That would be an excellent reason to abolish sales taxes in favor of state and possibly local income taxes, but unfortunately I don’t see that happening. Since online sales involve businesses that may (like Amazon.com) have locations in more than one state selling to consumers who live in more than one state, collecting sales taxes is problematic. But online shopping isn’t going anywhere, so some method of doing so fairly and reliably has got to be worked out.
I think sales taxes have their place, but are often misused. (See: California. Or don’t.)
The argument that it’s somehow hard to keep track is just nonsense - it might have been a burden on small business shippers 20 years ago and more, but if Amazon can track and database every other click and fart its buyers make, it can manage to charge sales tax based on the shipped destination.
Is this a whoosh? Do you really do this? If so, please realize that you are the only one.
I have a new plan. Send the money to me.
Occasionally. I actually went into a Best Buy (gasp) back in 2011 to try various tablets first-hand.
However I bought a TV from Amazon.com 4 or 5 years ago and had never seen one of that model in person.
But a lot of online businesses aren’t behemoths like Amazon. One of the reasons online shopping has taken off is that it allows customers from all over the US (and often the world) to buy specialty items from smaller retailers that simply would never be available locally. Collecting sales tax WILL be a burden on those smaller retailers, who don’t have the sophisticated computer system of Amazon.
There will be services for them to take advantage of. Just like credit cards, Square, Paypal, etc. I bought a used book from an independent small business through Amazon and Amazon calculated and collected the sales tax for them.
No, it’s not a whoosh. I was audited n the past, and the process involved the auditors looking over my credit card statements. My online purchases are significant enough that I’d be facing a hefty penalty if I was discovered not to be paying the sales tax on them. It’s not worth taking the risk.
That’s a good point. It would cost the smaller businesses a bit of profit, but the decreased hassle would no doubt make the tradeoff worthwhile to them.
A simplified interstate system seems to be in the works. I wouldn’t be surprised to see it have minimum reporting limits - even the states concerned don’t want a shitload of little $20-50 payments coming in.
Until then, there are tools and services within the reach of all but the very smallest businesses. QuickBooks can be set up to handle as many state taxes as needed, and if it were to become a universal requirement, Intuit would likely make it a fixed feature with rate, etc. updates.
Collecting interstate sales taxes is hardly new. I had a software business in the 1990s that sold all over the U.S. and parts of Canada. If we had an employee in the state (trainer or sales rep), we had to collect sales tax. It was a small business, but we had a ridiculous number of forms to fill out. Some states require you to continue filling out the forms even if you have no more sales there. In NYC, we had to file separate paperwork for the state, the city, the county, and the borough.
It must really suck to have a brick & mortar store in a high-sales tax state and have someone set up a competing business right over the state line and have a 10% advantage over you by not collecting sales tax on their online customers in your state.
One big advantage of brick and mortar stores is that if you are not satisfied with the item, you can return it (If they have a no-hassle return policy). One example; I recently purchased an RCA 46" LED TV from WalMart based on price. A week later I returned it because of poor picture and sound quality. Then I spent $150 more on a Sony which was well worth the extra money.
On the other hand, some things are ridiculously cheap on-line. Two years ago, I decided to buy a cordless bike computer for my son for Christmas. There were only two models available in local stores and they ran between $75-$120. I found a wide selection on-line from $7-$15. I bought a $7. one from Hong Kong, shipping pre-paid. Mind you, it arrived 6 weeks later, that’s what Standard International Shipping means, by slow boat. Still, I had lots of time so it wasn’t a problem. The bike computer worked great and there were no hassles, even duty-free.
When I shop, I tend to do it with the Red Laser app on my phone to match online prices. Target, for instance, will price match Amazon.com’s pricesand I’d rather pay local tax if that’s the only difference. But if there’s a large divide between the prices, I’ll use my Amazon prime.
Wow. Consider ignorance fought.
This backs up a theory of mine that basically everyone is a criminal in our society and is breaking rules and laws every day that they don’t even know about.
I assure you that the vast majority of people in MA aren’t paying anything when they come up to do their shopping in NH. I have friends from MA who attempt to not purchase ANYTHING in their home state.
[quote=“Gary “Wombat” Robson, post:50, topic:650739”]
It must really suck to have a brick & mortar store in a high-sales tax state and have someone set up a competing business right over the state line and have a 10% advantage over you by not collecting sales tax on their online customers in your state.
[/QUOTE]
The businesses in Northern MA are always complaining about this factor in having to compete with NH. I don’t know why anyone would shop in Methuen, MA when the same big box stores, and more of them, are just north in Salem, NH. MA does a tax free weekend and it’s the biggest shopping weekend of the year.
If they move to start taxing online purchases, it will be based on where you live. I suspect I’ll have a lot more friends wanting to ship things to my house.
I wonder if people will start getting a NH address to ship to. You can get a PO box for well under $100 a year.
Here is a list of the 20 online retailers that Best Buy is going to price match. They have amazon, buy.com, tigerdirect and newegg which usually have good electronics prices so I’m glad about that.
http://www.bestbuy.com/site/Global/Low-Price-Guarantee/pcmcat290300050002.c?id=pcmcat290300050002
This part concerns me
A lot of Amazon products are from 3rd party vendors.