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Senate To Vote On Internet Sales Tax (For Real This Time)
New submitter JoeyRox writes "On 3/22 the Senate approved a non-binding proposal to allow states to tax online sales to residents outside their state. That vote was a trial balloon to gauge the support for the Marketplace Fairness Act. This week Senate Majority Leader Harry Reid filed a cloture to allow the law to be voted on for real this time. The vote may occur as soon as tomorrow. eBay is attempting to rally Americans against the bill via a massive email campaign."
But very practical, and should have happened sooner. The overall efficiency of our society will increase if people buy more things at local stores. Less gas wasted on shipping, more money staying in its own communities.
It must be true, because I saw it bolded on the Internet.
If Slashdot were chemistry it would look like this:Cadaverine
How in the hell is income tax unconstitutional when Amendment XVI of the constitution specifically authorizes Congress to levy it?
No, but the people buying the products are.
Slashdot needs a "-1, Wrong" moderation option.
The Urban Hippie
Considering that taxes officially apply even to barter transactions (not that anyone ever declares them), and especially considering that there was another recent article on here talking about how bitcoin is now subject to many of the same regulations as normal currency (like reporting transactions over a set dollar threshold) then yes. this does.
Of course some currencies and transactions are easier to hide than others, but that doesn't make it legal, only likely.
All the software and systems for this are already in place for 24 states. There are services which will do a sales tax calculation for you, or you can download all the data files The required inputs are ZIP code (9 digit ZIP code in a few cases where a ZIP code crosses a tax boundary), product class, and date (for "sales tax holidays"). It's complex because the interstate consortium that does this has to accommodate all the vagaries of state sales tax law in each state.
The idea is that small businesses sign up with a service provider, and send them one check for all state taxes plus an XML file of the transactions. Big businesses will probably run their own software. Expect to see this as a standard component of most shopping cart programs.
What the Federal law is about is getting all the states on board for this, and applying it nationally. There's even a huge loophole - "Online sellers with less than $1,000,000 in remote sales annually will be exempt from collection requirements. Remote sales are sales to customers in states where the seller does not already have a physical presence." eBay lobbied for that, yet they're still whining about the law.
That's irrelevant. Here's an analogy for you:
John lives in New Jersey, but only a few miles away from the Pennsylvania state line. The nearest town from him is 20 miles away, but just 3 miles away from him is Stroudsburg, PA, a decently-sized town. Because of proximity, naturally John regularly drives over the border to this town to do all his grocery shopping and other shopping. Which state does John pay his sales tax to? Simple: it all goes to Pennsylvania, not New Jersey which he resides in. Sales tax is levied at the merchant's location, not the customer's.
Here's another similar analogy: it's 1975, and the internet doesn't exist. John wants to buy a quadrophonic stereo system, and he wants a particular model. No one in his state has the model he wants, however he calls around a lot (costing him a pretty penny in long-distance charges), and finds one at a specialty retailer in Boston, several states away. He doesn't want to trust any private shippers or the USPS with delivering this expensive piece of delicate equipment, so he drives 5 hours to Boston to pick it up in person. At the shop there, he has to pay sales tax. Does the retailer charge him based on his home address? Of course not; he has to pay the exact same sales tax that any local Bostonite would, and that tax money goes to Massachusetts and Boston (assuming Boston has a separate municipal sales tax as many cities do). John's home state of New Jersey doesn't get a cent.
So will someone please explain why these sales tax initiatives require the retailer to charge tax based on the customer's location, rather than the retailer's location? If I set up a shop in Kansas (with no mail orders or internet orders), all my customers, no matter how far they drive to visit me, will have to pay sales tax to the state of Kansas. It doesn't matter if they have an Oregon driver's license and try to argue they don't owe tax because OR has no sales taxes. If you're in KS and buy something, yo pay KS sales tax. So why should it be an different for internet sales? It'd surely make calculations a lot easier for any merchants, big or small, and be a boon to their localities and states. Of course, one might argue that a bunch of merchants might move their operations to tax-free jurisdictions like OR, but that's just too bad for high-tax states, and besides, many small business people don't have the capital to just pack up and move cross-country based on this one factor, or they might not be willing to leave all their family and friends just because of that. And secondly, for large corporations with operations in many states, this would complicate things and would certainly require special legislation so they can't just stick a small office in a tax-free state to avoid charging sales tax.
Have none of our legistraitors ever read the United States Constitution?
CONSTITUTION OF THE UNITED STATES
Article. I, Section. 9: "No Tax or Duty shall be laid on Articles exported from any State."
9/11 Eyewitnesses to Explosive WTC Demolition 1 of 2
Everyone seems to be missing a key issue here. Everyone is constantly complaining about the high costs of everything. Gasoline? Too expensive. Food? Too expensive. Healthcare? Too expensive. Satellite TV? Too expensive. And on, and on, and on. Why the hell isn't government too expensive? If I have to make do with less, then so does the government.
Most people have never run a business selling something and therefore have no clue how much time it takes to deal with sales taxes. In most states, even if you have no sales in any given month, you still have to file the paperwork. Proponents of this tax keep saying that it will "level the playing field for brick&mortar stores". Bzzzt. Wrong. A mom & pop brick & mortar store only sells locally therefore they don't have to deal with the out-of-state sales taxes. That effectively gives them an advantage rather than leveling the playing field. Furthermore, big box stores such as Wal-mart don't give a damn because they already have an army of accountants to deal with the paperwork.
And then who in each local state government is going to process the paperwork suddenly coming in from 49 other states? Oh, well, gee whiz, we don't have enough bureaucrats to deal with it so we'll have to hire more...and pay them...and give them benefits...and a pension...all at taxpayer expense. But wait, this tax was supposed to close budget shortfalls. Oops. Now you've compounded them.
And ultimately, this will lead to only one thing: inflation. Because nobody is going to take the extra costs up the a$$. They are going to pass it on to the consumer. A VAT tax won't solve this either. In fact it will make it worse because invariably there are sticky fingers all along the government food chain.