Bipartisan Internet Sales Tax Bill Introduced

jfruhlinger writes "Four senators, including both Democrats and Republicans, have introduced a bill that would allow (but not require) states to collect sales tax on items purchased by residents online, even the seller has no physical presence in that state. Sellers would be able to pay through either the existing Streamlined Sales and Use Tax Agreement or a new alternative tax simplification plan. Battle lines are being drawn predictably: brick-and-mortar retailers love the idea, Internet-only sellers hate it."

Comments

Bipartisan support

[Totenglocke]

Because the one thing all politicians can agree on is that they want more of your money.

Re:Bipartisan support

[Kenja]

And citizens want police & fire departments, better schools, better public transportation, better water supplies, better sewers, better roads, better bridges, etc. What they dont want is to have to pay for any of it.

Re:Bipartisan support

[TooMuchToDo]

Everything you just listed above is paid for in my property taxes, my fuel taxes (both that I pay and UPS/Fedex when delivering my Amazon packages), and my water bill. Why you need sales tax from me if I'm not using a brick and mortar store to buy something?

Re:Bipartisan support

[Dunbal]

If by "paying for it" you mean "paying at least 20 times what it's actually worth, then no, they don't want to pay for it. Paying for some lard ass to taser everyone he sees in the name of policing, or some pot-hole filled monstrosity that's always under repairs in the name of roads, or some zero tolerance school that teaches kids to walk through metal detectors, etc etc etc is not "better".

Re:Bipartisan support

[Dunbal]

Eh no - haven't you heard? Every single penny of every type of tax you pay ever only covers 38% of government spending. None of what you mention is "paid for" by you. Not even close. But the solution isn't to tax more, it's to spend less. I can't believe the amount of sheep who scream "rob me rob me yes please rob me some more!" in the name of raising taxes however whenever a tax hike is proposed, though. I guess I'm too old and too cynical now.

Re:Bipartisan support

[ackthpt]

Its the only legal way I'm aware of. Taxes are how the government raises money to pay for things. The only other option is a loan or bond, which still needs to be repaid with taxes.

Alas, the government has got away from responsible borrowing and gone credit-card-crazy.

First thing is pass federal law, which requires 66% in House and Senate to exceed revenues from prior year, further tying the overage to a repayment plan, which cannot be rotating (borrow again to pay the prior loan.)

Second, pay down the debt - all of it. After that, taxes could be lowered greatly. Probably never see it in my lifetime, though.

Re:Bipartisan support

[Kenja]

But we're talking about state taxes, not federal. For example, every election cycle here in CA we tend to vote YES on things like highway improvements but NO on taxes to fund them. Thats why CA is in the mess its in, because our state constitution requires a separate vote for funding and no one wants to pay for the stuff they want the government to do.

Re:Bipartisan support

[abhi_beckert]

Exactly how much tax is collected is a perfectly valid topic to discuss. But a successful nation needs to collect some kind of tax, and the tax being collected needs to be fair.

Making a local business charge tax while their competitors on the other side of the country (or planet) don't charge tax is damaging to the local economy.

Re:Bipartisan support

[PopeRatzo]

Yes, because tax dollars are the ONLY way to pay for such things. Great straw-man argument.

OK, how do you pay for police & fire & sewers without taxes?

Or maybe you believe crime victims or people whose houses are on fire should have to swipe their credit card before any help is sent.

Re:Bipartisan support

[Anguirel]

Yes, how dare the people working in the government expect retirement plans and healthcare? Clearly they should all be doing their public service as volunteer work.

Re:Bipartisan support

[riverat1]

You are talking about Federal taxes, not state and local taxes which is the subject of this post. In general state and local governments are required to balance their budgets.

Re:Bipartisan support

[hedwards]

Or you have absolutely no clue how expensive things are. Services have been cut back pretty substantially over the last 3 decades or so to the point where infrastructure is beginning to literally fall down. It's not the spending that's the issue it's the refusal to collect the taxes necessary to maintain what we have.

Around here the infrastructure has been crumbling since at least the late 70s and it's gotten to the point where the city is just working on the worst streets first and has a tremendous backlog. And this is a city in which the voters generally understand that we need to pay taxes to maintain and invest in the infrastructure.

Re:Bipartisan support

[riverat1]

I have no objection to you buying from online retailers. I just don't think they deserve an advantage over other retailers by not having to collect the sales tax. I buy some things online but other things at brick and mortar stores. For some things I want to be able to touch and feel them before I buy and having a local place to go back to if you have problems, someone who has to look you the eye, is good for resolving them. In the end it doesn't really matter much to me because I live in Oregon. We don't have a sales tax.

Re:Bipartisan support

[Buelldozer]

"ervices have been cut back pretty substantially over the last 3 decades or so to the point where infrastructure is beginning to literally fall down. "

Yes, and meanwhile there has been an explosion of six figure salaries in "administration."

Re:Bipartisan support

[Mr. Slippery]

some lard ass to taser everyone he sees in the name of policing,

If you want better cops, you need to pay better salaries to attract more qualified people and pay for more training.

or some pot-hole filled monstrosity that's always under repairs in the name of roads

If you want better roads, you need to pay more maintenance, and for a higher grade of construction.

or some zero tolerance school that teaches kids to walk through metal detectors, etc etc etc is not "better".

If you want better schools, you need to pay to repair the buildings, and pay for more and better qualified teachers.

All the problems you cite are evidence that taxes are too low to support necessary services. The idea that "underfunded public services suck, so we won't tax the wealthy to pay for public services" meme is the most irrational idea floating around in politics today.

Re:Bipartisan support

[paper tape]

The problem is that the government is made up of people who want to be re-elected - and what they have learned is the best way to do that is to pander to the special interests that finance them, and also to the electorate with handouts, subsidies, grants, kickbacks, loans, credits, bailouts, loans, etc.

All of those things cost money - and the people who write and pass the laws that create them have for decades done so without any consideration for how much they cost. Every year, the government just borrows more money to cover the additional spending. This is not a Republican problem or a Democrat problem - both major parties are equally guilty - they just want to spend the money on different things.

I'm very conservative. Despite that, I'll agree taxes probably need to go up at this point - BUT... with a couple of caveats:

1) Since the federal government has proved that it is incapable of reining in its spending, increased taxes by itself is not a solution - without some sort of enforced fiscal responsibility, they would just treat increased revenue as a license to increase spending. To that end, a balanced budget amendment is an immediate requirement. If necessary, peg spending to income, and pro-rate all budget items - but it has to be done.

2) The income tax needs to be replaced with a flat, federal sales tax that exempts food and clothing below a set dollar amount that is indexed to inflation. This accomplishes several things. First, it closes all the tax loopholes that the ultra-rich use to pay lower tax rates than the middle class. Money does them no good unless they spend it, and when they spend it, they pay taxes. Second, it abolishes corporate income taxes (which are just taxes on the customers of those corporations by proxy, since the corporations simply pass the costs of those taxes on to the consumer). Third, it gives private citizens at all income levels a stake in paying for the services and monies provided by the federal government. Currently almost half the population pays no federal income tax. As a result, they often have no concern for the costs of benefit programs. This change would mean that the "poor" while not taxed on basic necessities, would be paying some tax - and that tax would increase as federal spending increases. "Want national healthcare? No problem. Your taxes will go up X amount next year to pay for it."

Re:Bipartisan support

[Alastor187]

I'm very conservative. Despite that, I'll agree taxes probably need to go up at this point - BUT... with a couple of caveats:

I don't agree, raising taxes will just exacerbate the problem. Not because it wouldn't balance the budget, but because it just 'enables' more of the same behavior. Federal spending is out of control because the federal government is out of control. The federal government has taken on far more than was ever intended when the country was established.

The federal government as essentially usurped power that should have been reserved to the states. Our financial problems are fundamentally due to size of government (spending) and not insufficient revenue (taxation). As a conservative I understand the need for taxation but it is the size and number of services that I take issue with and therefore don't want to pay the additional taxes required to support those programs.

That's lovely

[wmbetts]

I wonder how long until all of the big retailers are no longer in the US.

Re:That's lovely

[perpenso]

I wonder how long until all of the big retailers are no longer in the US.

That would make taxation even simpler. Your package sits in customs until the use tax is paid.

should pay half, but to both states

[poppopret]

Any time you do a sales transaction over a border, even by phone or snail mail, both places should get paid but each at half their normal rate. Example: You're in a state that wants 7%, and the seller is in a state that wants 4%. OK, your state gets 3.5% and the seller's state gets 2%.

Oregon

[Baloo Uriza]

I wonder how this will fly in states that have a long history of successfully defending it's 10th Amendment rights, where sales tax is unconstitutional.

Ten Senators

[Attack DAWWG]

According to this article it was ten senators—six Republicans and four Democrats.

Re:Conservatives

[cosm]

Conservatives love a good sales tax because it is nice and regressive.

What part of "Bipartisan Internet Sales Tax Bill Introduced" and "Four senators, including both Democrats and Republicans" makes you want to point at just conservatives, besides demagoguing a single party? Almost all politicians love a good tax on whatever. Like the Christmas tree tax that just got added into all the other ridiculous Agri-taxes the fed has imposed over the years to prop up industries the free-market would otherwise have let work out on its own, this is just another federal manipulation of market desires for the wrong reasons. I'm for regulation, but taxes are an area that need 100% overhaul. Not incremental change. Sweeping reform. For the most part we never see taxes being removed. And that is a bipartisan ailment. Regressive taxes favor all the good-ole-boy club members, and their unfairness or however you view it is perpetrated by both parties.

The USPS needs a job.

[jackb_guppy]

Make the USPS the handler of the sales tax system. They are already in position to id your house, down to the City, County, State and whether it is actually city, county, state, federal or other jurisdiction.

Since we already have laws that make the drive of the truck responsible for the items. Then make the carriers which include FedEx and UPS, be the collector, since they are persons handing the package to customer.

This way the calculation of tax, is part of address validation that all these systems use along with freight charges.

More money not always the solution

[perpenso]

And citizens want police & fire departments, better schools, better public transportation, better water supplies, better sewers, better roads, better bridges, etc. What they dont want is to have to pay for any of it.

Wrong. What they don't want is a vast gulf between the amount of taxes collected and the quality of the services and infrastructure provided. For example spending more money per student and getting some of the lowest test scores. Its not that people are unwilling to fund education, its that money is obviously not the problem with education. Something else is broken and perhaps we should fix that first before evaluating what an appropriate level of spending would be.

Or if you prefer, a car analogy: They don't want to pay Cadillac prices and have a Chevy Aveo delivered. :-)

About time

[abhi_beckert]

I'm not sure if this bill is the answer, but it's about time you guys fixed this issue over on your side of the pond. It's just plain stupid that some businesses collect sales tax, while other businesses don't.

All businesses should be paying the exact same tax, under the same laws. Anything else is extremely unfair.

Re:About time

[broken_chaos]

Sales tax is applied to the consumer, not to the business. The business is unaffected, except in how many orders they receive as a result of having lower taxes than buying in-state.

Re:About time

[swillden]

Not just by county, but they can vary by school districts, or even by city!

Indeed. My wife shops at the grocery store near my home rather than one a few miles down the road because even though the other store has a better selection and lower shelf prices, the other one is on the other side of a city line, and sales tax there is 9% while the nearby store's sales tax is 4%. After you factor in taxes, checkout prices at the nearby store are lower.

However, all this tax variation isn't a problem for on-line retailers. Or, rather, it's a solved problem. There are plenty of on-line retailers who have broad physical presence and so have to collect tax in all states, and to do it correctly by locality, so there are services which will give you the accurate tax rate based on the buyer's address and also help you do the accounting to ensure that you pay all of the taxes to the right entities. For that matter, I think many brick-and-mortar chains use these same services because it's easier to let someone else keep track of the changes in the tax rates all over the country.

Honestly, although I've appreciated the lack of sales taxes on-line and the fact that it has allowed on-line businesses to grow when otherwise the combination of fear of buying online plus shipping costs might have buried them, we're past that point. Having to collect sales tax won't make it impossible for on-line retailers to compete with brick and mortar stores, because of all the other advantages on-line sellers have, and it may well prevent the imminent demise of many brick and mortar industries.

I like not paying sales tax for stuff, but the on-line/brick-and-mortar distinction is unfair. If you really don't want to pay sales tax, move to a state that doesn't have sales tax.

Re:I feel a disturbance in the force....

[Anonymous Coward]

Most people already owe these taxes, they just aren't paying them. Some don't know it, some do, but the fact of the matter is that most states already have a "use tax" that matches their sales tax, and is applied only to out-of-state purchases. This is just a way making the online retailers collect the current taxes, instead of the current "Yeah, pay your taxes after the goods ship. Wink, wink." system we have right now. And since it is being done on the federal level, it is entirely legal and constitutional.

Re:Too bad the law is unconstitutional

[Derekloffin]

This isn't the same. That was the state issuing the law. This is the Federal government. The problem before has always been a state attempting to tax interstate commerce, something they don't have the authority to do. The Federal government however does.

TASERS!

[TiggertheMad]

Paying for some lard ass to taser everyone he sees

I would pay for this. Is it like some sort of new reality tv show? "Chubby d00dz taser random people", tonight on Fox.

Property taxes in California

[tlambert]

Property tax increases have their growth rate capped by prop 13, they are not themselves capped.

When a property is sold, the value is assessed, and the tax rate set, so change in property ownership tends to raise the taxes on the property being sold, well in excess of the normal growth rate cap.

The failure in this scenario is that, as a corporate owner, like the Kaiser family, at the time prop 13 passed, they took all of their properties and incorporated a separate holding company for each one of them. When they want to sell the property, they instead sell the holding company, and the ownership on the property remains the same (the same holding company owns it), and therefore falls under the growth rate cap.

Thus individual property taxes go up, and commercial property taxes do not.

If you are buying a house in California, it's probably worth checking out zoning and corporate ownership over a period of several years compared to increases in the non-capped property assessment over the same period of time, and decide whether you will make more money off selling a property without a drastically increased property tax from a change of ownership, but with mortgage deductions, vs. selling a company which owns a property with a relatively low tax rate which will stay relatively low for the new owner of the corporation. You might be better off creating your own holding company, like the big players do.

My personal take on this would be to have prop 13 not apply to commercial properties, which was a very late amendment to the proposition in order to enable exactly this kind of corporate ownership loophole for commercial properties.

-- Terry

Bipartisan fuckery

[fyngyrz]

Yes, and meanwhile there has been an explosion of six figure salaries in "administration."

This. And also, six and seven and eight figure salaries in corporations, yes, those same corporations who won't hire anyone, but are delighted to offshore production while at the same time offshoring income so they don't pay the amount of tax they were intended to, thus putting more of it (taxes) on the backs of the middle class.

But, hey, keep electing rich fucks to political positions, and keep wondering why the tax laws/loopholes favor the rich, while your household budget shrinks every year. It's a frigging mystery, isn't it?

Re:you have no clue at the depth of fraud

[Nite_Hawk]

You are insane if you think teachers are making $100k/year in retirement. My wife used to teach elementary school and was making ~$40k/year with a masters degree in education. If you take a look at the national teacher averages that's right in line:

http://www.payscale.com/research/US/All_K-12_Teachers/Salary

Ok,l lets look at police:

http://www.payscale.com/research/US/Industry=Law_Enforcement/Salary

Wow. Lots of $100k salaries there.