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End of the Internet's Tax-Free Ride?
News.com has a piece looking at renewed efforts by both state and federal lawmakers to subject Internet sales to state taxes. "Two bills are pending in Congress that would allow tax collectors to target out-of-state Internet and mail-order retailers, and their supporters are optimistic about their political prospects... Meanwhile, pro-tax states are trying their own ways to circumvent a long-standing rule saying a retailer must have physical presence before it can be forced to collect taxes. One effort came from New York state, where legislators recently approved a measure requiring Amazon and other online retailers (that lack a physical presence in the state) to collect sales tax on New Yorkers' purchases... This is not exactly a new debate... But now, with a Democratic Congress and a potentially Democratic administration next year, the arguments may gain more political traction."
More taxes... I'm sure everyone feels a lot of sympathy for them with it being tax season and everything. I'm sure it will be a lot of fun for small mom and pop retailers to deal with filing paperwork and collecting tax in 50 states just in order to sell trinkets off a small business website.
It will be interesting because they probably don't have standing to collect. They would either have to collect from the customer or setup a customs system when the goods enter (are imported?) to the state.
This doesn't bother me, not in the least. I can remember a day, when any use of the Internet to sell anything was abhorent. Advertising of any matter was viewed with disgust.
Now, due to the greedy bureaucratic fatcats who wish to tax the little guy to the bitter end, we might see a drop in pointless port 80 communication. (Present company excluded, of course).
I say bring it, lets clean the fat off the bone.
Hi, I Boris. Hear fix bear, yes?
There are ALREADY laws and taxes in place! A state does not have legal authority to impose taxes on a sale made in another state. That is, it cannot force an Oklahoma retailer to collect California sales taxes for a sale made to a Californian.
However, as far as I am aware ALL 50 STATES have "use taxes" in place, that are supposed to be paid for out-of-state purchases. In most cases the amount of use tax is identical to what the sales tax would have been if the sale had been local. The difference is that the purchaser, not the seller, is responsible for paying the tax. This is the way it MUST be... neither the individual States nor the Federal government have the Constitutional authority to force a business to collect taxes for the other 49 states. And even if they could, it would be an excessive burden... trying to keep track of tax rates for different kinds of products in 50 individual states is beyond the reasonable capabilities of most small businesses, which even today are still the backbone of our economy. Further, the Federal government also does not have the authority to collect State taxes on their behalf.
The taxes are already there. The laws are already in place. If they don't like the way that works... too bad. They just do not have the Constitutional authority to do this. And there is nothing new here, either... people have been buying by mail-order for at least a couple of centuries now, and this debate has been going on all that time. DO NOT let them try to tell you that eBay is forcing their hands. Hogwash.
Normally, brick and mortar taxes are supposed to pay for police, fire, and whatnot.
This internet tax doesn't use any of that. The fees we pay for shipping and handling cover the road fees required to bring the product to our door.
I already pay tax on my internet service.
if you steal from one source, that is plagiarism, if you steal from many, well, that's just research.
Deal with it.
It's reality.
Reality is a heartless, cruel bitch.
"The fight for freedom has only just begun." - Geert Wilders
An AC speculates,
"Other, more likely solutions exist. Most notably, strong financial cryptography that makes secure currency transfers possible. They can't tax what they can't track."
This is only feasible with individual-to-individual transactions, which are a trivial minority of internet sales. The moment you become a business, you are already tracked in numerous ways, not least of which is income tax. Your sales, and any sales tax due therefrom, are concomitantly tracked via your declaring and paying taxes on your income, which as a business you will do, so the gov't doesn't socially rehabilitate you.
Likewise sales in a public forum like eBay, which by their very existence declare to the tax board that income has occurred at one end or the other of the transaction, and therefore needs taxing.
~REZ~ #43301. Who'd fake being me anyway?
I want my government reduced to 1890 levels, and armies of government useless eaters forced to find honest work.
Too much Law; not enough Order.
Maine does something similar. I moved there in Oct 2005 and had to pay Maine state income tax on what I made before I moved there. Then, when I moved back to Florida in 2006, I still had to pay Maine on what I made AFTER I moved out of the state.
Wisconsin is similar. I got double taxed one year because I was out of work and earned $0.00 in Wisconsin, and I moved to Oklahoma almost exactly in the middle of the year and earned about $20k in Oklahoma. Well, according to Oklahoma tax law, I owe income tax on the income I earned in the state, and according to Wisconsin tax law, I owe income on 1/2 the income I earned in that year because I lived there for half the year. So I was out of work half the year AND had to pay more than my fair share of taxes.
If you are not allowed to question your government then the government has answered your question.
The usual lament about mod points. Well said. Exactly right. There is no justification for this tax. How about cutting spending instead. The government is way bigger than it needs to be. And I can't decide which party is worse. After all the DMCA was put in place under Clinton's watch, no? Are we going to have corporate welfare like that *and* all kinds of fucking ridiculous new taxes. If this passes I will definitely be ordering more computer parts from Canada. Canadian internet retailers are going to love this. And for anyone who thinks that this tax can just easily be passed onto the consumer, you are in dreamland. Aint gonna happen. Look up the term "elasticity" in a microeconomics textbook. Most stuff that places like Amazon or Newegg sell are not exactly necessities in life. If stuff costs more people will buy less of it. Doesn't matter if the cost is profit for the gov't or for the business.
Quite an experience to live in fear, isn't it? That's what it is to be a slave.
The end of the internet tax subsidy is long overdue. Why should local businesses be at a disadvantage to mail-order companies that have zero commitment in the local community? These local businesses (most of them small businesses) provide the vast majority of jobs in a particular region. Exempting mail-order houses from certain responsibilities essentially encourages outsourcing of jobs.
It's not true that the mail order industry pays for what it uses through fuel taxes and other fees. Sales taxes are an important resource for local units of government. Roads get built with them. Transit gets built and operated. Services get provided.
Taxes are the way we invest in our community and our common future. Why should some companies be exempted from their civic responsibility?
I hate to say this, but Americans are very undertaxed relative to govt spending. The only thing worse than heavy taxes and heavy spending is light taxes and heavy spending (i.e. what we have now), because it WILL have to be repaid... with interest! Our deficit spending is killing the dollar, sending gas prices (and all imports) sky high.
What is killing the dollar is that its losing its place as the reserve currency of the world. This has a little bit to do with spending, but more to do with oil being traded in different denominations now.
At the risk of getting burned at the stake, I do see a problem with the mentality that it's "our money" implying we deserve to pay no taxes. We drive on the roads, we expect the fire dept and police to show up if necessary, we cheer on the troops - then we expect it all to be free.
With the exception of the troops and interstate highways, those are local issues. They don't excuse the high federal taxes. Yes we do 'drive on roads', but you should pay for that via a usage tax, (ie tolls) so that the people who use the roads pay for the maintenance. Yes, local people want local police and fire departments. That has nothing to do with federal taxes. The argument that we get all these 'great services' from the government in the US is shortsighted since most of the services we care about are handled, or best handled on a local level.
Could we disband public education and save a few bucks in tax money?
Again, you have to think about federal vs state in the US. The Dept of Education gets 68.6 billion dollars. 8% of that actually goes to schools. Now, the federal government sometimes does pass decent laws (NCLB was a mixed bag) that help, but not EVERY tax dollar you spend on education is used efficiently.
Sure, in the short run, but about 20 years later the GDP would fall by many times the amount "saved."
There is no proof of this. The reality is, if you disbanded public schools, you'd end up with a private system. Most kids probably would get a better education, but the poor would likely be left behind.
Sometimes taxing and spending is worthwhile.
That isn't a good excuse for overspending.
I think we need a balanced budget amendment to the Constitution. This idea has come and gone many times, such as Grahm/Rudman, and later Ross Perot advocated it. Our current course, especially since Reagan, is nothing short of robbing our children and grandchildren.
I think it's a good idea. I don't think Reagan 'robbed our grandchildren', and I do think the military spending was justified at the time. I don't think it is now.
Whether the deficit is resolved by cutting spending or increasing taxes, at least it would force us to be honest. We have proven beyond doubt that we're not capable of using the good times to repay deficits incurred during slowdowns.
I don't see how we'll ever repay the deficit. If it ever comes to that, expect a 'do over'.
I do agree that some taxation is needed for services on the local level. I can even live with the federal government taxing for interstate highways, the military, and possibly some income redistribution. I really think a balanced budget amendment and a 'war tax' would go a long way. The main philosophical problem I have with high federal taxes is that they're hard to get changed. At least when it comes to state and local taxes your voice can be heard, when something gets passed on a federal level, the odds of your congressional representative giving a shit about your point of view are slim.