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The End of Tax-Free Internet Shopping?

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."

15 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 aoteoroa · · Score: 5, Informative

      Here in Canada we have always had to pay sales tax on internet purchases. The tax is based on the purchaser's province.

    2. Re:which state(s)? by Samschnooks · · Score: 5, Funny

      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?

      What?!? You expect a simple solution from the politicians?!

      It'll probably be a complex formula that depends on: the card holder's state of residence, where the items were shipped, where the company does business, whether or not the person makes over $250,000 per year, which states the item passes through when it goes from the retailer to the purchaser, and I'm sure some lobbyist will make some other horse shit that I'd never think of in a million years.

    3. Re:which state(s)? by grotgrot · · Score: 5, Insightful

      Also the purchase may travel through several other states. And what happens when I am physically in Alabama (while travelling), order an item to be sent to Montana, use a company credit card based in Delaware and have a home address in California with the item shipped from Colorado manufactured by a company in Ohio, via a website located in Washington.

      I'd much rather see sales taxes abolished since they complicate retail and hurt the poorest people the most (they have to spend most of their income to live and hence proportionally pay way more sales tax).

  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. 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

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  4. Re:Make the Business pay the tax, not the Customer by Anonymous Coward · · Score: 5, Informative

    That's how it's done in the EU. Advantage: Truth in advertising. You know what it's going to cost you. Disadvantage: The sales tax is hidden, so there's less opposition to sales tax hikes. Sales tax is comparatively high in the EU.

  5. Re:good - It's about time by larry+bagina · · Score: 5, Insightful

    You raise an interesting issue. Let's say you download some music, software, movies, etc from teh pirate bay. Today, that's not a crime (uploading -- distribution -- is). But tomorrow, you may be charged with tax evasion or conspiracy to commit tax evasion.

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  6. Re:This already occurs in NYS by XxtraLarGe · · Score: 5, Funny

    Overtaxed? Are you kidding me? If anything, Americans are extremely UNDER taxed. Have you looked at your deficit recently? Have you ever compared your personal income tax rates to any other country's other than tax heavens? I didn't think so.

    That's like saying John Doe is a nicer guy than Joe Sixpack because Joe beats his wife three times a week and John only beats his wife twice a week.

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  7. 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.

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  8. Re:This already occurs in NYS by MyLongNickName · · Score: 5, Insightful

    I'll bite.

    The deficit is a result of us overspending, not us being undertaxed.

    As far as personal income taxes go, rates are low. However, I also pay FICA into a system which I hold little hope of seeing money come out of. My employer has to "match" this tax -- basic economics indicates a large percentage of this ultimately comes from my pay. I then pay taxes to my state. I then pay taxes locally. I pay property taxes. Occasionally I get a one-time assessment. I pay tax on gasoline. I then pay sales tax. Every item I buy has a hidden tax in it as I pay for all of these employment and sales taxes that are bundled into the price of the goods. I have to pay a tax to get a driver's license or renew my plates. I have to pay to get my car emissions tested. My internet and telephone have various taxes added onto them. On certain roads you have to pay for the privilege of driving on them. I am sure there are a half-dozen more taxes I pay that I am not thinking of or am unaware of.

    And what we get back for what we pay for is ludicrous. Welfare for banks and other financial institutions, welfare for folks who don't want to work. And the ability to invade other countries.

    At least in Europe you get a half-way decent health system. Here, after paying all of these taxes, we are stuck paying for our own. And generally, your pension systems are funded. Here, they are underfunded.

    So please don't tell me I am undertaxed.

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  9. Re:This already occurs in NYS by Anonymous Coward · · Score: 5, Insightful

    Insightful? I would have to disagree. The issue isn't a lack of tax revenue, it is one of unchecked Congressional spending. My 11 year old son understands basic budgeting. Don't spend more than you make. If you don't make enough, go out and earn more. Unfortunately, Congress doesn't feel compelled to earn as they can just take. If you sincerely feel that our level of taxation is unfair, why not simply pay more? You can, in fact, do so. Overpay your taxes and never file for a refund. Put your money where your mouth is.

  10. It means the end of mom'n'pop e-commerce by unfortunateson · · Score: 5, Insightful

    A company such as BestBuy, Borders, and so on already collects sales tax for the states where they have a presence.
    A company such as Amazon does enough volume of commerce that they can afford the accounting to figure whose tax is owed to whom.

    But a small company may have only a few cents to collect for a given state over a day, week, month or even year. Counting the beans costs more than the beans are worth.
    Most likely, "Sales Tax Clearinghouse" companies will crop up, which will offer to file your forms with each state and distribute... for another fee.

    When we ran an online store (selling Children's Books), most of our customers were out of state, but we did collect for our home state... which amounted to less than $50 per year most years, especially as many in-state customers were schools and churches (which do not pay sales tax). Multiply that by, what, 48 states that collect sales tax? The paperwork is horrendous.

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  11. Re:This already occurs in NYS by moeinvt · · Score: 5, Insightful

    "We do in fact need higher taxes in order to pay off the monstrous debt we're accumulating."

    NO!!!! What we need to do is stop accumulating debt by getting renegade government spending under control!

    "Only anti-Americans would still be wanting lower taxes given the huge crisis we're facing."

    What happens when an anti-American comes into contact with a regular American? The so called "crisis" was manufactured by the Washington DC power brokers and their politically well connected friends. If we had the limited Federal government that The Constitution mandates, there would be no "crisis". The Federal government sucks the lifeblood out of the economy by taxing the honest hard working citizens. Then they turn around and use the money to fund imperialistic military crusades, line the pockets of the wealthy elites (bailouts, subsidies, no bid contracts, etc.) take a cut of the profits to pay the salaries and benefits of bureaucrats, and if we're lucky, maybe spend 20 cents on the dollar in actual services to the people who pay the bills.

    Social Security and Medicare are supposed to be separate from the general fund. Take that off the table, and then tell me where the government is spending your tax dollars.

    Foreign Wars
    General military spending
    Bailouts
    Interest on the national debt
    Welfare programs (non SS or Medicare)

    Things like education, infrastructure spending, science and research funding, etc. barely make a dent.

    If you feel like paying more taxes to fund U.S. imperialism, enrich the financial elites and well connected corporations and pay for welfare programs, the government is accepting donations.

  12. Social Security is an example of practical govt. by sirwired · · Score: 5, Insightful

    Yes, ideally, folks should save for their own retirement. However, practically, most people except the most hardcore libertarians are against deciding you should starve to death because you ended up with insufficient cash when it came time to retire. What do you do for folks that lose their money through theft? They get to starve because they were unlucky?

    Many of the "problems" with Social Security come when people think of it as a govt. mandated retirement fund. Yes, when looked at in that light, the costs are high and the returns poor (although the requirement to invest only in T-Bills was a stroke of genius; if the trust fund were in private investments I can only imagine the pork-barreled SNAFU that would be.)

    However, Social Security was not conceived as a retirement program, it was conceived as an anti-poverty program for the elderly and unable to work. Looked at in that light, it makes a lot more sense: we (the citizens of the U.S.) achieve a jointly decided on societal goal of trying to keep penniless elderly and disabled fellow citizens from literally starving to death due to hunger.

    There are real problems with Social Security as it currently exists, but its very existence is not one of them.

    SirWired