taxes are one of the most practical ways of doing this. Determining taxes at the point of manufacture is dicey (when is an automobile really "built"? when the engine is inserted? what's a car without bumpers really worth?) and collecting taxes during wholesale is impractical because goods can be transferred more than once among wholesalers.
But at the point of sales it's easy: there's a fixed price, discreet items being sold, a single transaction, and the state collects the taxes from the retailer so the consumer doesn't have to keep records or be relied on to report the transaction. And since retailers are generally licensed, the state knows who they are.
They're a pain in the ass for retailers to keep track of, because typically some items are non-taxable (food, services, clothes, varies from taxing authority to taxing authority) and some consumers are exempt from sales taxes (churches, gub'mint buyers, again varies...etc). Back in the 80's I was writing Point Of Sales software, and this stuff made it a lot more complex than it needed to be.
[Personally, I can't stand sales taxes. Michigan had a 4% sales tax, and for some screwball reason raised it to 6% about 10 years ago. Foolish voters. (I was a non-resident at the time.)]
Get off my lawn.
Usually this is the case, and it's called a "Use Tax" levied by the state where the items are going.
The biggest problem with Use Taxes is that they are hard to enforce. For example in my area (VT/NH border area), a substantial fraction (well over 80%) of the retail businesses in the border area are all on the NH side, so much of Vermont shops over here to avoid the VT sales tax (we don't mind much, it brings in business). Of course, in reality, everything they buy over here that they drag back over the border is subject to the Vermont Use tax (which is the same value as the sales tax), so if they are being completely legal there is no price advantage at all. The problem is that Use Tax is so hard to track, that all the state of Vermont does is have a line on your taxes to report all this stuff, and they rely on your honesty to report it all. Of course, a simple polling of the Vermonters I know show that, unsurprisingly, nobody reports any realistic values, so the tax goes mostly uncollected.
This situation is similar in many other border areas, although usually the tax rate differential is even lower, meaning there is less motivation for the state to enforce it.
The ideal solution is to either (a) figure out a way to enforce it (which is what many states are trying to do with online retailers), or (b) give up on it and find a way to tax that is halfway enforceable.