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

Not 50, but Thousands of Taxing Jurisdictions

[Ron Bennett]

Among the challenges of collecting sales tax is there are thousands of taxing jurisdictions. And often the boundaries don't correspond to any zipcode nor even a particular municipality. In addition, sales tax jurisdictions can and often do overlap - ie. city and county.

Even a state that doesn't levy a sales tax itself may allow local authorities to do so, such as some local Alaskan towns do.

To make matters worse, there are numerous categories and exceptions in what's taxable depending on what it is, the amount purchased, the location / manner in which it's sold (ie. food item purchased in a convenience store verses supermarket; consumed on premises or take-out) and when (tax holidays, etc).

And then there's the matter of filing dozens of state sales tax returns - some will expect filings every month, some quarterly, etc. And the time-frames will often differ, so one could find themselves filing sales tax forms practically every month or even more often depending on sales volume. And that's not even getting into dealing with compliance checks that states may perform at any time.

Bottom line is sales tax is far more challenging to collect than many realize. It's not 50 states, but rather thousands of taxing jurisdictions with numerous different rates, rules, exemptions, etc.

There is talk of simplifying the collection process for on-line retailers, which would lessen the burden, especially to small businesses.

Re:bollocks

[MatthewCCNA]

If you're not gonna spend it, they'll need to tax it. So start spending, or we'll have to try Socialism. :-P

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