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North Carolina Tries to Tax Online Purchases
Anonymous Coward wrote with a link to this News-Observer story. AC says the "...NC State department of revenue has added an additional line to the NC Individual Income tax form requiring consumers to calculate how much they spent for goods online and pay taxes on it." Meanwhile, Parothed sent a link to an article that implies that the (heavily libertarian) Cato Institute's Center for Trade Policy Studies might just find the North Carolina Internet tax plan acceptable.
I do have a theory that there is some serious embezzlement in the NC gov't because I swear every 3 or 4 years there is a new scandal where somebody took $__ million from the gov't. So what about the people that aren't caught? Damn these politricrians.
Lets review how much college cost me when I started in 94: tuition was under $1000. I think about $881, and this semester is was $1252. And they want to raise it another $300! F@cking A! I'm sorry, in 5 years raise it close to 100%!
Just give my friggin' degree cause I want out of this f@cking state.
Just an interesting "what if"....
What if Cato were to support state taxation as opposed to federal taxation of ecommerce (given that the 'no taxation' option isn't available) in the hopes of having it struck down under the Interstate Commerce Clause. It would create a rather nifty constitutional precedent and perhaps put some restraints back on the proper scope of the commerce clause...(Another case for the Institute for Justice perhaps....)
Yes, thanks to the lottery, we've replaced the necessary evil of a tax on everyone (but especially the wealthy) with a tax on everyone uneducated enough to spend money on the lottery (but especially the poor). I suppose you believe that having a lower class is a necessary evil, then?
Gates' Law: Every 18 months, the speed of software halves.
The worst part of this is that if you read the article carefully, you'll note that it says on items over $1000, you have to pay an ADDITIONAL 6% tax (or 12% total), so on a $2000 computer, you'd have to pay $240 to the state!
Maybe you're onto something here.... Perhaps one of the states will be smart enough to stay out of this. Create a tax-free internet zone (sortof like vegas where everything illegal is legal). Then they can attract all of the e-business and rake in the money... Nevada? are you listening to this?? Or else everyone will just go offshore to some internet friendly country where they can bury their money anyway.
.plan!! what plan?
The taxed levied on the consumer are peanuts compared to the taxes on businesses. Businesses don't get it in the SALES tax dept, but they take it up the a** in the corperate INCOME tax arena.
Not even to mention the dissappearance of high-paying jobs from the local economy, property tax on the campus (high value by necessity, think of the bandwidth necessary for e-commerce), dissappearance of the high-tech infrastructure (don't kid yourself, high-bandwidth backbones are built first for BUSINESSES, second for colleges, and LAST for home DSL).
Don't have any illusions. If the geeks left for greener and less despotic pastures, NC'd lose far more than they gain by taxing the geeks into oblivion.
john
Imagine all the people...
I'm serious, do you "tax me please" folk really think the government will do better things with your money than you would?
No, I think the government will do different things with the money. Am I better off spending $1000 on books and computers and have public schools suck? Or buy rollerblades but have the parks filled with trash? There are things that government can provide much more effectively than anybody else.
The ONLY way in which an online store costs the local government any money is by the usage roads by delivery companies (UPS, etc).
Online stores still have physical addresses. Somewhere, the police have to protect a warehouse, an office, etc. and somewhere the trash needs to be taken away. If you have a problem with where the tax is implemented because it's different police protecting a store somewhere far away, don't turn that into all taxes are bad.
And I suppose taxing internet purchases is going to lower income or property taxes? Since when does the government ever repeal taxes, once they are created. Why don't you go suckle at the big nanny's breast...
It's not their money! It's our money!
They are all operating under the assumption that they have a right to some percentage of our money that we supposedly would have spent at a local retailer had we not bought online. I often will look for something online, and if I do not find a good price or if it is not available then I won't buy it at all. These guys will jump at any chance to get their hands in our wallets.
This sounds very similar to what has been hush-hushed over in MI - a tax on internet purchases. However, I don't think this is considered a use tax here, but more of a sales tax. Supposedly, it's been in place for several years too. Yeeesh.
"Pinky, you've left the lens cap of your mind on again." - P&TB
"I can see my house from here!" - ST:
Just hope you don't get audited. In CT they can subpoena your credit card records. Anything they find that was bought on-line or mailorder will be taxed. CT has had a Use-Tax for a while now.
North Carolina is not the only one trying to get in the the Intertet Tax thing (disguising it as something else). Check out this article from the November 30th edition of the Detroit News ( http://detnews.com/1999/metro/9911/30/11300078.htm ). I don't know how the heck they're going to enforce this thing...
I've never reported anything of the sort, and I don't intend to. I did 99% of my xmas shopping online this year, you think I'm gonna tally up the totals and write checks to the gov't? They eat my paycheck enough as it is!
This is a slippery issue...I'm very interested but not too worried. It will be a while before there is any real progress made towards a global solution for this mess. And it WILL have to be a global solution.
The Divine Creatrix in a Mortal Shell that stays Crunchy in Milk
The House Between - Original Sci-Fi Series
No, but I would rather some private company be contracted to do it (and do it cheaper, faster and better) than have to pay another 1/2% sales tax.
What's orange and sleeps six?
A Department of Transportation truck.
And how many of you have heard the phrase "Good enough for government work"?
"God does not play dice with the universe." -Albert Einstein
Those who fail to understand communication protocols, are doomed to repeat them over port 80.
In absolute terms, yes, but that's not the point of "regressive" versus "progressive"; the point is the relative percentage of income spent. A poor person is likely to spend close to 100% of income on necessities of life, hence to be sales-taxed on close to 100% of income (so an 8% sales tax would represent close to 8% of the poor person's income). A rich person might spend 50% of income on necessities and luxuries, hence be sales-taxed only on 50% of income (so the sales tax on the rich person is 4% of their income).
I hear this argument a lot. To me, it appears that this ignores the fact that the 50% of income not spent is pretty much useless. Oh sure, you can invest it and it may make more money (potentially generating more taxes you have to pay), but even if you save that 50% of your income and eventually have millions in investments it still seems to have no practical value unless you spend it on something (and then end up paying the sales taxes).
At least, that's how I see it. I'm not an accountant or an economist. What am I missing?
A "use" tax doesn't count as a tax on exports from other states if the rate is the same as the sales tax rate for the same item purchased in-state. If the rates are different, then the tax is screwing out-of-state merchants relative to in-state merchants, and violates the Constitution. If the rates match, the merchants are treated the same, and it is only the in-state consumers getting screwed, and the Supreme Court says that is not against the Constitution.
Last time I checked, louisiana had a pretty high sales tax. New orleans was especially high - 9% or over.
Chances are, you are already required to pay "Use Tax" on any purchase you failed to pay sales tax on. Most states already require this.
Sure, for Joe Sixpack, the issue may never come up. If you get audited, it could look bad, but that's about it.
For a business on the other hand, it could get very ugly.
Of course, I live in Utah, where the tax comission motto is "Tax anything that moves, and levy a fine on inanimate objects". We've got it all. 6.25% sales tax, state income tax, the whole deal.
These jokers once pressed for a 1/4 cent email tax, before a local ISP explained to the state legislature that they handle close to a million individual email messages a day, and would go out of business in about 16 hours if asked to pay that tax.
This is just like television, only you can see much further.
Dunno if anyone got arrested but it would've been poetic justice.
The state wine/liquor distribution racket is a topic for another day, though...
Maybe you think they're good things to spend money on, but to say that governments are the best providers of education and health care, that's just insane. Also, I'm not a Republican, although I've voted for some -- I'm not sure why you think that Republicans are the only ones who are sick of being overtaxed.
As for another person who replied to me, I purposely left out roads because that one (as opposed to education and health care) is actually debatable. I would expect that private companies would do better than the government, but we haven't seen the hard proof either way like we have in education and health care.
Actually, a friend told me a few years back that the U.S. government mixes in cheap rubber when paving the roads, so that it'll wear out more quickly, needing to be repaired sooner, and thus keep all those road workers employed. Anyone ever heard this before -- I never really made up my mind whether or not to believe him.
Cheers,
ZicoKnows@hotmail.com
The one and only fair way for online sales tax to work is if it is applied at the local level, based on where the "store" is. If you visit a "store" in person and buy merchandise there, you pay the local sales tax of the store's location. If you "visit" the "store" via a web browser to make a purchase, you should pay the local sales tax there exactly as if you went there in person. No other taxes should apply, plain and simple. :-)
Then all online sellers should base their operations in Oregon
Nice idea, but sadly the people who pay for government tend not to be the people who receive benefits from the money spent.
If the people who had to foot the bill actually got to decide what the goverment spent money on, the only result would be a much smaller government.
Having said that, I think it would be awesome to be able to say "I don't want to pay my share of this program. In exchange, I agree to never, ever make use of the services provided by this program". Hell, between welfare, employment insurance and goverment pension plan I could get >20% of my paycheck back overnight.
Sigh.
as a resident of North Carolina, I'm used to getting screwed at every turn by our fine legislators... however, most of our residents will simply leave that line blank.
as to me? im not concerned. i wouldn't buy something online if you held a gun to my head, so i can put "$0.00" on that line without guilt. guess thats a bit of the ex-hacker speaking out.
~spot
"and no, im not the spot working for Transmeta, although i wish i was..." -- ~spot "i'm the epitome of public enemy..."
You've never been audited, have you?
OK, neither have i, I'm just being a jerk.
The *One* way this tax could be overturned tho is that is unfairly burdens only one mode of purchase. That would depend on existing state laws, but it sure is a clumsy way of finding new revenue.
Of course, you could demand that the state prove that you ordered the items online, insisting that you selected the items online and then called the vendor on the telephone, thus avoiding a taxable online purchase.
This is just like television, only you can see much further.
Hey, you think that sucks... I'm not a citizen of the US, yet I work in it. And am expected to pay taxes to it, although I have no representation. The idea that there is taxation w/o representation is a joke.
It seems lots of people would buy stuff from Massachusetts or upstate New York (buy catalog or by driving up there) and get it tax free. *GASP* Tax free? So those geniuses in Hartford say "Hey, let's ask people to total up all the out-of-state purchases they make, and tax them because they're USING it in Connecticut!"
Needless to say, it didn't work to well. And I expect any net tax to work even LESS well.
"God does not play dice with the universe." -Albert Einstein
Those who fail to understand communication protocols, are doomed to repeat them over port 80.
Think though, with internet usage, their costs are also less, so they don't need as much.
Beep! First problem. Politicians will tax the buyer in some nations/states and the seller in others.
Now the companies are much more mobile than the customers (=us). So the companies will find a low(zero) tax country.
If I understood the original article right NC wanted to tax its own habitants, not its companies. Now if you want to tax the web, that is probably the only way. A little cooperation from the banks or "e-payment" will do it.
"So Mr J Random Person. You paid $3000 with your Visa this year. Prove that those money was spent on non-taxed stuff or cough up!"
All opinions are my own - until criticized
You pay tax when you buy in a regular store, shouldn't you then have to pay a similar tax when buying from an online store? If not, why?
Listen up. The internet exists (or should exist and should remain) outside physical jurisdictions. Do you follow? Let me put it to you this way. If I was to have remained in Canada and opened up a store, I would have to charge and collect Provincial Sales Tax (PST) and Goods and Services Tax (GST) on each purchase. Online, I would not. Sounds unfair, right? Now presuppose for a second that instead, I formed an Amazon.com. What these jokers are opening the door to is a scenario where I will be required to record, collect, file, and understand the tax laws for every given jurisdiction. The costs would overwhelm the benefits, and that's the end of the internet. Instead of streamlining business and generating wealth, it will get so tremendously bogged down that we're back to buying stuff in Wogga Wogga, Virginia FROM Wogga Wogga, Virginia, from a store, with all the attendant waste of time, lack of opportunity, and lack of buying power. You mean to tell me that a merchant in France is going to be expected to keep up with the tax laws in North Carolina, never mind collect, file and pay for the costs associated with acting as a tax collector? That's the end of this slippery slope. Canada expects U.S. merchants to collect its taxes and remit them. Many U.S. merchants therefore tell Canadians to get fucked whenever they try and order from them. Does North Carolina want to be next?
What's that?
I remember something about "grandfathering"
don't you all? Shouldn't they have been told
last year that this was going to be the case
this year.
I'd like to see someone take this to the supreme
court.
this space intentionally left blank
Besides, what reason is there for a sales tax? Why should I pay the government in order to obtain something I want? I already pay them taxes as it is. The internet is one of the last tax-free realms in the world, and I really, really, REALLY want it to stay that way. Really
--
Oh yea, THIS'LL be enforcable.
*PLEASE record how much money you spent online, despite the fact these conditions may apply:
A) You MAY have already been taxed for it.
B) You bought it from a web site in South Africa.
C) We have no right to tax things coming into our state simply becouse you bought it online
Also note, that soon we will be charging a tax on all merchandise bought in other states, that is imported into our state. Please also include those numbers.
We will also be implementing a plan to pull over all carbo laden trucks on our highways, and taxing the companies based on the total value of the merchandise on these trucks..
-- I'm the root of all that's evil, but you can call me cookie..
Now that (except in the many localities that have additional sales taxes) in-state and out-of-state purchases have similar sales tax penalties, does this mean I would buy more stuff locally? Probably not. I buy stuff on-line that I might not be able to get here. Such as when I have a hankering for a book with, say line drawing of an animal on the cover and the only remotely related literature around here are a couple of shelves of Idiot's guides to Z. I imagine the real bookstores in this state are all located in areas that have additional local sales taxes anyway, and for me the convenience of placing a quickly shipped order at any non-Amazon on-line bookstore even if I'm assessed the NC state sales tax definitely wins out over having to spend a day on the highway myself. So if you're in Ohio and would like me to buy your stuff, don't worry. Life for me sucks a little bit more because of this, but the suckiness is evenly distributed.
The practical (the moral/ethical/philosophical ones somebody else is dealing with, I'm sure) problem of sales taxes on the internet is collection. From the state's perspective (any state that employs sales taxes to generate income), it's just about getting a piece of each transaction. This is easy when the seller and the buyer are in the same place. I'm so conditioned to paying a sales tax that I think it's just something that the store does because the cash register automatically adds the tax. Tax-exempt sales are a pain because you have to fill out a piece of paper and/or tell the register to no calculate the tax (I forget exactly what the procedure is). But that thing is that it's a tax I pay. The store just collects it, which i s an administrative burden imposed on the store by the state, but I'm the one paying it. This is more apparent on mail-order forms that have that note at the bottom directing us to calculate our local sales tax -- the amount I pay in taxes has nothing to do with the state where the company I'm dealing with is located, even if it's in the same state.
The glaring inconsistency is, of course, that whether or not the tax is collected at all (but not how much is collected) depends on whether stores are operated in this state. But inconsistency is the hobgoblin in collecting state sales tax (which, in North Carolina, at least, is more a tax on buying rather than a tax on selling) in an international market. And a federal tax on buying would have the same types of problems, and we wouldn't really need the internet to see them. Internet or no internet, domestic purchases could be taxed by having the sellers automatically tack on the federal sales tax, but how does Uncle Sam get his cut on stuff that we buy in Canada? Canada's got enough to do without collecting sales taxes for us.
But let's pretend that there's a federal sales tax that includes internet commerce. Would the legislators in North Carolina look at it any differently? Probably not. They don't mean to penalize internet commerce, they just want all of us North Carolinians to be taxed on all the transactions we make, because they really do view every non-taxed purchase as loss to the general fund. So now I'd have to pay the federal sales tax on top of the state sales tax. It sucks to be us. And guess what: the revenue raised by either state or federal sales taxes would get dispersed to whatever projects the respective legistlatures feel like. Sure, they'd campaign for the federal sales tax to raise money for schools or more cops on the street or whatever looks best in the polls that year, but after the tax is established it won't be long before it just goes into general funds.
I've rambled and nobody reads this far down, but on the assumption that a state sales tax is a fair thing to do (it seems it could reward saving, especially if there is no state income tax (which there is here), but penalize the poor, so I'm not going to suggest that it is a fair thing to do), I have to say that the North Carolina plan tries to implement it fairly:
- It's a tax to collect money supposedly to be used for the good of the citizens of the collecting state. It wouldn't make sense, for example, to charge the North Carolina sales tax on every copy of RedHat that Bob Young sells to people in Ohio because the people in Ohio don't benefit from North Carolina services.
- It doesn't impose collection burdens on out-of-state retailers. Which would be truly nightmarish if those retailers (and for that matter, retailers here) were required to keep up with collections for every state that imposes sales taxes.
Of course, the sales tax has some pretty major problems, too.- Why are the many wonderful visitors from Ohio forced to pay North Carlina sales taxes? Of course there are some state expenditures that they benefit from while they are here, such as law enforcement and street maintenance and fire protection, but they don't attend our schools and I doubt that Ohioans who can afford out-of-state vacations are going to be much of a burden on our welfare system.
- If the state needs this money so badly, why hasn't it been collecting from mail-order and telephone-order companies that don't operate stores in North Carolina? If my friend in Chicago hooks me up with a really talented yet unknown artist and after a couple of telephone conversations and a couple of polaroids sent through the mail, I end up investing $1,000 in a sculpture, why should I not be paying sales tax on that but pay %6 on some paperback book I get from Barnes&Noble?
There is apparently a provision in the law for those of us who fail to keep up with our on-line purchases. From the article: Calculated this way, it's more of an income tax than a sales tax. How long before it just becomes an internet sales tax that you pay based on your income regardless of whether you have a computer, or have internet access, or use that access to make purchases?And finally, compare and contrast:
So, it seems there is a (probably small) non-zero chance that avoiding the tax will fail. But I hear Vegas is fun, too.JADBP
Ok, what I'm seeing here is that this is a use tax, one that goes towards maintaining the infrastructure. If they implement something like this in Texas, then will they actually improve the infrastructure? I seriously doubt it. I would have no problem paying a tax on online purchases if it actually went to where it was intended to go. If I pay a tax on internet purchases then I expect an improvement of the infrastructure, I want them to run the fiber so everyone can have a cable modem, I don't want to pay for Mr. Bureaucrat 's new car. Alas, usually that is where this money will go. So much for a government that is _for the people_.
The best way to accelerate a windows box is at 9.8 meters per second square.
After all, that's why a lot of places (including my state, which people used to like to call Taxachusetts) don't have sales tax on necessities like food and clothing.
In Europe the stakes are much higher. Some items have an value-added tax over 20%. And some are "sin taxes" (like an alcohol) with a social mission. The debates start to get complicated. But one could argue, "just increase the income tax (especially on higher-income people) and eliminate all sales taxes anyhow."
And yeah, I'll tell them how much I've spent in online purchases. I'll place it right next to that video where pigs fly out of my ass.
Of course, UPS on a per-package basis takes a much lower toll on the road than an individual shopper - they'd be nearby anyway.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
C'mon, if they can't come up with some methode of figuring out how much someone has spent online, then this simply isn't going to work.
I prefer to keep the government away from my money whenever possible! :-)
I support the tax of the Net. Let with me word with you why. It is really unjust that others must charge with the taxes it of the sale when the Internet companies not must. This will attract purchasers with the Internet sites instead of the stores. Moreover, paid people impose it with the purchase of sale in the function all their lives, I do not see why it should be just different because it is on the Internet.
So, a few things to ponder:
Article 1, Section 9, Clause 5 of the US Constitution:
"No Tax or Duty shall be laid on Articles exported from any State."
The Internet Tax Freedom Act, sect 1101(a):
"No State or poilitical subdivison thereof shall impose any of the following taxes during the period beginning on October 1, 1998 and ending 3 years after the date of the anactment of this Act --
[..] (2) multiple or discriminatory taxes on electronic commerce"
Internet Tax Freedom Act, section 1104 ("Definitions"), section 2:
Discriminatory tax -- The term "Discriminatory tax" means --
(A) Any tax imposed by a State or political subdivision thereof on electronic commerce that --
(i) is not generally imposed and legally collectible by [...] on transactions [...] accomplished through other means;
[...]
(iii) imposed an obligation to collect or pay the tax on a different person or tentity than in the case of transactions [...] accomplished through other means."
There are other problems: Purchasing items sent as gifts to people in other states, purchasing items that are not subject to state sales tax.
I live in Oregon as well, and my opinion (and I suspect, the opinion of most of the populace) is that there is no way in hell a sales tax is even going to be taken seriously in this state w/o BIG cuts (or even elimination) of the income/property taxes.
Unfortunately, the legislators keep hoping they can add a sales tax w/o reducing anything else. How many sales tax ballot issues have Oregon voters shot down over the past few decades? 9? And with some pretty convincing margins, no matter how much money was spent on the public relations campaigns...(even when they pulled out their dirty tricks like "you WANT your kids to have good schooling right?").
You'd think they'd get the message after a while, but I suspect they won't unless somebody uses a clue-stick the size of the Grand Canyon upside their collective heads...
The very real question of whether this collection method has any chance of working aside, the application of this just means that if I decide to buy something on line because:
- I have a wider selection to choose from.
- What I want is actually in stock.
- I don't have to put up with mind boggling ignorant salesdroids.
I will have to pay 106% of the list price just like I would if I chose to buy something that was almost, but not quite, what I was looking for because the local store carries it and it was in stock and I restrained myself from a lethal improvement to my state's aggragate IQ.E-retailers might be hurt by this because the effective cost to me would be a little bit higher, but if your price was already with 6 percent of what I could get the same thing for locally, why in the world would I pay the shipping and handling? And why would I order from Alaska? Nothing wrong with Alaska, but I find that I can usually get quicker delivery (and lower delivery prices?) if I limit my shopping to places east of the Mississippi.
As for why does the state feel that it has a right to this money, well, why does it feel it has a right to any money it collects? Don't forget, at least this method (which I have a hard time imagining will be effective) doesn't impose event the hardship of collecting the tax on any non North Carolina company. The expense is on the North Carolina buyer and the justification is that the money collected will be used by the state of North Carlina for the good of North Carolinians. And to be honest, I do feel that some of the tax collected by this state is used wisely. A lot isn't, but some is.
I can't say whether the brick and mortar businesses here (like Redhat?) supported this law. I don't know. But I suspect that having been hamstrung by the requirement that they collect sales taxes on things NC residents buy, they're happy to see the playing field leveled on that axis. And arguments that shipping charges balance no taxes on internet transactions just don't wash. The retailers in the malls and on main street here had to pay to have the stuff they stock shipped here, and the only way they can pay that cost is to pass it on to me in the price of the merchandise. And that's even if it's a huge company that has its own shipping service rather than relying on UPS or some other handler.
So will this tax (and let's pretend that this is 100% enforceable and they'll chop off fingers or something similar if I don't keep accurate records and pay up) change my on-line buying habits? Will I stop buying from retailers in other states? Other than keeping my receipts (to avoid the digit-removal process), I'd have to say no.
A more interesting question is why does North Carolina have both a sales tax and an income tax? Why do we get it coming and going? If there is a set of essential public services that should be supported by taxes, what is the fairest way to impose those taxes? Income tax so everybody pays regardless of what they do with rest of their money? Or sales tax that favors thrift? Does it matter if your poor so that you lose a chunk before you get your paycheck, or lose 6 percent of your paycheck because there isn't enough to save any of it?
JADBP
My understanding of Ohio sales tax law is that it applies to Ohio residents, requiring Ohio businesses to collect sales tax from them, and requiring them to pay sales tax on purchases made out of state. This hasn't stopped decades of driving to PA to buy clothing (sales-tax free) or mail-order by catalog. It's not legal, but it's commonly recognized as unenforceable. Since non-Ohio residents get charged sales tax while in Ohio, I consider my purchases in other states and on-line to be a balancing factor.
;-)
From what I've seen, most on-line merchants based in the US collect sales tax for the residents of their state (unless they're lucky like Oregon) and wal-mart.com collects state and county sales tax. (For some reason they know the tax rate in all those counties
-- Spring: Forces, coiled again!
Vicoria's secret is that Victoria is/was really named Victor ;-)
so therefore only in that district of cali can they not tax you for purchasing out-of-state.
Hmm, if a programmer's bookstore were to support such things, they might find a niche...
It's not that these types of taxes are new. For years people who order items via mail order are required to pay tax on those items. Even if they came from out of state.
However, no one actually pays the tax. In fact most people don't know they have to.
I, like many of you, have watched some of the hearings on e-com. I think the head auditor for CA made the best point. One) Big tax items like cars are never missed since they have to be registered. Two) The biggest offenders are in the USE TAX area. CA's solution is to have regular audits. Three) The average user is not the target. The money that would have to be spent to audit e-com for the average taxpayer is more than the ammount of money that would be collected.
Instead of taking the attitude that online business are getting a free ride by not having to apply taxes, try looking at it from the perspective that the local stores are getting screwed by having to tax their customers. Why would you want to be taxed in either situation, much less both?
Cheers,
ZicoKnows@hotmail.com
P.S. Trekkie?
..we also do need to tax people fairly.. and more importently we need to tax them in a way that they see, i.e. if the people do not see the tax then the gov. is committing fraud. I believe our current system of hidden taxation (by making the employer pay it for the consumer) should be illegal, but the fact remains that it is actually unrealistic to expect the Joe Moron to save enough money to pay his taxes.. the only compramize as I see it is to move totally to sales tax and do away with things like income tax and social security. Plus, it really is not that much harder to make a computer system handle the tax part. Now, perhaps we should use the interstand commerce clause to unifomize the state sales tax wthin the U.S., i.e. make city sales tax illegal so that sales tax can always be determined by zip code or state or soemthing. That would be a nice justifiable application of the interstate commerce clause that would solve the problem you discribe. Jeff
The Christian religion has been and still is the principal enemy of moral progress in the world. -- Bertrand Russell
List the taxes that must be paid, who pays and whop recevies, for each of the following purchasers :
Remember, when these people get their credit card bills, it doesn't say "Smaller Animals Software, Inc.", the name of my business. It says "RegSoft" the name of my credit card processor.
?? My accountant didn't know either.
I have discovered a truly remarkable proof which this margin is too small to contain.
I used to work for a company that handled incoming calls for people ordering from catalogs. When they placed their order they were only charged tax on the item if they happened to live in a state that also had a corporate office or local store for that company located in their state. They were charged what ever that sales tax was for that state.
So any state could technically use this same taxing scheme for buying over the internet as it is really not that different from mail order catalog purchases. So if North Carolina wants to charge internet sales tax they technically should only charge taxes on North Carolina residents purchasing from companies whose offices are located within the State of North Carolina.
Now even if the server was located in another state (as was the company I worked for) it would not allow that state to tax purchases also placed through that company as the hosting company is just a third party service provider for whatever company.
So if I order something online from the store down the street I should have to pay state sales tax, but if I purchase something from a company in another state that doesn't have an office within my state I should not be charged sales tax. I don't have any specific law references or anything, just passing along how I understood things to work regarding mail order purchases.
----------------
and I *love* not having income tax. I get to keep so much more of my money! And any big ticket items I purchase (computers, etc) will be either from Oregon or over the Internet.
SCREW YOU MONEY SPENDING LIBERALS! BWAHAHAHAHAHA!!!
Last I looked, North Carolina was a state (AFAIK Red Hat hasn't acquired it yet), so the Cato crowd can't scream too loudly about NC's attempt to tax *its own residents* on purchases made out-of-state, according to my reading of the very brief policy statement referenced above.
Please realize that we're not talking about any ethical justification for taxes here, or the moral implications of having government at all, just the mechanics of tax collection in today's world.
- Robin
No offense to you personally, Zico, it just seems like more and more peopel want something for nothing these days.
"Well .. Streets for the Stuff you *can't* just transfer over the 'net (ever tried to get a sixpack trough a telephone line?), then there is the police, that at last *tries* to prevent bad boys to just take the nice goods you bought over the 'net." We've had streets and police since our country was founded. I don't see how the net changes that. We don't need any more streets (well, /perhaps/ the heavier post office trucks weighted with ecommorce packages would wear out the streets more) or police (actually, I'd guess we'd need less police because there would be less stores to steal from). Anyway, the USPS is having a field day because they are getting so much more new business. That's at least one place where the government is already getting compensated.
Jazilla.org - the Java Mozilla
It's 10 PM. Do you know if you're un-American?
"The government can most certainly tax the citizens for anythign they want. The founding fathers abhorred the ideas of taxation without representation, not just taxation." I remember hearing or reading somewhere that they were against /arbitrary/ taxation too. The government shouldn't tax you without a reason. Taxes only exist to fund resources that the population actually uses. "Besides the fact that the US government basically created the internet, and the Feds or the states have been taxing interstate commerce for decades..." Well, after a certain point it was mostly education (non-profit usually) institutions and then private companies which developed the internet (BSD? SCO? CISCO?) For interstate commerce, the federal government has to repave and build new highways, etc. I don't see what the US government does to sustain the internet. It's not like they are out there putting in wire or running routers or something.
Jazilla.org - the Java Mozilla
It's 10 PM. Do you know if you're un-American?
As witty as your IPO remark is, technically hasn't it already IPOed and every American possesses an equal share?
Just a thought.
It still is not that simple. VAT should not charged when the product/service is exported. So if I had a business in London. If I sell over the net then I should only be charging VAT to people who live in the EU. Though I am sure a lot of the time it is still being charged.
There are numerous types of goods/services you can buy online that do not have to be delivered to your door.
Software
Music
Stamps
Information
etc...
In these cases, if the internet tax is to be used for road upkeep (as per the original posters comments), then the buyer is being taxed for a service they do not need.
Why? Governments today typically feel entitled to your money. For instance, it's called the *government's* budget surplus, not the people's...
Anything that threatens to reduce that income is considered wrong; this includes the burgeoning e-commerce business, which they see as denying them what they believe is their fair share of what otherwise might go to local businesses.
It's not that they can justify an instrinsic right to the transaction; it's that they believe they have a right to your money, be it through property taxes, lottery and liquor monopolies, or whatever.
Only the dead have seen the end of war.
Even if I agreed with this in principle, there are some serious practical problems with compliance. I didn't save any of the receipts, etc. much more than a month after I received whatever it was I ordered. I didn't know they were going to do this until now. I don't even remember all the stuff I bought online this year. This whole thing has the look and feel of some half baked scheme hatched by liquored up lawmakers. It wasn't thought out. If they were going to require us to provide this sort of info for 1999, the time to put out the word was at the beginning of 1999, not at the end.
Wansu, th' chinese sailor
that to me sounds like FUCKIN COMMUNISM!!!!!!!! AND IT REEKS OF LINUX ZEALOTRY!!!!!! DESTROY COMMUNISM AT WHATEVER THE COST!!!!!
opensource=communism=linux zealotry
if (!strcmp(linux, "communism")) DestroyLinux();
Why should you have to pay sales/use taxes on a used car? (which we do here in Michigan at 6%)
Since the first owner already paid, and the second owner paid, and the third owner paid... I think they make lots of money on this deal... So if a car sells new for 18k, then 10k, then 5k, then 2k, the state gets: $1080+$600+$300+$120=$2100, plus license plate, title transfer, and registration fees... (and gas taxes...)
DNA is a Turing machine. You, however, being dynamic and emergent, are not.
I don't get it... they're always tearing up the roads and repaving them, but then they're still lousy! Illinois (at least around the Chicago area) has bumpy too-shiny-when-it-rains roads. Back east it's a pleasure driving along the roads in Maryland through Tennessee, when you drive it feels like you're floating on air.
I'm in NC and I was talking to my accountant the other week. He said that, since Hurricane Floyd, the state is looking for any way to get money. I'm sure that they will figure out a way to enforce this sales tax with very few problems.
I don't care for taxes. But if paying tax on that Dell means that my home is taken care of, I'll do it.
About states which receive more than they send? Sure, it happens. I believe I saw the same article, which noted that Southern and Western states with relatively sparse populations typically got more than they sent (although it might have just been income taxes, instead of total; I don't remember); while the more populated Northeast and Mid-Atlantic states basically got screwed over -- especially Conn.
Only the dead have seen the end of war.
VS's headquarters is based in Columbus OH. They are kind of like Starbucks here. One on every corner.
:)
I wonder if you can buy a car online and save mega$ on sales tax. Or do the dealerships count as brick and mortar? I thought it was just the headquarters that counted as the brick-and-mortar.
Too bad I still had to pay the shipping/delivery charges on my Honda. Hell, I'd drive 30 miles to the Honda factory and pick it up if they would have let me...
Who do we flame. The easiest way to persuade people (government offocials especially) is to let them know what you think, if they don't listen they risk losing the next election. I'm very disappointed in every one of you over the age of 6 that hasn't emailed or called some representative.
Be active (better known as dominant), it's the only way to be heard.
It's only fair that e-commerce should be taxed just the same as anything you buy in a store.
Disclaimer: It's just my opinion. I could be wrong.
Wake up People....
...and in NJ (and most, if not all states in the US) you are obligated to pay it on item you purchase where the vendor does not collect. It's really not true that net-sold items are not taxed (or if it is it's not a sales tax issue). The law, IIRC, only prevents "new" taxes on Internet commerce. The use tax is not a new tax. Vendors are not obligated to collect it if they do not have "minimal contact" with the state, but the state's "right" to the money is the same regardless.
That's certinly the great news for euro-bureaucrats here! ;-)
Come on, reduce the US competitivity! Let's regulate everything!
I'm beginning to believe in a conspiracy theory - the conspiracy
between folks protesting against WTO summit and the govmnt of North
Carolina.
Maybe this way finally Europe would be able to (sooner) catch up
with States in e-commerce.
Kvasio
------- day's sig
- Who is General Failure - and why the hell is he reading my drive?
- He is a brother of Corrosion. She ate my socks.
--------norm sig
Maybe it's because it's a sales tax and not income or property tax?
I'm serious, do you "tax me please" folk really think the government will do better things with your money than you would?
Now this "you have to pay taxes at a real store, so why not online" argument is ridiculous. Buying online IS NOT like buying at a regular store.
You don't need to drive your gas guzzling car to shop online (causing environmental hazards, potential auto accident injuries)
You don't need to heat up (or cool down) a big building so online shoppers are comfortable. (uses lots of fuel-more environmental problems)
You don't need police and security personel to patrol an online web site. (to protect against thievery, shoplifters, crazed lunatics with guns)
You can't eat fast food online (gastro-intestinal hazards)
Overall, online transactions pretty much don't pose the same cost-issues. For local and regional governments.
The ONLY way in which an online store costs the local government any money is by the usage roads by delivery companies (UPS, etc). These companies already pay taxes (on gas, profits, who knows what else), and possibly tolls, or whatever else.
They are getting their money, don't worry. It sounds as if you think Almighty Government will come crashing down if it doesn't take more and more money away from it's citizens.
Actually, I think the foundations of taxation are somewhat different than you have explained.
Actually, that's only partially true. Tax is, fundamentally, just a form of tribute. Stripped of all it's trappings, isn't any tax arbitrary?
Also, the Founding Fathers' battle cry was "No taxation without representation" rather than "No taxation without service rendered." Actually, that's one of the things that confused the hell out of the brits -- us colonials were receiving services for our taxes to the crown -- mostly in the form of Red Coat protection from Indian/French raiding, frontier protection, etc. The Brit taxes were mostly to pay for the upkeep of the 13 colonies. Our beef was that we hadn't a say in the implementation of the taxes.
Besides, Pres. Washington used the military to enforce an unpopular -- and very arbitrary -- tax on Whisky soon after the war. Governments will tax whatever they can -- the beauty of our system is that we (if you're a U.S. citizen) can have a voice in our taxation, through our political process...it's easy to talk about the U.S. Government (or a state gov't) like it's a monolithic Force intent on railroading everyone, but c'mon, folks, if you're over 18 and you aren't a felon, technically, you are part of the government. Yes, a small part. But small parts can organize and become big parts. Look at AARP or the NRA -- traditional fringe groups who now have more than their share of influence.
[look now, ma, I'm digressing!]
With the billions of dollars in the e-commerce industry, there's a potential for a internet/free speech -friendly PAC or special interest group with a very big stick.
Sorry for the rant. I knew that history degree would come in handy.
My understanding is that the use tax also includes 1-800 purchases in addition to www.ecommerce.com purchases.
He makes a very good point about this issue. If there is a tax at all, it should be on a federal level.
Last time I checked, everyone here in Texas, regardless of income, buys stuff. Furthermore, when I stop in gas stations, I see people of virtually every income level buying lottery tickets. It's not a tax on the poor, it's a tax on the people who didn't pay attention in math class.
Peace,
Malachi
"Life is all about strategy, mathematics and psychological perceptiveness."
Money is a form of information. A tax will be interpreted as damage to the flow of information and the network ecosystem will route around it as appropriate.
This happens to some extent today, but as a larger portion of the economy moves online, the effect will become even more pronounced.
I happen to like Oregon's approach, myself: no sales tax, higher state income tax brackets and a stiff gasoline tax, the latter paying for roads.
High property tax, as well.
The cake is a pie
Mail order was famous back when there were a LOT rural areas incredibly far from any store. These days a town of 5-10k is probably loaded down with at least one walmart, one competing target, and god knows. There's a reason many of the old bigtime mailorder catalogs, like Sears, no longer exist. And yes, yes there are plenty of people who'll continue to buy retail, but its going to be very significantly less as the years wear on. Unless the internet tax is totally outrageous, there'll be initial moaning but I doubt it will last. I think there'll even been some support if its reasonable - the local news here has aired at least 2-3 stories from small buisness owners (bookstore comes to mind) complaining that they lose sales all over because they can get the same things via the internet without tax. I didn't mention the implementation for a reason - who knows. A national sales tax has been talked about for years. I certainly don't think anyone is figuring the "report it yourself" solution is worth anything (They'll put it right under the box on your 1040 for "Illegal Income") other than to get the ball rolling and force the issue.
Why are those damn carolineans starting up shit again? They did if before the civil war and they are doing it again.... Sounds like they need a swift kick to the ass
Right, and get a sweedish bank account as well. Unless the loopholes are really big, they aren't going to stick around. As for foreign purchases - people pay something called "Duty" all the time, a similar solution for int'l internet sales seems plausable. How bad the government sucks and how taxes are stupid is a different ballgame.
Like it or not, the net has gone business. Taxes are a part of the meat space business. It is hardly fair against meat space stores if they have to pay taxae, that their online competitors have not.
That said it is not so easy to tax the net (fortunately). I am a swedish citizen. Suppose that while I am in France, I step into an internet cafe (owned by an Israeli) and buy a Chinese product from a australian company, registred in the .com domain, that has its servers in Japan. Which law applies?
Of cource I choose to follow the law most beneficial to me. (That is I say nothing, hoping to slip between the systems).
Of cource, local and national goverments will try to impose taxes. They will fail horribly as long as the net is not own by any country (including the US thank you).
Is this a problem? Yes of course, but it is a problem that "we" can take advantage of. Enjoy your freedom while it lasts.
All opinions are my own - until criticized
...and I'd like sales taxes to replace virtually all taxes.
:) ), I have to say this particular implementation of the tax sucks. Not only is it tacked on to an income tax form, but it selectively targets a group, which sales tax should never do unless we want to get into a real mess. As the Supreme Court has pointed out, pretty much any distant-order sales tax puts an unfair burden on a company in another state to collect taxes for a distant jurisdiction (since, after all, if I go down the road to a location with a lower sales tax and make a purchase, my home city doesn't come back and try to charge me for the difference!). This particular plan gets around that, but puts an unreasonable burden on the consumer, along with the heavy-handed "pay this much and we won't audit you" hint about expected purchases by income level. NC is not making a good-faith effort to fairly collect a sales tax, but is attempting to indimidate taxpayers into supplementing their income tax.
Why? Because they are simple, comprehensive, instantaneous, and anonymous. There's one rate for a given locale, and a binary fact of applies/doesn't apply for any given item, so you know your tax burden at a glance, without being bitten by little hidden fees, taxes, line-items, and exceptions. Everyone pays sales taxes, because short of giving money to other people, you will eventually spend pretty much every dime you make. Sales taxes are based on a one-time payment of money for any income you make (this is shared with the income tax, admittedly), instead of property and similar taxes where you own one asset that will cost you again and again in taxes. Unlike the income tax system, you don't have to dick around with the government and worry about errors or audits, because the sales tax system is completely unaware of you and how you spend your money, as an individual. It's completely unintrusive.
Furthermore, the poor do get a break on sales taxes, as in most places the sales tax doesn't apply to "necessities" such as food, medicines, and clothing. Even better, there's one number that basically determines how much you're going to pay in taxes, no matter who you are, so the government can't hide just how much it takes in through a myriad of selective tax rules. A sales tax-only system would not discourage savings (though you'd still have to pay those taxes on your saved money when you at last spent it...), unlike our income and other taxes.
Now, after that litany of wonderful aspects of the sales tax, and why it should be our only tax (
Any sales tax puts a burden on the consumer (the tax) and on a vendor (the cost of collecting and sending along the sales tax to the government.) That's fair and reasonable as long as both parties are paying that money to the same governmental entity. Taxation is a necessary evil (in a very literal meaning of the word), but it's completely unreasonable to force either party to pay money or spend time complying with the rules of a government they aren't at the moment of the sale governed by - because neither, at that moment, are getting anything for that money. Therefore, any attempt to collect sales tax from a business outside the taxing body's jurisdiction, or on a person at the time outside that jurisdiction, is unjustifiable.
So, my point? The only tax that should apply to a company (or the customers of that company) that is selling products through mail order, by phone, or through the internet would be a federal sales tax (that would replace all other federal taxes instead of supplementing them...). Of course, such a federal income tax should apply to all taxable purchases in the US, not just internet taxes. This, of course, assumes both parties are in the US. (One could argue for a tariff equal to sales tax being set up to collect *those* funds, but that would just become a mess, and special interest groups would never let the rate stay the same as the sales tax. I'd frankly be willing to just let that money go - if the government spends a reasonable amount, that paltry sum wouldn't be needed).
I'm pretty sure this law is unconstitutional. The Constitution states explicitly that the Federal Government is the sole body allowed to control interstate commerce. In California, the state government had a law making you pay a certain amount if you bought a car out of state and registered it in Cali. The Supreme Court recently ruled it unconstitutional and the State has been forced to start issuing refunds. If something as subjective as an increase in registration fees for interstate commerce regulation can be found unconstitutional, then a full out interstate tax would almost definitley be found to be unconstitutional.
May I quote the Constitution of the United States, Article I, Section 9, Paragraph 5:
"No tax or duty shall be laid on articles exported from any state. No preference shall be given by any regulation of commerce or revenue to the ports of one state over those of another: nor shall vessels bound to, or from, one state, be obliged to enter, clear, or pay duties in another."
Litigation in support of said provision of the US Constitution was executed and ajudicated by the US District Court of the Eastern District of California on July 8, 1991. See: CIVS-88-1067 MLS.
In his ruling, the Honorable Milton L. Schwartz, said that not only was California's attempt to collect sales tax on interstate commerce was unenforcable, but California's attempt to collect the so-called "use tax", in an attempt to circumvent the express intent of the United States Constitution, was also unenforcable.
May I suggest to various legislative bodies and taxing authorities that they go fuck themselves until such time that they can amend the Constitution.
I love my country. I fear my government.
Did you even read the article?
It said that if you live in North Carolina, and you've purchased things online without paying sales tax, you will have to pay. It says nothing about what people who live in Nevada will have to do.
- In Capitalist America, law violates YOU!
You should be looking at it as, "I don't pay tax on my online shopping, shouldn't I then be free from sales tax when I buy in a regular store? If not, why?"
No offense to you personally, Tyrell, it just seems like more and more people accept constant taxation in their lives these days. We should really take a hard look at the situation and wonder just why we're spending so much.
Cheers,
ZicoKnows@hotmail.com
Of course, taxing traditional business and not eBusiness can set up a negative externality that will artificially increase business on the net.
It would be best (in welfare terms) if the internets advancement in the business arena could be secured from things such as lowering of transaction costs and moving variable costs to fixed costs, and not due to tax based incentives.
As many other people point out, this externality disproportionately affects the less wealthy, making it a double slam in terms of public policy.
If you are an economist and interested in taxation and eCommerce, the WTO has put out two "research documents" on this (vis a vis international taxation), the most recent of which came out in 97 and is probably the most cogent thing I have read on the topic. I don't know if it can be ordered online, but if so, check out www.wto.org. If you are interested, I can dig the book up from my colleague and find you ordering information.
Pax -- Ob
But the point is, a lot of states, including NC, require you to declare and pay taxes on the items which you purchase from a catalog or over the phone already. The internet provision is just meant to suppliment this existing tax. Now whether people pay the existing tax is another question altogther...
I fail to see how anyone can pass a tax while HUGE legal issues are unresolved. And the "internet tax moratorium" that was recently extended? Last time I checked, states cannot overrule the feds. Well I say, FUCK NORTH CAROLINA.
A good friend of mine has a print of a painting depicting a scene in a Scandinavian town where the ruler has required that taxes be paid--in the town square is a large container into which the citizens are placing their goods in payment, and the center of attention is a father staring at the military personnel supervising the affair--if looks could kill...I want the public to share that fury at having the products of their labor seized by the government.
We here in Cali caliente have to pay taxes federales, state income taxes, and a wonderful 8.25% sales tax in some areas (at least 7.25% all over the state). Anyone got it worse than us?
People who don't see a big issue because you normally pay sales tax when you buy something at a store need to consider that the tax is on the merchant. Sure, he passes it on to you, but he is the one who has to account for what was collected on what was sold. The states don't have a way of taxing a non-local business so far as I know, so this Internet tax is truly on the buyer. Is this an important difference? On in state sales the state effectively makes money on both sides of the transaction--the business passes the sales tax on to the consumer in charges but does pay an income tax. If a business sells out of state, it still has an income and will pay corporate taxes, but the person who purchases out of state will not be paying to either the state he lives in or the state the business is located in, normally. Seems to me the sane way to handle this is to levy a sales tax on the business for all it sales in state or out of state--they'll pass the tax along to consumers who are out of state. This has the benefit that foreign purchasers get to pay as well, unlike what happens if you only bother the purchaser as NC is planning on doing.
A growing majority of the Federal budget goes for "entitlements," i.e. welfare, Social Security, and Medicare. That will continue into the foreseeable future; one figure I've seen mentioned is a taxation rate of 80+% to fund Social Security if things continue unchanged--which they probably will, barring a tax revolt; the elderly vote in far greater proportion than the young. So basically, the answer is (b), Old Kodgers [sic].
As a resident of Maine, I am quite familiar with Use Taxes. The state of Maine strongly enforces their Use Tax law to discourage people from shopping in neighboring New Hampshire where there is no Sales Tax. Several years ago Maine added a line to their income tax forms requiring you to declare the amount of goods purchased out of state for use in Maine, and then requiring you to pay use tax on that amount. If leave that line blank, you are charged Use Tax on the percentage of your income that they assume the 'average' person spends out of state. You can however enter 0 and pay no use tax. Other than mentioning the internet specifically, the North Carolina tax doesn't sound any different.
The government taxes us everywhere else, and quite honestly, there isnt much reason why they shouldnt tax us on the net. We may like it if they didn't, but chances are they see a net-tax as the revenue maker that it is, and as such will tax us regardless
NC: First in Tax
As a resident of Nevada, I have no voice in the governmental affairs of North Caroline; zero. I CAN'T vote in their elections. I CAN'T speak at their legislature. I CAN'T use their states' services. HOW DARE THEIR GOVERNMENT TRY TO TAX ME. Get it? No voice in gov't. No tax. People killed and were killed standing up for this back in late 18th century America or has this been excised from your school's history cirriculum. Maybe we need to start dumping North Carolinian products into Boston Harbor.
It's ideas like this that make me wince at the outright stupidity of most governments around the world.
It's a pretty universal economic law that if you impose a cost on a certain kind of activity, the amount of that activity undertaken will tend to decrease.
Now costs include the cost/inconvenience of making a transaction. Although ivory tower economists tend to assume this cost out of existence most of the time, it is seriously important in the real world. Reducing transaction costs is one of the big determinants of economic organisation, e.g. the economies of scale of large firms.
Still with me?
OK, now consider a government that imposes a system whereby every *transaction* is taxed. The actual rate of tax is irrelevant, since it is vastly outweighed by the huge incovenience of recording transactions and beaurocratic monstrosties to administer and police the whole scheme. Companies will be faced with burdensome legislation and will probably have to shell out vast sums for new automated systems. Worst of all, the cost of making transactions will be a discourage trade in general and the economy will slow down.
I for one would be very disappointed if the potential of the internet is squandered by a bunch of clueless politicians who don't understand basic economics and are utterly clueless with regards to technology.
But let's not give them the chance, eh?
they are trying to do it for starters and you have to "remember" what you bought, well what if you dont recall ?
heh
I believe most states already require you to declare and pay use taxes on all items purchased out of state. This is ignored by most people. Some states do go after the purchasers of big ticket items such as boats and cars. In the Maryland/Virginia/D.C. area, revenue agents have been known to follow people who buy large quantities of liquor or tobacco in neighboring states.
Mea navis aericumbens anguillis abundat
What these state governments don't understand is that by taxing internet transactions, they're crippling their state's ability to participate in internet commerce. The state will benefit pleny without eh taxes though, because if the purchaser is in/from that state, they've got the income tax already, plus the state economy benefits from the taxes drawn from the telco/isp/computer purchases required to make the purchase in the first place. If the seller is i that state, then the state still benefits from telco/isp/computer purchases, but in addition gets payroll/corporate income taxes as well. Nevermind that most government activities could easily be done at half the cost and twice as effectively if they weren't so burecratic and corrupted. well, just my $0.02...
-earl
But in Texas, those least likely to be educated are the poorest. Those most likely to be scammed (it's a scam--the state knows it, or they wouldn't be sponsoring it) are those for whom the money they lose to the state is the greatest portion of their wealth (or lack thereof). A rich fool isn't going to miss the $20 he wastes every week; a poor fool would miss a quarter of that amount.
Gates' Law: Every 18 months, the speed of software halves.
Ok there Mr. NC tax collector, let's take a look at what I bought this online year:
Guns & Ammo subscription
7 pounds, nitro glycerine
3000 rounds, armour piercing 50 mm rounds
2 kilos, weapons grade plutonium
Thats about it, so did you want me to send in the cheque, or are you going to send some nice people around to collect it? Yeah, ok I thought you might be sending someone...
Hotnutz.com
Including the tax in the price doesn't mean you don't see how much tax you are paying. The percentage can be posted so that people see it.
Property tax is only part of the issue, again this is a fixed tax which isn't related to an individual purchase as UPS needs these bases to deliver taxed local purchases too. Either way less tax is paid for deliveries from outside the state, tax which it was claimed goes on roads.
Both sales and property tax fund the roads jointly, the consumer is still buying and should still pay a part through sales tax if it is delivered to the door.
Back on November 11, I submitted a story about certain U.S. state governors' plan to band together to adopt a so-called "voluntary" internet sales tax. ("Voluntary" on the states' part, naturally, not the consumers.) The Washington Times originally broke the then-secret plan, about a week before the article to which I made a link above. Unfortunately, it doesn't seem like the Wash Times's article is available on their web page anymore. (If you have a Northern Light account, you can get the entire Wash Times article.) Oh well, guess Slashdot had more important things to report*! ;-P
Cheers,
ZicoKnows@hotmail.com
[*] Most likely a story where "someone somewhere said that they weren't a fan of Linux" ;-)
Not sure what kind of stamps you have in mind though?
Boy, that ISP must have really been in dire straits if it couldn't pay the email tax for 16 hours. By my figuring, they would have had to pay about $1700. I bet they went out of business a couple of weeks later.
I'm the slightest bit curious why NC (or any other state trying to tax the 'net) thinks they deserve a share of this money? It is my understanding that the primary justification for a sales tax is because it costs a city/state quite a bit of money every year to maintain a good enviroment for business to function (road work, police coverage other basic services) By this logic taxing transactions at brick and mortar shops makes sense. However it falls apart when applied to internet transactions. The user already pays for the services that make ecommerce possible: 1) phone line to the local utility 2) account with ISP. Now I know the utility is paying a tax on it's profits to the state and so is the ISP, therefor the state is still getting it's money. And if any e-business's are being run out of NC you can be sure that they too are paying income tax. In addition anybody employed by this e-business in NC is paying a sales tax on all the purchases the make locally. With that logic in mind NC should permantly ban the idea of a 'net sales tax, give lots of incentives for high tech and ecommerce companies to set up shop there and make the whole state a haven for e-business. Then they would make up the tax revenue lost to ecommerce, and would annoy the people alot less every tax season.
;->
Trying to tax internet purchases is a step in the wrong direction anyway and is probably supported very strongly the brick and mortar business's in NC, who would rather have the government hamstring their competition rather than rework their strategy to stay competitive. It's not the actual tax amount that is going to cause people worry, it's the fact that now everytime they surf over to Amazon.com or wherever they are not only going to be thinking about price and quality of service, the concept of saving all their 'net receits for a year and figuring up the totals and the taxes due carries a high "pain in the ass" factor that will discourage people from shopping online because in some cases it will become less convienent than driving to the mall. Thus this new tax will seriously undermine one of ecommerce's biggest competitive advantages. On the other hand I suspect most people to ignore the idea, take a wild (low) guess at tax time and ship NC an extra 20 bucks rather than deal with the hassal of actually keeping track of everything they buy online, I know I would.
Once again glad I live in Alaska, where even the government doesn't trust the government
"Listen: We are here on Earth to fart around. Don't let anybody tell you any different!" - Kurt Vonnegut
i think /. was fucked there for a sec :/
Oh yea I almost forgot, another good reason to consider relocating to Alaska: There's a big push going on now to RE-legalize hemp for recreational use, looks like it will get on the ballat this year too. If it does it stands a REAL good chance of passing ;->
"Listen: We are here on Earth to fart around. Don't let anybody tell you any different!" - Kurt Vonnegut
Clue stick! That's funny! if you could market that, you'd make millions! Property taxes in Washington are pretty high too, but I don't know how they compare to Oregon. The sales tax is something like 8.5%, which, as a fringe benefit, tends to make otherwise mathematically incompetent people such as myself rather talented at multiplying integers by .08..
Anyways, I'm not really certain which is better necessarily in the sales tax vs. income tax debate, though paying sales tax is at least quite a bit easier than figuring out income taxes twice (so long as you don't have an unhealthy obsession with avoiding metal change), but I can definitely agree that it would truly suck to have both! So far as I know, Washington hasn't even tried in recent history to impose a state income tax on it's residents.
"I don't marshal my words to be quotable" - Captain Sodium, Gigsville...
I live in NC, it's a beautiful state, great people, but from what I've seen during my 3 years living here, crooked as hell politicians. There's one reason why they want to tax the internet - GREED. I live in Charlotte. Twice during the past year local politicians here decided I needed to have my property taxes raised despite a vote by the citizens to the contrary. Now here we are 10 days left in 1999 and we're told "oh by the way, you owe the state 6% on all those e-commerce purchases you made this year." I can see maybe announcing that starting on Jan 1, 2000 all e-commerce transactions will be taxed, but to go after money already spent is just plain wrong. We can't get a road widened here or a traffic light put in at a busy intersection, but the state has the money to go after me for a few bucks? Not likely. Lying or not, I'm not giving them a cent.
Anyway, as taxes goes, this one has quite a few benefits. First of all, it's highly visible to the taxpayer. Unlike almost all other taxes, which are collected for you for about 90% of the tax paying public, John Q Public will be seeing exactly how much money is going to the state. Maybe he'll start demanding more justification as to how that money's spent. Second, it's easily ignored or avoided. This might even prompt the faster development of the anonymous E-Cash that is an inevitable development of the net. Finally, it doesn't try to force the vendor to support every tax juristiction on the planet.
The various governments trying to tax net transactions (And everything else) is most obnoxious. But we all know it's inevitable -- they all have to have their greedy little fingers in every pie they can get their hands on. While we can slow the progress by fighting tooth and nail against net taxes, more progress would be made (IMHO) by demanding more accountability for the use of those funds once they've got them. Demanding justification for every penny they spend and every pay raise they vote themselves would be a much more effective deterrent against future taxes than anything else we could do.
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
(Switching to AC mode just in case I get audited. :-) The state I live in has long had a line on the tax form where you are supposed to enter the value of all of your out-of-state mail order purchases, so they can charge you a tax which is at the same rate as the sales tax (they don't call it "sales tax" in this case, for some reason). The state tax office has been known to complain now and then about the millions of dollars in tax revenue they are losing. Because nobody ever submits this value. I suspect most residents aren't even aware that such a tax exists. So I happily order thousands of dollars worth of items and have yet to pay tax on them. This sort of tax is basically unenforcable.
Horribly difficult to prove point. I've known too many terribly ignorant people who thought their mommy and daddy's money made education a low priority. They had a big surprise after graduation. :)
What, that sounds retroactive to you? It does to me, too. Do your duty as a red blooded american citizen, go shoot some politicians.
--Dan
Or even simpler, do as in the EU, where they have Value-Added Tax instead of sales tax, and the tax is payable according to the where the company is, not where the buyer is...
Some states, like New York and New Jersey, have reciprocal sales tax agreements that encourage collection of sales tax for mail-order across state lines; others don't. My wife used to do programming for a mail-order shop which was deciding whether to get involved or not, and New York is Obnoxious to deal with - sales taxes vary by town, township, county, etc., not always on zipcode lines.
The new issue with online sales is sales of non-tangible goods. The classic examples are software (big money from the big vendors who are easy to locate and tax, mostly-small money from shareware which is usually harder to locate), sound recordings (emerging non-pirated MP3 business) and pictures mostly in the (ahem) adult entertainment business. What's the taxable location, if any, of a performance viewed across state lines? Local governments could have sales taxes on movie and concert tickets, but they usually don't, though they may be hidden in the ticket price; what if you're listening to the concert from somewhere else?
Bill Stewart
New Fast-Compression-only CPR http://preview.tinyurl.com/dy575ks
Point taken about rich fools. However, my experience is that the rich fools don't need a lottery to screw them up. It's very easy to lose money; much harder to gain it.
Further correspondence via email please.
Gates' Law: Every 18 months, the speed of software halves.
Mom and Dad live in North Carolina. I go to school in Maryland. I probably order over the Internet as often as I order pizza. This year's tax return is going to suck. Especially since I order systems for work on my CC and then get them reimbursed. Wow... the audit will be beautiful. ``Sir, you've spent over $11,000 over the 'net this year, and made $8,000 in wages. We know you've already given us 1/2 of that in income tax, but we want the other half to support our Nazi-esque sales tax laws.''
-Chris
I agree that a "long hard look" at taxes and spending would be a good thing - but I wouldn't go into the discussion from an individualist point of view, saying that taxes need to be cut - I'd go in from an economists point of view, looking for the ideal amount of spending on those things that add the most value to the economy and the people. If in the end that means taxing less, so much the better, if not, then the money will be spent on something more worthwhile (and hopefully more efficiently).
On the other hand, I'm not as cynical about what that tax is spent on as many of the people on Slashdot seem to be. Whilst I enjoy a good consipracy theory as much as the next man, I can't say that I really think the government exists to exploit me (possibly with the help of LGM). I look around me here in the UK or in my native country in Europe, and I see a lot of good things being done with the money earned from taxes. I find that your point of view is expressed a little too strongly... I don't pay tax on my online shopping, shouldn't I then be free from sales tax when I buy in a regular store? If not, why?
Taxes are collected at the point of sale because as far as the budget for the state is concerned, that money is needed. If they stop taxing there, they have to either tax elsewhere or cease spending somewhere, and since they're never going to get agreement on what they ought to cut/tax, it's not a realistic option for them. That previous sentence can be debated forever as we could go through all the different taxes and areas of government spending and debate them all - the point I'm making isn't what's right or what's wrong, but that agreement will never be reached, so from a politician's point of view, it's not a can of worms they really want to open as it's not worth their while.
That having been said, how can it be considered fair to continue taxing non-internet shoppers whilst not taxing those who shop online. It would create a price disparity between online and physical stores and the owners of bricks-and-mortar businesses would have a very real complaint in terms of who is getting a favourable treatment - it's a hidden subsidy to online stores.
In the end of course, as in all things related to taxes, businesses will simply relocate to those areas which have favourable tax legislation in place, or shoppers will buy out-of-state so that they avoid in-state taxes. The problem will seem to go away, or it'll get accepted as the status quo, even if the government or states do nothing to solve it. It's another example of how the internet is making us re-think previously well-established rules.
Salocin.com
The article stated that the tax pre-dates the internet. It's been on the books for 60 years, but was not stringently enforced. Now that there is money there to be stolen, they will try enforcing it.
WireHead
WireHead
The previous message was created with 100% recycled words.
This is the real reason the government doesn't want strong public encyption. It threatens their ability to tax. If all transactions are encrypted and privacy exists (i.e., - companies don't distribute 'marketing data'), then there is no way for them to prosecute or collect.
What we need is a government that only protects individual rights. No more and certainly no less. Health care, education, roads, et al. are not rights. Life, liberty, property, and privacy are rights and they are not-so-slowly being cut away.
This is especially important because we live in a service economy. That's where the money is. (Look at Red Hat.) If the government continues its monopoly on services, there will come a day when the people say no more and then the government will hand off that monopoly to some corporation (like Microsoft, for education!) and then we'll really be screwed.
This is civilization. The progress to a private society. It used to be that the government controlled everything. Then century after century they controlled less and less. Some societies survived the transistions well (Ancient Greece). Others didn't (the Pharohs). And in some places people became slaves of monopolies granted by the government (Rome/Feudal Society).
The US survived the industrial revolution because of the ideas of Aristotle and Locke. It almost didn't (The War Between the States).
We are faced with a new revolution. Call it what you will, define it as you like, but be reasonable. Some call it the 'Digital Revolution', some call it the 'Internet Revolution' and I'm sure there's a million other names that focus on different long-term changes that we barely notice because our lives are so short (and that's changing too).
The fact remains that we are thinking animals. We survive by our good ideas and die by our bad ones. Human evolution is intellectual. Since we became human we have changed our environment to fit our needs, but we often neglect to change our ideas to fit the environment we create.
"My privilege to write these sanguinary sentences in soft security was bought for me by rivers of blood poured upon many fields, in many lands, but I possess not one single little paltry right or privilege that come to me as a result of persuasion, agitation for reform, or any kindred method of procedure." -- Mark Twain
Can we change?
Why on earth would you have the individual attempt to calculate how much they've spent on internet based purchases, that's just stupid, expensive and unworkable.
Instead, the business should collect the tax and be legally obliged to display prices including the tax.
Deleted
Called Value Added Tax, it goes on almost all products.
Deleted
But you're talking about a flat sales tax. Sales taxes need not be flat, necessarily. You can have a Sales Tax where poor people get quarterly (or whatever) rebates, which makes a sales tax more progressive (I think this is how most of the national sales tax proposals work). Consider that in some states (including California) food items (non-prepared) are non-taxable.
And we haven't even brought up property taxes. I live in Oregon, and our property taxes are pretty high. Of course, if they were to add a sales tax, do you suppose they would cut the property and/or income taxes.
Not likely... :-/
The mail-order catalog analogy really doesn't cut it. I won't pretend to know numbers here, but if online purchasing hasn't already surpassed the peak years of mail-ordering (highly, highly unlikely) it will soon enough. Thing about mail order catalogs - most buisnesses didn't have one, you might not the "kind" of mailorder catalog you wanted for whatever purchase at buying time, it may have been woefully outdated, etc. The internet is obviously quite a bit different - every buisness in the universe can have (and most do) a webpage for minimal cost, updating doesn't mean reprinting and re-mailing, and anyone can find it whenever they please. The amount of tax dollars "lost" from interstate purchases will be far larger. It just comes down to the overall impact - people buying interstate via the internet will make a really big impact on tax revenue, mail-order catalogs never did. These things are not the same bag simply because they involve interstate transactions. I imagine if it comes to it, you'll find the supreme court will hear the case ratheer than defer it because they feel the topics been dealt with.
We can all bemoan internet taxes, but they're going to get it from you one way or another. If tax on internet sales is somehow "stopped" while retail sales continue to dive, other taxes will increase and new ones will pop up. They'll probably much less visible/unassuming that will not be making slashdot headlines and pissing off the growing populace of heaving using internet folk. Probably a better political route to go, right McCain ?
Since all transactions on the net are paid by credit card, all they have to do is get a data feed of your credit card purchases and tax away accordingly. I know of someone who didn't pay federal tax, when the IRS called them in, and asked weres the money and they said they had none, the IRS said how did you pay for all these airline tickets from here to there. They had a copy of all of their credit card purchases. So much for privacy.
All that's novel here is that they are putting the reporting form on their income tax form and specifically mentioning online purchases.
Businesses that don't pay the tax can work it out in reverse, but they are in a minority.
There is nothing more annoying than going to a point of sale and then finding out that a $1 item costs you $1.07, not to mention the fact that quite often you don't know what the tax rate is going to be because it isn't posted.
I am a Brit and I just got my first internet service bill here in Sweden, there appears to be a 25% tax added on.
North Carolina has one of the most rapidly growing economies of any state. Did you forget Red Hat lives here? Also, ten of the past twelve computer purchases I have made in the last year have been located in North Carolina, and that was a complete accident. Now, I already have to pay sales tax on products I buy over the Internet from companies located in North Carolina. What they are trying to tax is purchasess made by North Carolinians outside of the state, which is a bummer.
Ironically VS charged me Ohio tax on a purchase I made (I live in Ohio). I wonder if it is because they have brick and mortar stores in the state?
So you calculate your own tax, eh?
I can see the headlines a year from now...
The NASDAQ plunged 98% today after new figures released by the government revealed that Americans spent a total of $6.24 online last year. Government sources are baffled by this lack of enthusiasm, but suggest that possible reasons include the boycotting of everyone who owns a patent and an increasing reluctance to log onto an IIS machine.
Yes, it is true that Texas has a State (and often city) sales tax, but you also have to account that Texas does not have a state-wide income tax. With thanks to the Lotto and Lottery they've kept the 'need' for that 'necessary evil' at bay for a few more years. With Thanks,
TENEMENT
--
How about the ability to choose what you want out of your government based on the tax rates you pay (sales tax excluded). This would have been impossible without computers, but I hope to see it happen sometime in the not so distant future.
Indiana's required Hoosiers to total up their out-of-state purchases and send in the appropriate sales tax since long before you *could* buy stuff online. And it's a yearly pain in the neck. (I'm one of the probably five or six citizens who actually do this.)
I'm now trying to figure out how it's burdensome to ask several thousand businesses to use the accounting systems they already have to figure state and local taxes along with all the other calculations they have to do anyway, but not to require millions of buyers to figure out which purchases are or are not taxable when they're already burnt out from hours spent decrypting income tax booklets.
Let's see how many of you give up the sales tax for goods purchased via mail order?
There is no way in hell they can prove you purchased something and the online crap bought falls under the mail order laws.
Someone PLEASE let's enact a beat the sense into a lawmaker day... that way we can at least wake them up to EXISTING laws that would do the job.
"Dave, let's enact a law that copies another law exactly except for some slight wording changes."
"Why John"
"Dave, how can we be effective unless we have numerous redundant laws on the books to harass the citizens we dont agree with? Some of those people out there dont think like us! we must opress them!!"
(door opens)
"Whos' there? Mien furer! Siek Hiel!"
This excerpt secretely taken from a secet state/locality/federal meeting of heads of state/yard/toilet bowl #6
and you think I'm paranoid... why do they have 39 laws covering the same thing??????
The North Carolina tax is a "use tax." It applies to net and non-net transactions, and so it is sort of fair. (There is always someone whose ox is disproportionately gored by any particular tax.) I think that every state that has a sales tax has a use tax. The idea is to prevent shopping based on the sales tax alone.
Consider a state with no sales tax next to a state with a sales tax. Everyone would go over the state line to buy their cars if not for the use tax. The use tax means you pay the sales tax in the state you live in, even if the state you bought in doesn't charge sales tax.
Since you have to register cars, that is one item that such taxes are collected on. Some states also allow counties and cities to track the cars, so that big city buyers can't just go to the suburbs to skip city and county sales taxes.
Apart from big things that you have to tell the government about, use taxes are pretty much a failure. They should apply not only to net purchases, but mail order (phone order) buying too. And yes, in theory, people are supposed to fink on themselves to pay it! North Carolina seems to be taking the big step of putting a line on a form for it. Nobody does it. Actually, most states don't make any effort to collect it.
Sort of reminds me of a story about James Franck (famous physicist). He moved to Chicago, and in accordance with the law, reported all his luxury goods to pay tax. The astounded city employee he went to asked him: "And do you think you are the only man in Chicago with a watch, Mr. Franck?" And the functionary sent him along without charging any tax.
So, how do I as a citizen of Ohio get NC to cough up the portion of that tax that reduces my company's marketability?
If there is EVER going to be an internet sales tax it will have to be at the federal level and, revenue raised will have to be dispursed to specific projects with a wide support base.
If I were a North Carolinian you could bet the outer banks that I would deny any internet purchases I may have made. "I made those purchases over the phone to a toll-free number and, that company does not have facilities in NC so you can't touch me."
--
Una piccola canzone, un piccolo ballo, poco seltzer giù i vostri pantaloni.
My office has been taken over by iPod people.
The Government taxes my money when I get it.
They tax it when I spend it.
There are also a ton of hidden taxes. Better know ones are taxes added to gasoline, alcohol, and cigarettes.
I read a disturbing article the other day in a dead tree publication. The state I live in received more tax money from the federal government than it sent in. *???* Is this commom to other states as well?
I have a cash in hand economic policy. I do not buy anything unless I have the cash in hand. The U.S. Government has put me in debt up to my ears without my permission.
Wait a moment. I think I see their reasoning now. One in five Americans is metally ill. *leap* Mentally incompetent persons can not be held accountable for their actions. Ergo someone (a self-appointing government) is responsible. Guess what they will call me if I make a stink about them spending money they do not have?
An earlier poster mentioned how IBM threatened to pull all operations out of Florida when Tallahassee tried to get cute and tax ALL of IBM's business.
Well, why shouldn't the same principle apply to NC? What if every online retailer that has operations in North Carolina packed up and went to a more enlighteded state? Add in a nice consumer boycott of e-business that *didn't* leave, and you hit them where it REALLY hurts... business income tax!
After all, an online retailer can do business from pretty much anywhere. Why *not* relocate to a more enlightened state; one which is NOT run by viciously greedy tin-plated despots?
Something along the lines of "geeks of the world unite"? Make an example of NC, and the rest'll fall into line.
john
Imagine all the people...
But UK VAT is not applied to certain items, the most notable being: food (other than cakes, confectionary and take away meals) books childrens clothing whilst US sales tax is normally applied to everything I believe? (please correct me if I am wrong)
I read the article that allegedly implied that Cato might support North Carolina's efforts to collect sales tax.
I could see no such implication - to me the article supported the status quo, where mail order businesses do not wind up paying tax on sales outside of their state.
Needless to say, I'd be extremely shocked if Cato actually supported any such proposal.
My personal feeling is that bricks and mortar stores aren't going away any time soon. Online purchases are perfect for some things (obscure or expensive books) and lousy for others (books you buy on impulse). And I don't see us moving towards buying groceries or eating at restaurants in a way we can avoid sales tax.
Sales tax is here to stay, more's the pity. I just don't see this kind of rule as being necessary, and I doubt that it's enforcable - the data processing overhead is just too high.
D
----
In NC, like (I think) all other places that collect sales tax (or use tax, or whatever you want to call it):
The merchant gets to keep a portion, as compensation for the work in collecting and sending in the tax. In NC, this is 1%.
So, merchants actually come out ahead by collecting tax. This could be quite an incentive for an Internet-based business if all businesses work this way - it's a "free" 1% on all goods sold. But, if people are deciding where to shop based on whether they will need to pay tax (as online shoppers are wont to do), any sort of tax collected by the seller could be a deterrent to business.
Ouch. I already have to pay income tax to a state I only work in, not live in, and now they want more from me? Heh, okay guys..
Sales tax varies from state to state, but you generally pay no sales tax on food (but you do pay sales tax on beer! what gall!) Also, clothing is usually exempt. In my state of Connecticut I believe you only pay sales tax on an article of clothing if that article of clothing costs more than $100.
Blar.
Indeed, this should be looked upon as a taxation issue, the ranting about it is from the usual suspects, people who are anti-tax anyway ('cause JC is going to lay the roads, you see).
Issues that are relevant are, whether double-taxation is avoided, that is, tax once because the seller has a physical presence in the state, and again on the tax form; and whether an Internet purchase is equivalent to an out-of-state mail order purchase. I have heard the argument that the online purchase is cheaper but you have to pay shipping and handling, but I don't see why that has to enter into a taxation debate. Afterall, goods sold in local stores are transported too, but in a more efficient fashion.
But /what/ does
.. Streets for the Stuff you *can't* just transfer over the 'net (ever tried to get a sixpack trough a telephone line?), then there is the police, that at last *tries* to prevent bad boys to just take the nice goods you bought over the 'net.
the government provide for ecommerce?
Well
I really can understand them for wanting a piece of that cake, but their methods are ridicilous. Now don't ask me about workable alternatives. The only one I could think would be a globaly standarized mechanism to tax the *source* (the ecommerce shops) but then again I can't see this happen.
Oh, incidentally. It takes quite some investments to really get into ecommerce. So the ones who (potentionally) get the benefit of tax-free sales are the big companies again. Small and mid sized shops will have *another* disadvantage in trade, not a good idea, really. Of course to prevent *that* it would be easy to just forget about sales taxation altogether and find money elswhere.
Ciao, Peter
The reality is, state and local governments are awash in cash. Minn-ee-so-ta just refunded some of it, Michigan has money it can't spend, and Wisconsin and all the other states are in the same the same position. This crying poormouth all the time is tiring, and it's a lie.
If all the states would settle on a single rate for their state, this would be easy to implement. Once you make an exception for NYC or Chicago, Katonah and Arlington Heights are going to want to have their special rates, too. Not even today's computers can babysit this kind of wanton indulgence.
I know Michigan has a coupon on the back page of their return for this untaxed stuff, fortunately everybody has the presence of mind to ignore it. If you report one of these, they'll be back for more.
I have watched a bit of CSPAN over this. It seems that local governments claim that they should be compensated for the money the lose to ecommerce.
/for services rendered/. Governments cannot extract arbitrary taxes because they want to. For a brick-and-mortor storefront, the government provides the land, the streets, the legislatural and financial infrastructure to support businesses, etc. But /what/ does the government provide for ecommerce? Not much really. You could make the case that the /federal/ government helped ecommerce, because, of course, they started ARPANET, and provide funds to institutions and companies that support the backbone. So indirectly, by supporting the internet, they support ecommerce and should be paid a small tax by corporations and individuals using ecommerce. But this certainly wouldn't be a /local/ government issue. I mean, any one state shouldn't be able to dictate a different tax than another. But still that's a tenuous argument. The federal government, as it should, hasn't been innovating or supporting the internet directly for decades.
But didn't the "founding fathers" explicitly abhor arbitrary taxation? I mean that was what the revolutionary war was supposedly about. Governments can tax citizens, but
I think there is really very little to justify an internet tax.
Jazilla.org - the Java Mozilla
It's 10 PM. Do you know if you're un-American?
taxes are bad, m'kay? if the gov desn't know how much i buy online, why would i want to tell them?
----------- destroy evil immediately!
As a new North Carolina resident in the high tech industry, I can say from experience that the taxes here are ALREADY outrageous. My wife is a teacher, and lemme tell you, the income is most certainly not going to pay public servents. North Carolina Teachers have one of the worst pay rates in the counrtry, she took a $10k pay cut to come here. I understand that the Police and fire services will not be retiring early to Tahiti either. The sad part of the situation is the annoying tendency for we the people to do nothing as long as we still get Wheel of Fortune at 7. This policy and law have truly offended me, especially in light of the reasons given, which are ambiguous at best. If they taxed e-commerce to provide better phone or network services, perhaps I could see the process with more understanding, however I have no intention to fund someone's pet project with my family's income. Wasn't there just rioting in Seattle about this? E-commerce is flamboyant and obnoxious at its worst, but at its best it can equalize the playing field in business for the world. It's simply too important to let trends such as this pass unprotested.
What's next, a quota system for NC State Department of Taxation auditors?
I think the Charlotte News & Observer got it partly right in the article when they said:
One really obvious bogus statement in this article is that the Internet has eased the process of determining Use Tax violations in the event of an audit. Anyone who lives in the Northeast where states are geographically small, or shops by mail order or while on vacation has had their lack of compliance documented for years. Why say something so obviously wrong and ruin an otherwise useful article?
A small criticism of the "Slashdot Powers that Be". I realize it's a holiday week and we're all partying, but.... next time, insight should be applied to the analysis of the article before it hits the Slashdot home page. It would have been much more useful to have characterized this step taken by North Carolina as an attempt to increase awareness of their existing Use Tax among consumers who do some shopping on-line or through traditional mail order. That's not nearly as exciting to most people as the headline lead you to believe, but it would have been more accurate.
The big question about these sorts of efforts, in my opinion, is where will the states come up with the money to enforce this law? This is where the analogy to the speed limit really works. You could pull over a lot more speeders if you wanted to put a lot more police in cars with radar and laser speed detection devices. But, then a whole new set of questions will arise.
I expect the states to do little to increase enforcement of Use Tax reporting. Some over-zealous states will probably pick a couple of cases to really screw-over some taxpayers in a public way. This will get press in the newspaper and on TV in a way that will be designed to scare people. This actually serves both the media's and the government's interests.
--
Dave Aiello
-- Dave Aiello
In the UK, collecting VAT is the law. The government comes down on people who keep the VAT like a tonne of bricks. They often end up losing their business, car, house, savings etc etc. it can be very very nasty.
Deleted
This is the way it is done in New Hamphire, which is one of the few remaining states without a sales or income tax.
Note, the *Federal* government ran without an income tax. This is not the same as to say that it ran without taxation.
The States collected the tax and passed it on to the Feds. The effect on you was just one less tax colletor to deal with. The out of pocket is ALWAYS the same to the taxed, regardless who does the collecting and at what point the collection is made.
It's worse than that. Try State, County, and City taxes. Any accounting department has a set of books which summarizes tax laws. Some states need many pages to list the assorted tax variations due to the many local taxes.
On the bright side, if you really want to implement such a tax calculation system you can probably buy the database from a company that has assembled it already. Unfortunately, you may find a continual flow of inquiries from cities you haven't paid properly due to ongoing changes in local laws...
Amazing the number of idiots who believe the internet should be free of taxes for purchase. Just where in the hell do you expect governments to make up for the loss revenue? Huh? Want a hint? Higher income tax Higher property tax DUH
Personally I'm fine with sales taxes. The state has to create a hospitable environment for businesses to set up shop there (as the poster of "What right does NC have to this money?" said).
It's the income taxes that tick me off. I'm the one working, not the gov't. Why do they get a share of my work? A hundred years ago the gov't could run itself without income tax. The only reason we have one now is that the gov't become increasingly bloated. Even when first instated it was only 1%.
So what's up with that???
Constitutionally Correct
Gee, maybe they should reduce their spending for a change.
If the company's registered in NC, then that's where the tax is collected and paid.
Anything else is simply stupid.
Deleted
It has no teeth so how are they going to know?
actually, i'm not the least bit surprised.
in Virginia, residents are required to report any goods bought out-of-state so that they can pay 4.5% sales tax on said goods.
i don't know the exact wording of the law but i would suspect this applies to online purchases as well.
~ fEXt ~
According to one of my high school teachers, the sales tax (at least here in Ohio) was intended to be a tax on the merchant, not the consumer. Hence the term "sales tax" instead of "purchase tax". Of course the merchant immediately passes the burden on to the consumer. So in reality the consumer is the one paying the tax -- the merchant merely handles the administrative overhead (these days, by buying a computerized point-of-sale system; but when I was a kid I remember seeing "sales tax cheat sheets" -- laminated/plastic documents at the check-out with the amount of sales tax for ranges of total purchase amount, which the cashier would consult when adding up the bill).
only idiots believe the government has an inherent right to as much of everyone's money as the pols see fit to spend. i suppose you'd like to see every human activity taxed, so the government can get revenue. since when do bureaucrats know how to provide much value for the revenue they get anyway?