Era of no tax internet sales coming to a close- Senate planning vote on Internet sales tax bill

Great Debates
61

The state will collect the tax and cut checks to local retailers? No way. The state will collect the tax and reduce the tax of small merchants hurt by online business? Also no way. Funding the operations of the state? I’m already doing that with both my state and local taxes, so is the merchant. So is the shipping company delivering my product.

The state is just upset about lost tax revenue due to people getting a better price online. It used to be that they would tax all sales in the state for revenue, obviously this created a cottage industry of people going to the next state or farther in order to avoid taxes. Now, the state wants part of the sale total no matter where you buy something, just because you live in that state.

If I buy a taco on the street in Mexico, should I have to give money to Ohio since I bought something and I live there? If I have tacos shipped to me from Mexico they clearly want to tax it.

I just think that it’s fucked up for the Government to say “Here’s your paycheck minus a bunch of taxes, maybe 20%”. If you want to buy things with that leftover money, for anything, anytime, anywhere, we’re gonna have to take more money."

I’m in full rant mode now.

I buy a used car, pay tax on the purchase for some reason, pay it off in full, then own it outright. My brother wants to buy the car, so I sell it to him. The fully paid for car can only be sold to him if he pays tax on the sale price. The state is telling me “Thanks for the tax money on the car, the tags, the registration and everything, that was swell.” “You’re selling the car to your brother? Ok, cool, we’re gonna need some money from him too. Nobody cares that your tax burden was satisfied when you paid the car off, we have a new guy we can tax because laws and stuff.”

I’m starting to think that there are “last straw” tax issues that push people over the edge into either conservatism or libertarianism. One last tax that seems unnecessary starts to make the rest look suspect too, and then it snowballs. I was by no means a tax hater, sales tax, capital gains, etc. Now the state wants to make a law to claw back the $2 I saved buying a bottle of vitamins online? That measly $2 (that does add up of course) needs to still be my tiny victory over the retail game, not funneled to my state that will use it to fund a study about tax revenue.

“Tax dodge” sounds pretty shady, and might be illegal. “Tax evasion” is certainly illegal and can get you jail time like Capone did. “Tax exemptions, shelters, and loopholes” are things people can do legally to avoid paying taxes. Taking advantage of a current system that does not include taxation does not make it a “tax dodge” even if the wording of the original laws have become outdated.

I’m surprised the Tea Party people aren’t starting riots screaming “No taxation without representation.” Yes there is representation for this, but where is their voice when a tax that affects millions of Americans rears it’s head?

62

There was a local tv segment on this purposed tax. They interviewed some local businesses that do sales on the Internet. They’re really worried about trying to keep up with the thousands of sales tax districts. There’s state sales tax, city sales tax and even county sales tax in some places. It’s going to be a nightmare for a small business to track these rates.

Big dogs like Amazon will be fine. They got tax accountants up the wahzoo. But small businesses run by four or five people? They are going to be royally screwed. In some cases it might costs less to simply stop selling on the Internet and focus on local sales.

As usual the fools in Washington are determined to destroy small businesses. They’ll get their wish eventually if they keep it up.

I had a sales tax license for a couple years. I needed it because I was building PC’s and selling them. I hated filling out that quarterly revenue form and paying the tax I had charged. It was a PITA for because some quarters I didn’t have any sales. I still had to fill out the form and report zero sales.

63

No, the states are not just now deciding to tax online purchases. This is not a new tax; what’s new is actually collecting it. Again, online purchases are not tax-free just because the retailer did not collect any taxes from you.

64

Here in Canada, our governments (federal and provincial) have taxed Internet sales for years. Mind, since most of the stuff we want comes from foreign places (remember that to us, the US is a foreign place), we get stung for federal taxes, provincial taxes, and customs brokerage fees. It is easy for our governments to collect taxes–you either pay the taxes on goods as they come through customs, or you don’t get the goods.

I’d like to see our Canadian and provincial governments raise the amount I can have exempt from duty on Internet or mail-order sales to about $500. As it is, it’s about $40.

People wonder why Canadians haven’t taken to online sales as Americans have; I would suggest that it is because extortionate taxes do not allow us to.

65

I have the impression that businesses doing less than $1 million in sales are exempt…correct?

66

Correct. Although some want that raised to $10 million.

The argument being that a $1 million dollar company isn’t very large. After business costs (labor, materials, distribution, etc) a “million dollar in sales company” could be a four employee company with less than $100k a year in revenue.

That’s not my argument, by the way so I won’t debate it – and don’t have the experience to do so anyway. Just the argument I’m hearing put forth.

67

I think most years I don’t purchase anything over the Internet exept airline tickets, and related things like rental cars and hotels. (my wife does, however). I would not at all be surprised to hear someone claim no Internet sales. Hell, my father shops catalogs but doesn’t even own a computer.

68

I don’t see the connection between whether you have a car loan or not and whether sales can be taxed. The mode of financing a purchase doesn’t change the tax liability one way or the other.

69

Am I the only one who thinks government needs to learn to live on what they bring in instead of finding new ways to bring in more money?

70

Yeah, it’ll actually be pretty good for them.

I buy a lot of photographic equipment, which is naturally pretty pricy, and with sales tax included, my local store (which is a rather big photo store, non-chain, and caters to the high end…they do a lot of internet sales in their lighting department as well) is generally going to be more expensive than buying online. However, if their prices are the same as B&H or Adorama or the like, I’ll generally buy locally if I’m only paying extra sales tax. It’s worth the extra $70 or so to have the ability to bring a return directly back, or to try out equipment in-store before a purchase. I also like supporting the local store. However, I’d imagine that a LOT of people will look at that $1,200 lens and think “I can get that for $1215 online, shipped, but it’ll cost me $1284 with tax here” and go buy it on line. Taking that equation out of it should help them a lot.

For me, it won’t make much of a difference, but it may spur me to buy almost all my gear locally rather than the occasional item online, barring the situations where my local store’s actual retail price is significantly higher, which happens on occasion, but only on about 20% of their stuff.

71

If you have a hole in your pocket that’s leaking money, fixing the hole is smarter than learning to live with less money.

Tax Free Internet Sales is a hole, it’s a straight up tax dodge, people avoiding taxes they are responsible for paying because the government chose to avoid enforcing the tax rules to help the Internet retail market gain a foothold.

72

But it’s not a tax dodge. The buyers have always been legally required to pay that sales tax. It’s just now, the states want to shift their enforcement/collection burden onto retailers they have no jurisdiction over. Until the Feds stick their big noses in, Internet retailers have no responsibility to collect taxes for a state they have no presence in. Why should a business in California that gains absolutely zero benefits from the state of Wyoming be required to spend their own money and time collecting taxes for them?

73

A business selling goods to people in Wyoming is still benefiting from the roads (so that the goods can get to their customers), police (so that their goods aren’t stolen en-route), etc.

Anyway, it’s been pointed out several times in this thread: sales taxes don’t tax businesses; they tax customers.

74

  1. FedEx, UPS, USPS and other carriers are already paying taxes in those states to use those roads an services.

  2. It’s not the taxes I object to, it’s the states demanding that a business in an entirely different state collect taxes for them at their own time and expense.

75

That’s why it’s a tax dodge, the buyers are required to pay, and don’t. Internet retailers gain a competitive advantage by this fact. You did notice that the title of the thread is “no tax internet sales” when there is technically no such thing.

That’s kind of what the Feds are for, to ensure that we have an overarching presence that can prevent rampant interstate tax dodging by enacting appropriate legislation.

Let’s also not pretend that the internet retailer isn’t banking on the tax dodging aspect of their business model to compete against local businesses. Believe me, they’re not pissed off that they’ll have to spend a few bucks on processing tax, they’re pissed off because their going to lose a 5% price advantage over other retailers.

76

As an Internet retailer myself, all I can say is “Bullshit!” I collect California sales tax and (adjusted for population) California sales are generally the same or better then for states I don’t collect sales tax for. Most people don’t care about paying sales tax for online purchases. Just like in a brick and mortar store, they largely ignore it and use the before-tax price for comparison.

Second, “have to spend a few bucks on processing tax” displays complete ignorance about what a hassle this is going to be for a business like mine. It takes me half a day every quarter to file sales tax for one state. Now multiply that by 50 and add in the vagaries of hundreds of local tax districts. I’ll be lucky if I can get away with just hiring one full time employee to do nothing but file sales tax returns. But only after I have modified my shopping cart to charge wildly varying sales tax rates for 43,000 different zip codes.

77

Going to move this to Great Debates.

78

There would be a legitimate case for collecting sales tax at the point of sale (i.e. the business address of the seller).

This bill forces every Internet retailer to track tax rates for every one of the thousands of state, county, city, district, and whatnot taxing authorities. It’s a crony-capitalism giveaway to old-style shopping establishments and Amazon (which hopes to set itself up as the middleman handling these complexities, for a fee of course).

79

It might limit the number of accidental frivolous audits. A system that allows any of the 9000-plus tax jurisdictions to audit an Internet merchant anywhere in the country is inevitably going to result in abuses – e.g. sellers of “COEXIST” bumper stickers will hear from the tax department of Biblethump, Mississippi while the “NOBAMA” publishers will get nastygrams from Snootylib, Massachusetts.

80

Well, then, let the states collect from the customers directly, by enforcing the existing “use tax”.

Ah, but that would force the politicians to explain themselves to people who have the power to vote them out of office…