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States Push to Collect Online Sales Tax
Carl Bialik from the WSJ writes "On Saturday, 18 states will implement the Streamlined Sales Tax Project, which will make it easier to collect local and state sales taxes on purchases made over the Internet while offering amnesty on uncollected taxes. In their longstanding opposition to collect sales tax, many online retailers 'have cited a 1992 Supreme Court ruling that said that it would be too onerous for e-tailers to calculate all the permutations of differing state and local tax rates,' the Wall Street Journal reports. 'One goal of the project was to remove the ruling as a key defense for online merchants.' Is your state involved? 'The states that have signed on are Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Nebraska, New Jersey, North Carolina, North Dakota, Oklahoma, South Dakota and West Virginia. Five more -- Arkansas, Ohio, Tennessee, Utah and Wyoming -- are in the process of finalizing the requirements needed to join, while Washington, Texas and Nevada are in earlier stages.'"
BTW, there's been a noteable increase in Wall Street Journal stories on Slashdot - certainly has improved the quality - kudo's to the editors and Carl Bialik from the WSJ
halloween webcam is coming
Hulk SMASH Celiac Disease
They call it a "Use Tax" on thier tax form, been doing it for two years now. :/
"Enjoy what you're doing! If it becomes drudgery, you're doing it wrong!" - Jim Butterfield
I think the fed hasn't implemented some sort of online tax as of yet because they haven't figure out how to. They tax everything they possibly can, internet sales are the next logical step. I think the biggest issues are, if you live in TX and order something from MD, where do you pay sales tax? What if you order something abroad? It is insane to think you would have to pay sales tax for the state you reside and the state you are purchasing from.
But if you can dream it, they can tax it.
Thank God you can still lie to servers about your location (sheesh...)
Physics is nothing like religion. If it was, we'd have an easier time trying to raise money!
Couldn't be any worse than what California already puts me through. They want you to report sales for each individual tax district in the state. Most of my sales are out of the state, and probably half are out of the country, so I've got very little to report there - I wind up paying 6 cents to one county, 12 cents to another, and so on. Or at least, that's how I'm supposed to do it. In reality I just go nuts and grossly over-pay them all - 50 cents for everyone!
So I'm a little skeptical about just how 'easy' they consider a reasonable system to be...
How is ordering over the Internet different?
No folly is more costly than the folly of intolerant idealism. - Winston Churchill
A guy named Guido broke my leg last week. He said that if I paid this year's protection money, he wouldn't break it three more times for the last three years I've been in business. In other words, rather than threatening or extorting, Guido enticed me into paying my protection money.
Entice. They keep using that word. I do not think that word means what they think it means.
But you guys in Nebraska. You already have high property taxes, a state income tax and now they're trying to add this. Plus really crapass weather in the winter. Just doesn't seem fair.
That's our life, the big wheel of shit. - The Fat Man, Blue Tango Salvage
Well, it sucks that they are getting around to figuring out how to tax online purchases. However, I can't really fault them for doing it. As more and more sales go online, there is a real issue with decreasing tax revenues. It probably won't be a critical issue for decades, but the fact is that governments need taxes to operate and I've always tended to prefer sales taxes over income taxes.
Here's to being from Mississippi, where they aren't smart enough to know to tax this here Inter-Net. ;)
Prior to online sales, the rule was that if the seller had what is called a 'nexus' (meaning a busines presence basically) in a given state, then sales tax applied. The buyer and seller did NOT have to be in the same state if nexus could be established.
While I disagree with this arguement, it *could* be argued that the Internet creates a presence in every state, far beyond the old days of mail order catalogs.
What it really boils down to is politicians on both sides of the aisle hate seeing money being exchanged that they can't get their greedy hands on.
Many states, Ohio being one, tax all purchases that are made out of state and shipped to an Ohio address. There is even a special line on the Ohio income tax form especially for reporting the amount of goods you've purchased online, through mail order, over the phone, etc.
Of course no one I know of that lives in Ohio has ever put any amount there other than a 0. Nonetheless, it isn't accurate to say that interstate transactions are not subject to and have never been subject to sales tax.
The unfortunate thing with living in Canada is that 90% of the stuff you order online will come from the states, which means the Canadian government can tax the living hell out of it as soon as it crosses the border. UPS and Fedex do the same thing, adding on nice brokerage fees for no apparent reason. It was quite a shock a few years ago when my laptop arrived with an apparent COD charge of over $400.
It's better to vote for what you want and not get it than to vote for what you don't want and get it.
- E. Debs
For years, there was a myth that online sales were "cheaper" because you didn't pay sales tax. Rather, the truth is that states, counties and municipalities were being cheated out of collecting legal sales and use taxes.
If you don't like sales tax, then fight your local/state sales and use taxes on principal. But as long as 7-11 down the street has to charge it, why should a company that's in another state be exempt?
There exists no way of exchanging information without making judgments. --Bene Gesserit Axiom
Typically import duty and associated collection charge will dwarf sales tax.
In the European Union you pay the sales tax of the country which the product was purcahsed in. If i'm in the UK and buy something from Finland over the net, then i'll pay 22% finnish sales tax and nothing to the british government. Even though the british rate is only 17.5%.
This works in europe since it's an EU wide practise.
If this is implemented on a state-by-state basis, then it'll generate revenue for the states who implement it first at the expense of eroding their online businesses. It'll have the effect of forcing a large chunk of e-commerce into the states with no sales tax. This already happens in Europe.
As such, it's much more desirable for states to collect tax revenue on products which are shipped TO their state, but this greatly complicates the merchants end.
The article mentions how some states consider candy different than other food as an example of the many little differences in tax code. Another one is different counties charge different taxes - in New York state, Queens county and Nassau county have slightly different tax rates. And then these tax rates change every time a new law is passed. So you have to update your tax tables whenever that happens. Most people who are truly concerned about this pay thousands to get regular Taxware updates. Luckily, right now I only have to worry about one state.
Now in general terms, I would not mind if some flat, national tax were charged on items going from me to a consumer. I could just say "add x.y%" to every sale, just like everyone else would be doing. But the way this is being done is ridiculous. What has happened in the US is that federal taxes have remained the same, I suppose to pay for the increased military spending for the war in Iraq and whatnot, while money the federal government used to give to the states was cut. So now the states are all scrambling to get money, and since the politicians don't want to go after locals, they are fighting to gouge out of state people for taxes. So we have this mess. And it doesn't effect Amazon.com who can afford to pay for Taxware updates and whatnot, it hurts the small businessman like me, who now has a lot more work to do and may have to buy expensive Taxware updates to be in compliance with this. If one steps back and looks at the whole country, this is a ridiculous way to do things. It's not even that I have to pay the tax, if everyone else had to, it's that now I have to be concerned about not just the tax laws of each state, but the tax laws of each county in each state. It's ridiculous. So much for "state's rights".
Article. I, Section. 10., Clause 2 specifically forbids states from collecting intrastate tariffs. But, for some strange reason if they call it a "use" tax it's ok. I'm also guessing that if the south reinstituted slavery under the term "Happy Fun Work" it'd be legal.
Surely if I got to California and buy something, take it back to my state, I'm not obligated to pay a sales tax back here. And if I asked my brother to buy me something and bring it back from California, I wouldn't have to pay my state's sales tax. But for some reason, could it be greed?!, if I pay FedEx to bring it to me, suddenly I have to pay.
I have NO problem paying sales tax. I think that if I buy something shipped from California, for example, California's sales tax should be added to the order. But I see no reason to flush the Constitution merely because states are greedy.
If someone says he and his monkey have nothing to hide, they almost certainly do.
It's not, which should have mail-order retailers worried about this move, because it would almost certainly end up affecting them.
One way to apply this is to charge it based on the state of origination. It is a sales tax, not a purchase tax, even though the purchaser pays that tax for the seller. The seller would pay the tax on all sales to their home state, no matter where the product is shipped.
This would be good news for no-sales-tax states like New Hampshire, because it would encourage e-tailers to set up shop there. I'm sure that some creative loophole-hunter could work up a way to sell from one state, ship from a warehouse in a second state, to a destination in a third state.
Of life's two inevitabilities, they would prefer death to taxes.
Hey now.... We Nebraskan's have a few things going for us. First off, we are a "red state" (both in politics and in football). Next we elected a college football coach to Congress. Third we were featured in SouthPark a few seasons back (when Ike was shipped off to our State by his Kyle because Ike wasn't his adopted brother). Fourth... ahm.. well.. *breaking down* *crying* Oh we got nothing. It really sucks being trapped in this hole. Over a hundred in the summer, below zero in the winter... Not to mention the exodus of young, educated people from the state to cooler states. *sniffle* Well at least our school boards didn't ban evolution from public schools - I am looking at you Kansas.
The article says "states and local governments will lose $18 billion in online sales tax in 2005".
They're not losing that money. It's staying in the pockets of their citizens for them to spend or save as they see fit. All that's happening is that the money is not being filtered through the sticky fingers of the politicians on its path to supposedly benefit those citizens.
Insert witty sig here.
Living in NH (Live, Freeze, and Die) has its benefits, among them no state sales tax. I cannot see how any e-tailer can possibly levy any such tax on me, since there is no sales tax in my jurisdiction that would apply... unless the "tourist tax" (hotels and restaurants) applies.
I'm interested in this only in an academic sense. I think sales taxes in general are regressive and hurt the poor hardest. Income taxes with varying rates based on income are more fair, but could be taken to extremes, such as how Britain used to require 95% withholding on the richest people. Property taxes, luxury taxes, estate taxes (let's not go into that stupid term "Death Tax") and every other tax you can think of each have their own share of problems.
We'll need to face it, there isn't any way that governments can make money that somebody isn't going to consider unfair. The days when the government could survive simply by collecting customs duties (NO TAXES!) are long gone.
"May I have ten thousand marbles, please?"
(or this one at least) that seems like an utterly crazy system of taxation, wouldn't it be easier to set it at (say) 5% for everyone which goes to a central pot and is then distributed to the individual states based on population or estimated online sales or who-needs-it-the-most (or whatever)?
FGD 135
That says they have no ability to tax or regulate interstate commerce?
The supreme law of the land does mean something, you know.
http://lkml.org/lkml/2005/8/20/95
When is enough enough? I know we need taxes for things like policmen, firemen, the military, the courts, roads, etc, but fer cryin' out loud, when I have to work until July 1 just to pay my income, property, sales, gas, ticket, etc etc etc taxes, I'm ready to spend the winter at Valley Forge. If a politican and bureaucrat are getting less of our money to waste because there is no on-line sales tax, and they complain about it, then I for one am against any internet tax.
*sigh* Sorry, I'll go cheer myself up by reading some Thomas Payne and James Madison ... until the government tries to ban those books.
The Independent: Reverend Spooner Arrested in Friar Tuck Incident - ISIHAC, Historical Headlines
I am paying for the privilege of not being surrounded by slack-jawed morons with not a whit of education to their name. I am also paying for the privilege to deal almost exclusively with people who learned to cope with a forced social setting. Even if I do not partake of the educational services offered in my district directly, I indirectly benefit from it every time I interact with the world around me.
Yes, I aware of the state of public education (in the US) today. Everything I said is true, in theory. It is the execution that leaves a lot to be desired.
I work 10 - 12 hour days everyday...
Except for all of those hours you spend posting to Slashdot.
In order to create taxes that treat everyone fairly there are several things that need to happen. The first is that the government needs to be run like a business. Profitibility ought to be important. A yearly loss SHOULD be a bad thing. Second if income taxes were removed and a sales tax was put on all items that was equal across the country those that buy the most goods pay the most taxes. This also means that those who are at the poverty level can buy less expensive necessities and pay less taxes. The people who need a Bentley will in turn be taxed approprately (at the same rate as everyone else) but because it is a more expensive item, more gross taxes are paid. This would remove challenge, and inconsistancy in taxes. Simplification will never prevail. Todays mighty oak is just yesterdays nut that held its ground.
I'm confused. How is buying something on the Internet (when the company is in another state no less) not INTERstate commerce? And since when did the constitution stop explicitly forbidding states from taxing interstate commerce? Now maybe it is arguable that the spirit of that law was that Nevada could not put a tax on goods passing from California to Utah, but I don't think the artlcie spells it out in those terms. I am pretty sure that no state is allowed to tax goods that pass across a border. Of course IANAL so I can't say for sure.
I tried for 5 years to come up with a clever sig...only to realize that I am not clever.
I'm not sure when this all started (maybe all the social programs after the great depression?), but the entitlement attitude of todays society is going to be the downfall of this country.
ooh, I missed this. Anyway, though FDR did a lot that has been built on since, the ball was rolling before he inflated it. Some credit the start to the 14th Admendment and others put it elsewhere. When Lincoln started collecting an income tax of 3% or 5% people were upset, and they only went along with it because the Civil War had to be paid somehow, however compliance wasn't high.
Here's what Col. David Crockett when he was a US Representative from Tennessee said one day in the House of Representatives when a bill was taken up appropriating money for the benefit of a widow of a distinguished naval officer, Not Yours To Give. It's a good read, and I thank someone else on /. for posting it previously.
FalconShould there be a Law?