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Congress Takes Up Online Sales Tax
head_dunce writes "A bill introduced Thursday by a bipartisan group of U.S. lawmakers seeks to make it easier for states to collect sales taxes stemming from online purchases. Amazon is among the e-retailers supporting the proposal, while a lobbying group representing eBay and Overstock.com stands opposed. From the article: '"Small businesses and states alike are suffering from the inability to collect due -- not new -- taxes from purchases made online," said Rep. Steve Womack, R-Ark., adding the legislation is a "bipartisan, bicameral, common-sense solution that promotes states' rights and levels the playing field for our Main Street businesses."'"
I've been noticing that Amazon has been spreading out physical presence in a lot of states in recent years, and in the process cutting deals with those states to suspend sales taxes specifically on them (though a few states wouldn't play ball). So it makes sense to me why they might actually support this. As a big employer in a lot of states, Amazon can continue to create and extend special deals to exempt themselves at the state level, while sticking competing online retailers who don't have so much local presence with a new tax burden. Plus, it also standardizes the now chaotic process a little more at the federal level.
What political party do you join when you don't like Bible-thumpers *or* hippies?
Obviously small business is going to suffer when the western economical system favors growing bigger and bigger.
Only idiot politicians give out tax suspensions. Its happened several times with VW and Sony. As soon as the 10 year suspension was up both companies packed up and left.
Only the State obtains its revenue by coercion. - Murray Rothbard
Yay! More taxes that the government is going to take and waste through ego, corruption, and bureaucracy!
Maybe, just maybe, your Main Street business strategy isn't viable anymore?
Slashdot is always full of "the RIAA's business model is old and they're trying to use the law to defend an outdated model, down with the regime!" messages. how is this any different other than the giant monster behemoth corporation is on the right side of the business model this time?
better than any sitcom.
We shouldn't even be looking at sales tax as a revenue source. The reason sales tax is so acceptable is that people don't notice it until it's too late. They don't realize how regressive it is. In fact, people are so oblivious to this tax that it's become the fashionable way to pay for multi-million dollar stadiums. That reason alone is why I buy things online. Because of all these projects, sales taxes in "major" metro areas are approaching 10% and exceed that for hotels, car rentals, bars and restaurants. That's money that's taxed after you've already paid income tax on it.
Would anyone here take a 10% cut in pay? Yet we gladly pass sales taxes that do the same thing.
The U.S. should go back to its roots and use tariffs as the only source of revenue.
If they have the courage of their convictions, the GOP will kill this in the House. This job killing tax will take money out of the hands of private individuals, where it can't be spent wisely and place it in the hands of government where it will be squandered.
When you walk into a store and buy something there, there is no question about where the sale takes place. That store has no question about what items are taxable and what the rates are: they are the ones that apply to that place. Online sellers do not have that luxury, not anything close to that. There are more than 7000 taxing districts in the U.S., and the rules--and even the boundaries of the districts--are in a constant state of flux. Just determining the district, let alone keeping track of the rules, becomes an immense undertaking.
Several states wanted to streamline the process with the Streamlined Sales Tax Project, but it has turned into something that is not streamlined at all. All those little taxing districts wanted their own distinct parts of the pie, and there is still the hodgepodge of rates and classes of items taxed.
How did we come up with the principle that the point of sale for mail-order and online purchases the address of the customer? If I walk into a store in a state with a higher tax state, they don't let me pay sales tax in my home state at the lower rate instead of that higher rate. No, in this case the rate depends on where I have my feet when I make the purchase. If I then travel to a lower-tax-rate state and, while there, buy an app for my smartphone, they don't consider that my feet are in a state with a lower rate, but where I live.
Why not cut through all the confusion and say that the point of sale for an online purchase where the business is that sells the item?
The moment I have to pay sales tax on {stuff I get from Amazon} is the moment I stop being an Amazon customer - over 90% of my online purchases are with Amazon, and its not just the usual stuff that people buy online - I buy the sort of stuff that people would buy at walmart (soap, deodorant, batteries and other household goods at Amazon so I don't have to pay sales tax
So is this tax a federal sales tax, or is it going to allow the states to collect sales tax? From the article (which was vague) it makes it sound like it's going to allow states to collect and is to benefit states / local economies. That sounds great (not really), but...
...how long until I'm paying taxes to two (or more!) states for a purchase online? (Tax to my state and tax to the state where the merchant is)
I can't find the bills online (spent 5 minutes on senate.gov), so I can't see if the bill provides some direction on which state gets to collect the tax. If someone finds the bills it would be great to provide a link.
Here's a new video card for $0.01 - shipping is $200.
The problem isn't that "state taxes are too big for Amazon to figure out." They've got plenty of legal and tax representation.
The real issue is for SMALL sellers on the internet. Say, people who sell via etsy, or bands that sell albums direct to fans.
Now, suddenly, THOSE people need to understand and properly understand taxes for all 50 states, collect those taxes, and remit them to the proper time to the proper authorities. Oh, with all the necessary paperwork.
Rep. Steve Womack, R-Ark., (said) the legislation is a "bipartisan, bicameral, common-sense solution that promotes states' rights and levels the playing field for our Main Street businesses."
This, folks, is a politician.
When he sees that local businesses are being heavily taxed, and some other business model comes into existence that evades that tax, his efforts are to ensure that other business is ALSO heavily taxed. Make sure the misery is spread equally, instead of (perhaps) asking if there's anything that can be done to reduce the misery generally.
Specialization increases efficiency in a system, generally.
If products can be viewed electronically (remotely), and delivered by mail/courier, the 'public services' being used are minimal. The distribution center already pays property and relevant taxes. The carriers are paying taxes for gasoline and vehicles (which is already subsumed in their prices) which compensate for the public ways/facilities used. The homeowner is already paying property taxes for local law enforcement, etc. (Or the property owner, if it's a rental unit.) I and the retailer are both already further paying for the infrastructure allowing us to communicate.
The fact is that modern technology has made many goods more efficiently sold through remote-purchase and postal distribution. This is simply a (faster) recap of the paradigm-shift in commerce when traveling merchant caravans no longer bought everything on speculation to (hopefully) sell later down the trail. Likewise, big-box retailers kicked the crap out of local small retail/grocery stores generally (albeit that process isn't quite complete yet). Nobody today mourns the loss of the merchant caravan; and already the younger generations have no maudlin feelings about the local small general store.
-Styopa
It's about fucking time. Of course, most of the damage has already been done. Not only have many businesses been destroyed, but at this point, there are so many lazy people who feel entitled to have everything delivered to their door for free, that it's going to be a tough road back for many businesses.
I don't respond to AC's.
The real problem is voracious government entities that will NEVER be satisfied with how much they take from you. NEVER.
You want fairness? Get rid of the sales tax on the brick and mortar stores. What? We can’t do that need that money! For the children! To buy civilization!
We are WAY past “buying civilization”. The only question discussed by any parasitic government entity is how quickly to kill the host.
And yes, the host is dying. The U.S. is over 100 trillion in the crapper with admitted debt and unfunded government liabilities according to the Dallas Federal Reserve president. We can’t grow our way out of a 100 trillion (and rapidly growing because of massive spending) problem. The U.S. at least, is screwed.
Peace is easy to achieve, just surrender. Liberty is much harder get/keep.
How will this shiny new tax be collected and enforced?
One option is to put the onus on the retailers to maintain a database of all the different sales tax rates in the country, so they can collect the appropriate amount on the purchase. At least in New York, sales taxes vary by county -- the State takes 4% and the county takes anywhere from 3-5%. That's 62 lines on the spreadsheet, just for New York. I think NYC adds a point or two as well. This would have to be correlated with a ZIP code table, so the retailer would know which ZIPs are in which jurisdictions. It's tedious, but not impossible. Perhaps the IRS could spend some of our money to draw up the tables and maintain them.
Another avenue is to put the onus on the buyer to calculate and remit the appropriate taxes to the authorities. If I were a sociopath, I'd like this method better. It doesn't burden the retailers and it provides a delicious means of social control, not to mention a wealth of interesting information on what people are buying. Let's take a non-Amazon company as an example, since Amazon has bought exemptions from State sales taxes:
NewEgg is contacted by the NY Department of Taxation and Finance and ordered to turn over their NY sales records. No warrant is required, since the request is for tax compliance purposes. DTF runs the records through their computer system and looks up the tax records of each NewEgg customer. If the customer didn't report the sale, they're in big trouble. If it's a significant amount that they didn't report, or there's a pattern of non-compliance, off to private prison with you!
Cue the naysayers saying I'm a paranoiac and Our Glorious Overlords would never do something so fiendish...
Mail order sales have been taxed in various states for a long time. What is the difference between mail order and internet sales? You order by mail or phone and it gets delivered by mail or parcel post.
So what percentage of tax will I need to charge customers who pay anonymously for online services and download products where I don't even know what country they are in?
now we need to go OSS in diesel cars
How about getting rid of the fucking tax?
Field by removing the brick and mortar tax instead of adding a tax you hypocrite no new taxes republicans.
Surprise! The Congressman representing (3rd District, encompassing Bentonville, where Wal-Mart's HQ is located) the largest brick-and-mortar retailer in the world is pushing for sales tax on sales made by their main competitors.
"These people look deep within my soul and assign me a number based on the order in which I joined" --Homer re:
Would you expect your grocery store to suddenly stop charging you tax? Because that's what's happening with Amazon's groceries. Shipping doesn't make up for it, that goes to fedex and ups. It's been a loophole for a while now, and a lot of people have taken advantage, while brick and mortar stores have suffered. The latter may not be the worst thing, customer service at Best Buy is a lot better now, but I can buy a surfband modem on amazon for $80, and at bestbuy for $120, after tax in my area that comes out to $130, that's quite the difference. It sucks that we'll eventually have to start paying tax for online items, but we'd be returning to the standard and the way the economy is supposed to work, and improve things in the long term.
They will create 1,500 more Kiva robots to handle picking and hire just 100 humans
Ron Paul's organization, the Campaign for Liberty, is trying to kill this thing and prevent the national sales tax from being implemented:
http://dailycaller.com/2013/02/15/the-national-internet-tax-mandate-must-be-stopped/
Libertas in infinitum
"Small businesses and states alike are suffering from the inability to collect due -- not new -- taxes from purchases made online," said Rep. Steve Womack, R-Ark.
Small businesses are not suffering from an inability to collect taxes.
If I'm not mistaken, then you are only exempt from sales tax for an online purchase if the retailer does not have a local presence. So, is it any surprise that the guy is from the state where the world's largest retailer is headquartered?
I'll leave the debate about lost revenue for another day. But this is nothing more than WalMart taking a shot at Amazon.
When are we going to collect due -- not new -- taxes from big oil?
People living outside the "Continental" US are already forced to pay obscene shipping rates -- if we must pay a sales tax, then the vendors need to provide actual choice of shipping methods.
It's ludicrous to claim that Amazon has an "unfair advantage" when the local retailer charges 3x the price; in many cases, the cost difference is even greater than the obscenely high shipping charges.
Sales tax is a huge waste of everybody's time and resources. just outlaw sales taxes and get it over with. The differences can be made up by income tax. Besides, sales tax is regressive in that it harms the poor more than the rich; especially when applied to essentials like food... and I'd include electricity and heat too.
So, you don't care about the poor? (seems like most Americans do not) well how about an appeal to equity - why should you pay more tax than bill gates? sales tax is higher for you than it is him. that is not equitable.
If you do not consume, you pay less tax; essentially we reward people who do not consume in this heavily consumer biased economy... Your income is taxed already (unless too poor) so why tax you again when you spend that money?? Isn't that a double tax?
If you save money, you get taxed on the interest unless you have one of the loophole schemes.... even then you have to invest aggressively because inflation is higher than any conservative investments. Inflation is an indirect covert tax on everybody who isn't heavily and aggressively invested - and what is worse the inflation tax does NOT go to the public it goes to the same Robber Barron Bankers, or more aptly put term from the last century: Banksters.
Democracy Now! - uncensored, anti-establishment news
Time to move to Alaska, Delaware, Montana, New Hampshire, or Oregon. Alaska and New Hampshire also have no state income tax, but Alaska is isolated and has a cold climate until global warming makes it into a paradise sometime in the 3rd millenium and New Hampshire is only free when it comes to taxes. They have routine suspicionless roadblocks, stop and identify laws and other nasty police state stuff. Delaware can be ruled out immediately.
So that just leaves Montana vs Oregon. Unfortunately both have state income taxes. Oregon's income taxes are currently 9% if you make betwen 7750 and 125,000 which should cover pretty much everyone here. Montana has a much more incremental sliding scale at the low end. Only 1% if you manage to make less than 2,600 per year and still survive. 5% if you make between 9,400 and 12,100 as I do. 6.9% if you make more than 15,600 as I'm sure nearly all of you do.
So I guess Montana would win on taxes alone, but Montana also has suspicionless roadblocks which they call 'safety checks' or something like that because sobriety checkpoints are actually illegal there. Montana also shares a border with Canada so the northern half of the state is a constitution free zone from the POV of the CBP and is probably plagued with overzealous jackbooted thugs known as the border patrol who will be only too happy to interrogate you for half an hour every time you drive by even during the day and if you annoy them or 'stand up for your rights' you will probably end up in jail on contempt of cop charges. Maybe even after being beaten or killed. Attorney fees will easily trump sales tax for most of us and even if you make or spend enough that it doesn't take it from me that being locked in a cage is not much fun. Montana also has stop and identify laws. Oregon doesn't. So I think Oregon wins despite the (for most people) slightly higher income taxes.
Quite an experience to live in fear, isn't it? That's what it is to be a slave.
makes sense, since congress is but-fukked and raped by the feds. so yes those britons (read: congress members) want to pass more ---federal--- income tax laws. someone is going to take the personal offshore bank accounts of congress members away: thats the -take away-. paying taxes and following laws is for everyone except the neural network of washington dc. tally-ho
A few years ago, Wal-Mart was the company that people loved to hate. Wal-Mart stumbled, or more accurately, reached their natural maximum growth rate and penetration, so the small business lovers trained their sites on Amazon instead. It's the Wal-Mart hate all over again. We hear more tired arguments.
Amazon is killing some small business because they are inherently more efficient in delivering their products. It has NOTHING at all to do with sales tax. This is the same reason Wal-Mart grew so quickly and bankrupted even the once-mighty Sears. No great business model is impervious for long. Sooner or later, Amazon's successor will rise with a better, cheaper, or more convenient model to deliver their products and the haters will complain anew.
TFA is wrong. The reason the Supreme Court said States can only tax transactions made with companies that "have a physical presence" in that state, is because (follow along now):
(A) States have no legal authority to tax transactions that take place in other States, and
(B) an Internet transaction is deemed to have taken place at the seller's place of business, and
(C) the Federal government has no legal authority to collect taxes on behalf of the States.
Item (B) came about because of the rise of mail-order businesses, well over 100 years ago. The internet brings NOTHING new to the table... it just means a bit more business is being done remotely. (In case you hadn't noticed, the rise of the Internet has created a corresponding fall in traditional mail order business. It has not made as big an impact on sales taxes as many people would have you believe.)
If a mail-order (or Internet) business has a "physical presence" in your State, then it is not unreasonable to conclude that the business transaction took place in your State. Thus, sales tax is applicable. But if it doesn't, then the sale took place in the seller's state and your state can't charge sales tax.
And the reason (B) says that the transaction takes place in the seller's state, is because doing it the other way around is not practically possible; EVERY business would have to keep track of all Federal, State, and local tax laws, everywhere in the United States. Even today, there is no practical way to overcome this. Small businesses simply could not operate.
There is NOTHING that Congress has legal authority to do to change this situation, except amend the Constitution. They simply cannot give States additional taxation power, and they cannot give themselves power to tax on behalf of the States, without amending the Constitution.
This is not mere theory. These are past SCOTUS rulings and the stated reasoning behind them.
(NOTE: most if not all States have a separate tax, called a "Use Tax", that taxes the use of an item that is purchased out-of-state. But that is a separate issue. A Use Tax is not a Sales Tax... the transaction is not being taxed, the use of the item is. So it is legal. The problem is that States have no way to know what purchases you have made out-of-state, unless you tell them. Which makes it an enforcement nightmare. In my experience, many people do not even know that Use Taxes exist... unless they buy a car in a different state.)
Why not just let the idea of sales tax die and instead create a real digital currency similar to debit cards and let the government collect those fees instead of banks. There are reasons we decided on a national currency in the first place and those points apply to digital money as well as paper money and banks sure haven't shown themselves to be all that responsible. Banks do a good job of screwing both merchants and consumers and making their digital currency very un-democratic so not only would it be good to let the government collect these fees in lieu of taxes but it'd also be easy to improve on the current situation.
At what price learning? At what cost wisdom? The price is a man's peace of mind, and the cost is his life.
One of the major functions of government is to protect property rights. The people with the most property are the ones who use the most of this function. Therefore the people should pay a portion of the value of the property they own which is protected by the US government at all levels.
The steps go like this:
1. eliminate all current forms of taxation
2. tax all currency leaving the country (this gets rid of the offshore tax haven loopholes) equal to about 5 years worth of the tax in step 3
3. institute national property tax with no exceptions (houses, cars, bank accounts, stocks, bonds, land and the big one, intellectual property)
My napkin math says the revenue neutral amount would be between 2.3 and 2.8% annual rate for the federal taxes, would be maybe twice that if state taxes were included.
The beauty of a national property tax is that its impossible to avoid. SOMEONE owns the property and if nobody comes forward to pay then the property is seized and auctioned off. Foreign entities are taxes the same as domestic ones. The tax burden is now shifted from labor to capital as it should have always been.
Politicians can't give their friends favors because there is nothing to fiddle with or hide behind. If you own, then you owe. Rich people can't hide their money in trusts or foundations because those will be taxed like everything else. They can take their money to another country but step 2 is a disincentive to do that and the overall tax rate will be so low there wouldn't be a point.
The one possible gotcha is that food production should be considered to be a national security issue. The land and equipment used in farming is usually a much higher ratio vs the value of the crop produced. So family (not corporate owned) farms below a certain size should get a tax deferment until the property is transferred to a non-family member, at which point the back taxes are collected. This deferment would be included in the Homeland Security budget.
This is the correct solution.
Obama should have an executive order to have sales tax on all garage sales and other private sales, and create a new governmental agency to enforce that law. They should have a 2 trillian dollar budget to pay for this enforcement. Anyone that would disagree with this would be fined $1,000,000. that would provide additional funds for new social programs.
Bullshit, you can't tax the Internet. It is not a PHYSICAL building to be taxed. It's online, there is no taxes. Stop trying to take that away from me.
Online retailers should not be REQUIRED to charge tax unless they have a PHYSICAL building.
Alvin in MN sells me a whatsit. Bluehost in UT processes sale. Chase in CA handles debit of my card. Dong in China ships whatsit via China post. US snail comletes delivery via aircraft that fly from LA to MEM to IAH. Federal and state taxes are paid for fuel & use of each airport, roads are not used.
Tell me what state incurred expenses needing my sales tax $, what state gets my sales tax $ & what state my sales tax $ only because it can?
Or is it just about local business having unfair competition? Maybe we should have subsidized horse crap shovelers after cars replaced horses?
When Amazon or greedy Demonrats force all retailers to collect taxes for all interstate & international sales, I will buy all direct from retailers in China, without any sales tax collections. Why not buy direct from China? Is Wally World due a % or all Chinese sales?
I'm sure there will be an internet sales tax. There is too much money
involved for politicians to not tax it. Since this is inevitable, I
think the best thing to do is design a tax system that causes the least
complication for retailers. I propose the following:
1) An internet sales tax based solely on the shipping address.
2) The tax rate be set at 5% (no more then 7%).
3) The money is collected by the IRS or a separate federal sales tax
division.
4) The collected money is divided as follows:
4a) 1% goes to the federal government general fund.
4b) 3% goes to the state according to item 1 above.
4c) .9% (or less then 1% depending on the amounts involved with the
rest going to the federal government) goes to R&D for the internet,
support of public exchange points, support of public high speed links,
and the rest goes to college/university scholarships, general research,
the current general research emphases should be development of new new
sources of energy such as fusion, wind, water, etc.
4d) .1% should go into an emergency relief fund to help deal with
emergencies so relief organizations do not have to wait for congress to
authorize funds. This money would also go to the military to cover
costs of military assistance when military resources are used to
transport relief supplies any where in the world.
5) All merchants have to report is $$$'s collected by city, state,
zip/postal code, and country.
6) Other countries can sign on to the tax agreement by meeting the same
requirements for simplicity, ie reporting is done like item 5 above and
each country can decide how to apply the 5% between federal and local
authorities.
7) Tax should be collected on all sales, no exceptions even if the sale
is to a government, church, state, college, university, etc.
This is my basic opinion and plan. KEEP IT SIMPLE!!!!