The Coming Fight Over Sales Tax For Online Retailers
from the congressional-battle dept
For years, we've written about the back and forth in various attempts by states to force Amazon to collect sales tax for purchases in states where it doesn't have a presence (or, well, claims it doesn't have a presence). Existing law says that states have no right to force out of state businesses to collect sales tax for transactions in states in which they have no presence. This rule came out of questions concerning the requirements on catalog retailers, but easily carried over to online retailers. For years, two main groups have been very upset about these rules: brick-and-mortar retailers and state governments. The brick and mortar retailers, of course, don't like having to compete with retailers who don't have to charge sales tax, since it puts them at a disadvantage. State governments hate it, of course, because they want more tax revenue anywhere they can find it (even if it harms their constituents).Of course, there are some good reasons for not forcing out-of-state retailers to collect sales tax in states where they have no presence. There's the general question of the taxing authority of a state to reach cross borders to get a sales tax, for example. Related to this is the massive complication in collecting such a tax. There are so many different local tax rules, requiring any single entity to understand them all seems like a complete compliance nightmare. Separately, there's a question of the purpose behind such a tax. Generally speaking, a sales tax is supposed to cover the public infrastructure that a retailer uses -- e.g., the streets and clean downtown area that make it easy for customers to come to the store. But with the internet, the retailers aren't really getting the benefit of all of that, so why should they be taxed for it? You can argue that they still get some of the benefits in the roads/infrastructure used to deliver the goods, but that seems like a much more limited benefit. Finally, there's a more recent argument: we want to encourage growth in the internet sector, because it creates wonderful efficiencies and positive externalities that we should encourage. The brick-and-mortar folks really hate that one.
Anyway, for years there have been a series of fights and attempts to "deal" with this -- mostly pushed by the brick and mortar guys. Amazon seems resolved to accept having to collect sales tax, but has pushed for rules to simplify such taxes across borders to avoid the compliance nightmare. Unfortunately, it looks like the brick-and-mortar guys may be getting their wish with a new bill that will make it easier for states to force out-of-state retailers to pay up... and without many of the safeguards or requirements for simplified/standardized rules across states. While Amazon has suggested it might be okay with this, it could be a massive pain for any smaller retailer. In an age of micro-retailers -- think the musician selling products off his or her own website -- having to comply with every states' tax laws is going to be huge pain.
Thankfully, it appears there's at least some opposition to this. Senators Ron Wyden and Kelly Ayotte are trying to pre-empt the legislative effort, by getting a resolution through that would say that the Senate won't pass "burdensome or unfair" taxes on internet retailers. The resolution points out that such out-of-state tax requirements could become a massive burden on smaller players, and given today's unemployment situation, it seems like the wrong time to put in place such taxes:
Whereas any Federal legislation that would upset the free and fair Internet marketplace and allow State governments to impose new, onerous and burdensome sales tax-collecting schemes on out-of-State, Internet-enabled small businesses would adversely impact hundreds of thousands of jobs, reduce consumer choice, and impede the growth and development of interstate commerce; andFor a while now, it's seemed like such taxes were going to be unavoidable, even as they could end up creating significant problems for small businesses and individuals who sell items directly. Hopefully this small bit of opposition helps those on the other side think twice about the unintended consequences of a massive new tax regime for small businesses online.
Whereas at a time when national unemployment numbers are high and businesses across the country are struggling to keep their doors open, the Federal Government should promote pro-growth and pro-business policies instead of enacting legislation that extracts additional taxes from our Nation�s Internet-enabled businesses
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Filed Under: internet, interstate commerce, kelly ayotte, retail, ron wyden, sales tax, states
Companies: amazon, ebay, walmart
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Every state...
The perfect Presidential write-in IMHO.
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Re: Every state...
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Re: Every state...
He is the lobbyist's best $$$ friend.
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Re: Re: Every state...
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State sales tax...
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Re: State sales tax...
Good enough reason to derail this entire conversation right now.
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Re: Re: State sales tax...
if we are going to talk about sales taxes on the internet then let's talk about it on its merits. don't try to reinvent problems that were solved 20 years ago.
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Re: Re: Re: State sales tax...
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Re: Re: Re: State sales tax...
You don't have these complications when you're brick and mortar.
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Re: Re: Re: Re: State sales tax...
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Re: Re: Re: Re: State sales tax...
Shipping of the goods, whether brick and mortar or online, uses much of the same infrastructure, unless they have invented teleporters and didn't tell anyone. The big difference is, they have to deliver to your house or business rather than a store.
For online avoiding sales tax is an advantage, charging shipping is a disadvantage. They are trying to avoid a double whammy, and who can blame them.
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Re: Re: Re: Re: Re: State sales tax...
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Re: Re: Re: Re: Re: State sales tax...
By the by, Walmart and Target both use proprietary systems for calculating taxes (the same ones they use for their stores), currently there are zero services available which can accurately calculate taxes for all addresses in the United States. Most of the tax calculator services round up to the highest state tax when the number is unknown. Also, I believe that Walmart bases their taxes online on the closest physical Walmart to your location which actually allows them to collect lower taxes than they should in some circumstances.
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Re: Re: Re: Re: Re: Re: State sales tax...
This would not be a problem for Amazon, and could probably be a big boon for them. It would really hurt the smaller competitors, which adversely effects the market.
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Re: Re: Re: State sales tax...
For example, I live in Newcastle, Oklahoma. However, because of the nature of my ISP's infrastructure, my IP is often recognized as Blanchard or Kingfisher, Oklahoma.
We could go off of an entered address, but what is to stop me from entering a local with a low or no sales tax?
Do you see where I am going with this?
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Re: Re: Re: Re: State sales tax...
Because you want the package to actually come to you...
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Re: Re: Re: Re: Re: Re: State sales tax...
If that's the worst tax evasion to happen with such a plan, I would say we could ignore that.
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I hate to say it...
I do however think it needs to be greatly simplified, at a minimum to a state-wide rate or even a national rate. Now, if the "sales tax" was the same between say Best Buy and an online retailer such as NewEgg, will I start going back to Best Buy if the merchandise price is the same? No, because sales tax was never the reason why I stopped frequenting Best Buy.
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Re: I hate to say it...
That's what Britain thought too.
"Britain imposed a series of direct taxes followed by other laws intended to demonstrate British authority, all of which proved extremely unpopular in America despite the level of taxation being only 1/26 that paid by British taxpayers."
http://en.wikipedia.org/wiki/American_Revolution
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Re: Re: I hate to say it...
http://en.wikipedia.org/wiki/No_taxation_without_representation
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Re: Re: Re: I hate to say it...
I think that "Taxation without Representation" sum it up pretty clearly.
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Think twice?
Think twice about it? When that brick-and-mortar lobby money came rolling in, I'd be surprised if they thought ONCE about it!
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So, once they have killed the golden egg goose
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The complexity is unworkable
CA's response was
- coming to CA to install is enough of a nexus
- you need a sellers permit before even taking an order
- you will need to charge CA state sales tax and submit quarterly CA state tax returns
- you'll be responsible for figuring out the state/county (stadium ?) tax rates and charging them.
Imagine if
- that UK company had taken these suggestions seriously
- it had been the same in all 50 states
Imagine a small UK company filing 50 separate US state tax returns and having to be able to calculate the sales tax anywhere in the USA, JUST so they were allowed to potentially accept an order from the USA.
And imagine a UK company collecting California taxes from US citizens and taking the money out of the country for 3 months. Absurd.
Now, I can see the bricks and mortar argument. The internet sector doesn't deserve a tax break just because it's "a bit tricky" to collect it.
But it's really unworkable unless someone builds
- a single official easy to use calculator/website/webservice that will calculate sales tax for any zip code nationwide
- there is sensible (approved) software or website to keep track of it so you know what should be submitting on your quarterly state sales tax return
- a means of submitting all state sales taxes in a single return to a national body that then divides them all up and shares them out to the states, to minimise needless overheads
And I don't see that level of cooperation between the states any time soon.
As some people often say in Europe, "you can't have a single currency across that many different regions until you harmonise the tax system"....
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Re: The complexity is unworkable
And that's after all the free income tax accounting services. Or do you want to use the free one supplied by the IRS (if you fall into the correct tax bracket)?
In other words, if you think that will happen anytime soon, I have bridge in Brooklyn I think you'd be interested in purchasing.
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Re: The complexity is unworkable
And that's where the tax break is. It's not the sellers getting a break. It's the customers. Whether or not sales tax is charged, the store makes the same amount. Sales tax just goes through as an additional fee in most states. Then there are states that require sales tax to be included in the advertised/labeled price. And more... stuff... is added to the morass.
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Re: The complexity is unworkable
software and services that you suggest are needed already exist. every retailer/restaurant/gas station chain that has more than one site has to deal with this. hmmm, sounds like a market. look into this just a little and you will find there are literally hundreds of companies that will do sales taxes for you.
everyone is assuming that this is harder for amazon than it is for walmart. it's not.
if we are going to talk about sales taxes on the internet then let's talk about it on its merits. don't try to reinvent problems that were solved 20 years ago.
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Re: Re: The complexity is unworkable
For example, if Amazon relied on an entered address by the purchaser, they can always inter a location that has a lower or no sales tax.
If Amazon relies on IP address information, that is also unreliable. For example, my IP address often registers as cities other than the one I reside in. That messes up who gets the sales tax.
It is not simple in the least.
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Re: Re: Re: The complexity is unworkable
IP addresses are irrelevant! This "law" is total bullshit, and can never be enforced. If I was to purchase a big-ticket item, I would do it on-line via an out-of-country VPN.
It would seem congress is totally clueless when it comes to the Internet. How have we elected such idiot Dunsels?
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Re: Re: The complexity is unworkable
Just because you don't understand something that doesn't make it false. It amazes me how ignorant most people are about ecommerce. Help me out by answering the following questions:
Where can I get (for free) a complete listing of the tax codes for each state?
Where can I get (for free) a complete listing of all zip codes in the United States?
Where can I go (for free) to validate addresses?
Stop thinking of this as an Amazon vs. Walmart problem and start considering business like the one I work for. We do a few million a year in internet sales and collect taxes in the four states where we have employees, we have a CFO who thought it would be the "American" thing to do by collecting taxes in every state. After 2 months of research he couldn't find any way to do so that would be consistent or reasonable.
Since you seem to know it all, please explain (in detail) how an online retailer goes about determining the sales tax of an order. Keep in mind, shipping address vs billing address, local, stadium, economic development area, and specialty tax zones (like tax free clothing week in NY, which is not optional).
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Re: Re: Re: The complexity is unworkable
google will validate addresses for free using their api.
usps or ups will provide zip codes. there are other services out there.
if the world were limited to what people like you could find for free, we wouldn't accomplish much. can you imagine trying to cure cancer based on what could be found for free on google? just because you cannot do the research yourself or don't have the connections to get the information yourself doesn't mean that we have to be limited by what you can accomplish.
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sales taxes are for buyers, not retailers
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Re: sales taxes are for buyers, not retailers
I currently live in one of the highest taxed states in the country, and we are not the largest or most populated by a long shot. We are getting "ripped off" as it is and we don't need anymore government intrusion in our lives. Can't even afford a gallon of gas or a bag of chips these days. NOTHING is worth the price tag anymore.
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Re: Re: sales taxes are for buyers, not retailers
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Re: sales taxes are for buyers, not retailers
> infrastructure benefits in the local jurisdiction.
> Retailers only act as the collection agent
Wow! Don't you think the retailers should be paid for their new job as tax collectors / collection agents? They should work for free on behalf of the state? Really?
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Re: Re: sales taxes are for buyers, not retailers
Next question, please
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Occam's Razor
We're based in PA. PA residents pay 6% sales tax on purchases. The simplest tax would be to just charge all customers this rate and then the business just files the taxes with PA.
Of course we'd rather not have to charge any sales tax at all, and doing so would certainly result in a loss of sales revenue. Any sale we make technically occurs in PA as that is where the money is accepted into our account and where our items ship from.
Once lawmakers start going down this road, is there anywhere they will ever stop? If we have to file taxes in 50 states, what's to stop counties, municipalities (Pittsburgh as extra % for stadiums), townships, etc. from implementing additional sales taxes. And what's to stop them from enacting additional percentages for online only purchases? Huge metropolitan centers account for a greater percentage of our sales (simply due to higher population density), a NYC additional online sales tax would account for huge amounts of revenue for the city.
....and all of this doesn't begin to address what happens when foreign countries get in on the action and start charging tariff's on the online retailers in addition to the customs fees and VAT's that their citizens already pay.
It would never end.
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Re: Occam's Razor
And so the business relocate to any of the states without sales tax?
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Re: Occam's Razor
I remember years ago, PA didn't charge sales tax on clothes. Has that changed? If not, it's an easy case in point as to why the imposing of tax collection duties on Internet retailers is so difficult to impose. Would you be happy if you bought clothes on zappos.com and were taxed on those goods when you could go to the local Hess and buy those goods tax-free? Now the Internet retailer is at a disadvantage. BTW, do they still even have Hess stores? It's been year's since I've been to eastern PA.
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Re: Re: Occam's Razor
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Say again...?
You want politicians to consider the unintended consequences of legislation? I think the temperature in Hell must drop quite a bit before that happens...
What is more likely to happen is that pols in the states where internet businesses nest will cry fowl and start defending their constituents' interests. If they wake up in time, that is. Otherwise there'll be a stampede to offshore and more US jobs will be lost.
Then again, your country seems bound and determined to stay a 20th century mastodon so I'm not gonna bet on anything smart happening. Oh, and remember what happened to the mastodons...?
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A smaller benefit?
Roads and infrastructure is a much more limited benefit? Without the roads and infrastructure there would be no delivery system for the online retailers. In the area I live in, I only see a few B&M tractor trailer deliveries a week to stores like Target, Wal-Mart and Best Buy. But I see 5 or 6 Fedex, UPS, and USPS trucks driving around my neighborhood every day. So just on that basis alone I'd say that the online retailers are using a lot more of the infrastructure than a B&M retailer. No Best Buy trailer has pulled up at my house but it would be kind of interesting if one did.
I'd rather see a local tax on Fedex, UPS, etc. whose vehicles actually use the roads and infrastructure. Then those companies would increase their shipping costs which the internet retailers would pass on to their customers. There are already different shipping costs for different parts of the country (depending on who you're using and what you're sending) but I bet there wouldn't be as many different zones as there are taxing localities. I'm sure the shipping companies would bundle large chucks of area together to come up with an average shipping cost that would cover the local taxes for those areas.
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Re: A smaller benefit?
The problem with the online sales tax isn't so much that it would have to be paid, but rather that if it was charged to the customer's location, the filing process and software upgrades would be stupid expensive and cumbersome.
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Re: Re: A smaller benefit?
I was home schooled for 3 years and those books can be pricey.
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Re: A smaller benefit?
They already pay tax's, Lets see
Gas, parking tickets, payroll, tolls,landing tax's for the their planes etc. Enough with the the lets see how much more blood we can drain from the regular individuals.
Why not get companies like GE($14.2 billion in profits last year, including $5.1 billion from U.S. operations. n fact, it received a tax benefit of $3.2 billion. Source http://money.msn.com/top-stocks/post.aspx?post=d715c70d-f0d0-4474-8223-2949588e90f6 ) to pay their fair share of taxes and that revenue cover whatever they feel they are losing to internet buyers!
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Re: Re: A smaller benefit?
granted i'd like to see them pay more federal tax, but you can bet they pay a significant amount of tax elsewhere.
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Re: A smaller benefit?
First, this is as opposed to a 100 or so cars and SUVs traveling to a 100 or so different destinations in order to buy the same thing. So 5 or 6 trucks following optimized delivery routes use much LESS infrastructure than the alternative.
And as already said above, local delivery companies already pay gas, parking tickets, payroll, tolls, landing tax's for the their planes, and so on.
The local infrastructure thing is a diversion. Several states like Texas have already stated that they're somehow losing "billions." When in fact, they're simply trying to extract billions more from their citizens.
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Re: A smaller benefit?
I learn something new every day. I didn't realize just how necessary roads were to my Steam downloads and Amazon MP3 purchases.
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The roads and infrastructure around here is a joke. The same roads get ripped up every other year (got federal money, have to spend it!). Cops will will cut you a deal if they pull you over and give you a no point ticket if your license is in jeopardy (which is kind I will admit), but they give you a ticket that's nearly the same amount anyway. So in the end they keep you driving, keep pulling you over, and keep the revenue coming in.
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Mike, /retailers/ don't pay sales tax, buyers do.
When you go that blatantly wrong on a fundamental -- while claiming to be an Ivy League schooled economist -- can't take you seriously on anything.
(Yes, was already mentioned in comments. Formed my opinion before reading.)
As for the internet sales tax problem, let's just simplify it to one flat number for all states and territories, to be returned to buyer's state. Simple and fair.
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Re: Mike, /retailers/ don't pay sales tax, buyers do.
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Re: Mike, /retailers/ don't pay sales tax, buyers do.
So, business as usual in your world, eh?
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Re:
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Promoting the Progress
My understanding of the idea is that you want the conglomeration of 50 separate state governments to come together and work as a federated whole. One of the best ways to do that is to prevent them from having petty trade wars with each other and constantly throwing up tariffs on one thing in response to some perceived wrong on another thing. This whole idea seems reasonable to me, and also appears to have worked well to date. I can't recall the last time Nebraska retaliated against Idaho over a trade dispute.
I think we should be careful to not get distracted into discussions over efficiency and inevitability on this issue. Our track record on creating efficient tax collection systems is abysmal (e.g. toll roads, or the IRS), so that's not too promising of a road to go down. I don't get the impression that efficiency is high on the list of goals for most of our government entities.
Amazon seems to have caved in to the pressure on this question, but that is a business decision about whether it's more effective to fight or to join the other side. What is best for the country, and what is the "right" thing to do is another question entirely. I don't fall into the camp that says since it was written on parchment 200 years ago, it must always be so. I do, however, think it would be ignorant of us to lose sight of the reasons it was done to begin with.
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You might be hard pressed to find a law that doesn't somehow favor the 'rights' of non-humans, such as government or corporations over the rights of an individual.
What a sad legacy for a culture.
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This makes sense. If I drive to New Jersey and buy something, I have to pay the state tax.
If I have a friend go to New Jersey and buy something for me, I have to pay the state tax.
And if I pay someone to go to New Jersey and buy something for me, I have to pay the state tax.
But yet when I pay Fedex or UPS to pick it up and ship it for me, I don't have to pay New Jersey's tax. How does that make any sense?!
States hate this idea because it would lead to states competing against themselves for shipping centers. Texas, for example, could offer low out of state shipping taxes for Amazon's promise to build a new shipping center. Governments hate competition.
No to mention that not every state is capable of becoming a shipping mecca.
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Re:
To start with, figuring out which directions to bow could become a real nightmare!
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There many of companies, like Paypal, that provide (or could easily provide) tax tables for every square inch of the US.
What could be made easier is allowing the payment processor to pay the tax to the tax agencies and take that burden off the little guy.
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Re:
If you were to base your sales tax on the address information provided by the buyer, they could always enter an address that has little or no sales tax.
If you base it off of IP address, those can be mixed up. I am always flagged as living in a city other than the one I live in when sites do an IP check.
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Re: Re:
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2. It wouldn't be all that hard to have a service that maps zip+4 to a state/local tax rate, collects it, and redistributes it. That's what's happening to payroll withholding of local income taxes in Pennsylvania beginning next year. They hid the details by creating single points of contact.
3. Online/catalog sales have had their time to blossom. The electronic efficiencies should be enough of a competitive edge. The tax dodge seems to be a little too much of an additional benefit for my taste.
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Re:
Well, there is the sort of minor thing about how many jurisdictions have different rates FOR DIFFERENT PRODUCTS.
Food, alcohol, clothing, durable goods, appliances, cars... can all be taxed at different rates. What's exempt here may not be exempt there. And so on.
"The electronic efficiencies should be enough of a competitive edge."
Like the big box stores that have massive electronic supply chain management systems, warehouses, and distribution systems?
If you want to hand more money over to the state, feel free to calculate the use tax on all of your own internet purchases, write 'em a check, and send it in...
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Re:
if the Government needs money because the budget is no at big they should cut their salaries by a little bit (maybe 1 or 2%) which WILL translate in huge amounts of money .... also companies "give to charity" only to have tax cuts, i say bullshit, they should pay the FULL amount of tax, regardless of any charity donations. Even more money for "Budgets". leave the tax cuts for those how really need it, individual who barely make enough to get food, medicine and education, not the fat, deep pocket, pig companies who make millions, pay little to their employees and get all the tax cuts.
WE break our back to ear the money to buy or NECESSITIES. they already have income tax (tax on what i sweated like there is no tomorrow to earn only to have the government take a slice) then the sales tax, tax on my home property (yearly) tax on services. and even tax on stuff i don't even use (i live in san luis, Az. yet a pay tax for San Luis, Gadsden, Somerton and Yuma school districts).
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2. It wouldn't be all that hard to have a service that maps zip+4 to a state/local tax rate, collects it, and redistributes it. That's what's happening to payroll withholding of local income taxes in Pennsylvania beginning next year. They hid the details by creating single points of contact.
3. Online/catalog sales have had their time to blossom. The electronic efficiencies should be enough of a competitive edge. The tax dodge seems to be a little too much of an additional benefit for my taste.
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Interstate taxation
Give 33.33% to each of the shipping state, the shipped to state and the feds.
That way states would get a bite of anything shipped out(now they get nothing) and a bite of anything shipped in (now they get a bit of this - if they can find the people) and the feds get a bite. If it is pegged at 6% in total = 2% each.
This would end this wrangle for good in a rational way. Internal states sales taxes would not be affected.
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Jurisdiction
How could this possibly be enforced? I can see mega-businesses like Amazon voluntarily acting as out of state tax collectors, but what about the small business? The independent musician? What can a state, city, or municipality do when these small businesses simply refuse to collect taxes for them?
I see this proposal as largely unenforceable.
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Re:
Sure for giant corporations like Apple and Best Buy, it's just 'code' but for small retailers, it's 10 (or 20 or 50) different state tax laws to learn and follow...
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Jurisdiction
States have tried to say that an affiliate marketing arrangement, like Amazon has with many people, is a physical presence and Amazon must collect and remit. So Amazon turfs those affiliates.
NY can enforce sales tax collection from any NY buyer - if they know who they are. Sellers never reveal this. NY has chased a number of people who dodged sales taxes on high ticket items if they find out about them from insurance records etc. (say you have a fire, and your $10,000 big screen TV burns up, and you make an insurance claim, then NY will ask for the details of the acquisition of this TV and get you if you had it shipped in from NJ, and so on. Small stuff escapes this net)
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Re: Jurisdiction
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Re: Jurisdiction
Here in NYC we are supposed to declare all out-of-state, out-of-city purchases on our tax returns, and pay the difference between the sales tax paid to the selling state and the NY state/city sales tax differential. I don't know of anyone who does this. I certainly never have! It would not be possible for me to do so even if I wanted to. I drove to the Bronx for many years transiting from NY through NJ, where gas and sales taxes were lower than in NY. I bought all my gas in NJ. Am I supposed to keep a record of all the NJ gas purchases and declare them to NY? I am not a crazy fool! Of course not!
Not one part of this proposed legislation is enforceable. It's DOA! It matters not if it were to be passed. There is no way this could be enforced.
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Sales Tax Blues
When I go to my local store, I pay taxes because that store had a legal requirement to do so, and because that store only has one locality, one county, and one state to deal with. So they can stay up on all of that fairly easily.
If we MUST make those who sell over the internet collect sales tax, we could make it very easy on them, big or small, if we simply make it that they collect sales tax based on where they, the seller, are. Just as with a local store, it's fairly easy to be up on all of their laws, local, county, and state.
If I live in VA and I drive to WV and buy something there, I pay WV sales tax. And if they have none (I'm not saying they do or don't), VA doesn't stop me at the border and ask me to declare any goods, and then pay VA sales tax on the purchase price. Hell, they don't even stop me.
In this case, consider the internet as both the vehicle and the road to get me to any place. So I pay sales tax where I bought it, not where I live. Just like when I drive to the store.
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Re: Sales Tax Blues
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Carbon Footprint
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Re: Carbon Footprint
Lets simplify tax code, instead of introducing new exemptions we should be eliminating existing exemptions and lowering the tax rate.
I am tired of social aggendas realized through economic policy. End child tax credits, end earned-income credits, end off-shore tax shelters, and lower the tax rate.
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I dont know of any local retailer where I can find a product I want so easily at work and have it show up at my door a day or two later.
I already bypass cheaper local alternatives to have this convenience. I'll continue to do so when Amazon adds the tax.
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I wish I had a solution to this problem, but I don't see one. I don't think it's fair having to compete against online retailers that not only don't have to charge tax, but also don't have the overhead of having to pay for tax data. Saying it's too hard to keep up with all local tax laws just isn't a good excuse given that all large brick and mortar retailers have to do it.
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Re:
So... if I sell a few hundred dollars' worth of items on the Internet per year, it's fair that I should have to pay six figures to license that tax software? Because otherwise I run afoul of the same local tax laws that you have to deal with.
Sounds like you're advocating that big businesses should drive out little businesses. Yep, that's the American way alright.
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I feel the it is in the interest of the states and the feds to adopt my plan, as it solves all the problems.
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Aren't you the one that wants to change laws that make ordinary people criminals? Wouldn't requiring Amazon to collect this sales tax prevent normal citizens from breaking the law?
Why do you want special circumstances for the internet sector? Aren't you the one that complains about the media companies using the law to their advantage? Isn't the existing situation an unfair advantage for internet based companies?
Geesh Mike, you're always pandering for your special interest but you moan and groan when brick and mortar stores want a level playing field.
The taxes are owed, better to have the retailer collect the tax than to have the customer become a criminal.
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New Hampshire doesn't have a sales tax, by the way, which is why so many folks from Maine, Vermont, (not to mention Canadians) and Massachusetts shop there.
In Canada, sales taxes do apply to Internet purchases even if they come from away -- then they're simply levied by the Customs service.
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Re:
No they trade those expenses for employees - putting sales associates, stockers, managers, custodians, maintenance workers, technicians, etc.. to work. Hmm which method do you think more positively benefits the economy.
And I hate to break it to you, but you WANT local brick and mortar retailers in your area, they are great for things you want/need immediately and there are certain items that just arent practical purchases from e-tailers.
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sales tax methodism
"I agree with everything you have said! What I don't understand is how any federal statute, allowing states to collect out-of-state sales taxes, can possibly be enforced. It seems impossible on it's face."
What is needed is a sales tax treaty between the feds and each state that wants to sign up for the 33% of the 6% sales tax.
On the face of it, high sales tax states would lose - but they actually win, because they keep all taxes on their own sales with the state and in addition, get 2% of whatever is shipped into the state and what is shipped out of the state.
States with no sales tax, can waive their 2%.
I think a scheme like this is the only way.
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Currently, where the goods end up is the state that gets the taxes - if it can find out who shipped what to whome. Under the 33% plan, the place it was physicallt shipped from gets 33% and the place it was shipped to gets 33% and the Feds get 33%.
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> which ships the product out of Indiana,
> o my gift recipient in New Mexico,
> which tax rate applies?
This is a perfect example of why this is totally unenforceable.
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Easy to enforce.
You are creating a strawman argument that is invalid.
How the goods got to the buyer, where they came from, or their form (electronic or physical) is irrelevant.
The tax collected is on behalf of the BUYER's local government for the BUYERs benefit ( not the seller's benefit ). If the BUYER doesn't like the sales tax - the vote appropriately.
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Brick & Mortar Stores have too much overhead to compete with internet stores. Even without the sales tax, Brick & Mortar stores can't seem to compete with prices on the internet.
I shop for just about everything on the internet and I save tons of money doing so.
Raising taxes on the populace will only send us further into debt and downfall. Our governments, local, state, & federal are spending us into decline. Look at several European countries. It is predicted that some of these will bankrupt and unable to recover within a year.
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Retailers COLLECT sales tax - they do not pay it!
COLLECT - get it?
As in would-not-affect-Amazon's-bottom-line-at-all because the BUYER pays sales tax.
As for "complexity" - this is utter BS.
50 states in the union. 50 states that have the mathematical formula for how to calculate the sales tax. Got that? 50. Not 50 million. 50. (actual 45 because Alaska, Delaware, New Hampshire, Montana and Oregon do not levy general sales taxes)
Next, if a state wants to go after a brick and mortar retailer for underreporting the sales tax, the state needs to prove in court the correct amount owed. This means that sales tax calculation is a tractable problem in all 50 states.
Finally, are you seriously implying that Amazon which can manages millions of servers can not manage to calculate a small number of mathematical formulas that my 4th grader could?
Be f*cking real.
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Re: Retailers COLLECT sales tax - they do not pay it!
From goole, see this.
http://zip2tax.com/
there are lots more.
the 33% plan is just a way to impose a more or less level playing field compared to local sellers
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Re: Retailers COLLECT sales tax - they do not pay it!
You can't even go strictly by zip code, as some span city and county lines.
Plus the rate often varies based on WHAT is purchased. Food vs consumer goods vs luxury goods and so on. As stated above by someone who supposedly works for a big box retailer... it's a friggin' mess.
And while Amazon may be able to do it, it's a INTERNET sales tax, not an AMAZON sales tax. What about the little mom and pop web site that sell handcrafted whatsit's online? They don't have a IT department to track and disperse funds owed to 50 different states.
Pay a service to do it? Many businesses are marginal enough already. Let's add even more rules and regulations and reporting to the mix.
Let the Feds do it? Oh, there's a BRILLIANT idea. Let's get the Federal government involved in tracking and recording every single internet transaction in the entire country. (Remember, different goods, different taxes.)
Yeah, what could go wrong with that? Not like there'd be any privacy issues there...
Try to wrap your little head around the idea that, yes, it is a complex problem. Or in other words...
Be f*cking real.
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Re: Re: Retailers COLLECT sales tax - they do not pay it!
Hell, if Walmart can do it, anybody can do it!
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BUZZ, sorry wrong.
My wife is an accountant who deals with sales tax issues all the time. Different municipalities may have different rates, but it is the state government that collects and audits sales tax.
Besides -- who cares Amazon will take care of all of this for 2.9% of the sales tax collect. Guess it wasn't so hard after all. (Funny my wife never found it hard either)
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Sales Tax as discussed by a panel largely made up of morons!
Local unemployment will continue to rise under that form of "competition". Tax revenues will dwindle since sales taxes drop as do income taxes. Who pays for infrastructure now?
And... Sales Taxes are NOT regressive when applied appropriately. Don't tax food, health and all the basics. Do tax everything else and it becomes a consumption tax. Pay as you go is a pretty fair way of spreading the tax to those who appear to be able to afford it. If you want to buy, buy, buy, then you are taxed.
No one should get off tax free. All this anti-tax crap. Where's the money going to come from to fix your crumbling infrastructure?
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Re: Sales Tax as discussed by a panel largely made up of morons!
It's weird, but as I drive around my town, it seems that there are still local businesses.
Local unemployment will continue to rise under that form of "competition".
I have a hard time believing that raising taxes on online retailers is the best form of employment stimulus.
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Re: Re: Sales Tax as discussed by a panel largely made up of morons!
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Make a decision
If they are going to require all online companies to collect sales taxes then all the offline companies need to tax based on the home of the buyer rather than the location of the store.
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Isn't this already covered in the costs they pay to deliver the goods? They pay UPS, who includes in their fees the cost that the truck they use costs them. The trucker's fee is included in that, and his fee includes money for gas. Gas is taxed primarily for the use of the roads/infrastructure.
So wouldn't taxing them again with that in mind just be double dipping into their pockets?
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buy and pay the taxes there.
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internet taxation
""I guess if they start taxing on the Internet, I will stop ordering on the Internet. May as well go to the store and
buy and pay the taxes there.""
The balance had shifted to large internet companies, and what better way to balance the playing field.
I remember Stalin, when asked why Americans had stores full of plentiful goods, and the stores in the USSR were empty, replied that Americans were so poor they were unable to enter the stores and buy good, but the Russians were so wealthy that they all the goods had sold out.
I see a similar Stalinist mindset in you.
The truth is we will all balance price, availability, delivery, warranty and taxes and each will vote with their feet and wallet.
Right now many stores are dying after showing a product to a person, who then goes and buys it online to save taxes etc. Do we want local shops? If not, what will those people do? All work for UPS or ??.
An economy is a complex system of purchase and distribution of goods and services and a balance needs to be struck as we change from one form to another.
A reasonable tax for a reasonable government is good enough for me. Right now the USA has too many fat cats in the various government services for a good economy, only the fat cats can survive these days. Yes, I mean the unions and their pensions and bosses that are breaking the USA just like they broke Greece and Italy etc.
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Re: internet taxation
Why does the playing field need balancing? People are going to small specialist locally owned shops less in favor of more convenient "big box" stores. Do you want to balance the playing field there by taxing big stores more?
I see a similar Stalinist mindset in you.
Shopping on the interent is Stalinist? Wow.
Do we want local shops? If not, what will those people do? All work for UPS or ??.
You seem to be advocating we resist efficiencies in favor of the higher employment the inefficiency creates. That's never worked before, the efficiency always wins.
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Re: Re: internet taxation
Why should trade between states escape sales taxes any more than trade between countries escapes duties?
Back when internet sales were small, the sales tax was a minor problem, but now it has become a major loss to the states as well as the retail businesses.
Specialty stores can prosper with unique products - which are few, and with client hand-holding - which far away internet suppliers are unable to easily supply(if they hire local hand holders = presence = sales taxes)
As for Stalinism = central distributionism with excess power in one supplier. In the USSR there was one brand of toilet paper - scratchy. With excess centralization, products can fall below a threshold of sales and not be worth distribution, much like orphan vaccines and other medical products.
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Re: Re: Re: internet taxation
It's not a loss to the states. Failure to tax something that was never taxed is not a loss. And yes, local businesses are losing some revenue, but the government ought not to step in and level the field every time someone starts losing money. That would be a disaster, and completely anti-free market.
Your point is fair, but the problem is forcing sales tax collection from every internet merchant would be seriously problematic, and forcing it only on a list of the biggest ones would be unfair.
Specialty stores can prosper with unique products - which are few, and with client hand-holding - which far away internet suppliers are unable to easily supply(if they hire local hand holders = presence = sales taxes)
So no problem there, right?
As for Stalinism = central distributionism with excess power in one supplier.
From Wikipedia:
'Stalinist policies in the Soviet Union included: rapid industrialization, Socialism in One Country, a centralized state, collectivization of agriculture, and subordination of interests of other communist parties to those of the Soviet party.[2] When used in its broadest sense, the term "Stalinist" refers to socialist states comparable to the Stalin-era Soviet Union (i.e., those characterized by a high degree of centralization, totalitarianism, the use of a secret police, propaganda, and especially brutal tactics of political coercion). According to Encyclop�dia Britannica, "Stalinism is associated with a regime of terror and totalitarian rule."'
That doesn't sound like Amazon.com to me.
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Re: Re: Re: Re: internet taxation
It's not a loss to the states. Failure to tax something that was never taxed is not a loss. And yes, local businesses are losing some revenue, but the government ought not to step in and level the field every time someone starts losing money. That would be a disaster, and completely anti-free market./
Are you blind? As retail sales that were taxed at retail within a state move to out-of-state internet sale there is indeed a loss of taxes/
Your point is fair, but the problem is forcing sales tax collection from every internet merchant would be seriously problematic, and forcing it only on a list of the biggest ones would be unfair.
Specialty stores can prosper with unique products - which are few, and with client hand-holding - which far away internet suppliers are unable to easily supply(if they hire local hand holders = presence = sales taxes)
So no problem there, right?
As for Stalinism = central distributionism with excess power in one supplier.
From Wikipedia:
'Stalinist policies in the Soviet Union included: rapid industrialization, Socialism in One Country, a centralized state, collectivization of agriculture, and subordination of interests of other communist parties to those of the Soviet party.[2] When used in its broadest sense, the term "Stalinist" refers to socialist states comparable to the Stalin-era Soviet Union (i.e., those characterized by a high degree of centralization, totalitarianism, the use of a secret police, propaganda, and especially brutal tactics of political coercion). According to Encyclop�dia Britannica, "Stalinism is associated with a regime of terror and totalitarian rule."'
That doesn't sound like Amazon.com to me.
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Re: Re: Re: Re: Re: internet taxation
'Stalinist policies in the Soviet Union included: rapid industrialization, Socialism in One Country, a centralized state, collectivization of agriculture, and subordination of interests of other communist parties to those of the Soviet party.[2] When used in its broadest sense, the term "Stalinist" refers to socialist states comparable to the Stalin-era Soviet Union (i.e., those characterized by a high degree of centralization, totalitarianism, the use of a secret police, propaganda, and especially brutal tactics of political coercion). According to Encyclop�dia Britannica, "Stalinism is associated with a regime of terror and totalitarian rule."'
That doesn't sound like Amazon.com to me.
Stalin had a broad stifling effect on capitalism. All aspects were denied validity. Competition by brand name, quality or price was not allowed. Promotion by advertsing was not allowed. This all acted to limit product development, innovation and competition, all with no advertising. One brand of corn flakes, shoe polish, toilet paper etc. In like manner having a sole distributor has a stifling effect when items with small markets are denied a listing or charged a listing fee. Amazon approaches stalinism from the other end. What happens when Amazon is the only book seller left, online or bricks and mortar? This can happen as the Amazon monolith can easily do this. Will we then regulate Amazon as a monopoly?
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Re: Re: Re: Re: Re: Re: internet taxation
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Re: Re: Re: Re: Re: Re: Re: internet taxation
Not that this is bad, but it needs moderation. We are both too young to know about the standard oil monopoly that gave rise to counter measures.
Here is an interesting read.
http://en.wikipedia.org/wiki/Standard_Oil
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Re: Re: Re: Re: Re: Re: Re: Re: Re: internet taxation
and I see Amazon is going into the sales tax business. That 2.9% is a good deal for the sellers = a small enough fee. It will kick the crap out of that software company with its huge licencing fees, Amazon has enough nimble fingers to create tables of all the little sales tax zones in the USA and ROW
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Re: Re: Re: Re: internet taxation
Every internet merchant already collects sales tax on their state (save for those with no taxes on sales) So it is no real problem, just a small burden paid for by allowing them to keep part of what they collect
Specialty stores can prosper with unique products - which are few, and with client hand-holding - which far away internet suppliers are unable to easily supply(if they hire local hand holders = presence = sales taxes)
So no problem there, right?
As for Stalinism = central distributionism with excess power in one supplier.
From Wikipedia:
'Stalinist policies in the Soviet Union included: rapid industrialization, Socialism in One Country, a centralized state, collectivization of agriculture, and subordination of interests of other communist parties to those of the Soviet party.[2] When used in its broadest sense, the term "Stalinist" refers to socialist states comparable to the Stalin-era Soviet Union (i.e., those characterized by a high degree of centralization, totalitarianism, the use of a secret police, propaganda, and especially brutal tactics of political coercion). According to Encyclop�dia Britannica, "Stalinism is associated with a regime of terror and totalitarian rule."'
That doesn't sound like Amazon.com to me.
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Re: Re: internet taxation
SO WHAT ARE THOSE PEOPLE SUPPOSED TO DO? In an economy like this, we really can't afford to have people losing their jobs. Where do you expect them to work if their business is shut down? Or do you actually like the idea of more people on gov't assistance? But hey, guess it doesn't matter. Sure is easy to say it's ok to sacrifice jobs in favor of a more efficient model when YOU aren't the one whose job is at risk.
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Re: Re: Re: internet taxation
I'm not sure exactly what point you're arguing, so let's start there. Are you saying we should make internet sellers collect sales tax in order to save jobs? Or something else?
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Re: Re: Re: Re: internet taxation
"You seem to be advocating we resist efficiencies in favor of the higher employment the inefficiency creates. That's never worked before, the efficiency always wins."
That was the point I was arguing against. If you just say let the local businesses die because they are "inefficient," what are those people supposed to do now? They are out of a job, and their skills probably don't transfer over to a new one since the internet killed their old line of work.
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Re: Re: Re: Re: Re: internet taxation
If the purpose of sales tax is simply to get revenue for the state, then OK. But what about counties, cities, school districts, etc? Can we give online retailers a free lunch from those taxes? If so, why, and if not, are you sure the cost in retailers deciding not to sell over the internet would be worth it?
f you just say let the local businesses die because they are "inefficient," what are those people supposed to do now? They are out of a job, and their skills probably don't transfer over to a new one since the internet killed their old line of work.
That is always the problem with disruptive efficiencies. For example, telephone operators weren't qualified to work on phone infrastructure, yet we managed the changeover anyway, and are better off for it. Imagine if we had taxed automatic exchanges to death to prevent losing jobs. Besides the obvious problems, who knows what amazing internet service of the future will never happen if the sales tax collection is too burdensome?
I'm actually not completely convinced either way, but I think we should be very wary of placing burdens on internet services and sales. Perhaps there could be a system where a state sets a sales tax rates for its residents for out of state sales, registers that rate in a central location, and cannot change it for some period of years. That would give retailers simplicity and certainty in implementing the taxes.
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Re:
Obama promised us government transparency and we've gotten the exact opposit.
Obama promised to get the lobbyists off of Capitital Hill and we got the complete opposite.
Obama promised to close Guantanamo Bay. Instead he did this...
"On Jan 7, 2011, President Obama signed the 2011 Defense Authorization Bill which contains provisions preventing the transfer of Guant�namo prisoners to the mainland or to other foreign countries, and thus effectively stops the closure of the detention facility."
What you and every other citizen of this country needs to get through you old-fashioned thick skulls is that the U.S. is a One Party system. The only thing that differentiates the Republicans from the Democrats are their talking points. PROTECT-IP (Democratic Senate) and SOPA (Republican Congress) are a perfect example. Both parties are bought and paid for by the same corporations. The only times the parties differ is when corporate interests are not involved.
Welcome to corporate run and owned America.
Your only reason for existence is to do the entertainment and insurance industries' bidding. Just keep giving them all your blood, sweat, tears, money, and your first born child and you can be assured a happy, prosperous life.
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No tax on internet purchases
Let them eat cake?
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I feel all retailers should be treated equally
This is one aspect of what is called the tragedy of the commons. Google it.
People see their own ends and motives ahead of those of others
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Re: I feel all retailers should be treated equally
The tragedy of the commons applies to a shared resource. There is no such shared resource in this scenario.
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Re: Re: I feel all retailers should be treated equally
The tragedy of the commons applies to a shared resource. There is no such shared resource in this scenario.
DUHHHHH
So the consumers of the USA/WORLD are not a resource shared amongst all retailers (both internet and B&M)?
Well, I say they are and the sales tax not charged by out-of-state merchants constitutes a tragedy of the commons in the classical sense.
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Yet another reason ...
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sales tax
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So much for complexity, all you naysayers have been played by Amazon
Amazon finds a new revenue source as Internet tax collector:
So now the problem of handling sales tax on internet purchases is reduced from impossible to costing merely 2.9% of the tax collected.
What say you now, Mike?
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Re: So much for complexity, all you naysayers have been played by Amazon
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An Economy fails once a high enough % do not work for $$
If you refuse to work = no NIT. it supplements work only. Like the spendthrift trusts that dispense an amount to the beneficiary that depends on what he makes. For example, if you make $1000 the trust will give you $1000. So a $10/hour job becomes a $20/hr job...or whatever ratio works.
What we now have is a beggar class on welfare, that can not or will not work - even if offered jobs.
We then have unemployed, who want to work, but either refuse minimum wage jobs as too menial, or are ex union people who can not get a job because employers know that if they are recalled tomorrow morning - they are gone, no notice etc., or their jobs have gone west - to China.
Free trade needs adjustment. If you have free trade between $2/hour workers and $20/hour workers, then all the work goes to China. In fact China is making better and better stuff every day as they follow the path that Japan and Korea followed - at a far higher velocity.
Free trade only work between equals. The USA/Canada?Australia/Europe have been hollowed out in terms of production. Forget the small amounts of protected intellectual property earnings - they are nothing. /RANT
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Lol. I'm pretty sure the idea of a sales tax is to help pay for the things you just listed. States don't make retailers charge tax because its fun. They do it so they can pay for shit.
"That is always the problem with disruptive efficiencies. For example, telephone operators weren't qualified to work on phone infrastructure, yet we managed the changeover anyway, and are better off for it"
True. But you are talking about just telephone operators in that example. Here, we are talking about pretty much every small retail store being done away with thanks to the internet, and probably bigger stores getting less profit because of it. In the first example, that's obviously bad since a hell lot of people would have to be on gov't assistance...don't think I really have to explain that one though. As for the 2nd example...well, we all know what big stores like to do when they lose profit. Bye-bye jobs! Even if they ARE just entry level ones for the most part, everybody has to start somewhere...unless you actually like the prospect of people having to live with mom and dad until they're 30 because all the entry level jobs are being replaced with unpaid internships. (not lying about that...a LOT of companies, especially the newspapers, love to do this)
"I think we should be very wary of placing burdens on internet services and sales"
Not really. While I agree we can't go charging them an arm and a leg or make it a hike up Mount Everest to collect them, charging the state sales tax isn't unreasonable at all. It helps to level the playing field with regular stores, not to mention that they shouldn't get a free lunch just because they aren't a physical store.
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Re:
What about the theory that sales tax is to help pay for the "shit" that businesses benefit from, such as roads and power infrastructure?
Here, we are talking about pretty much every small retail store being done away with thanks to the internet, and probably bigger stores getting less profit because of it.
The sky is not falling. Yes, some businesses will close. Others will find ways to compete.
As for the 2nd example...well, we all know what big stores like to do when they lose profit. Bye-bye jobs!
Adjusting the tax code any time jobs are lost is a terrible idea.
While I agree we can't go charging them an arm and a leg or make it a hike up Mount Everest to collect them, charging the state sales tax isn't unreasonable at all.
So what did you think of my idea to do that?
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Re: Re:
Because online retailers TOTALLY don't get to benefit from it as well? I mean, it IS how their products get shipped to customers and their warehouses.
"Adjusting the tax code any time jobs are lost is a terrible idea."
Yes it is. But I never suggested that. Don't know where you got the idea that I did.
"So what did you think of my idea to do that?"
You can't charge different rates for in and out of state residents. Think of it this way; if a new tax code like that were written, it would apply to everyone. Should a tourist get to pay less tax while they are there? They are still using things like public transportation and probably other things the city pays for.
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Re: Re: Re:
Aren't the shipping payments, trucks, and fuel taxed?
Yes it is. But I never suggested that. Don't know where you got the idea that I did.
Your whole point, unless I misunderstand, is that we need to change the tax laws because jobs are being lost.
You can't charge different rates for in and out of state residents.
I don't really follow you, but the tax would be based on the buyer's location. If I bought something online, I would be charged my state's sales tax rate. If I buy something down the street, I get charged my state's (and county's, etc) sales tax rate. If I visit your state, I get charged your state's sales tax rate.
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Re: Re: Re: Re:
Yes, but if EVERY OTHER business must pay tax on their profit, so should online retailers. It helps level the playing field if everyone gets taxed on the same things.
"Your whole point, unless I misunderstand, is that we need to change the tax laws because jobs are being lost."
You misunderstood...I was just pointing out a possible job loss scenario that would probably happen if the internet really did kill off a lot of stores.
"I don't really follow you, but the tax would be based on the buyer's location. If I bought something online, I would be charged my state's sales tax rate. If I buy something down the street, I get charged my state's (and county's, etc) sales tax rate. If I visit your state, I get charged your state's sales tax rate."
That's reasonable. The way your post was worded, I thought you were suggesting that out of state residents pay a different tax rate for buying anything at any store.
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Re: Re: Re: Re: Re:
Yes, but if EVERY OTHER business must pay tax on their profit, so should online retailers. It helps level the playing field if everyone gets taxed on the same things.
Well no need to go changing the subject here. Internet retailers are already taxed on their profits. We were talking about taxing buyers for their purchases.
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Why States want taxes
Civil serpents should not have the vote to elect those that pay them, that is a conflict of interest and decades of crooked unions and politicians have put us where we are now
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