US Senate Passes Internet Tax Bill 69 To 27

schwit1 quotes The Washington Post: "The Senate aimed to help traditional retailers and financially strapped state and local governments Monday by passing a bill that would widely subject online shopping — for many a largely tax-free frontier — to state sales taxes. The Senate passed the bill by a vote of 69 to 27, getting support from Republicans and Democrats alike." schwit1 adds "Unfortunately online businesses could be in for a rude awakening when it comes to the law's interpretation." Passage in the House is not certain, and companies like eBay are lobbying to raise the minimum sales required to collect state sales tax to $10 million instead of $1 million per year.

Comments

bollocks

[DFurno2003]

Total Garbage. Just what I expect from the U.S. Government. Can't balance our budget, find more ways to tax consumers.

Re:bollocks

[Anonymous Coward]

Or rather find ways to collect the tax that consumers already owed.

Re:bollocks

[Anonymous Coward]

We are taxed when we earn the money, and double taxed when we spend it.

Re:bollocks

[ganjadude]

if you dont spend your money you got people claiming you are not paying your fair share. there is no winning anymore. your money is not yours, its the governments, they just let you have some to keep you content.

Re:bollocks

[oh_my_080980980]

No one owes taxes on purchases made from companies that do not have operations in your state. That's how state sales tax works.

Re:bollocks

[Anonymous Coward]

Thanks you for saying what no one else seems to be able to grasp.

Sorry folks, but I don't work my ass off so you can have a better life/health insurance/nice things/whatever... Once all you commie bastards figure that out and realize the path to a better life lies only within you, things will start to be good again. Until that time we are all fucked.

Re:bollocks

[pla]

Mod parent up! It disgusts me to hear US Senators not "get" that point.

The customer may owe use tax in their state. The merchant has (or "had", if this turd of a bill passes the house) an obligation only to the states in which they have a physical presence.

And this whole "level playing field" BS? Seriously? How many mom-n'-pops (and don't give me any lip about the $1M threshold, your corner convenience store easily has gross receipts 2-3x that) have to deal with the individual sales tax structures of every US state, countless counties, and even individual towns? And as if that doesn't get messy enough, figuring out which products fall into which tax categories in each of those jurisdictions?

This won't hurt Amazon. This will merely annoy Amazon. It will destroy smaller online merchants, however - If not up front, then when the owner goes to prison for screwing up some obscure detail of NYC taxes on imported llama-hair socks.

Re:bollocks

[Gamer_2k4]

What do so many Americans have such fear/hatred of Socialism?

Because we like to think we deserve to use the money we earn in the way we choose.

Re:bollocks

[Anonymous Coward]

Indeed. Socialism is not a bad thing. I was born an American and have lived in not one, but three countries that have socialist economies. All three countries have a higher quality of life than the US, all three have universal healthcare, all three have very inexpensive university systems through the PhD level, the list goes on.

The average American with a family pays ~$5000 for the "right" to have health insurance. Taxes for better, actual guaranteed healthcare in other countries is far less, on average ~$2600.

Americans want the government far removed from their healthcare, but think nothing of letting their child's mind be marinated in a government-run school system for 12 years.

Americans want the government far from their money, but love Social Security, clean air, pot-hole-free highways, safe air travel, clean water, etc. All of the above are paid for with tax dollars.

A civilized, democratic society uses taxes for the benefit of all, especially the least of these. Anything less is greedy, evil, and inhumane. It isn't about getting wealthy, or shouldn't be, it's about everyone having a decent life.

Re:bollocks

[gstoddart]

Because socialists have this nasty habit of killing LOTS of people.

Yup, countries like Canada, Denmark, Finland, New Zealand and the Netherlands are well known for their atrocities and killings.

Seriously, just because you can cite a couple of really awful examples of historical groups who had the word "Socialist" in their name, doesn't mean you can equate all forms of socialism with killing.

Re:bollocks

[hedwards]

Right, because fascists are such cute and cuddly people.If you're too stupid to understand that, then do us all a favor and don't vote and don't breed.

Because god forbid that the government do something nice for us.

Re:bollocks

[mwvdlee]

Because "somewhat less rational" people confuse socialism with communism, as demonstrated by parent.

Re:bollocks

[mwvdlee]

Because we like to think we deserve to use the money we earn in the way we choose.

Isn't that what voting is for?
Or are you describing anarchy?

Re:bollocks

[ducomputergeek]

Not only this, but most people hear $1M in online sales, you must be rich!. They don't seem to realize that $1M in sales != $1M in profit. I do consulting work for a couple clients that are above the $1M per year in sales mark. One did about $1.4M in sales last year and had profits of less than $200k. The other did about $7M in online business last year and still had profits of less than $1M.

Add in the additional legal and accounting costs for having to track at least 50 different taxing jurisdictions and up to potentially almost 10k and be up on all the changes to tax law and try to figure out what items are taxable where....it's a nightmare. No only that but it's a legal minefield. For instance our state exempts certain grocery items from sales tax. And some of the things considered grocery items gets funky. An example: a big bag of potato chips are a grocery item. A small sized bag at a snack counter is not. Charge sales tax on the wrong item and get caught and the fine is rather steep even if it's an honest mistake.

If I have a retail location in this state, I get to keep a percentage of the sales tax I collect to cover the cost of being the collector. What about the other states? How much of that tax collected will be owed? Now you times this by at least 50 opening up your legal liabilities tremendously.

Re:bollocks

[Attila Dimedici]

Fascists and Socialists are separated by a hair's worth of difference when it comes to government control over economic activity and respecting the rights of individuals.

Re:bollocks

[Bardez]

No, that is not what voting is for. That is what personal responsibility is for. Voting is for electing people and collectively deciding directly on very few issues that involve all of our society. The money that I earn does not fall into that category. What I make and do with my money is none of your fucking business.

Re:bollocks

[i kan reed]

We also like to pretend that we earn every dime that goes are way, and in no way are dependent on society at large for the potential to do so. We are by-and-large stuck up pricks who don't understand social contract theory, it's all about freedom.

If you gave us Americans a multiple choice test about how the world works we'd just go down and answer every single question "C. Freedom" without reading what it said. Well, some would answer "Jesus" to every question, but the lever of understanding reflected is the same.

Re:bollocks

[cob666]

More importantly, the bottom line is that the government needs tax revenues. If you want the gov't to cut spending, that is a totally different topic. If you allow the government to exist in any way/shape/form, it needs money, and if they can't get sales tax, they will just increase your real estate taxes instead until they can cover the difference, or any number of alternative tax revenue avenues. Heck, abolish state sales taxes entirely for all I care, it's a regressive tax anyway, just make sure that whatever tax is raised in its place is applied fairly. One way or another, they will collect tax. If you don't like it, then fight spending until they don't have to collect tax. But wanting all the spending, while denying the necessary tax revenues is fiscally irresponsible.

If by government, you mean State Government then yes, they do rely on sales tax. But most (if not all) states that collect sales tax ALREADY have a mechanism in place to charge sales tax on out of state purchases directly to the consumer. It's called a 'use tax' and states should be using THAT to collect the sales tax due. Do you know how many businesses I deal with that don't pay the use tax when they buy stuff from Amazon? States should have focused on collecting this tax instead of wishing for some magical solution that would drop revenue in their laps. So, now instead of auditing state citizens, states are going to have to create centralized departments to deal with basically every online company in the entire country and start auditing them. Sounds like a much more expensive solution to collect what should be the SAME amount of use tax revenue.

Re:bollocks

[cayenne8]

What do so many Americans have such fear/hatred of Socialism?

Because it is the antithesis of the values and principals that America was built upon.

We value the individual, the person that can take his own matters into his own hands and succeed. Personal responsibility and individual effort are what brought such success to the US over its life, until about now.

The thought has been in the US, that the government is there just enough for basic needs (military, police, fire, etc), and largely stays out of your way to allow you to succeed or fail as you see fit.

Many (self included) see the recent years of people depending ever more on the govt., not taking responsibility for their own actions, people not being allowed to fail, and more and more intrusive govt. as being the major factors into our fiscal and economic woes.

The US was built upon the individual small business, and right now, it seems most all levels of govt are going out of their way to make this more and more difficult and kill things off.

The US was built and succeeded with methods directly opposing true socialism.

The needs of the one outweigh the needs of the many.

Re:bollocks

[Anonymous Coward]

It won't stand.

Taxation requires representation. If I buy something in another state, I either have to be present for self-representation (as is the case with in-store purchases) or have a legislative representation appointed by a vote that I had a chance to participate in. This is NOT the case for ANY state. I cannot vote in other states, thus I have no representation, thus I cannot be taxed unless I'm physically present within the borders of their jurisdiction.

So they try "reciprocity". Reciprocity destroys any reason for levying the tax in the first place, since the state that actually bears the burden of the business (shipping, warehousing, etc.) doesn't collect the tax. Sure, they can make this stick, but expect the big exporting states to push to throw this out. They get no more benefit than anyone else, but they bear most of the costs. Think of shipping hub states like NY (Syracuse), OH (several cities), NC (Raleigh/Durham), GA (Atlanta), TN (Memphis), TX (Dallas/Fort Worth/Greenville), IL (Chicago-metro), or CO (Denver). Those places bear more than their "fair" (or taxed) share of infrastructure costs.

The real problem lies in the definition of a sales tax and the restrictions they place upon it for no actually valid reason. Sales tax is defined as a tax paid by the buyer, but collected by the seller on behalf of the government. Some states even restrict sellers from "eating" the sales tax by paying it on behalf of the buyer. Some are even so strict as to try to "mask" the tax rate by not allowing sellers to show with-tax prices before the sale transaction begins. This is why we don't have more stores that say "this item is $5.00, tax included". This is an asinine bureaucratic requirement that needs to be removed and the people who invented it, continued to enforce it, and who support it idealogically dragged out into the street and publicly humiliated and executed. This is the price that should be paid for shoddy leadership and bureaucratic masturbation. Seriously, fuck bureaucrats.

The real fix to all of it: Define sales tax as a seller-paid tax. No further restrictions on who can see what or when in the transaction it's made clear how much tax applies. Now, sales taxes are paid to the local jurisdictions over the seller, which has an established, known location (location of the "store" that made the sale, which must be declared as part of doing business in each state). This ALSO provides an incentive for state governments to make it easier for businesses to set up shop in their state, lest they lose out on potential tax revenue. It's just that "setting up shop" now would include moving into a data center in that state. For a setup like Amazon's, distributed transactions would have to be handled by a distributed tax, shared equally among the registered locations where transactions can be handled.

Re:bollocks

[arfonrg]

Your comment in another way: "Sure influenza has killed some people but not everyone dies when they get it so how can you say it's bad?"

Re:bollocks

[twistofsin]

What do so many Americans have such fear/hatred of Socialism?

Because we like to think we deserve to use the money we earn in the way we choose.

From what I have observed from my countrymen this is correct, and until we change the way we view each other we don't deserve better.

Re:bollocks

[Hillgiant]

What do so many Americans have such fear/hatred of Socialism?

Because we like to think we deserve to use the money we earn in the way we choose.

Because we like to imagine that we are somehow separate from and superior to the society we live in.

Re:bollocks

[Anonymous Coward]

I think I understand social contract theory just fine and I reject it outright because of its 1) similarity to slavery/indentured servitude (we are all born into a system owing something to that system) and 2) contracts are things you enter into voluntary, yet social contract theory is neither voluntary nor something clearly negotitated and agreed upon by two parties. Social contracts also put the individual at greater risk to direct democracy. Social contract theory also puts everyone at odds. Everyone suddenly becomes debtor and debtee.

America is a solution to an optimization problem: maximum individual liberty. Not maximum quality of life, not maximum education, not maximum civil welfare. If you want to maximize these, I highly recommend totalitarianism. The US certainly didn't need to bother with States, Checks and Balances, and local government if this weren't the case.

I trust in the good of individuals to do the right thing. You seem to trust in the good of society to do the right thing, often at the expense of the individual (or at least under the assumption the individual will not do the right thing). While your code may be a more expedient means to an end, mine respects has a greater respect for rights of the individual without resulting in the use of force or turning people against each other. Keep your social contract. I'll keep my freedom.

Re:bollocks

[i kan reed]

I have a social contract with America? Can you point out where I signed that particular piece of paper?

Quoting since the thread depth cutoff has made me start to appear schizophrenic.

The social contract is signed every day you're not dead from the laws protecting you. You're free to reject the contract at any time, but then you lose the implicit protections. In fact, we're so nice with our social contract in modern liberal democracies, we limit how much protection you lose based on the severity of your breach. Isn't that nice of us?

Re:bollocks

[thomasw_lrd]

It's the entire US system. We're taught from an early age that those evil Communist Russians and Chinese are eviiiiil. We are not taught that Socialism and Communism are not the same. We are also not taught the difference between a true democracy and a republic. (The US is not a democracy). There are a few other issues that need to be worked on to. There are aspects of Socialism that work, and there are aspects of Democracy that work. But you must be evil if you teach that in school.

My personal belief is that in a perfect world Communism is the best form of government, in an imperfect world, a combination of governmental philosophies are the best.

Re:bollocks

[danbert8]

Canada, Denmark, and New Zealand are higher than the US on the Heritage economic freedom index. They openly admit to some socialism and they are freer than we Americans are. Finland and the Netherlands are also pretty high up there.

At $10 million companies would "outsource"...

[Chrisq]

to collect state sales tax to $10 million instead of $1 million per year.

I predict that if the limit is raised to $10 million then companies will "outsource" sales to wholly owned subsidiaries. For example "Your order has been filled by Amazon West Houston INC"... which has sales below the threshold. At $1 million a year it would be debatable whether the large organisational overhead would be worthwhile for larger companies, but an $10 million it probably would be.

...wont make me shop at "traditional"

[cgiannelli]

Shopping at home is more convenient and less stress inducing. Societal courtesy is low, people wander about stores aimlessly blocking isles, screaming kids, yelling parents. Store personnel that ignore you, and if you ask for an item seem annoyed. 10 registers and 8 people in line but only a single register is ever open. It feels like an interrogation when you go through checkout "have our store card? want our store card? Did you know about this special? fill out this form? Zip code please, credit or debit?" and I just say "can i just pay and leave please?".

Traditional retailers want business? Change their service, train staff better, have more registers open, kick out the rabble who just hang out in stores and never buy stuff. Most of all lower prices. Even with shipping and sales taxes, I've bought quite a few items online far cheaper. It adds up. Time saved, gas saved, not desiring to punch a moron, or rude person. Despite our need to be around people, malls and shopping just sucks. It's not the same pleasant experience it used to be.

Re:...wont make me shop at "traditional"

[davidbrit2]

So what you're saying is that they should reduce marketing, spend more on training and staffing, and shrink the clientele, while at the same time lowering prices? Interesting strategy, but I don't think "reduce revenue and increase operational overhead" would have the desired result.

Re:...wont make me shop at "traditional"

[jbmartin6]

I said roughly the same thing when the Best Buy CEO was complaining about people using BB as a showroom for the Internet. I thought "You are really complaining that people are coming into your store?" That chump wanted to blame everyone else when people who WANTED to buy something were in his store and left empty handed. That's called opportunity, how do you get to be a CEO without recognizing this? Instead of looking into the top reasons people don't buy in the store, which you mentioned, and doing something about it. I was just in Target the other day looking at TVs and the only employee around was hunched over a laptop off in the corner studiously ignoring everyone. Well I guess an online retailer gets the sale. I wanted a big red button under the TV that I could press if I wanted to buy it. And no I don't want the goddamn Spanish Inquisition about club cards and extended warranties. Those last two are the sort of crap you get when you put stock analysts and accountants in charge of the company.

Re:...wont make me shop at "traditional"

[140Mandak262Jamuna]

You shop where you find it convenient. Traditional or the net. But the tax is due either way. Eithter you allow the retailer to collect the sales tax and remit it or you track it cleanly and file the taxes yourself. If you are going to take the route, "Come and collect the taxes if you can". Then you are simply a tax dodger and a tax cheat. All this protestations about traditional marketers are thin veneer for the show. Basically you want to dodge the tax.

Re:...wont make me shop at "traditional"

[dhermann]

Tell me more about this "rabble" to which you refer. Can we easily identify them to make ejection procedures? Do I need to print out a Whole Foods shopping list to show to security personnel? Will there be a credit check at the door to ensure that a potential customer can afford to shop at Crate & Barrel? Or perhaps you would prefer to filter by skin tone?

Re:...wont make me shop at "traditional"

[mjr167]

The kinds of sales where online works well are when you either know exactly what you want (down to the model number) or don't particularly care because a wide variety of items fit the bill.

So what kinds of items are left? Either I know exactly what I want or I want or I'm ok with whatever is on the shelf in front of me... I have found more variety and better stuff on line. I have also found the luxury of actually doing research on the product I am trying to buy. I buy diapers and cat food from Amazon, shipped to my door on a regular basis. There are actually very few items that you really do need NOW and not in two days, assuming you are capable of forethought and planning. There actually people that buy ALL their groceries online and have them delivered to their door.

I bought a swing set online the other day and it was shipped to my door with free shipping. Had I bought the swingset from the storefront I would have had to find a way to transport it home.

Re:...wont make me shop at "traditional"

[BLKMGK]

I can only look at pictures, I cannot handle the item in question. I have to wait for shipping and sometimes even have to be home when it arrives during business hours or travel miles to a shipping depot - during business hours. If left the item can be stolen from my doorstep, the item can be broken in shipping, I have to use a credit card or other more direct form of payment and cannot use cash. I'm often forced to setup an account and divulge email information for marketing purposes. I could go on but that's a start.... there is indeed some friction in making an online sale, it's often made up by the more competitive pricing and the ability to easily price compare. It's also nice when a site offers online reviews that aren't full of shills.

Re:National Sales Tax

[Anonymous Coward]

"Congress shall have the power to regulate commerce among the several states". Maybe you should actually read the Constitution before you spout off your talk radio style nonsense.

Re:National Sales Tax

[SuricouRaven]

This may be a very rare thing indeed: The commerce clause being used as intended.

im just glad to see this

[nimbius]

bipartisan effort working together to screw the common american. Major multinational corporations are entirely exempt from burdens like taxation, while wageslaves enjoy a cornucopia of arcane, recursive taxation. That some how we're not supposed to talk about class warfare, why we all make shit-tier pay, or what sand encrusted foreign clusterfuck our taxes are being shoveled into.

it leads me to believe Hollyoaks has it all wrong. That Tony Stark only runs around fixing problems he created in the first place. that Batman is just the billionaire boilerplate we've come to recognize as our perpetual prison industrial complex. That should a revolution ever befall this great nation it will start with a flaming Wal-Mart, and not stop until every mansion and chateau from marthas vinyard to kennebunkport is reduced to a smoldering pile of ash twisted wrought iron.

This is a good idea.

[sidragon.net]

Some big online retailers charge you sales tax, some patchwork of others do. Currently, I have to dig back through receipts to report unpaid sales tax come April and it's a hassle. How about some of you stop your whining and accept that a tax code should be consistently applied.

General Electric

[tekrat]

GE paid zero corporate income taxes. ZERO. On a company that continuously reports record profits. They "offshore" most of their money so they don't even have to pay taxes on the interest they earn. Exxon Mobil plays the same games, but they're in an even better position because they receive subsidies from the government, so their taxes are actually negative (the government gives them money), on top of their record profits.

My guess is that the larger online retailers will have to start playing these games as well. Amazon for sure, will probably charge us (the buyer) taxes, and then offshore the income, so that those taxes never get to the states they should.

Therefore, Amazon will actually get more income from every product sold, and that money will go right into Bezo's pocket. Because he has lawyers and accountants to make that money vanish into his mansion(s), without ever reporting it to the government.

And if not, it's fairly easy to buy a few senators and congressmen and make the problem go away.

What three countries?

[Viewsonic]

I can only think of Cuba, and Venezuela as the only Socialist economies that exist today. A lot of people like to call Europe Socialist, only because they have social services like free health care and such. But that has absolutely NOTHING to do with a Socialism economy. All economies can have free and amazing social services - it is not tied to one particular brand.

Re:What three countries?

[Zeromous]

You are creating a false dichtomy.

To someone upset about the US government collecting taxes to fund social programs, like Medicare, it makes perfect sense to compare them to "socialist" "tax and spend" economies like Canada, Europe, and other western social democracies.