Federal Court Tosses Colorado's Amazon Tax

suraj.sun writes, quoting the Denver Post: "A federal court has thrown out a 2010 Colorado law, which had already been temporarily blocked in federal court last year, meant to spur online retailers like Amazon to collect state sales tax. 'I conclude that the veil provided by the words of the act and the regulations is too thin to support the conclusion that the act and the regulations regulate in-state and out-of-state retailers even-handedly,' U.S. District Judge Robert Blackburn wrote in his opinion. The law and the rules to carry it out 'impose an undue burden on interstate commerce' and are unconstitutional, the judge wrote. The tax mainly affected online sales of out-of-state companies that have in-state affiliates, usually generating sales through links on their websites." I wonder what this means for the plethora of similar bills in other states. Will Amazon continue to call for a national Internet sales tax if they are all struck down?

Comments

It's pretty black and white

[Ferzerp]

These laws are unconstitutional. The states are free to try to amend the constitution, but as it stands today, their inability to tax purchases like this is one of the most non-vague areas of our constitution.

Re:It's pretty black and white

[NatasRevol]

Just run it by SCOTUS. They changed the 4th amendment yesterday. Why not another one?

Re:It's pretty black and white

[Anonymous Coward]

Not sure if troll? It prohibits "unreasonable" searches and seizures. They were asked, if you're going into gen-pop, is it unreasonable for you to be strip searched? They said no, its not, and here are several reasons. They didn't require all jails to strip search all inmates, they only said it was reasonable in that context, and Alito and Roberts, those evil hate mongering right wingers, added in some wiggle room saying there should be some exceptions.

This kind of judicial ignorance is why lawyers laugh at you. Yes, specifically, you.

Re:It's pretty black and white

[Hatta]

The Supreme Court is engaging in egregious question begging here. They argue that every inmate going into general population requires a strip search, but they ignored whether it was apprpriate for this fellow to go into general population at all.

If every inmane in jail requires a strip search, and strip searches for minor crimes are unreasonable, then it's unreasonable to send people accused of minor crimes to jail at all.

Re:It's pretty black and white

[cpu6502]

I could also make the argument about taxation-without-representation. Who is Colorado to force me to collect sales taxes on my ebay auctions? I live ~1500 miles away & have nobody to represent me in their foreign legislature! That would be like Canada or the UK demanding I collect-and-remit sales tax. Forget that.

Besides the Member States of this union DO have the power to tax out-of-state purchases. It's called a "use tax" and in most cases is the same rate as the in-state sales tax. The problem is the unwillingness of state citizens to cooperate (they refuse to pay).

It is not proper to place the burden on retailers (not just amazon, but also ebay sellers). If the States want the use tax, then they need to start going after their own residents, and punishing those who falsely-claim "0.00 use tax" on their returns.

Re:It's pretty black and white

[blueg3]

They argue that every inmate going into general population requires a strip search, but they ignored whether it was apprpriate for this fellow to go into general population at all.

The Supreme Court rules on specific points of law, not on how they fell the overall case should have gone. Despite how it's portrayed in some news articles, they are not a catch-all "I really think I should have one this case" appeals court.

If you have a suit that claims your rights were violated because you were strip-searched upon admission to jail and you end up appealing that suit, the Supreme Court is going to rule on whether the strip search is Constitutional. If you wanted to make the claim that you were falsely arrested or unjustly imprisoned, you should have made your suit about that.

Re:It's pretty black and white

[Hatta]

The strip search is unreasonable. There is absolutely nothing that could possibly justify the sexual abuse of someone who is falsely accused of paying a fine.

See, the SC didn't even address that. They only addressed whether it was reasonable to strip search someone going to jail. That was never the question at all.

Re:It's pretty black and white

[Anonymous Coward]

Eric Holder is that you?

Re:It's pretty black and white

[bkaul01]

You might try reading the opinion; virtually everything you said is factually incorrect.

The fellow had priors for obstruction of justice and use of a deadly weapon after having run from the cops in the past (he plead guilty to lesser charges), and was arrested on a bench warrant that (due to a clerical error) was still in existence for later unpaid tickets (which had since been paid). Neither side contested the question of whether he should've gone into the general population given his arrest (there was no other option, since he was arrested on a warrant, not merely detained for a traffic violation).

They don't argue that every inmate going into general population requires a strip search. The Court did say that deference to the judgment of jail administrators is needed in cases where they're not clearly in the wrong, and they said that a jail choosing to conduct such searches (for contraband, injury, delousing, detection of gang tattoos, and similar purposes) is not unreasonable for prisoners being put into the general population. Quite the opposite of suggesting that such a search be mandated, they did suggest that there are situations where it would not be appropriate, though in general it is up to the discretion of the officers involved.

See, for instance, Part IV:

This case does not require the Court to rule on the types of searches that would be reasonable in instances where, for example, a detainee will be held without assignment to the general jail population and without substantial contact with other detainees. This describes the circumstances in Atwater. See 532 U. S., at 324 (“Officers took Atwater’s ‘mug shot’ and placed her, alone, in a jail cell for about one hour, after which she was taken before a magistrate and released on $310 bond”). The accommodations provided in these situations may diminish the need to conduct some aspects of the searches at issue. Cf. United States Brief 30 (discussing the segregation, and less invasive searches, of individuals held by the Federal Bureau of Prisons for misdemeanors or civil contempt). The circumstances before the Court, however, do not present the opportunity to consider a narrow exception of the sort JUSTICE ALITO describes, post, at 2–3 (concurring opinion), which might restrict whether an arrestee whose detention has not yet been reviewed by a magistrate or other judicial officer,and who can be held in available facilities removed from the general population, may be subjected to the types of searches at issue here.

Petitioner’s amici raise concerns about instances of officers engaging in intentional humiliation and other abusive practices. See Brief for Sister Bernie Galvin et al. as Amici Curiae; see also Hudson, 468 U. S., at 528 (“[I]ntentional harassment of even the most hardened criminals cannot be tolerated by a civilized society”); Bell, 441 U. S., at 560. There also may be legitimate concerns about the invasiveness of searches that involve the touching of detainees. These issues are not implicated on the facts of this case, however, and it is unnecessary to consider them here.

And in Alito's concurring opinion:

It is important to note, however, that the Court does not hold that it is always reasonable to conduct a full strip search of an arrestee whose detention has not been reviewed by a judicial officer and who could be held in available facilities apart from the general population. Most of those arrested for minor offenses are not dangerous, and most are released from custody prior to or at the time of their initial appearance before a magistrate. In some cases, the charges are dropped. In others, arrestees are released either on their own recognizance or on minimal bail. In the end, few are sentenced to incarceration. For these persons, admission to the general jail population, with the concomitant humiliation of a strip search, may not be reasonable, particularly if an alternative procedure is feasible.

Re:It's pretty black and white

[NatasRevol]

And that's why we, as non-lawyers, laugh at the SCOTUS.

Re:It's pretty black and white

[NatasRevol]

That kind of narrow focus, where cops will apply to all cases, is why all of us non-lawyers laugh at the larger ignorance of the SCOTUS.

While they strip away our freedoms (and our clothes).

Sorry, but it's unreasonable to get a strip search for an unpaid fine. All the moreso one that was already paid. But SCOTUS disagrees.

Re:It's pretty black and white

[Anonymous Coward]

If you wanted to make the claim that you were falsely arrested or unjustly imprisoned, you should have made your suit about that.

And yet, based on the argument of whether or not mandating the purchase of insurance is constitutional, the supreme court is considering throwing out the entire law.

It's a bullshit excuse made whenever the SCOTUS wants to avoid making any hard decisions. Sort of like how the SCOTUS will never have to rule on the constitutionality of SS or Medicare or any other entitlement program because they'll claim you haven't been hurt by them personally.

Re:It's pretty black and white

[NatasRevol]

Strip searches for PRISONERS is ok. You've lost rights.

Strip searches for ARRESTEES is not ok. You're not guilty of anything.

You're conflating the two.

The SCOTUS didn't. They say it's ok for any arrestee to be strip searched, giving the jail administrators leeway for not having to do so. As if they'll not take it.

Re:It's pretty black and white

[CrimsonAvenger]

They argue that every inmate going into general population requires a strip search

Umm, no.

What they said was that the Constitution doesn't forbid the legislature from requiring that. They did NOT say that it must happen, merely that if the laws say so, then there's nothing wrong with the law.

If you don't like it, call your legislators, since they're the ones who have to fix problems with Constitutional laws that people disapprove of.

Re:It's pretty black and white

[geekoid]

Because that wasn't the issue.

Re:It's pretty black and white

[mk1004]

What it seems to boil down to is that: 1. The residents of each state owe the sales tax on the taxable items they buy, regardless of the source. 2. The states collect this tax from the in-state merchants for their (the state's) convenience--it's easier to verify compliance on a small group rather than a large one. 3. They want to apply the same collection method to out of state merchants.

Ignoring constitutional issues, then to reduce the burden on those collecting the tax, it needs to be just the base tax that's collected by the state. A local merchant knows exactly what tax rate to apply because that rate is based upon the physical location of the store, not the address of the buyer. So you use the base tax rate, and apply it only to the items that the state requires the tax be paid on.

If the states want this to happen, then they'll need to get the federal government on board somehow. I'd say that's not likely to happen, but then we've got legislators who'd like to tax imputed income on things like living in a home that you own free and clear.

Re:It's pretty black and white

[Anonymous Coward]

North Korean law doesn't say you MUST be executed for talking shit about the Dear Leader but for some reason it always seems to go down that way anyways...

Re:It's pretty black and white

[blueg3]

I don't think I'd really qualify a noncontact search as "sexual abuse".

Again, they didn't address whether someone who is thought to have not paid a fine should be put in jail because that wasn't the point that was appealed.

Re:It's pretty black and white

[Hatta]

The issue is whether the strip search was appropriate given the crime. If going into jail requires a strip search, then it's necessary to consider whether going to jail is appropriate in order to determine whether the strip search was appropriate. They assumed that jail for minor offences was approprate, thereby begging the original question.

Re:It's pretty black and white

[Anonymous Coward]

So you are claiming that you are a prisoner, and thus it is OK for you to be strip searched right now?

You have been convicted of no crime, just like the person in question. You are not being accused of a crime, just like the person in question. If you are trying to imply that makes the person in question a prisoner with no rights, then likewise you being in the exact same situation must be a prisoner with no rights.

Why are you arguing for strip searches for people such as ourselves who are in reality not convicts nor accused of a crime? Why do you actively desire such a thing to happen to yourself?

Just imagine a police officer coming up to your mother on the street, stating out loud "You ma'am are resisting arrest!", then cuff her and take her down town for two or three strip searches on camera in front of a room full of people.

THIS is what you are arguing FOR.

Re:It's pretty black and white

[Anonymous Coward]

And I think it is unreasonable for you, an individual, to decide for the rest of the US, whether or not a given set of facts fits the 'reasonable' requirement.

I don't like the decision any more than you do, but I much prefer that a panel of very accomlished legal minds decides those questions as opposed you doing it on your own.

Re:It's pretty black and white

[Hatta]

The Court did say that deference to the judgment of jail administrators is needed in cases where they're not clearly in the wrong

Strip searching someone falsely accused of failing to pay a small fine is clearly in the wrong.

Re:It's pretty black and white

[Mindcontrolled]

If a pointless bodily humiliation of a person falsely jailed and, even so, still under the presumption of innocence, does not constitute sexual abuse, I wonder what will. They picked up a guy for an allegedly non-paid ticket. Do you think it a reasonable assumption that he has a shiv up his arse? Twice in a week? That was not about searching him, that was about humiliating him and establishing dominance. Power games using his body and shame. Sexual abuse, in other words.

Re:It's pretty black and white

[Fjandr]

No, based on the fact that the act contains language specifically designed to make it non-severable, the Supreme Court is considering throwing out the entire law.

Re:It's pretty black and white

[andymadigan]

The Supreme Court can't rule on a question that isn't brought before it. If the question brought before it is "can a person being placed in jail/prison be strip searched?" then that's all they can answer. If the defense had brought the question of "can someone charged with XYZ be thrown in jail?" then SCOTUS may have answered differently. You don't really appeal a case to the court, you appeal a particular decision by a lower court.

Re:It's pretty black and white

[PoopMonkey]

Use tax is an attempt to do a runaround of the taxing interstate commerce bit. So no, they don't have a power to tax out-of-state purchases, they just think they do.

Re:It's pretty black and white

[erroneus]

People seriously need to get over the notion that "naked" == sexual. If that's true, then most medical activities are inherently sexual and morticians are.... uh...

Re:It's pretty black and white

[NatasRevol]

Strip searching someone falsely accused of failing to pay a small fine is clearly in the wrong. Regardless of what those legal minds have accomplished.

But they said it was ok because of the dangers in prison. As if that justifies everything.

Re:It's pretty black and white

[Mindcontrolled]

In the case of the physician, he got my consent. In the case of the mortician, my consent isn't worth a rat's arse. In the case of the jail guard playing power games - well, if you can't see that there is a perfectly different situation there, the problem is on your side.

Re:It's pretty black and white

[Hatta]

The question brought before the SC was "can a person accused of a minor crime be strip searched" The answer comes in two parts:

1) Does everyone entering jail have to be strip searched?
2) Does everyone accused of a minor crime have to go to jail?

If the answer to either question is no, then people accused of minor crimes shouldn't be strip searched. The SC only answered question 1, ignoring question 2 entirely.

Re:It's pretty black and white

[Hatta]

I don't think I'd really qualify a noncontact search as "sexual abuse".

So it's OK if I have your wife/daughter/mother strip for me and shine a flashlight in her tender bits against her will, as long as I don't touch her?

Again, they didn't address whether someone who is thought to have not paid a fine should be put in jail because that wasn't the point that was appealed.

In order to determine whether people accused of minor crimes should suffer strip searches it's necessary to first determine whether they should go to jail. If they shouldn't go to jail, they obviously shouldn't be strip searched. You can't answer the one question without considering the other. The SC failed to do that, and they failed to do their jobs.

Re:It's pretty black and white

[andymadigan]

He was jailed because there was a warrant for his arrest.

Re:It's pretty black and white

[Albanach]

The strip search is unreasonable. There is absolutely nothing that could possibly justify the sexual abuse of someone who is falsely accused of paying a fine.

Is there a problem with drugs, weapons, cell phones and money being smuggled into jails?

If so, then surely there's something that _could_ justify a full body search of everyone entering the general prison population. Why would someone being jailed for not paying a fine be less likely to want to smuggle items of value into jail?

Whether jailing someone for non-payment of a fine is an appropriate punishment is a whole other question.

Re:It's pretty black and white

[Anonymous Coward]

That's why we laugh at all you who use SCOTUS. Stop watching The West Wing and come into the real world. I can't tell you how silly you all look, sound going around SCOTUS this, SCOTUS that.

Re:It's pretty black and white

[triffid_98]

I don't think I'd really qualify a noncontact search as "sexual abuse".

Is non-contact search specifically stipulated? If you're trying to prevent contraband getting smuggled in you're going to need to do more than just look at them naked. Full cavity searches agents, deep and hard!

Re:It's pretty black and white

[blueg3]

The Supreme Court decision specifically stipulates a non-contact search.

Re:It's pretty black and white

[chrismcb]

If you ask someone a question, you don't expect them to answer a different question.
The question posed to the SC was "Is it unconstitutional to strip search a person being jailed." The SC didn't rule on why the person was jailed, because that wasn't part of the question.
I think it was insane that this person was in jail for TWO weeks for failing to pay a fine, AND that it took two weeks to figure out there was a clerical error. But that is a separate issue on whether he should have been strip searched or not.

Re:It's pretty black and white

[chrismcb]

Not everyone who is arrested is taken to jail.

Re:It's pretty black and white

[andymadigan]

Bench warrant generally means you have to be taken before a judge. That takes time, in the meantime to make sure you don't run off again they're going to hold you.

I recognize in this case the issue had already been dealt with, the warrant should have been rescinded. However, the cops were well within their powers to jail the guy.

The decision of the court is correct, there are enough problems in prisons today that anyone entering general pop. should be searched. Otherwise people would do just enough to get arrested and held (but ultimately have the charges dropped) in order to pass in items like weapons, drugs, phones, etc. to their friends.

Maybe we should take those strip search scanners out of airports and use them in jails instead...

Re:It's pretty black and white

[bkaul01]

THIS is what you are arguing FOR.

All I'm arguing for is an accurate understanding of exactly what the decision was and the actual logic behind it (and resulting exceptions), without all the hyperbole and conspiracy theories that keep getting bandied about. I haven't commented on whether I wish it were different or not; I'm just pointing out how it actually is, as opposed to the "ZOMG!!eleventy-one! The sky is falling! The Supreme Court ordered that everyone in the country be strip searched daily!" nonsense. Not that the parent I replied to was guilty of quite that level of hyperbole, but still, the actual Opinion in question is being ignored by most commentators, who are instead relying on sensationalist stories put out by media agencies looking to bump ratings/revenue. What I'm arguing for is actually reading, understanding, and discussing what the decision was in reality as opposed to sensationalized caricatures of it.

Re:It's pretty black and white

[Drugmath]

Incorrect. There was an INVALID warrant for his arrest. He specifically carried around the paper showing that the warrant was quashed, as he had been arrested multiple times previously for the same thing.

Wow

[SaroDarksbane]

Finally, a ruling that deals with the commerce clause as it was actually intended to be used, rather than the current "the federal government can do anything it wants at any time simply by saying the word 'commerce'" interpretation.

Re:Wow

[AngryDeuce]

Or child porn...

Re:Wow

[rilian4]

Not exactly. This was a state law that was struck down...Not a federal one. It sounds (I haven't read the ruling) like it was a proper ruling but it does nothing to curb the federal government...only state governments.

That said, I agree that the federal government has gotten away w/ far too much for far too long by claiming all kinds of powers under the commerce clause. No doubt about it.

Re:Wow

[geekoid]

A) Commerce clause is a federal constitutional law. This is state law. Please try to comprehend the issue before posting.

B) If it was a federal issue, this would be exactly what the commerce clause is for. The federal government uses the commerce clause more because a lot more commerce is done across state borders.

Re:Wow

[geekoid]

"That said, I agree that the federal government has gotten away w/ far too much for far too long by claiming all kinds of powers under the commerce clause. No doubt about it."

Name one.

Re:Wow

[thedonger]

No, no, no! We need this tax. We owe to it our states to bolster their general funds so they can spend more money, and when they grow accustomed to the newly inflated budget can add some more taxes.

Also, I really like the idea of paying in-state tax for out-of-state, on-line purchases. Along those lines, I created a program to add occasional static to my HD Netflix streaming so it is just like watching television back when we used rabbit ears. Old logic ALWAYS applies to new ideas.

While I'm at it...God Bless the RIAA!

Re:Wow

[CrimsonAvenger]

"That said, I agree that the federal government has gotten away w/ far too much for far too long by claiming all kinds of powers under the commerce clause. No doubt about it."

Name one.

The power to prevent someone from growing medical marijiuana for their own use.

Re:Wow

[deblau]

No, GP is correct. The federal interstate commerce clause was used to strike down a state law, because the state law (improperly) regulated interstate commerce.

See http://en.wikipedia.org/wiki/Dormant_Commerce_Clause for more details.

Re:Wow

[hldn]

wickard v filburn is probably one of the most well known abuses of the commerce clause, but it's certainly not alone. it also leads directly to the case of gonzales v raich above, re: growing marijuana.

https://en.wikipedia.org/wiki/Wickard_v._Filburn
https://en.wikipedia.org/wiki/Gonzales_v._Raich

"growing your own X instead of buying it effects interstate commerce, so we can limit how much X you grow"

Re:Wow

[Anonymous Coward]

Here's some ConLaw 101:

The Commerce Clause is indeed a part of federal Constitutional law. The doctrine of the "dormant" Commerce Clause, however, prevents STATES from regulating INTERstate commerce. (Note: this is different from the *direct* application of the Commerce Clause that empowers the FEDERAL government to regulate interstate commerce and its intrastate aspects).

What's really going on

[dkleinsc]

Amazon to states: "There should be no Internet sales taxes created on the state level, because this deals with interstate commerce."
Amazon to federal government: "The federal government shouldn't handle sales taxes, they should be handled on a state level. Plus, you wouldn't want to have to answer to the voters regarding a *tax increase*, would you?"

End result: No sales taxes on Amazon, which is almost definitely the outcome they want.

Re:What's really going on

[sangreal66]

Sure, if you want to just make shit up and blindly ignore the facts. Amazon has consistently lobbied for a federal internet sales tax.

Re:What's really going on

[Anonymous Coward]

That's the only workable system, given the way local sales taxes are completely fucked up. I'm a programmer and I have wake-up-screaming nightmares about Bezos ordering me to write a system that calculates the correct local sales tax for any order on Amazon.

Re:What's really going on

[Enry]

MA (and other states probably do this as well) has a safe-harbor amount in the tax return based off your AGI to cover out-of-state purchases. Any major purchases over $1000 has to be listed separately and pay the full sales tax on, but the safe-harbor covers purchases I made in other states or via Amazon.

Re:What's really going on

[Dcnjoe60]

Sure, if you want to just make shit up and blindly ignore the facts. Amazon has consistently lobbied for a federal internet sales tax.

That is true, but only because they don't the burden of maintaining a sales tax for every state and municipality. They see the handwriting on the wall that eventually internet sales will be taxed. Having one taxing authority is much better than tens of thousands.

Re:What's really going on

[Anonymous Coward]

Maybe someone can answer this.. historically has there been sales tax on mail-order purchases? I'm thinking specifically about the old Sears catalog and the like.

Re:What's really going on

[Anonymous Coward]

THIS. Determining the tax classification for every product for over 10,000 tax jurisdictions, with vague and conflicting guidance on the rates to be applied from each one, is an extremely difficult task and imposes an undue burden for internet retailers. If the states want to get a cut of the action, they need to drastically reduce and streamline their sales tax code.

Re:What's really going on

[tompaulco]

If the states want to get a cut of the action, they need to drastically reduce and streamline their sales tax code.
The states already are entitled to a cut of the action. What they are trying to do is get somebody else to do their collecting for them. Somebody who the state has no authority over. The states just need to get their act together and collect the tax themselves. In fact, they shouldn't be allowed to force in-state retailers to collect the sales tax for them. In my state, no only do retailers have to collect this money and give it to the state, they have to PAY the state for the privilege of doing the state's job for them.

Re:What's really going on

[tompaulco]

Maybe someone can answer this.. historically has there been sales tax on mail-order purchases? I'm thinking specifically about the old Sears catalog and the like.
Yes, but it was not collected by Sears. You had to put down the purchases in the "Use Tax" area on your stat tax return. And the same is still true and holds for internet purchases as well.

Re:What's really going on

[Anonymous Coward]

No, "use taxes" happened after Internet purchases became widespread; the first one was created in the 1990s. Historically, pre-Internet, buying something mail-order from Sears-Roebuck or whatever was untaxed, and nobody really cared because such purchases were a negligible percentage of retail commerce, so it wasn't worth bothering with. Now, in some states more than 10% of all purchases are from online retailers so this is starting to become significant, particularly in states that don't collect income tax and rely entirely from sales taxes for revenue.

Re:What's really going on

[milkmage]

...as an alternative to individual state sales taxes.
they don't really want any tax (what's in it for them?).. it's just lip service to appease the bean counters.

managing state taxes is a hassle.
do they tax based on where your loot ships? what about downloads that don't "ship"?
do they tax based on the mailing address of your credit card? now they have to remember when I move.
what about their cloud services? do they tax based on where the businesses HQ is?
amazon started charging sales tax in california this year. I live here, my visa mailing address is in CA, 99% of my orders ship to a CA addy, yet they only charge tax on SOME purchases. does it have to do with where my purchases ship FROM? the digital music part of amazon is based (or has offices) in CA, so they definitely have presence here.. yet they don't charge consistently.

even a flat tax has problems.. how do you divvy it up? if huge California got the same share as little Delaware.. CA would complain. so now you're back to (presumably) sales volume or shipping origination - sales volume raises the questions above, shipping origination? well, what if the CA warehouse is out of the widget, so orders will ship from NV for the next 48 hours... CA not happy.

online only retailers do not want to deal with any of this. no matter what they settle on.. it results in nothing but the potential for more bugs in the store code and a longer QA cycle.

if the economy wasn't so fucked up with states closing schools and firing cops, we wouldn't be having this discussion. LLBean has been in business for a hundred years (initially catalog, now online with a small retail presence near their HQ) - I don't recall anyone asking them for a cut.

Re:What's really going on

[Anonymous Coward]

link please.. mass requires you to submit all out of state purchases as a use tax... there was no special safe harbor that I have seen.. your kidding yourself.

Re:What's really going on

[jabelli]

Form 1 instructions page 13, line 33 instructions:

Taxpayers may use the following table to self-report a “safe-harbor” amount of use tax based on their Massachusetts adjusted gross income. A taxpayer may pay this amount in lieu of the actual amount of use tax that would otherwise be due with respect to such purchases. Individual taxpayers electing to report use tax under this method will not be assessed additional use tax on audit, even if the actual amount of use tax due would have been greater than the amount from the schedule.

The estimated liability applies only to purchases of any individual items each having a total sales price of less than $1,000. For each taxable item purchased at a sales price of $1,000 or greater, the actual use tax liability for each purchase must be added to the amount of the estimated liability from the table below. See TIR 04-26 for more information.

And I don't even live in Mass. New York has similar language in the instructions.

Re:What's really going on

[__aajgon4133]

No, "use taxes" happened after Internet purchases became widespread; the first one was created in the 1990s.

According to the California State Board of Equalization, "[t]he use tax was enacted effective July 1, 1935." http://www.boe.ca.gov/sutax/taxrateshist.htm

Re:What's really going on

[__aajgon4133]

No, "use taxes" happened after Internet purchases became widespread; the first one was created in the 1990s.

According to the California State Board of Equalization: "The use tax was enacted effective July 1, 1935." http://www.boe.ca.gov/sutax/taxrateshist.htm

Re:What's really going on

[shutdown -p now]

The states could get what they want without involving the Feds - they just need to enter into agreement with each other regarding sales taxes. Colorado doesn't have power to force Amazon to collect sales tax on a purchase that they ship from (say) California; but California could collect that tax on their behalf, and Colorado could do the same for purchases that California residents make.

Re:What's really going on

[Noren]

This is obvious nonsense, why on earth was it modded up? Amazon correctly assesses and collects every dime of the Washington State sales tax owing on every purchase that I, a Washington State resident, make from them over the internet. They have always done so.

Amazon is in full, voluntary compliance with all Washington state laws regarding collection of sales tax, and always has been.

To use your format:
State of Colorado: hey you, out of state corporations, we claim that you are required to act as our agent to collect taxes on our behalf. You all have to serve as our tax collectors, and we're not even going to pay you to do so.
Amazon: We have no opinion whatsoever concerning your state's tax structure. That's your business. However, we aren't going to serve as your unpaid tax collector.

See a pattern here?

[Anonymous Coward]

The Dodd-Frank bill contained a provision regulating the interchange fees charged by Mastercard, Visa, and other credit card networks. That was very popular with retailers, who saw it as the equivalent of rolling back the local sales tax by a percent or so. Who was against it? The Republicans. No, they didn't say "that is the only worthwhile provision in an otherwise bad bill", they said the entire bill was bad. And they've vowed to repeal it if and when they control the WH and Congress after November's election.

Despite their professed love for the small businessmen on Main Street and Pine Street, they're the first ones the Republican Party will throw under the bus in order to help the national and global corporations like Amazon and the big banks.

Re:See a pattern here?

[Fwipp]

I was going to ask "Doesn't Amazon pay interchange fees, too?"

But then I realized that of course Amazon has the power to negotiate the fees that they pay, while my local coffee shop almost certainly cannot. So, consider this a "+1 Insightful," instead of a "-1 What?"

Re:See a pattern here?

[Anonymous Coward]

http://online.wsj.com/article/SB10001424052970204319004577084613307585768.html

Yes, just ignore the bad effects of this provision. It's a good provision. Nothing bad has happened because of it.

Liberals love these 'sound good' provisions, but they only hold up if you don't take more than two seconds to think about who will be harmed by the unintended side effects.

Re:See a pattern here?

[Dcnjoe60]

I was going to ask "Doesn't Amazon pay interchange fees, too?"

But then I realized that of course Amazon has the power to negotiate the fees that they pay, while my local coffee shop almost certainly cannot. So, consider this a "+1 Insightful," instead of a "-1 What?"

While it is true that Amazon must pay interchange fees, it is almost a certainty that it is figured into their pricing structure (since you cannot pay with cash). Besides, most business find that paying CC fees is less costly than processing bad checks.

Re:See a pattern here?

[cpu6502]

>>>Who was against it? The Republicans.

Note: Both parties suck ass.
I plan to vote for neither Obama or Romney.
That said if you're going to play this tit-for-that game, it was the Democrats that repealed Glass-Steagall, a Democrat HUD secretary (under clinton) who changed the rules so literally anybody could buy a house even if they couldn't afford it (the source of the bubble/crash), and the Democrats who rammed-through the TARP banker bailouts even as most Republicans opposed it. (It failed to pass the first time, but passed the second.) And the Democrats who gave us this shitty insurance mandate to force me to buy a product I don't want (not one republican voted for it and it was opposed by 65% of Americans).

Oh and let's not forget: Both of the sucky Democrats/Republicans were responsible for passing NDAA's provision to take-away our right to a trial (~95% voted aye). You can now be jailed indefinitely merely be being charged as a "terrorist". Carry a gun? Have a pocket constitution? Donated money to Ron Paul? Question if global warming is real? Pay your bills with cash?

You're now a "terrorist" according to the MIAC report.

Re:See a pattern here?

[cpu6502]

Some stores/gas stations give a 5 or 10 cent discount if you pay with cash (instead of credit). I wish more stores would do that.
http://financialservices.house.gov/News/DocumentSingle.aspx?DocumentID=252291

âOverall budget cost of Dodd-Frank through FY 2012: $1,251,578,000
âNumber of government positions created (projected for 2012): 2,849
âAnnual labor hours required to comply with just the 10% of Dodd-Frank rules that have been issued so far: 2,260,631
âNumber of Americans who will have to work all year, every year solely on complying with all of Dodd-Frankâ(TM)s rules: Over 10,000

âThe largest financial institutions in America remain "too big to fail"; in fact, they are even bigger now than they were before Dodd-Frankâ(TM)s passage. In its section of the report on too big to fail, Republicans note that even Treasury Secretary Timothy Geithner acknowledged the Dodd-Frank Act does not end too big to fail.

âBy institutionalizing a government policy of too big to fail, Dodd-Frank further skews the competitive landscape in favor of large, complex financial institutions at the expense of smaller institutions and community banks.

âThe Dodd-Frank Act failed to address the problems at Fannie Mae and Freddie Mac, which helped spark the financial crisis in 2008, and hobbles the private mortgage market through onerous regulations. This will ensure "that housing will remain in limbo for some time to come, as investors, securitizers, and lenders try to navigate its cumbersome and unworkable rules."

Re:See a pattern here?

[Anonymous Coward]

I was going to ask "Doesn't Amazon pay interchange fees, too?"

Amazon has to pay interchange fees too. But they really, really enjoy a big advantage of not having to collect the states' sales tax. If you don't think that matters, ask Borders (if you can find them). Or ask any number of posters here re their individual purchase decisions.

Visa and Mastercard probably don't care whether online retailers have to collect sales tax or not. But they really, really would enjoyed their power to set their interchange fees free from government regulation (or "let the free market decide", as they would put it - the same way Microsoft let the free market decide their price and terms of Windows during the '90s, including discounts for OEMs who agree not to sell computers loaded with competing operating systems. When someone has a monopoly, there is no free market).

These are two separate issues, but in both cases the GOP sided with the big guys who have money to spend on lobbyists, PR, and political campaigns.

Re:See a pattern here?

[jabelli]

The fucking 8% (or whatever local sales tax is) that Amazon didn't pay is not why Borders went out of business, not when you can order the same books from Amazon and still pay less than the Borders price even before the sales tax.

Re:See a pattern here?

[cayenne8]

I like your post, but what's with all the weird symbols in your post?

:-D

[bbbaldie]

Good for the court. Good for Amazon. I pay 10% on anything I buy in Arkansas (including food) and they scream that it's not enough. Funny, I paid 3% sales tax here in the 70's and the roads weren't any worse than they are today. Screw any state that attempts to cash in on internet sales.

Re::-D

[Dcnjoe60]

Good for the court. Good for Amazon. I pay 10% on anything I buy in Arkansas (including food) and they scream that it's not enough. Funny, I paid 3% sales tax here in the 70's and the roads weren't any worse than they are today. Screw any state that attempts to cash in on internet sales.

Like gasoline, the price of asphalt has gone up since the 70s, too. Maybe if 30% of all Arkansas sales were not internet sales, then there would be higher employment, more tax revenues and better roads in Arkansas. Just a thought.

Re::-D

[bbbaldie]

Not a very good one, though. Gasoline and asphalt aren't the only things that have gone up. I had a choice Monday of buying a 50 dollar power supply from Best Buy, adding 10%, and getting my main PC going that night, or buying the same one from Tigerdirect for 25 bucks and paying an additional five bucks to ship it here by Thursday. I'll have my computer back tomorrow night. Oh, and thanks for reminding me, President Clinton alone id responsible for ten cents of additional gas tax while he was screwing women the state troopers were bringing to the governor's mansion for him. Remove that obscene 10% surcharge, I'll buy more in state.

Re::-D

[Anonymous Coward]

Like gasoline, the price of asphalt has gone up since the 70s, too.

You seem to have a lack of understanding about percentages. That's ok, the government likes people who don't understand percentages. That way, they can claim that they need to raise the tax rate to make more money, when in fact, mathematics says that if 3% tax on 1970's income was enough to get by, then 3% tax on 2012 income (about 5.4 times as high) should also be plenty.

Re::-D

[drinkypoo]

I cheer when I see an "END ROAD WORK" sign. But then, I own a 4x4.

Some roads need paving. Other roads could equally well be dirt and gravel if they only had local traffic on them. Let's get more public transportation (trains or PRT) and stop maintaining all these stupid roads.

Re::-D

[geekoid]

because road costs don't go up~

You ignorance its amazing. Must be the well known Arkansas educational system.
You know nothing about road work, but yet use it as some sort of example.

Clue: the costs to do the materials and equipment have out paced personal income levels, hence they need more money for the same mile of work, even after adjusted for inflation.

Did it occurred to you the 10% may not be enough because amazon is taking millions and millions of dollars of tax revenue away from your state?

Re::-D

[cpu6502]

Even if asphalt is more costly, it doesn't vary from state-to-state. We only pay 5% in my state (which is in the north where roads suffer ice/salt destruction). Why should Arkansas residents have to pay twice as much tax? The road maintenance should actually be cheaper than my state.

Re::-D

[mcgrew]

In Illinois (and every other state I've been in, and I've been in most, including Arkansas) the roads are paid for by a combination of motor fuel taxes and federal highway grants (paid for by federal fuel taxes). Illinois' motor fuel tax is 19 cents per gallon, federal tax 19.4 cents -- in 1971 I was paying a total, federal and state fuel tax included, of 25 to 30 cents per gallon. Today I pay thirty seven cents in taxes alone!

Some states have low sales tax because they get their revenue elsewhere. Forida's sales taxes are fairly low and they have no state income tax because they tax the hell out of tourists staying in their hotels. Between state, county, and local sales tax Illinois' is pretty much on par with Arkansas. We do get a break on food and drugs, though.

Re::-D

[bbbaldie]

"You ignorance its amazing."
Yep, me ignorance is amazing.
ALL costs have gone up, charlie. Costs of food, gasoline, golf tees, rubber balls, whale oil, bulldozers, Chryslers.
Taxes inexplicably go up in addition to cost. That makes my standard of living go down.
Arkansas had this obscene tax rate when Amazon's sales were maybe 10,000 dollars a day.
Now, I buy online as a protest. Maybe raising sales tax to 12% is the answer?

Re::-D

[mcgrew]

Like gasoline, the price of asphalt has gone up since the 70s, too.

As have wages and the dollar amount of taxes collected. In 1960 the minimum wage was $1.60 per hour, so someone earning the minimum wage is paying five times in taxes what he was then.

And the roads are financed by motor fuel tax, not sales tax. Motor fuel taxes now cost more per gallon than a gallon of gas did in 1970.

Re::-D

[sjames]

Since a tax is based on percentages, it will naturally scale with inflation. If 3% was enough way back when, it's still enough when inflation roughly doubles the price of everything (as long as the state supports employees enough that their wages keep up).

Re::-D

[Anonymous Coward]

If, prices have increased, then the revenue to the state has increased. If the number of citizens has increased, then the revenue to the state has increased.

Internet shopping reduces that revenue. Many government have more departments than 30 years ago, consuming the available revenue faster.

Usually the main reason, many states have tripled their taxes in the last 30 years is 'minimum spend' covenants, usually on welfare. That is, the state promises to spend 2 billion on saving the whale, or whatever. As the dollar devalues, this target is more easy to meet, unless there is an economic crisis, or a corporat-ocracy arises refusing to pay their fair share.

Re::-D

[Dcnjoe60]

Like gasoline, the price of asphalt has gone up since the 70s, too.

You seem to have a lack of understanding about percentages. That's ok, the government likes people who don't understand percentages. That way, they can claim that they need to raise the tax rate to make more money, when in fact, mathematics says that if 3% tax on 1970's income was enough to get by, then 3% tax on 2012 income (about 5.4 times as high) should also be plenty.

What you say would be true if income since the seventies kept up with the inflation rate since the seventies, which it has not. I believe in the 70s, Arkansas was ranked 50th interms of education. So, if you know away to improve upon something like that without increasing taxes, you should run for office.

Face it, in the 70s, almost 100% of goods were purchased and taxed locally. Today, it is less than 70%. Not only have incomes not kept up with inflation, but the tax revenues from sales tax are spread over a smaller and smaller base.

But then maybe you are one of those people who like to complain about having to pay too much in taxes while exempting billions of dollars in sales from the local tax base. It's crazy that if I order something from Sears online, I have to pay sales tax, even though the closes storefront to me is 100 miles away and yet, ordering the same thing from Amazon is tax free. All because of 100 year old mail order catalog rules.

Re::-D

[Dcnjoe60]

Even if asphalt is more costly, it doesn't vary from state-to-state. We only pay 5% in my state (which is in the north where roads suffer ice/salt destruction). Why should Arkansas residents have to pay twice as much tax? The road maintenance should actually be cheaper than my state.

Well, it depends on how much federal fuel tax your state gets compared to Arkansas. It dependes on how large a geographical area your state is to Arkansas. It depends on the other taxes, like income, that your state charges versus Arkansas. It depends on the corporate tax base and number of people in the state. The list goes on and on.

Why in Arkansas can you buy a nice 3000 square foot house for $175,000 but in New York, the same thing costs 10 times more?

Re::-D

[Dcnjoe60]

Like gasoline, the price of asphalt has gone up since the 70s, too.

As have wages and the dollar amount of taxes collected. In 1960 the minimum wage was $1.60 per hour, so someone earning the minimum wage is paying five times in taxes what he was then.

And the roads are financed by motor fuel tax, not sales tax. Motor fuel taxes now cost more per gallon than a gallon of gas did in 1970.

Federal fuel tax can only be used for new construction, not maintenance of existing roads. The federal fuel tax is a fixed amount, not a percentage and it has not significanlty increased since the time gas was $0.59/gallon.

Re::-D

[Dcnjoe60]

Since a tax is based on percentages, it will naturally scale with inflation. If 3% was enough way back when, it's still enough when inflation roughly doubles the price of everything (as long as the state supports employees enough that their wages keep up).

That assumes that 3% was enough back then. Of course income tax rates were significantly higher then than they are today. One needs to look at the entire tax base and not just one tax to determine if it is proportional. In addition, populations and their needs change. 40 years ago, the southern border states spent next to nothing on illegal immigrants. Where does that money come from today? 40 years ago, most roads were not paved (except in cities), and those that were were usually 2 lanes.

Those are just a few examples of what has changed.

Re::-D

[sjames]

I don't remember all that many dirt roads in 1972. If the roads need to be more than 2 lanes now, that's because there's a lot more people driving around buying things (and paying sales tax). Most states still spend next to nothing on illegals (who also pay sales tax).

Other taxes also scale with inflation since they all tend to be based on a percentage one way or another.

Re::-D

[Dcnjoe60]

About 50% of all roads in the US were unpaved in 1975. That amount dropped to 1/3 as of 2008.

http://www.bts.gov/publications/national_transportation_statistics/html/table_01_04.html

As sales shifted from instate storefronts, to out of state internet, sales tax revenue declined. Granted, inflation increased sales tax revenue proportionately, but the outflow from the internet was far greater than the inflation increase causing real sales tax revenues to decline. Likewise as businesses moved overseas, property tax and corporate income tax decreased, too. States are forced to increase the tax rates to just maintain the status quo from the lost tax revenues.

Re::-D

[sjames]

But businesses moving overseas has nothing to do with the premise (asphalt costs more due to inflation so sales tax must increase) I argued against.

However, given that in this case, the sales tax rate has more than tripled, that would suggest an awful lot of businesses have moved out leaving ghost cities. Those don't need road repairs, nothing is wearing them out.

Re::-D

[Dcnjoe60]

Local sales have declined by more then 50%, mainly due to internet sales. That is one tax base that has declined. Business moving operations overseas impacts both corporate income tax. That is another tax base that won't return. People employed at those firms taht are no longer employed and move away reduce both personal income tax revenues and further erode the local sales tax revenues.

Fuel taxes do not rise with the cost of fuel, as they are fixed and set by congress. It was 9 cents in 1983 and is now 18.4 cents, a 100% increase. However, the costof highway contruction and maintenance has trippled over the same period, so those taxes still don't cover all of the new construction. In addition, with very few exceptions, the federal fuel tax cannot be used for maintenance, only constructing new roads. This means the states have to raise additional revenue to maintain the existing roads and as they keep increasing, more and more money is needed (it is approximately $477K to resurface one mile of road: ftp://ftp.dot.state.fl.us/LTS/CO/Estimates/CPM/summary.pdf) Not only has the cost of materials gone up three-fold, but the amount of road surface has doubled also since the federal fuel tax was 9 cents.

By the way, fuel tax/roads were just an example of many things that we take for granted that have been a burden on tax revenues. Everybody thinks of entitlement programs, but infrastructure maintenance plays a big part of it, too. Then, to top all of that off, Congress keeps enacting regulations that shift costs to the staes and local municipalities.

The point of all of this is that it is logical that as tax bases decline, tax rates need to increase just to maintain the status quo. They need to increase even more, if the state or local municipality wants to add additional services. In a perfect world, tax revenues would rise with inflation (at least for those based on a percentage of sales or income). However, with the explosion of internet sales, this has not been the case as they are exempt from sales tax unless they have a presence in the state (Nexus). Amazon doesn't, so its sales are tax free.

Amazon's call for a federal sales tax is a recognition that eventually they are going to have to remit sales tax (stores don't pay sales tax, consumers do). They are lobbying for a federal tax, because it is simpler and cheaper for them than to build a system for each state and municipality (even though Walmart and every other retailer with both store fronts ande internet sales has done). An additional issue is that the federal government will then have to allocate that money back to the states. As with the federal fuel excise tax, it is not allocated proportionately to where the money comes from, but instead where the goverment wants it to go. It then becomes a club to beat the states into submisison to "voluntarily" follow new regs or lose the funding. However, that is a whole different topic.

Re::-D

[sjames]

Estimates are that online sales account for 6-9% of retail sales. That would suggest that if a 3% tax rate was enough before, 3.3% would net the same amount now. In reality, the number will be lower, because some of that 6-9% is the result of absorbing mail order.

The biggest hit on tax revenue is income stagnation and unemployment. If the government was doing it's job, that wouldn't be an issue.

As for the federal bludgeon, more than one state has introduced (but not voted on) measures to funnel all federal tax collection through state revenue divisions which would then pass along only the proportion of the taxation deemed Constitutional and fair. The rest would replace federal funding to the state or be refunded to the People (I'm thinking the latter is unlikely). For now, it's just a bit of sabre rattling, but the threat is real.

State you purchased it from...

[Anonymous Coward]

Logically, any sales tax levied should be the state you purchased the item from, not where you live. If I drive to a neighboring state and buy something, I pay that state's sales tax, not my home state's sales tax. By extension if I buy something online, the state where the "store" is located should be the one collecting sales tax. When ordering online from a store with multiple locations in different states, it should probably be the state where of the warehouse it ships from since that's essentially the last point at which it was in the seller's possession. Some might argue that the tax should be collected in the state in which the sale occurred but a single online sale can occur in 2 states simultaneously. Ordering online can be likened to having an designated agent go to another state to purchase something for you and bring it back to you.

Re:State you purchased it from...

[Anonymous Coward]

Why is this so hard for Americans? Companies are already handling this in the 27 state EU.

Re:State you purchased it from...

[kidgenius]

It is an interesting concept, but truthfully, you are benefiting by the services in your state. The sales tax you pay goes to cover those services. So, it really should be paid against the locality in which you reside. You would really hate to have your sales tax go to the state where you made the purchase, as opposed to where you reside. Otherwise, all your money would go to California, New York, etc. Your state would suffer greatly, and the quality of the services you receive would drop dramatically. It would make sales tax calculation much simpler for Amazon to charge based on their locality, but then they would move their operations to states that don't collect sales taxes.

Re:State you purchased it from...

[Attila Dimedici]

Well, according to current law, if you purchase on item in a different state for use in your home state, you are required to pay the difference between the amount of sales tax in that state and that of your home state. For example, if you purchased an item in a neighboring state that charges 5% sales tax and took it home to use and your home state's sales tax is 6%, you are supposed to register to pay that full 6% and take the 5% you paid as a credit, thus ending up paying 1% to your home state.
The fact that few people actually do this, does not in any way obligate a company that does not have an actual presence in your state to collect sales tax. Personally, I think that sales tax as currently written is a bad law since it has many hidden costs that are paid by the businesses it makes into unpaid tax collectors for the state.

Re:State you purchased it from...

[Anonymous Coward]

Out of state purchases are taxed by your home state already, see Use Tax.

Re:State you purchased it from...

[TheGatesofBill]

But technically you need to pay use tax on those items already. Nobody does.

Re:State you purchased it from...

[dkf]

Ordering online can be likened to having an designated agent go to another state to purchase something for you and bring it back to you.

Ordering online is exactly like mail order purchasing, and that's been around for a very long time. "On the internet!!!" doesn't automatically make it different from what before (except perhaps in scale).

Re:State you purchased it from...

[tnk1]

Because the EU is a newer entity with laws and charter that are more up to date for modern considerations. The US Constitution is 200+ years old and the interstate commerce clause was mostly created to make sure that states couldn't go off and declare trade wars on other states in the trade of things like molasses, tobacco and slaves that came in on sailing ships or in wagons.

EU regulations will be just as out of date when the Singularity hits and our posthuman overlords are busy using the subether to trade computing power, stars and human souls.
         

Re:State you purchased it from...

[Anonymous Coward]

By extension if I buy something online, the state where the "store" is located should be the one collecting sales tax.

But where is the "store" located? Is it located where the particular server that your transaction occurred upon is located? Is it based upon where the company's headquarters are located? Is it in your living room? The current state law determines that it is located at your primary residence at the time of the sale.

Re:State you purchased it from...

[geekoid]

" I pay that state's sales tax, not my home state's sales tax."
then you are breaking the law and cheating yourself.

A) You are suppose to pay the tax in your state at the end of the year.

B) You are entitled to a refund of the taxes you paid in the other state.

Re:State you purchased it from...

[cpu6502]

If I had to collect taxes on my ebay sales, I would have to submit literally thousands of tax returns (both state and local sales tax). Even if it were simplified to the state level I'd still have to submit 50 returns --- 1 for each state. That is a burden that would literally drive me out of business. (I only sell ~5000 dollars per annum.)

I don't know how Ebay sellers in the EU operate, but I'm guessing it's just as heavy a burden.

Oh and in the U.S. there's the concept of "taxation without representation". Basically it means I am not required to pay a tax to a foreign state legislature, because I have no representation there. I only pay taxes to my home state and the union government (congress).

Re:State you purchased it from...

[Anonymous Coward]

you are benefiting by the services in your state

The most-possibly-fair tax system will directly charge people for services as they use them, e.g. toll booths. Every indirect layer, while possibly making things simpler (and therefore potentially more efficient), also introduces corruption and opportunities for people to avoid charges and get others to pay for things.

I don't doubt I benefit from the services in my state, but don't you see that those very words are vague? Which services? Charge me right when I use them (or charge an intermediate party when they use them on my behalf, e.g. UPS drivers paying tolls, so that they have to raise the price of UPS shipping), and you've got a perfect situation. And then if I decide I don't need one of those services and opt to use an alternative, no one will have cause to complain, either, because I won't be incurring expense for them.

Not every public expenditure can be handled that way (e.g. how much do we charge each person for the feds to create a nuclear deterrent vs USSR ICBMs?) but it's something to strive for.

This is where sales taxes (and income taxes too, actually) fail. It's just an arbitrary number tacked onto the bill, and no matter how you vary which services you use, the number doesn't change. I know the government wants the money and spends it on .. things. But when you drive across a state border and buy something, it really is dubious just whose services you used for what. again, I'm not doubting the expenses exist and I owe a fair share, just that sales tax can't address it in any way that'll make sense. Whether you give the money to the state I live in or the state I bought it in, there will be arguments against whichever way you decide. The solution doesn't fit the problem well.

Re:State you purchased it from...

[StikyPad]

So, it really should be paid against the locality in which you reside.

It really should be abolished. Sales tax is both regressive and anti-competitive. If income, property, and vehicle taxes are insufficient, then (go ahead and try to) adjust them accordingly.

Re:State you purchased it from...

[ZombieBraintrust]

Ahh but they carefully crafted the legislation so it would only apply to Amazon. You have to do millions in buisness before these laws apply to you. Likely one of the reasons this was tossed.

Re:State you purchased it from...

[Caetel]

In the EU, the seller would charge the VAT rate of the country they operate out of - so there's only one rate to be concerned with. Also, I don't know whether this applies to other countries in the EU, but sellers only have to charge VAT when they're annual sales exceed ~£80,000 in the UK.

Re:State you purchased it from...

[Caetel]

Ugh. Their.

Re:State you purchased it from...

[Anonymous Coward]

This is actually the way it is done in quite a few other countries.

Re:State you purchased it from...

[Solandri]

Logically, any sales tax levied should be the state you purchased the item from, not where you live. If I drive to a neighboring state and buy something, I pay that state's sales tax, not my home state's sales tax. By extension if I buy something online, the state where the "store" is located should be the one collecting sales tax. [...] Ordering online can be likened to having an designated agent go to another state to purchase something for you and bring it back to you.

You are mixing up what the Constitution says with what you think makes sense. The Constitution prohibits taxes on interstate commerce - that is, transactions which cross state boundaries. If you drive to a neighboring state and buy something, the purchase is not crossing a state boundary and thus does not run afoul of the Commerce clause. The state you're buying it in is free to assume you are a state resident (even if you aren't) and collect a tax.

When you buy something online, you the buyer are in one state, while the seller is in another state. The Commerce clause specifically says that States can't tax this type of transaction. Period. What the seller's state does to sellers within the state is its business. What your state does with buyers who live in the state is its business (e.g. use taxes). But neither state can specifically tax the transaction of Amazon selling to you across state lines. By the Commerce clause, it is totally not like a designated agent going to another state to purchase something for you and bringing it back to you.

The States just need to grow a pair and start up a referendum for a Constitutional amendment fixing this with some sort of national sales tax. The Commerce clause made sense back when trade was conducted by merchants carrying goods across state lines on horse-drawn wagons. The fledgling nation wanted free trade across state boundaries, and prohibiting taxes, duties, and levies when crossing state lines was a good way to do that. But in this day and age where you can conduct the entire transaction while sitting on the toilet in your home and the shipment of the product is a mere afterthought, it needs to be revamped.

The only reason I can think of why the States don't try for an amendment is that it would set up a huge debate between states with low (or no) sales tax and those with high sales taxes. Which is also related to the debate between collecting State government revenue through sales taxes vs. other taxes (income, property). The solution is a lot more complicated than simply setting up a national sales tax. And FWIW, stores in foreign countries enjoy the same advantage. If I buy something from a Canadian store, my state cannot charge sales tax on it. The Federal government may charge a levy or duty to import my purchase from Canada into the U.S., but my state gets nothing. So if this isn't handled properly (i.e. states with high sales taxes completely get their way), it will just end up driving buyers away from U.S. retailers like Amazon, towards foreign retailers which ship internationally.

If it will stifle competition, they will

[Maximum Prophet]

Will Amazon continue to call for a national Internet sales tax ...

If Amazon thinks that any tax, national or state will hurt its competitors and especially new entrants more than it hurts Amazon, they will call for it.

Re:If it will stifle competition, they will

[Anonymous Coward]

This is the nature of almost all "legislation" or "regulations": they are sold as being good for "the little guy", but instead they are just cynical ways to increase barriers to entry so that the entrenched interests can stay entrenched. It really confuses me when people say "the corporations control the government" and then call for the government to have more power to... fight against the corporations?? if you want to fight against corporate abuse, remove what is by far their biggest weapon of abuse: government power.

Eliminate the state.

Sure, but

[oGMo]

This benefits customers, because they get items cheaper. Amazon has no presence in the state, so why should they have to pay sales tax? Gas tax already covers any usage of the roads etc by shipping and delivery companies. And it's not a big hit for local businesses because for the extra $0.50 a customer gets to have the product now.

In short, the only ones who "lose" are Colorado politicians. And if there was a federal sales tax, Colorado wouldn't get a cut, anyway.

Re:Sure, but

[kidgenius]

Amazon has no presence in the state, so why should they have to pay sales tax? G.

The thing you, and many other people, don't realize is that no retailer, ANYWHERE, pays sales taxes on purchases you make....ever.....never ever.....never, never ever. The retailers merely COLLECT the tax from YOU on behalf of the the government. YOU are the one paying the taxes. And, no, this is not some weird "retailers pass the cost on" kind of thing. Sales taxes are paid by the consumer. That's why states have things called Use Tax, which is to cover things like mail-order and online. You are supposed to claim those purchases on your income tax forms at the state level, and then pay the appropriate tax. No one does it though, and that's why states are trying to find ways to get their lost revenue.

Re:Sure, but

[Dcnjoe60]

This benefits customers, because they get items cheaper. Amazon has no presence in the state, so why should they have to pay sales tax? Gas tax already covers any usage of the roads etc by shipping and delivery companies. And it's not a big hit for local businesses because for the extra $0.50 a customer gets to have the product now.

In short, the only ones who "lose" are Colorado politicians. And if there was a federal sales tax, Colorado wouldn't get a cut, anyway.

Amazon would not be paying state sales taxes. They would be collecting state sales taxes, like any other company doing business located in the state and remitting those taxes to the state on behalf of the purchaser. It is the purchaser, who benefits from the state sales tax as it is used to fund state services.

Where Colorado messed up is that they tried to levy sales tax on out of state purchases from a company that did not have a presence int he state. This has long ago been decided. What Colorado should have done is passed a bill that out of state companies, doing more than $X business in the state, must collect use tax on behalf of the state. Since use taxes are already deemed constitutional, having the vendor collecting them should not be a problem.

Re:Sure, but

[CrimsonAvenger]

Where Colorado messed up is that they tried to levy sales tax on out of state purchases from a company that did not have a presence int he state. This has long ago been decided. What Colorado should have done is passed a bill that out of state companies, doing more than $X business in the state, must collect use tax on behalf of the state. Since use taxes are already deemed constitutional, having the vendor collecting them should not be a problem.

Requiring a business (or individual) not resident in your State to abide by your State laws while they are outside your State is usually considered to be a bad thing.

Or do you really think you should be obligated to obey the laws of all 50 States, even those you've never even visited?

Re:Sure, but

[Anonymous Coward]

Actually given that slashdot article about the feds nailing some colorado company for 'interstate commerce' because they bought tools from outside the state to use for medical treatment or supplies or whatever inside the state, having amazon collect the use tax because 'omg interstate commerce!' sounds perfectly reasonable to me. Honestly if they get told 'well you're a state and that's outside your jurisdiction' then just get a bunch of governors together and draft a federal bill requiring state use tax to be collected by any corporation conducting interstate commerce, and problem solved, it's now federal and the 'omg interstate commerce' clause applies.

Pardon if that's not very 'professionally written', but I hope the concept makes it through okay.

Re:Sure, but

[Anonymous Coward]

You are either playing the naive card or don't understand what taxes are for.

Education? paid with taxes. Roads? taxes. Defense? taxes.

Letting Amazon not to pay any taxes is a burden to the rest of tax-paying businesses and citizens. You may benefit in the short run as a customer but in the long run everybody lose except Amazon.

Re:Sure, but

[Maxwell'sSilverLART]

Education is paid for by the residents of the state, typically by income or property taxes. Defense is paid for by Federal taxes. Roads are funded at least in part by fuel taxes, which would apply to the delivery trucks carrying the stuff you purchase from Amazon.

Any more ill-considered arguments?

Re:Sure, but

[Local ID10T]

Amazon has no presence in the state, so why should they have to pay sales tax? G.

The thing you, and many other people, don't realize is that no retailer, ANYWHERE, pays sales taxes on purchases you make....ever.....never ever.....never, never ever. The retailers merely COLLECT the tax from YOU on behalf of the the government. YOU are the one paying the taxes. And, no, this is not some weird "retailers pass the cost on" kind of thing. Sales taxes are paid by the consumer. That's why states have things called Use Tax, which is to cover things like mail-order and online. You are supposed to claim those purchases on your income tax forms at the state level, and then pay the appropriate tax. No one does it though, and that's why states are trying to find ways to get their lost revenue.

Not entirely true. You are correct that this is the way it is supposed to work, but in practice many small businesses find it less costly to pay the taxes than to collect them. I run one, and we do.

For our online sales, we do not collect taxes -they are too damn complicated, and the software packages available to calculate them are prone to errors that really piss customers off. It is simpler for our accountants to calculate the tax after the fact, on all sales that are applicable, and cut a check for the amount due. For our direct sales website, we do collect taxes, but for sales through affiliates, and channels (ebay, amazon, etc) we do not. The cost of getting it to work correctly is higher than the cost of paying the taxes ourselves, and it keeps our customers happier.

To put this post back on topic... I have received demand letters from the state of Colorado under this law - and after a quick reading, declined to pay them as it was obviously an extra-jurisdictional attempt to squeeze money out of us.

Re:Sure, but

[kidgenius]

I'm sorry, but you still aren't paying the tax. You increased the price of the product to include the tax, and then make it transparent to the consumer. You are remitting the tax on behalf of the consumer in the same way as if you were to tack it on to the end.

Re:Sure, but

[gv250]

no retailer, ANYWHERE, pays sales taxes on purchases you make

That may be true somewhere, but it isn't true in Illinois. Quoting the Illinois Department of Revenue: "Sales tax is a combination of “occupation” taxes that are imposed on sellers’ receipts and “use” taxes that are imposed on amounts paid by purchasers. Sellers owe the occupation tax to the department; they reimburse themselves for this liability by collecting use tax from the buyers."

And, 35 ILCS 120/2 "A tax is imposed upon persons engaged in the business of selling at retail tangible personal property ...".

In Illinois, at least, sales tax is quite clearly imposed upon the retailer, and not the retail purchaser. On a related note, when I was running a small business in Illinois I contacted the DOR and asked if I was obliged to collect sales tax from my customers. They advised me that I was under no obligation to collect sales tax, my only obligation was to pay it.

Re:Sure, but

[Local ID10T]

I'm sorry, but you still aren't paying the tax. You increased the price of the product to include the tax, and then make it transparent to the consumer. You are remitting the tax on behalf of the consumer in the same way as if you were to tack it on to the end.

WRONG.

Our prices are set by price matching other sellers in the various markets we sell in. There is no increase in price to hide the tax. Any additions would make our products non-competitive.

Of course it is possible that we are price matching competitors who have built in a buffer to cover their tax liabilities, but its not relevant either from our standpoint or from our customers.

Re:Sure, but

[Mongo T. Oaf]

Wow! There's somebody with the correct information on /. And he may be sane. Wow!

Re:Sure, but

[Anonymous Coward]

This also isn't true in Arizona. Arizona doesn't have a state "sales tax" but a "transaction privilege tax" which is billed to the RETAILER, not the consumer. If you sell goods in Arizona, you are responsible for paying this tax, whether or not you charge the customer for it.

Re:Sure, but

[sjames]

So to rephrase, Amazon has no presence in the state, so why should they be subject to being conscripted as tax collectors by the state?

Re:Sure, but

[SillyHamster]

Your decision on how to set prices (look at the competition) still doesn't change the reality that the consumers pay the tax.

You have margins large enough that you can pay for the tax out of your "profits". Your business still relies on customers paying for goods, and you pay taxes proportional to the goods sold.

Would you disagree with the statement that your customers pay your costs of business? If they weren't willing to pay you more for services/goods than it costs you to provide them, you wouldn't be in business.

Taxes are a cost. Who pays for the costs of business? Ultimately, for any business that is profitable enough to continue operating, it's the consumer.

Re:Sure, but

[hiryuu]

That's why states have things called Use Tax, which is to cover things like mail-order and online. You are supposed to claim those purchases on your income tax forms at the state level, and then pay the appropriate tax. No one does it though, and that's why states are trying to find ways to get their lost revenue.

See, there's a part of that statement - assuming it's true, and I have no reason to doubt it - regarding people failing to pay use taxes that makes no sense to me. I suppose if one strongly disagrees with the tax for specific reasons, perhaps they view non-payment as their form of protest. I think the bulk of people who fail to pay use tax, though, are simply engaged in a combination of intellectual laziness and plain ol' selfish dishonesty. As I see it, if there's not a philosophical objection to paying that tax, then it should be paid as part of one's fair share for supporting the state's infrastructure and needs.

I pay use tax. I have for years. Initially, I just ball-parked an estimate of how much I'd spent, but with my current tracking and record-keeping I know to the penny what I spent on out-of-state purchases, and even manage to exempt the amount spent on taxes collected in other states (for non-mail-order items). Even if someone isn't as analretentive about their records as I am, it's easy enough to say "I spent about $1000 this year on mail-order goodies, so that's the figure I'll use."

And let's be honest - someone who can afford to spend a thousand bucks a year on mail-order stuff (gifts, clothes, DVDs, books, appliances, hardware, etc.) can afford the fifty or one-hundred in taxes that a 5-10% use tax rate would indicate they owe.

Re:Sure, but

[rsborg]

Requiring a business (or individual) not resident in your State to abide by your State laws while they are outside your State is usually considered to be a bad thing.

Or do you really think you should be obligated to obey the laws of all 50 States, even those you've never even visited?

This is an asinine reduction of Dcnjoe's brilliant argument. It's not the retailer/business that is being forced to "abide by State laws"... it's the buyer. All the seller should be required to do is to collect the use-tax where appropriate (ie, if they have presence in-state). If they don't want to do so, by all means, they should refuse to sell to those states that are too restrictive or labyrinthine to be profitable.

Re:Sure, but

[__aajgon4133]

no retailer, ANYWHERE, pays sales taxes on purchases you make

That may be true somewhere, but it isn't true in Illinois. Quoting the Illinois Department of Revenue: "Sales tax is a combination of “occupation” taxes that are imposed on sellers’ receipts and “use” taxes that are imposed on amounts paid by purchasers. Sellers owe the occupation tax to the department; they reimburse themselves for this liability by collecting use tax from the buyers."

And, 35 ILCS 120/2 "A tax is imposed upon persons engaged in the business of selling at retail tangible personal property ...".

In Illinois, at least, sales tax is quite clearly imposed upon the retailer, and not the retail purchaser. On a related note, when I was running a small business in Illinois I contacted the DOR and asked if I was obliged to collect sales tax from my customers. They advised me that I was under no obligation to collect sales tax, my only obligation was to pay it.

So what do you use to pay it? Is it, perhaps, paid from your business's revenue? Assuming it is, where are you obtaining revenue if not from your customers?

Re:Sure, but

[CrimsonAvenger]

All the seller should be required to do is to collect the use-tax where appropriate

Hmm, you're perhaps unaware that businesses collecting sales taxes on behalf of the buyer is a...law...

So, you want to require people to obey laws of States that they don't have a presence in. Which means all 50 States.

And since we can't have selective laws ("This law applies to whites only, for instance, or Walmart only, for another instance), that means that YOU would be bound by the laws of all 50 States.

Re:Sure, but

[sjames]

Actually, that would still create a jurisdiction problem. If the company actually has no presence in the state, where does the legislature get jurisdiction at all?

Re:Sure, but

[sjames]

It's exactly the OPPOSITE problem. The Feds are in a habit of using the slightest excuse to claim they have jurisdiction (rather than the state) due to interstate commerce. If the state argues interstate commerce, they are arguing that they have no authority in the matter.

Re:Sure, but

[cdwiegand]

Indeed, thank goodness in most places you don't have to COLLECT, just pay it. See, the problem is, at least in my state (Colorado), I have so many different possible combinations of tax nexuses I'd have to account for, but Google (and in fact everyone but Apple) can't calculate them correctly based on their address (because they don't have mine, and can't use it if I give it to them). So someone from the same city as me (so state + city + county + bus district and entertainment districts taxes) gets charged the same flat rate by Google (and others) as someone from the Springs (for whom I would only need to collect state, in fact, collecting the others is technically a no-no). So rather than have Google collect the wrong amount, I just set them to collect the state level tax for CO residents, and if they are in a common nexus with me I pay it out of my own profit. Annoying, but legal (and more legal than collecting too much tax), and easier than trying the impossible (get Google to use a proper tax database).

Personally, I'm all for a flat federal sales/use tax that gets redistributed back to the states based on census population or something similar.

Re:Sure, but

[rsborg]

All the seller should be required to do is to collect the use-tax where appropriate

Hmm, you're perhaps unaware that businesses collecting sales taxes on behalf of the buyer is a...law...

So, you want to require people to obey laws of States that they don't have a presence in. Which means all 50 States.

And since we can't have selective laws ("This law applies to whites only, for instance, or Walmart only, for another instance), that means that YOU would be bound by the laws of all 50 States.

When I mentioned " to collect the use-tax where appropriate", I meant, "where the company has presence in the state". Would you agree with a requirement to collect taxes in that case, or are you just trolling?

Yes, the Colorado law probably screwed up here, but if other states adhere to that simple clause it will be fine... and affiliates have been construed to be "presence in state" - feel free to argue that with the states, but that won't trigger a constitutional review.

Re:Sure, but

[Local ID10T]

Your decision on how to set prices (look at the competition) still doesn't change the reality that the consumers pay the tax.

You have margins large enough that you can pay for the tax out of your "profits". Your business still relies on customers paying for goods, and you pay taxes proportional to the goods sold.

Would you disagree with the statement that your customers pay your costs of business? If they weren't willing to pay you more for services/goods than it costs you to provide them, you wouldn't be in business.

Taxes are a cost. Who pays for the costs of business? Ultimately, for any business that is profitable enough to continue operating, it's the consumer.

reductio ad absurdum

Sure! ...and the customers pay the rent, the utilities, the salaries of all our employees, and of course the rent that the employees pay, and their utilities, and their groceries, and the rent of the grocery store where they buy groceries, and the salaries of the staff at the stores where our employees shop, and the rent that the employees of the stores where our employees shop pay, etc.

How far do you want to take that line of reasoning? Its a cycle. It's just turtles all the way down.

In fact, whomever pays, pays. Where they got their money doesn't change it. Money is just a representation of a transaction. We all got it from somewhere, and we all give it to someone else.

Re:Sure, but

[SillyHamster]

My argument is absurd because you try to subdivide your employee salary costs into an infinite number of subcategories?

Why do we care? Where your employees spend their money has no relevance to how your business is run. Every business boils down to $income - $cost = $profit.

All of the money you get, you get because someone valued your goods and paid for them. Every single cost you have is paid for by your customers. How you choose to itemize your costs is irrelevant.

The only way for your costs to not be paid for by your customers is if $cost > $income, meaning you're losing money operating your business. In which case your business has no purpose to continue existing.

Since the very nature of markets leaves only the businesses that can break even or make a profit, all costs must by definition be borne by the consumer who pays more for the goods than they cost the business to provide them.

Best Buy

[Slider451]

We all hate paying sales tax. But giving Amazon a pass on tax while brick-and-mortar stores must charge tax is a significant contributor to the demise of retailers such as Best Buy.

Re:Best Buy

[Anonymous Coward]

If you think having to collect tax is a significant reason to the demise of Best Buy, clearly you haven't shopped at one in a long time.

Re:Best Buy

[Kalriath]

For the billionth time, it isn't "giving Amazon a pass" it's recognition of the fact that the reality is you can't tax purchases that occur over the internet or the telephone. The first problem is whose tax rules should apply... the source? Nice and easy, but that results in double taxation as the destination jurisdiction demands a "use tax" payment - and if the destination is a different country, an entire treaty is needed just to prevent it being taxed twice. The destination rules might work, but what about where the tax should be collected? You could collect it at the source, but then you have the problem of retailers outside of your jurisdiction - you can't apply laws to them (DealExtreme for example would be unlikely to charge and remit the tax. Besides, Europe already tried this and got told to get bent by the USA, so it'd be pretty hypocritical to try it). Collect at the destination instead? Could work - but you either have to do it on the honour system, rely on retailers to hand your local authority their entire sales receipts so they can comb through looking for transactions that need tax collected (not going to happen) or apply it at the border - which doesn't really work in places like the USA where goods don't pass through customs agents getting from A to B.

Re:Best Buy

[kidgenius]

And?

No, really. Of what concern of mine is the health of Best Buy?

The only benefit of Best Buy is that it gives an easy way for the states to collect sales taxes from you. So without Best Buy, the tax revenue drops as more people shop online. But, tax revenue shouldn't decline if people were all fine upstanding citizens that paid their Use Tax. But of course, no one does.

I think we should eliminate sales taxes entirely and raise the income taxes.

Re:Best Buy

[tompaulco]

But giving Amazon a pass on tax while brick-and-mortar stores must charge tax is a significant contributor to the demise of retailers such as Best Buy.
They are not giving Amazon a pass. The tax is still due, but Amazon doesn't have to collect it. You have to pay it. They can't make Amazon collect it because Amazon is not under their jurisdiction.
Further, I think that the state should not be allowed to force retailers to collect the tax either. The retailers don't get to keep that money. They have to forward it to the state. There are record-keeping costs, storage costs of transaction information, and other administrative costs to this process, all borne by the retailer, who then has to charge you more for their product, or just shut down if they can't charge more. If the state wants the money, they need to collect it themselves. Now if some business wants to make a deal with the state and say "I will collect your sales tax for you , if you pay me $100,000 a year to do it", then that would be fine with me. Unfortunately, the reality is that state's force retailers to collect the sales tax, and if they won't, then they don't get a business license. In my state, the state makes retailers pay a fee for the privilege of collecting the state's sales tax for them, bearing all the costs of collection and record keeping, and forwarding every penny on to the state.

Re:Best Buy

[wheeda]

If I had mod points, I would be tempted to mod up this off topic comment.

Re:Best Buy

[cpu6502]

It's not a "pass" for amazon. EVERY purchase you buy from amazon or any other retailer, you are required to pay 6, 7, or 8% tax. Either sales for local business or use tax for out-of-state.

The fact that you choose not to pay your use tax to your state is not Amazon's problem, and not their responsibility to fix. It is yours. You (and your fellow residents) are tax dodgers for claiming $0.00 use tax on your return.

Re:Best Buy

[Slider451]

So consumers are criminals, while laws benefiting sales at some companies over others are defended. Your unquestioning acceptance of the status quo is interesting.

Re:Best Buy

[SillyHamster]

Well, they *could* tax the transaction.

It's just that it has to be the federal gov't that implements such an interstate commerce regulation. States are denied that power by the US Constitution.

The federal gov't not having done such a thing can be seen as a result of various factors:

- Various online retailers lobbying Congress to not increase their costs of business (whether fair or not)

- Congress not particularly interested in passing laws whose only purpose is to raise money for the states, as opposed to the federal gov't

- Congress not interested in being responsible for raising everyone's taxes, which a national sales tax regulation for online/phone/mail transactions would do. They'd much rather tax some "evil" minority, such as the rich, oil companies, phone companies - someone who the public wouldn't care as much about.

Congress could pass a law that states the sales tax is determined by the location of the purchaser. (encourages people to move to lower tax states) Or it could be based on the location of the seller. (encourages businesses to move to lower tax states)

For whatever reasons, Congress hasn't done so yet, but Amazon, to its credit, is not freeloading - they're lobbying Congress to do such a thing. (And get rid of individual states trying to specifically target Amazon for higher taxes)

Re:Best Buy

[Anonymous Coward]

Really? I remember going to stores like Best Buy, Curcuit City and Comp USA long before New Egg and Amazon came along. The product offerings were horrible! I could choose from maybe two vendors' product lines and only a few models at that. I wasn't able to build my first PC until New Egg came along because none of my local stores stocked what I wanted. The two Best Buy stores where I live still offer pathetic product choices. Brick and mortar stores simply cannot keep enough items from multiple vendors in stock to cater to my needs.

Choice and convenience are my two primary drivers when I shop electronics. I have actually paid more for items on Amazon than I would have at my local Best Buy simply because Amazon had what I really wanted.

Re:Best Buy

[mcgrew]

Best Buy wasn't murdered, it committed suicide by treating its customers like garbage. No business can treat its customers badly and stay in business without a monopoly.

Re:Best Buy

[Slider451]

I don't disagree with your comments about Best Buy's own role in its downfall. However, at the bottom of the slippery slope of failing retailers is Walmart, who survives by undercutting all its competition via massive scale. Walmart is certainly not known for its knowledgeable sales people and great customer service. The only other tech option locally (Minneapolis, MN area) is Microcenter, but there's only one on my side of town and it's a much farther drive than BB.

Geeks like us will always buy our niche components (e.g. graphics cards, HDDs) online. But I do make the occasional visit to Best Buy for accessories such as keyboards, mice, and headphones that I want to touch before buying. I did the same at CompUSA, CircuitCity, and countless other deceased stores. It's a shame they have to charge tax when the base price is the same as Amazon's. Retailers have a legitimate complaint that buyers do their hands-on research in-store then order online to get a better price. If stores didn't charge tax this wouldn't happen nearly as often.

Re:Best Buy

[Kalriath]

To be honest, the only chance they have is to tax the transaction itself instead - otherwise you essentially give a leg up to foreign merchants. This isn't a new idea - retailers in many countries have been advocating it on the basis that foreign merchants can undercut them because they don't have to pay taxes (newsflash for Aus/NZ retailers: foreign merchants can undercut you even with GST, because you charge too fucking much).

Re:Best Buy

[mcgrew]

Walmart is certainly not known for its knowledgeable sales people and great customer service.

Neither is Best Buy. Things like laptops and headphones I'll get at WalMart, stuff like drives and memory and such I usually get from JDR in California.

Well, hell!

[Quiet_Desperation]

(Fires up GPS app)

Where did they toss it?

There may be a federal deal in the works.

[SuperKendall]

I had read last year that Amazon is working out a deal with legislators for a federal sales tax for internet sales.

You knew the feds were not going to be cut out forever, and that online sales would have to be taxed someday...

The states will of course get a cut of the tax, better than nothing.

I wonder if the brick and mortar rule will still apply. If there's a simpler way to pay taxes for online purchases and any business is allowed to apply it, imagine all the lost sales tax from companies like Apple that pay local sales taxes today...

Of course, there's a more recent rumor that Amazon will be opening real stores soon and thus subject to local sales tax after all.

Re:There may be a federal deal in the works.

[tompaulco]

You knew the feds were not going to be cut out forever, and that online sales would have to be taxed someday...

The states will of course get a cut of the tax, better than nothing.
Well, I don't see how that will work. Some states have no sales tax. So now, do you have to file for a refund of these taxes that you don't owe and now have to wait around up to 18 months from the time of purchase to get your money back?

Gid Rid of All Sales Taxes

[kidcharles]

Here's an idea to clear up this mess nicely: get rid of all sales taxes. They're extremely regressive and complicate and impede commerce. Increase income, property, and capital gains taxes to compensate.

Re:Gid Rid of All Sales Taxes

[Anonymous Coward]

Income and capital gains taxes don't complicate and impede commerce?

Re:Gid Rid of All Sales Taxes

[PPH]

But the sales tax is part of a tactic to maximize revenue without the taxpayer noticing. The fewer events that you tax, the greater the rate on each one. And then the taxpayer sees it and starts to ask questions. Like: What the hell are you clowns doing with all this money?

Re:Gid Rid of All Sales Taxes

[drinkypoo]

Income and capital gains taxes don't complicate and impede commerce?

Yes, that is correct. They complicate and impede other things.

Re:Gid Rid of All Sales Taxes

[geekoid]

A) Find me one adult who doesn't realize they pay a sales tax. IN a state that has a sales tax, obviously.

SO, at best, your initial premise is a straw man, at worst, just stupid.

B) No, it's actually the less on each one.

C) Any taxpayer can find out exactly what they are doing with the money. It is not hidden. Don't confuse your 'Too lazy to actually look' with 'No one knows what they do with the money."

You're post has made you look stupid AND lazy.

Re:Gid Rid of All Sales Taxes

[wheeda]

This is true. It is also true that only 50% of people actually pay income tax. If we had a flat tax with no deductions, the whole population would be interested in reducing government spending. Right now 50% of the population wants more government spending because it doesn't cost them anything. Who wouldn't?

Re:Gid Rid of All Sales Taxes

[Anonymous Coward]

Here's an idea to clear up this mess nicely: get rid of all sales taxes. They're extremely regressive and complicate and impede commerce. Increase income, property, and capital gains taxes to compensate.

So the government can create special loopholes for special people so they don't have to pay? Loopholes that buy these government officials a re-election? Will this let those who don't claim income, like drug dealers, pay less taxes?

Re:Gid Rid of All Sales Taxes

[Anonymous Coward]

Well... sort of. But the drug dealers who don't pay income tax on their drug dealing income are subject to criminal penalties for tax evasion just like any other person who doesn't pay income tax..

Re:Gid Rid of All Sales Taxes

[Josh Coalson]

Here's an idea to clear up this mess nicely: get rid of all sales taxes. They're extremely regressive and complicate and impede commerce. Increase income, property, and capital gains taxes to compensate.

Sales tax is only 'regressive' if you measure the expenditure as a percentage of income, which is totally arbitrary. That phony definition plays on people's classism to sway them one way or the other. Sales tax when measured against the actual tax base is not regressive and in the US is actually more 'progressive' in that some goods you need to survive have no sales tax.

Re:Gid Rid of All Sales Taxes

[Mindcontrolled]

Yes. In particular the accumulation of wealth by the already wealthy and the widening of the already too wide gap between rich and poor. That's why they are too low at the moment.

Re:Gid Rid of All Sales Taxes

[kidcharles]

This is true. It is also true that only 50% of people actually pay income tax. If we had a flat tax with no deductions, the whole population would be interested in reducing government spending. Right now 50% of the population wants more government spending because it doesn't cost them anything. Who wouldn't?

This statistic is misleading out of context. Everyone who works pays Social Security and Medicare taxes (currently 7.65%), meaning 100% of people with income pay income tax, and of course sales taxes when they spend it. They also pay property taxes explicitly (if they are property owners) or implicitly (as a hidden part of their rent).

The reason the number who pay income taxes is so low is because wages have fallen so much. So it's actually a symptom of one of the critical problems in our country, rather than in and of itself a problem. Anyway, it's completely criminal that if I sit on my ass doing nothing and let a big pile of money I have make more money for me, I only have to pay 15% on the capital gains, while if I go out and actually work the tax can be significantly higher on my earned income. Lumping capital gains in with earned income (with a maximum marginal rate of 35%) would go a long way in reducing the national debt that people pretend to care about when it is politically advantageous.

Re:Gid Rid of All Sales Taxes

[StikyPad]

It's also part of the tactic to get tourists to pay for your infrastructure and services. I'm looking at you, old people in Florida.

Re:Gid Rid of All Sales Taxes

[JustNilt]

Here's an idea to clear up this mess nicely: get rid of all sales taxes. They're extremely regressive and complicate and impede commerce. Increase income, property, and capital gains taxes to compensate.

I agree sales taxes can be harder on the poor in some cases but it's a manageable risk. Blanket statements suchas yours do little more than expose the lack of depth of your understanding. They're only harmful if you assume sales tax is charged on the basics of life. Food, for example, is not taxable in many states. There's no reason the poor shouldn't pay sales tax on a television, however, or a car.

There are ways to make the taxes more fair overall. I'm a fan of the Fair Tax myself which offers a rebate up front every year to everyone that covers the tax paid for everyone up to the income level for poverty. That way nobody pays anything out of pocket until you make more than that base level. I also like that it wouldn't tax used goods. There may be other issues with the Fair Tax that I don't recognize as I am not an expert in the field but that method would seem to work well.

Anyhow, saying a regressive tax is inherently bad ignores that other forms of taxes are too easy to avoid for those wealthy enough to pay accountants and attorneys to do so. How's that any more fair?

Re:Gid Rid of All Sales Taxes

[Ichijo]

They're only harmful if you assume sales tax is charged on the basics of life.

Like clothes.

Even if all of the basics of life were tax free, it still doesn't change the fact that sales taxes are regressive. It only makes them slightly less regressive.

Re:Gid Rid of All Sales Taxes

[ZombieBraintrust]

I think you need to define actual tax base or go into more detail. Becaue currently your arguement amounts to "Nuh Uhh!" I think your twisting the common meaning of regressive to fit your point of view. Like it or not. Regressive tax is about percentage of income.

Re:Gid Rid of All Sales Taxes

[mcgrew]

I'd agree, except the property tax part. I had a friend whose elderly parents lost their home, which had been paid for in full after a 30 year mortgage. Property values had skyrocketed in the 40 years since they moved into their home, and the taxes were three times what they'd paid for mortgage payments.

I just think it's wrong to tax you over and over for the same thing. It's bad enough that they tax you when you earn money, and again when you spend it.

Sales tax is regressive, but property tax is worse. There should be no capital gains tax, capital gains should be taxed as income. Why should someone who makes his money gambling on the stock markey pay a higher rate than someone who earns the same amount risking his life as a roofer or firefighter?

Re:Gid Rid of All Sales Taxes

[Anonymous Coward]

Right, because the rich control the government, and they are so likely to use government power to hurt themselves at the expense of others... you fools calling for more government power are just digging your own graves.

Burden is on Colorado citizens, but...?

[AttyBobDobalina]

Sure, undue burden on so-called out-of-state businesses on this plan. However, the drop in sales tax income as more and more sales have moved online is a serious problem that underlies the tax structure of all state governments (Putting aside arguments against the sales tax in general). What does not change is the fact that Colorado citizens are required to pay sales tax on these purchases, just like anywhere else. Of course, no one does this, so the taxes go uncollected. Coloradans may as well be Greeks. (And well, frankly, all of us.) The problem with overturning this law is that it now puts pressure on the idea of "regulating the Internet" - in other words, government may now want to obtain your internet history from your service provider to see how many items you have purchased. Call it an automated audit. Pretty sure no one is going to like that. So, sales tax is rendered obsolete with internet sales = increased property tax burdens on homeowners = further stress on already shaky housing market = ?

Re:Burden is on Colorado citizens, but...?

[kidgenius]

Much simpler answer really that doesn't involve privacy issues, and that is to just raise income taxes and get rid of sales taxes. You also have the added benefit of eliminating a regressive tax.

Do you work for Goldman-Sachs?

[SuperKendall]

The Republicans want to repeal the bill because it IS bad. It may have one part that is good in there but mostly it just benefits really big banks or companies, and imposes WAY too many regulations on businesses (that again benefit larger companies because they have staff that can handle stupid overhead like that).

I mean, if you are all for benefitting large companies that is fine, but most people would like to see government support for them reduced and Dodd/Frank are KINGS of supporting large companies through government graft.

Re:Do you work for Goldman-Sachs?

[geekoid]

No, it is not bad. They do however continue to us it in their lie that the economy isn't getting better.
So it benefits and hurts business.?

Do you even think, at all, when reading what your echo chambers feeds into your bias? no, of course not.

At least you read the bill, looked at the data and confirmed what they said? no? of course not.

You are a loud mouth and should keep the in mind next time you think every gut feeling you get is correct.

Fucking moron.

And yes, I have read it and looked a the data. I find it more effective when I communicate with my representative.

You're post reminds me of a quote:
“Anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that 'my ignorance is just as good as your knowledge.'”
  Isaac Asimov

Just get rid of sales taxes.

[Ichijo]

Sales taxes are regressive, they discourage commerce, and they incentivize cities to put up big-box stores, while property taxes encourage cities to make land-use decisions that bolster property values.

With so many advantages of property taxes over sales taxes, the sales tax just doesn't make much sense. Conveniently, eliminating the sales tax would also solve the problem of collecting it over the Internet.

Re:Just get rid of sales taxes.

[geekoid]

"Sales taxes are regressive, they discourage commerce,"
false.

", and they incentivize cities to put up big-box stores, "
false

"With so many advantages of property taxes over sales taxes,"

Your conclusion is, well... stupid.
Property tax and sales tax are different things, and each has value different from the other.

Sales tax is applied to all people, usually not on 'needed' items. All people pay them. .Property taxes have less of an impact on low end apts dwellers. Because it's on the property, not on per living unit; which should be changed to be based on number of apts. Because the people density is higher, so they use more servers and pay lass taxes per family then a single family unattached home does.

That's one of MANY complexities you would need to deal with in changing a tax.

Re:Just get rid of sales taxes.

[Anonymous Coward]

"incentivize cities to put up big-box stores?" Where do you live that cities own big-box stores? You're clearly talking out of your ass.

Re:Just get rid of sales taxes.

[roman_mir]

Sales tax definitely does not discourage commerce, income, payroll, corporate tax discourages commerce, because they discourage production, they are part of the cause manufacturing moves some other place, and once manufacturing leaves from your location, your location can no longer really exchange for anything, which means that you can't produce anything that can be exchange for the products that you are consuming.

Sales taxes are the way to go, not income, payroll, corporate taxes also because they are so much easier for the end consumer.

Instead of having to file taxes with the IRS every year, you just pay the sales tax at the point of sale and you don't have to care about your receipt or anything.

Also with sales taxes you can minimise how much you want to pay in taxes by buying less of whatever is taxed.

With income type taxes, you are automatically forced to tell the government about your life, you have no privacy, it's a big brother behind your shoulder.

Not with sales taxes, especially not if you pay cash.

Re:Just get rid of sales taxes.

[Anonymous Coward]

naturally, you favor the taxes that are the least amount of work for wealthy people to avoid. all you have to do to avoid sales taxes is do all your dealings in private, directly with other private parties. people do it all the time, all over the world.

Re:Just get rid of sales taxes.

[Anonymous Coward]

They pay lass taxes?! Lock up your daughters!

Heh, captcha=mating

Alternative collection

[smackmywhammy]

Easy 99% fix for the states: require credit card processors to collect sales tax, and pay them for the privilege. Then there is no preference between Internet and local sales.

Re:Alternative collection

[Anonymous Coward]

Its so easy, because you ignore the same problem that requiring out of state vendors to collect sales taxes have.. which is that the credit card processors have presence in even fewer states than internet retailers. Which would suck for Delaware residents except that Delaware doesn't have have a consumer sales tax.

Please, this is easy to implement.

[Anonymous Coward]

Some might argue that the tax should be collected in the state in which the sale occurred but a single online sale can occur in 2 states simultaneously.

What?

When you order online, I have yet to see an online retailer that allows you to ship two different addresses and there's only one address for billing. So, just collect sales tax based upon the billing address if there's some question as to which state to charge sales tax.

Anyway, big stores like Home Depot and Microcenter have no problem with this - they solved this problem years ago.

Re:Please, this is easy to implement.

[kidgenius]

Anyway, big stores like Home Depot and Microcenter have no problem with this - they solved this problem years ago.

Not quite. They probably determine the closest store to your billing address, and calculate your tax based on that store (with some caveats of course). Home Depot only has 2200 stores. There are probably over ten times that many combinations of taxing districts. It's very easy to determine the sales tax to charge for a single location. It's quiet a more complex thing to calculate the sales tax for all locations.

Re:Please, this is easy to implement.

[mcgrew]

It's quiet a more complex thing to calculate the sales tax for all locations.

Bullshit, that's what computers and databases are for. Lookup tables are trivial to impliment.

Or maybe I was just a better programmer than you kids? It annoys the hell out of me that forms I fill out require me to type the city name, pick the state from a drop down list, and enter the zip code. Forms I programmed only needed the street address and zip code, and the city and state were populated automatically.

Trivial -- but nobody does it. Why? Lack of skill or lack of giving a damn?

Not all state levy sales tax

[Anonymous Coward]

Logically, any sales tax levied should be the state you purchased the item from, not where you live.

If that happens, then all online sellers will move to Alaska, Delaware, Montana, New Hampshire or Oregon.

Re:Not all state levy sales tax

[Sloppy]

Would that bad?

If that were to happen, who loses? Nobody, I think. The states they move from wouldn't lose, because they would no longer have to provide the expensive services that selling things supposedly requires. The states they move to wouldn't lose, because their lack of sales tax indicates they've already thought of a better way to fund their services. The customers don't lose because they pay less. Every party breaks even or wins.

What's Also Going On

[geoffrobinson]

States don't feel like auditing their citizens. There is already a method of collection. At least in my state, there is a line on the state tax form to pay use taxes. Barely anyone pays it and it would be extremely hard to audit. Plus, you have to do it for each individual.

But if I were Amazon, I would tell the different states that their problems with collecting from individuals is not my problem.

Re:What's Also Going On

[cpu6502]

+1 for your last sentence.
States already have a Use tax to apply against out-of-state purchases. But citizens refuse to pay. The states should be enforcing that non-compliance using their own police force, not trying to make foreign non-resident businesses (like me, ebay, amazon) be the police.

Oh! Oh! Oh! Wassup Colorado?

[Greyfox]

Looks like the only thing you're taxing is our patience!

Amazon calls for a federal online tax

[geekoid]

because they know it can not happen. They want to appear 'fair' when in fact they are cheap bastards who won't spend a tiny amount of money to ensure states get there legally mandate tax from in state people purchasing goods.

Re:Amazon calls for a federal online tax

[tompaulco]

The states are perfectly entitled to enter into a business relationship with Amazon where they pay Amazon to collect the state's Use Tax for them. Wait, no, I don't think that would work, because of interstate commerce laws. Nevermind.

Re:Amazon calls for a federal online tax

[Darinbob]

It's simpler just to boycott Amazon and other online retailers.

Bad Arguments

[asylumx]

There are two arguments for why Amazon should collect sales tax.
One is because the state gov'ts are losing revenue. To this one, I would argue that it is too vague which state should get that revenue anyway -- if I live in Indiana, work in michigan, and order something from Amazon (based in WA), then which state should the tax revenue go to? Does it matter if I am sitting at work in Michigan when I order it? Does it matter where I ship it to? or where my bank is?

The other argument is "not having to collect sales tax gives internet companies like Amazon an unfair market advantage." To this one I would say that the argument should not be about sales tax as long as I can buy the same cable for $2 + $4 shipping ($6 total) from Amazon as I can buy for $25 + tax from Walmart, Best Buy, Target, or whatever other brick & mortar store you can think of. The prices are often much cheaper *before* taxes are considered. I think these brick & mortar stores need to figure out how to adapt their models to the changing market rather than try to get gov'ts to legislate against their competitors.

Re:Bad Arguments

[tompaulco]

Amazon only has an "unfair market advantage" if the state is not doing its job properly of making sure its citizens are paying their Use Tax. They are still entitled to that money, and they have every right to collect it, but they have no right to force someone outside their jurisdiction to do their job for them. They only have the right to force companies INSIDE their jurisdiction to do their job for them.

Re:Bad Arguments

[T Murphy]

So because Amazon already has a (fair) advantage, they should get an unfair advantage on top of that?

Re:Bad Arguments

[Darinbob]

Amazon is essentially marketing products as "it's cheaper to buy from us, but please remember to pay sales tax *wink* *wink*". That is, they KNOW people aren't paying the tax and this is a very distinct part of their business model.

Not really complex.

[geekoid]

" They probably determine t"

So, you don't really know.

As for collecting. You set up a method where every year, a county official post there tax, Amazon grabs that information and updates it automatically.

Complexity argument is a Red Herring.

Re:Not really complex.

[kidgenius]

As for collecting. You set up a method where every year, a county official post there tax, Amazon grabs that information and updates it automatically.

Complexity argument is a Red Herring.

So you are going to get >3000 counties in the US to all voluntarily "post" this information somewhere? Good luck with that. Also, you've only described a county tax. What about state sales taxes? Easy enough I guess because there are only 46 of those. What about cities that collect sales taxes? Or any of the other various authorities that collect sales tax?

Re:Not really complex.

[Anonymous Coward]

You are extremely wrong about this. It is incredibly complex. Perhaps some sort of configuration table would work if you just had a few rates to incorporate per jurisdiction, but each jurisdiction has different *rules*. In california, for example, if you buy a cellphone "below cost", you have to pay tax on the cost, rather than what you actually paid. This means that an etailer has to have special code to ask "if this is California and item is cellphone and price cost of cellphone (and where do they get those "costs" from??), then calculate it this way, otherwise that way." In some states, kids shoes are taxes as shoes but in others as kids items. In Washington, there was a law (may have been struck down by now) that taxed "candy" differently than non-candy, but defined "candy" in terms of specific ingredients, so that some granola bars were "candy" and some candy bars weren't. Every etailer has to implement complex ingredient checking logic, including getting a feed of the ingredients in the first place... And this is just scratching the surface. the truth is that most etailers get a lot of this wrong, and eat it by just overpaying taxes when it is too hard to do the calculation right.

"Use" tax

[wcrowe]

Last year Oklahoma implemented a "use" tax. Basically, you are required by law to declare any online purchases made from retailers who do not collect state sales tax. The fact that this law is completely unenforceable did not deter the state legislature from passing it.

Most cities have sales taxes too. I wonder when cities will start trying to get on the bandwagon?

Re:"Use" tax

[wcrowe]

I forgot to mention that you are required to declare this on your state income tax form.

Meanwhile, Oklahoma is considering getting rid of state income tax, soooooo ....

Re:"Use" tax

[Darinbob]

Similar in California. I honestly and truthfully declared $0 for out of state purchases.

I live in colorado

[Anonymous Coward]

And the basic income tax form (104) does not have a line for "Use Tax." This tax, and the fact that you owe it, is not mentioned *at all* in the standard process that most residents use.

Also, popular tax filing software, such as TaxAct, never mentions this tax.

You have to "just know" that you owe this tax, and further just know what forms you need to figure it out and pay it. Furthermore, figuring out how much you owe is very complicated and error-prone due to oddly-shaped and overlapping tax regions (where you live in the state determines how much use tax you must pay), and a long list of exceptions with difficult-to-understand descriptions.

Colorado does have an online app that calculates your tax rate based on where you live, which helps a lot, but they don't advertise this app. You have to already know it exists, and already know how to find it on their web site (putting any obvious key words into their site search, such as "use tax" does not result in this app being in the results list).

So it appears that the state of Colorado believes that every resident must be a tax expert.

You incomprehension is indefensible

[SuperKendall]

No, it is not bad. They do however continue to us it in their lie that the economy isn't getting better.

Ask all the people out of work how well the economy is growing.

Or just try to use your brain for one second and imagine the continued effects of high energy prices will have on and economy that is in even a weak recovery (even though I doubt very much it's as good as that).

So it benefits and hurts business.?

Here is the key part where you reveal that you are simply too ignorant to speak on the matter.

YES YES YES YES YES. That fact you cannot understand this most simply and basic thing is REALLY disturbing. It means I think willful ignorance on your part, a deception of yourself as to what is real! Unimaginable once on a site like Slashdot that someone would be so willing to be used as a tool and lie so deeply to even themselves.

See, here is the core of it. How can it "hurt business and not hurt business" as you seem to be astonished by?

It's because of scale. A small business, say 10-100 employees, is just trying to get by. They have little resources to spend time filing paperwork, even fewer to find out what regulations they really need to follow - lawyers are VERY expensive.

But a large company, they have lawyers on staff so that discovery process is no big deal. They have lots of paper pushers that can just, well, push more paper. To them following the regulations does not add a lot of overhead, but it can easily be enough to utterly kill a small business and prevent it from competing with the large one. They can even use lobbying to add provisions that benefit themselves further at at cost to smaller competitors.

That's why I asked if you worked with Goldman Sachs (I note here you did not say no, just launched a giant ad-hominem assault without any facts and indeed presented a huge misconception of what is the issue). Because you are defending a structure that is killing small business while at the same time keeping larger companies from having viable competition.

I own a small company, do you?

Do you even think, at all, when reading what your echo chambers feeds into your bias? no, of course not.

You need to look in the mirror and recite those very words.

At least you read the bill, looked at the data and confirmed what they said? no? of course not.

Since you obviously don't understand the implications of what it did you sure didn't.

I have read through the bill. But unlike you I know what it means.

The mirror, look in the mirror....

And yes, I have read it and looked a the data.

If that's even true it's an even sadder commentary on your intellect than anything I could say, given the conclusions you have reached.

Anti-intellectualism has been a constant thread

Mirror.

Just because you like to pretend to be an intellectual does not mean you are one.

In the end all you are is another puppet, dancing on strings that you yourself tie in place. Pathetic and somewhat frightening that someone would bind themselves so.

I award you no points, and may god have mercy on your soul (if you can get it back).

Well, then, I'm surely not paying tax twice!

[joshjellel]

Thanks for this explanation. I'll go ahead and assume that all the retailers I buy from online are doing the same, for the same reason, and I will not feel guilty about not paying use tax. After all, why should tax be paid twice? And how am I to know if tax has been paid if a retailer does not state such, but in fact are paying it for their own convenience?

TRUE

[bussdriver]

Therefore impose a SHIPPING TAX on all the companies which MUST operate inside the state to deliver those items! No way of getting around that (without overhead costs.) The massive logistics shipping companies do makes dealing with a state's "import" tax extremely easy for them to implement by comparison.

What about local business? They are exempt; so is freight shipping. Sure some clever business might form to import products then ship them to people somehow illegally... Well, maybe the loophole might be a local warehouse where you pick up your items yourself; but that might not be a bad deal in the end and that warehouse would add some cost make some taxable profit for the state.

Does anybody see how the lack of import taxation is causing a HUGE problem for our economy?? Not just our states but especially the cheap stuff coming in from China... and the foreign subsidized industries intent on killing our industries (like how the USA has done historically to other nations - we don't even spot our own tactics being used against us!)

Re:TRUE

[tompaulco]

Therefore impose a SHIPPING TAX on all the companies which MUST operate inside the state to deliver those items!
That would be regulating interstate commerce, which is unconstitutional.
No, the state just needs to do a better job of collecting the Use tax. If somebody owes you money, it is your own responsibility to get it yourself.

Re:TRUE

[Anonymous Coward]

If you think "lack of import taxation" is causing a huge problem for "our" economy, you don't read the newspapers much (the USA is an extremely protectionist country, at least for the politically connected industries), and you need to (re)invest in your economics education. Try Henry Hazlitt's "Economics in One Lesson".

Re:TRUE

[bussdriver]

Plenty of states provide tax benefits for local businesses to indirectly mess with interstate commerce.

It is not interstate commerce it is shipping tax INSIDE the state. States can tax inside businesses any way they wish; the motives are a separate issue. Lawyers and politicians have a talent for abstracting things from the literal rules in order to circumvent them. It is already done today and if prohibited they surely can find a way around it. Would be if they put their talents into doing something good for a change.

Re:TRUE

[bussdriver]

Ayn Rand Economics do not work and MOST people think libertarian ideals are crazy. Just because of a movement in that direction in many schools does not mean that brand of economic religion works -- especially since we benefited greatly post WW2 and heavily exploited our situation to create an economic empire - it would be hard to fail without doing something really stupid. We've been going downhill ever since and anybody pushing something tries to lay claim to our past success.

Our political system is broken. Most people realize this. The politically "connected" RUN this Plutocracy so it does what they want; which is naturally is to protect their source of power if not gain some more power.

Amazon.com benefits indirectly from state resources but pays nothing; meanwhile local businesses do pay and are punished for the overhead. Local shipping companies actually cost HALF than the national ones; so it is not entirely local stores impacted, an online local business has lower shipping but still must add tax.

Amen Brother

[fuzznutz]

Never does sales tax enter into my calculation of what is the best choice. Usually, the cost differential is so great that sales tax makes no impact on the decision anyway. In the case of Best Buy, I now avoid them at *ANY* cost after the last time I had to return something and spent 45 minutes standing in line and then had to fight for my refund. Many times, I'm just plain lazy and I like being able to have it shipped to my door in two days without the bother of driving, parking, searching, and fighting the crowds. I don't even compare the price in those cases. I find customer feedback on the web more valuable than holding it in my hand. And in the most recent case, while looking for a couple of lighting fixtures I couldn't even find what I wanted locally anyway.

The sales tax advantage is a big lie propagated by businesses that can't compete on service, selection, or satisfaction. Price is secondary.

Use tax == Sales tax, unconstitutional? same thing

[neurocutie]

I still don't understand why a "use tax" is constitutional, but a sales tax for out-of-state purchases is not.

Sales tax on out of state purchases are unconstitutional because no state can impede interstate commerce. But just renaming an out-of-state sales tax as a "use tax" doesn't make it any less unconstitutional. Why is a "use" tax NOT a sales tax? They look the same, smell the same, etc...

If a use tax is REALLY a use tax then:
Why don't you have to pay the use tax for ALL newly acquired items, both those WITHIN state and those obtain from out of state? You can't argue that the sales tax takes care of in state use since the sales tax is for SALES, not USE. If you apply the use tax only to out-of-state purchases, then that unfairly and unconstitutionally impedes inter-state commerce.
Why don't you have to pay the use tax for ALL items brought INTO the state? If the use tax is really a use tax, and NOT a sales tax, then ALL items brought into the state should be subject to the use tax, e.g. I bring in a new camera that I bought elsewhere, or I bring in a sweater that my mom in another state made for me. Again, if the use tax is a USE tax, not a sales tax, then it should apply to ALL items newly being USED within the state, REGARDLESS of it was purchased or not. Even here, it still would seem to apply to inter-state commerce, hence unconstitutional.

It seems obvious that the use tax *IS* a sales tax on out of state purchases and just calling it something else doesn't mean that it is constitutional... Apply whatever test you which and see if you can truly distinguish the use tax from a sales tax on out-of-state purchases... I don't think it will pass the test...

WTH?

[sgent]

Use taxes have been around forever -- in fact they usually predate or come up along side of sales tax. Sales tax is just the state requiring businesses in the state to collect your use tax. For instance, in CA the first use tax was passed at the same time as the first sales tax -- 1954.

http://www.boe.ca.gov/sutax/taxrateshist.htm

Re:Not really complex - HA HA HA

[sgent]

Ok, let's say I'm not amazon, I'm a small tractor supply store in MN. I sell a lawn tractor to a MS resident. Problem is, there are 3 different taxes for "lawn tractors" depending on various factors. If I'm Home Depot I've hired a lawyer to figure this out, but lawn company in MN can't do that for every one they sell. MS by the way is a comparatively easy state to collect in.

Now, think of a state like Louisiana. The state, parish, every town, and often other political entities (special taxation districts) all can level sales taxes. So you can have a different tax rate in the same town and zip code by crossing a street. On top of that, every jurisdiction exempts different items or taxes them at different rates. How the hell is someone in California supposed to figure this out? On top of that, I'm supposed to file separately with every entity I'm subject to taxation from, so one sale could easily land me with 3-4 tax returns to complete. Oh yea, and if I sell that tractor to a farmer the thing maybe exempt, but I still have to file on their specific paperwork, etc.

The reasonable way to do this (and I'm not opposed) is for the states to simplify the collections. This could be accomplished in many ways -- for instance an interstate compact or federal law. However, states need to have a uniform rate within their jurisdiction, uniform exemption standards (at least from the merchants perspective) and all states need the same definitions as to what is taxable. They also need to allow for proxies to file / pay the tax. Then a merchant would be responsible for knowing 1 set of rules, and submitting up to 50 returns -- which they could do through a proxy (for instance if I'm a small seller I can send my sales records to salestaxcompliance.com and they will take care of the filing paperwork, etc.).

Re:Use tax == Sales tax, unconstitutional? same th

[shutdown -p now]

My understanding is that it's not the tax itself that's found unconstitutional here, but rather the requirement for out-of-state merchants to collect it on the state's behalf. Use tax is collected on residents of the state, and the right of states to tax their residents (whether on income, sales, or something else) is firmly established. But out-of-state companies do not reside in the state, so it doesn't get to force them to do anything.

+5 Informative

[Anonymous Coward]

for posting a link to the House Republican leadership's one page caricature-ization of the bill?

C'mon mods...

Refund? Unclear on the concept.

[SuperKendall]

Well, I don't see how that will work. Some states have no sales tax.

It works quite well, the states then would either get no sales tax or the same flat portion that every other state is getting (the whole idea of a national online sales tax would be the same rate across the board).