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End of the Internet's Tax-Free Ride?

Posted by kdawson on from the pay-me-now-or-pay-me-later dept.

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."

7 of 426 comments (clear)

  1. Fantastic by Lost+Found · · Score: 5, Interesting

    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.

    1. Re:Fantastic by Anonymous Coward · · Score: 4, Interesting

      Yeah, but it's going to hurt online retailers. They will have to offer alot more free shipping. The only reason to shop online in my case was because it was cheaper to pay shipping than sales tax, which netted more money in my pocket. If I have to pay sales tax and shipping, then I'm just going to wal-mart to buy what I need. It's more convenient and cheaper in the long run. Plus I don't have to wait three days to play with my new toys. :)

    2. Re:Fantastic by larry+bagina · · Score: 3, Interesting

      some states have a "use tax" where you list the amount of tax-free out-of-state purchases you made and pay sales tax on them when you file your state income taxes. (Of course, most people don't). I am aware of some states nailing people over that, though.

      --
      Do you even lift?

      These aren't the 'roids you're looking for.

    3. Re:Fantastic by LynnwoodRooster · · Score: 4, Interesting
      Additionally, at least in the State of Washington, the State gets to decide if your resale certs on file are valid. If they are not - regardless of a sworn statement from the business/entity that supplied the resale cert - you, the seller, are on the hook for any sales taxes that should have been collected.

      In essence, the only way you can be sure you are collecting the proper amount of sales tax is to collect tax on EVERYTHING, regardless of the actual legal resale or charitable tax status of the buyer. And the buyer's statement is not enough proof to show otherwise.

      Trust me, I've gone through a WA State DOR "audit" and extortion (pay us $10,000 and we'll just forgive that other $4,500 - never mind that our own directions and documentation we provided at your request 4 years ago caused you to underreport and misclassify your business as a manufacturing, not engineering/design company).

      Bottom line for this "Internet Tax" issue: if it doesn't apply to catalog sales, it shouldn't apply to Internet sales. Sales out of state are sales out of state, regardless of the means of delivery of the sale.

      --
      Browsing at +1 - no ACs, I ignore their posts. So refreshing!
  2. THIS IS ASININE! by Jane+Q.+Public · · Score: 5, Interesting

    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.

  3. Re:I'm surprised they don't just make it federal by Ucklak · · Score: 4, Interesting

    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.
  4. Re:Their claim: It's Not Your Money by ccmay · · Score: 5, Interesting
    do you want to be an American who wants to cheat your government deliberately?"

    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.