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The End of Tax-Free Internet Shopping?

Posted by timothy on from the awaiting-a-60-cent-refund-check dept.

Mordok-DestroyerOfWo writes "If a little-known but influential alliance of state politicians, large retailers, and tax collectors have their way, the days of tax-free Internet shopping may be nearly over. A bill expected to be introduced in the US Congress as early as Monday would rewrite the ground rules for mail order and Internet sales by eliminating what its supporters view as a 'loophole' that, in many cases, allows Americans to shop over the Internet without paying sales taxes."

9 of 784 comments (clear)

  1. which state(s)? by pak9rabid · · Score: 5, Interesting

    Ok...so which state will the taxes be going to? The state in which the business operates out of, or the state in which the purchase was made in, or both?

    1. Re:which state(s)? by plague3106 · · Score: 4, Interesting

      Heh... the company I work for sells products. If we send the invoice to CA, but the product anywhere else, we pay CA tax. If we ship the product to CA, we pay CA tax. If the person that made the order is in CA, but it's being billed and shipped elsewhere.. we pay CA.

      We also had NY make us pay sales tax because we DROVE THROUGH NY to delivery products ourselves to PA.

    2. Re:which state(s)? by EtherMonkey · · Score: 4, Interesting

      I think you're incredibly naive.

      While there's plenty of examples of retailers overcharging on shipping, when you understand the overall pricing model you'll realize that the most popular retailers seldom net more than 15% and often as little as 8%, except for specialty/collector/restricted products. And this isn't considering their overhead and business expenses.

      For example, I resell computers and the spread between my distributor cost and HP's own website is 8 - 12% before considering my overhead. If I advertise my prices above HP's, nobody's going to buy from me. But if I meet my distributor's minimum order and pay immediately I get free shipping. So, to attract customers I advertise just above my cost (to not get charged with dumping or gray-marketing) and make up my overhead and profit by charging S&H. It's the only way I can stay in business.

      Anyway, if you think there's some extra 7% of profit margin hiding in today's Internet-powered, dog-eat-dog marketplace, you are about to be very disappointed. The environment is way too competitive for that. Shit, half the time I buy my components from NewEgg because its cheaper than the big distributors. Just look out for those free shipping deals.

      --
      --- A man with a briefcase can steal more money, than any man with a gun. [Don Henley]
  2. Oh thank goodness by Deosyne · · Score: 5, Interesting

    I was beginning to worry that I might actually be able to spend the remainder of the money that that the government lets me keep each payday without having them take more from me. I'm so glad that they're working hard to prevent that from happening.

  3. Make the Business pay the tax, not the Customer by janeuner · · Score: 4, Interesting

    The difference?
    Price Tag: $2.99
    Total: $3.15

    - versus -

    Price Tag: $3.15
    Total: $3.15

  4. Only if you make over $250,000 by ArcherB · · Score: 5, Interesting

      "I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes."

    "You will not see any of your taxes increase one single dime."
    -- Barack Obama

    --
    There is no "I disagree" mod for a reason. Flamebait, Troll, and Overrated are not substitutes.
  5. It's All Greed by Nom+du+Keyboard · · Score: 4, Interesting

    It's all about greed. The internet company operating outside the state (if they're in the state they're already paying taxes) isn't using any of the infrastructure that the taxes pay for. If anything, they should be paying taxes in the state where they do the business, but then you have customers in other states paying out-of-state sales taxes which don't benefit them and aren't fair either.

    The current system has worked well for many years. What hasn't worked well over that time is politicians controlling their spending of other people's money in their attempts to buy their way into continued future paychecks. Now they're out trying to steal even more from you.

    If we threw out these politicians trying to vote this in as just yet more Big Taxers and Spenders then this stupid and unfair idea might actually go away for a while.

    And it goes without mentioning the problems any Internet company would face in computing the proper state, county, city, and even borough taxes properly and paying them to all the proper taxing authorities. This is MANY TIMES the burden any local business faces. Talk about an attempt to kill internet companies - you couldn't have come up with a better scheme.

    And think of the companies (FedEx, UPS...) which depend of them for a large chunk of their business. Raise prices, kill off companies, are you really trying to make this recession worse!

    --
    "It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
  6. Re:This already occurs in NYS by networkBoy · · Score: 5, Interesting

    fine then I want less services.
    Specifically I don't want services not enumerated in the US or state constitution.

    --
    whois gawk date unzip strip find touch finger mount join nice man top fsck grep eject more yes exit umount sleep dump
  7. I just wish we'd adopt the VAT paradigm by Asmor · · Score: 4, Interesting

    I don't mind paying taxes, but I wish the US did something like VAT in Europe.

    Basically, the prices you see advertised already include the tax in them. No trying to figure out 8% of some number, no more $2.99 item being just a hair over $3 and filling your pockets with loose change.