One Step Closer To Sales Taxes On All Internet Purchases
from the is-that-really-necessary? dept
On Friday, Congress came one step closer to imposing a federal "internet sales tax" on any internet purchases by agreeing to amendment that more or less indicates strong support for a more comprehensive internet sales tax down the road. This kind of tax has been pushed for years mainly by two key constituents: (1) big box offline retailers who think that the online guys are only beating them because they don't have to charge a sales tax for out of state purchases (2) local state governments who think they're being ripped off by not being able to collect such taxes. There are still some hurdles in the way, but it's becoming clear that this kind of tax is inevitable. The amendment passed 75 to 24, so it's got plenty of support. Max Baucus, who heads the Senate Finance Committee which could kill such a bill if it had less support, has already noted that his state, Montana, has no sales tax at all, and he's a bit ticked off that Montana residents may need to start paying sales tax online. Still, as the article above notes, Baucus's ability to block the bill via the Finance Committee is limited due to the size of the support among other Senators. I've yet to see a compelling argument for why such a tax makes sense -- other than random state governments insisting they need the money -- but at this point it seems almost inevitable that it's going to happen.Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
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There's a system already in place where Paypal, Visa, etc. report to states on certain purchases made online so they can collect the tax by contacting the individual directly, such as tobacco products. I imagine this will be expanded to verify proper taxes were paid (including international).
As it is, payment processing has become a tool of enforcement against industries, trades, technology that someone didn't and they've been very happy to comply. Mp3's from Russia, MegaUpload, file hosts (cyberlockers) - what's next? VPN service - or a distributor based in China? Bitcoin? Anonymous pre-paid cards?
This might be an easy way to gain oversight or all online purchases. That may seem extreme, but I've never known a US corporation that didn't "want it all", including viewing the food stamp program as "competition" (Citibank) when there might be a buck they could make.
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Who actually wrote this bill?
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Rein in. As in horse's reins.
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Reigning, but not reigning in.
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And indeed throughout europe and in much of the rest of the world.
Seems to me there are two issues here.
i) Do sales taxes make sense?
ii) Do local sales taxes make sense?
It is clear that whatever your answer to i) the answer to ii) is clearly no.
When the UK reviewed local taxation a few years back it was pretty clear that local sales tax was not viable in the modern world.
If the US wants sales taxes then they have to be national. Anything else is just an invitation to load of anomalies.
In the long run the only viable local tax is a property (real estate) tax - because you can't move a house over the border.
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There is an interstate commerce clause (Article I, Section 8, Clause 3: [The Congress shall have Power] To regulate Commerce with foreign Nations, and among the several States, and with the Indian tribes;) that gets used, quite often actually, to grant the government the right to do things outside the specific scope of the Constitution but I don't think that forbidding the states from levying a sales tax on business that occurs within their borders would fall inside of that clause.
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Does that include tea? If it does you should follow your what the Colonies did.
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Apples and Oranges. Governments typically don't just charge taxes without typically giving something in return.
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I think maybe they're actually willing to pay for the services they want from their government, unlike the citizens of the US.
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Response to: Anonymous Coward on Mar 26th, 2013 @ 1:07am
A VAT is not really a sales tax.
Who cares if taxes are exorbitant in the UK or EU? That's no reason to make taxes more oppressive in the US.
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Look, there _will_ be a tax on internet purchases. This is as certain as the sun will rise tomorrow. Now, you can stand defiant on your hill and scream hatred at the storm. Or, you can get ahead of it, and work to kee it as low as possible. Congress will enact the tax, and Congress will set the rate. Get the rate set low; get the tax targeted at a problem, like gas and cigarette taxes are; like maybe the national debt, or national healthcare, or infrastructure improvements, or wifi coverage for municipalities, or free Girl Scout cookies for everyone. Or, you can piss and moan about life sucks, and then when they inevitably roll over you, you are beaten _and_ fucked
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Pretty much. I don't buy much from Amazon anymore if I have an alternative (I go directly to Amazon Marketplace vendors' sites) because Amazon has started charging sales tax in Texas.
So, yes, it can be a make-or-break point.
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The trick is staying ahead of it once it's implemented. Once its imposed, raises are also inevitable. Fighting it out of the box is the most efficient response.
Tough talk with the "you can piss and moan" comments, but the pissers and moaners have been around the block a couple more times than you.
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Come to think of it, how can a tax be collected if the goods are coming from another country - say China for example? Will they monitor all courier, mail, or shipping services?
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Come on a trip to the UK. Now buy something direct from the US. You will find out that the answer to that question is (unfortunately) yes.
The solution to the US problem is to introduce a national sales tax and abolish the local sales taxes. Then redistribute the proceeds to the states. That way you will get a level playing field whilst continuing to raise the revenue.
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You think?
You have 50+ states and the bun fight will just be bigger.
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Re: You think?
Having said that, it does solve the crazy sales issues you sometimes get from state to state.
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For you guys in places that have always had another tax (Vat), that's your own damn fault. Just like the cameras on every corner and other intrusive laws, you have yet to have a public consensus to fight these things or stop them in the first place. Just because you have always had a tax doesn't mean it is right. Just as the US has severe problems to fight/fix, you guys are leading the charge into a police state. I really wish the US could resist the lure of making a law for everything.
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Somewhat ironically, in my eyes at least, the reason we don't mind it is because you can choose whether to buy something or not - and so you can choose to pay the tax or not. I say ironically, because I thought that was the argument many americans had against have a nationalised health insurance/service as we do in the UK.
What also happens is that, if set nationally, the sales tax will be included in the price, so you won't spend time worrying about it. Service compris.
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Dick Durbin is pictured in the article. So if you live in Illinois, you can look forward to a minimum of 15% federal income tax, then 10% sales tax on most of your purchases, and now what will probably be another 5-10% federal internet sales tax. So basically 30-40% of your income.
The federal government has been trying to figure out how to make a national sales tax palatable for a long time. Seems like the web is so different from reality that it makes sense.
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> national sales tax and abolish the local sales taxes.
They can't abolish local sales taxes. The federal government doesn't have that authority.
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The anonymous pre-paid credit card will go the way of the do-do. People will have to register and verify them somehow.
What disturbs me is that payment processing is a gateway point. If payment processors are told to stop accepting charges for something, they do without question. This includes services that are entirely LEGAL but some industry doesn't like. It's a new form of "law", without debate, without representation, without due process, without oversight or accountability.
How is that different than a toleration regime via online sales? If they don't want you buying from India or China - your payment can't be processed even using a foreign exchange service or Bitcoin.
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TBH, I don't see why the delivery channel should matter on whether you pay taxes or not.
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Try to buy a boat in Canada and see for yourself ;)
btw, it should really be called 'buyer's tax', since the side that makes the purchase pays it (either directly to the shop, or in the case of international sales, at the border)
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This is anti-competitive. I buy online because I can't find the selection available at a retailer. They are living on another planet if they think I'm going to walk into a big box store, after wasting gas, time parking and then wait for service, wait again to check out, during the hours convienent for them - and half the time, I'm told I need to order what I want online anyway and have it shipped to the store. Wow. I just wasted several hours for that?
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i can't tell you how many times i WANT to buy from local sources, but they don't have the selection...
crap, i live near a small metro area, but it STILL can take HOURS to drive around to find out no one is stocking what i want/need...
...vs 5 minutes of googling/amazon ? ? ?
who are you kidding, Big Boxes, gtfoh...
if i hear -one more time!- that 'we can order that for you you and have it in a week or two', i'm going to go postal...
no shit sherlock, I CAN ORDER THAT SHIT ONLINE TOO, and save myself the aggravation AND extra money you will charge...
not to mention, sales droids DO NOT have better knowledge, expert advice to -you know- actually HELP me... the only reason they are there, is to pressure me into bullshit service/maintenance/replacement contracts, and generally rip me off...
gee, why don't i want to deal with them ? ? ?
more selection, cheaper, delivered to my door, no fucking annoying sales droids...
WHY do i want to shop at your crappy stores again ? ? ?
oh, i don't...
art guerrilla
aka ann archy
eof
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No kidding. A while back when micro SD was new I called a certain blue and yellow electronics store to see if they had the size of micro SD card I wanted and he said yes. I get there and it turns out no, they do not have it. I call another store and he says yes. "Now this is micro SD not mini SD, right?" "Oh, um..." Another five minutes on hold and no, they don't have it either.
I pretty much just shop online now.
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The problem as a couple others here stated, is this will be a NEW tax on top of the sales tax states already collect. So the consumer/taxpayer will be worse off as old taxes do not go away and do not diminish.
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> it's called 20% VAT.
The fact that you've fucked yourselves doesn't mean everyone else should too.
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yep.
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Sorry if I'm wrong, but shouldn't that be "" by agreeing to an amendment..."" ?
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It's still cheaper, faster, more convenient and more efficient and better to shop online.
All the Gotcha pure profit items (700% markup) are cheaper online.
It's much easier to find a product in a search bar than in a store with constantly changing placements and generic labeling.
You don't have to drive to Amazon.com
You have a wider selection of choices. B&M stores typically have fewer brands. Even worse when it comes to lower spotlight items such as adapters.
User Reviews (Never shop without knowing what you're getting yourself into)
Sometimes intuitive designs. Did you know that item you're trying to buy might not work properly without this other item? Or might not work with your setup? Or hey, it might even work better with this other item.
There are only two areas in which B&M stores beat out online shopping. Demo units and shipping time (which is to say, there is none).
So unless this proposed tax is ridiculously high to the point of Boston Tea Party revolution, it's not going to deter people from online shopping in the slightest.
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FFS, it's not an "internet" tax
Yes, I realize that the largest impact will probably be to online retailers, but I wish there was a SINGLE article about it that didn't call it an "internet" tax.
As a side note, yes, "random state governments" are complaining; they've budgeted for that sales tax revenue in their budgets, and they'd like to collect it. I'm not sure why their voices should not be considered important; after all, it's state taxes that are the subject of the discussion. Not collecting it results in a revenue shortage. Whether or not they spend their revenue wisely is an entirely separate discussion.
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Re: Re: FFS, it's not an "internet" tax
> purposes you've eliminated waste, and
> you still don't have enough money for
> what the taxpayers want you to do, then
> raise taxes. Otherwise, go back to the
> books and find money that I've already
> paid you and stop throwing it down th
> toilet.
Amen.
It truly amazes me how the people in CA keep falling for the same old song and dance. Jerry Brown and his bald head, along with his almost entirely Democrat/union-controlled legislature, continually waste all the revenue collected every year on idiotic crap like high-speed railways to nowhere anyone wants to go, and giving illegal aliens college scholarships, then when it comes time to pay for the things government actually *should* be doing (repairing roads, paying for police, firefighters, schools, etc.), there's nothing left.
So what do they do? They say they need more taxes, and if we don't vote to raise taxes on ourselves *yet again*, we'll be raped and murdered in our beds because there won't be any cops, and even if that doesn't happen, our houses will burn to the ground because there won't be any firemen to put them out, and if we somehow survive that, our kids won't have anywhere to go to school.
And like clockwork, the sheep get terrified that the big bad wolf is coming to get them and vote for more new and exciting taxes every time.
Here's a thought, Jerry, you bald-headed dipshit, why don't you spend the money on cops, firemen and schools *first*, then if anything is left over, you can play around with your lefty-loony projects like hiring dozens of 'diversity and inclusion specialists' at $200,000/yr a piece for the state government.
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Re: FFS, it's not an "internet" tax
The fact of the matter is that taxes were based on the supposition of some value for those being taxed. Sales tax was in return for providing a favorable business environment with roads, and police and laws protecting buyers and merchants. Interstate commerce benefits from almost no state expenditures. However, some how the argument has been turned into taxes as some sort of medieval fealty to the local feudal lords and their power structure. Now they simply decide to spend money so they are entitled to shake their serfs by the ankles until all the change falls out of their pockets. Basically, you are arguing that we are back to indentured servitude working our masters' lands. How did that come to be?
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Re: FFS, it's not an "internet" tax
Please.
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MAJOR tax actually NEEDED is transaction tax on Wall Street.
But Ivy League Mike is FOR allowing Wall Street to remain untaxed. Those are his pals, and he too no doubt gets unearned income sheerly from being born having capital, not from anything resembling productive work.
By the way, Wall Street and Chicago BOT are anachronisms that should be done away with now. Not needed for either start-up capital or trading, it's become sheerly a casino.
1% TRANSACTION TAX ON WALL STREET will go a long way towards limiting The Rich from skimming off the rest of us.
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Re: MAJOR tax actually NEEDED is transaction tax on Wall Street.
It instantly destroys all credibility your statement may have gained.
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Re: MAJOR tax actually NEEDED is transaction tax on Wall Street.
*head implodes since he actually agrees with ootb*
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Re: Re: MAJOR tax actually NEEDED is transaction tax on Wall Street.
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Re: MAJOR tax actually NEEDED is transaction tax on Wall Street.
and abolish each, every and all the other taxes forever.
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Re: MAJOR tax actually NEEDED is transaction tax on Wall Street.
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Re: MAJOR tax actually NEEDED is transaction tax on Wall Street.
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Re: MAJOR tax actually NEEDED is transaction tax on Wall Street.
But the gains from them are not. What problem are you trying to solve by taxing trades as well as gains? High frequency trading?
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Re: MAJOR tax actually NEEDED is transaction tax on Wall Street.
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I'm guessing you live in Portland? Do you think everyone in the smaller towns and rural areas that don't have the same wealth of shopping options will feel the same way that you do?
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We do. I live in one of those rural towns. Oregonians are united on this.
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Re: Oregon
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Obedient Big Box Stores
If the individuals who run the big box stores truly wanted "fair competition", they would speak out against all forms of theft and allow individuals to engage in consensual voluntary exchange.
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Re: Obedient Big Box Stores
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> Boehner there, he also thinks taxes are theft.
The only thing that makes them not theft is that they're legal. However, for all practical purposes there is no difference.
And I'd rather in be in line with that view, than the view of someone like Biden who thinks it's patriotic to want higher taxes.
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In other words, they're not theft, at all. :-)
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Abusive monopoly is illegal, but we often call a certain class of abusive monopoly "copyright".
Theft is illegal, but we call a certain class of legalized theft "taxes". The only reason no one is punished is because we authorize them by proxy by re-electing those who impose them on us, thereby consenting.
When that taxation is imposed without representation, people get mad. America isn't too far gone yet, but it's not looking good.
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That's nonsensical. If it's legalized, then it isn't theft, by definition. It's not a special class of theft, it's just not theft.
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Failure to understand
In one sense online retailers such as Amazon are doing to Wal-mart and others what they did to small chains and local merchants before. I would not be surprised if B&M retailing returns to specialized retailers who focus on what B&M can do better than an online retailer. The problem Big-Box and discounters have that an online vendor can have a much wider selection and significantly lower prices simultaneously than can ever be displayed and stocked in a store.
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Better Than the Present Arrangement.
As I understand it, the bill calls for a standardized federal classification matrix, and an exemption for firms doing less than a million dollars of business. I presume there would be some kind of mechanism to report tax-paid, so that the consumer does not wind up paying the tax twice for the same item. My observation is that the Internal Revenue Service is much more competent than the state tax offices generally. It would probably be harder to get a "fiddle" past the IRS, but if you are honest, it is much less trouble to deal with them. So my thinking is "The More Federal, the Better."
The things I spend a relatively large sum on, eg. fresh salad, cannot be mailed, and have to be gotten locally, specifically across the road, within convenient walking distance. Five or ten dollars of salad, if otherwise packaged, would be fifty or seventy cents worth of canned vegetables. What you are paying for is the mostly local labor of keeping the vegetables fresh enough to eat raw. Once one slices up an onion, that increases the surface area, and various chemical reactions start to happen in the presence of air. So the best salad is prepared by someone wielding a knife before the customer's eyes. There is a general principle that, if something can be shipped, it can be subjected to a cost-reducing process at the place of manufacture, and the tax on it is not likely to be worth arguing about.
The real primary emphasis of the internet will always be people giving information away, not selling it. Each year, there has been a promise that this will be the year of the micropayment, and each year, it turns out that this is not the year of the micropayment after all. Free content is not subject to sales tax. Internet purchases will be largely confined to the narrower sphere of physical things which are readily shippable.
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Can congress do that?
No Tax or Duty shall be laid on Articles exported from any State.
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Re: Can congress do that?
I don't think they really care anymore. When Congress passes a law regulating growing a plant in your backyard and using it yourself, and the Supreme Court says that's OK because that's interstate commerce, they've pretty much given up with sticking to what the Constitution actually allows the federal government to do.
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Re: Can congress do that?
Our politicians (so much for their oath) want to circumvent the original purpose of the Commerce Clause, which was to guarantee free trade among the states. Instead, the bill would allow states to levy taxes on goods crossing into their state, which is not what our Founding Fathers intended. In the process, they will see how many idiots stand by and watch as they chip another piece of our Constitution away.
Ask yourself, are we worthy of a document that protects us when we don't try to protect it?
Call your Congressman. Stand up and say WTF..
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Short-sighted at best.
There's already a means for states/locals to collects sales taxes: The Streamlined Sales Tax Board/Initiative/Whatever, it provides reciprocity to jurisdictions in levying sales taxes provided they align their laws with a common set to make it (slightly) easier on the business.
What they're all missing is that by levying sales taxes on Amazon (for example) they're making it more likely for Amazon to have "nexus" in your state/neighborhood. Which means that Amazon can now set up warehouses nationwide and offer same-day delivery.
Think that might compete with local retailers?
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Is there not an argument that....
(TBH, I don't know how it is in the US, but a secondary tax credit on purchases bought on the high street would likely improve customers shopping experience, leading to more sales at small businesses. As it is now, Amazon is taking a large proportion of sales and is not paying corporation taxes.)
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Re: Is there not an argument that....
Do you mean to say that Amazon customers generally aren't paying sales tax, or are you claiming Amazon doesn't pay corporate income tax?
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Re: Re: Is there not an argument that....
Amazon, Google and Starbucks accused of diverting UK profits.
It's the inherent problem of globalisation - companies can pick where they pay tax and where they don't.
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Raising fuel taxes is an immensely unpopular thing to do here.
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> other taxes.
If you're in Uruguay, what business is it of yours what we tax here in the US and what we don't?
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> energy and produces a tenth of the world's road
> vehicles. Yes it matters to me.
It's still nunya business. Mind yours. We don't opine on how you should better run your country. Try returning the courtesy.
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Why do I get the feeling that even with such a tax, states are still going to be crying that they're bankrupt and businesses are still going to be closing left and right?
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To: Rekrul, #78, Non-Internet Purchases
http://thomas.loc.gov/cgi-bin/query/z?c113:S.336:
The bill doesn't say anything about how the order is placed, or paid for, only about a seller who is out of state, and does not have locus, but does business on a sufficiently large scale to have lost his amateur status. Also, the out-of-state tax rate has to be the same as the in-state rate, and the state's tax code has to be "harmonized" with the new interstate code, so that an out-of-state seller doesn't have to operate according to a bunch of different rules. Amazon is happy with the bill, and they wouldn't be if there was anything seriously discriminatory.
Realistically, Amazon is becoming the means by which one buys from a small mail-order seller who is not entirely businesslike. At a distance, I cannot determine whether someone like that is trying to cheat me, or is merely un-businesslike. Amazon knows enough to draw lines. As Amazon gets its new robots, it will probably require more sellers to deposit their merchandise in an Amazon warehouse, and will handle the fulfillment in-house. That way, Amazon knows the merchandise actually exists, and knows when or if it has been shipped. EBay is fundamentally flawed because it persistently refuses to take this kind of responsibility. In competition with a Kiva robot, a human is worth about fifty cents an hour. People who are not in a position to spend half a million dollars on a Kiva robot system probably should not be in the business of inventory and fulfillment.
Of course, a state-of-the-art telephone order system has Caller ID, and is tied into telephone directories, etc., so they know your full particulars as soon as they answer the telephone, and they just ask, is this so-and-so, of such and such an address, for confirmation. From there on, it's in the computer.
Paying for things by check, sent by mail, could offer complications, but there is a reasonably workable solution. Back in the 1980's, I sometimes bought stuff mail-order from J.C. Penney, notably bookcases, which were heavy enough that I didn't want to have to get them home by myself. J.C. Penney had a complicated system for computing shipping charges, but I found that if I just sent a check for the price and approximate shipping, plus about ten percent extra, they would work out the correct figure and send me a refund check. If someone who does a million dollars of business or more per year doesn't do refund checks, and takes over-payments as free gifts, then at that point, you have to question his honesty. Reputable mail-order merchants do refunds all the time for items which turn out not to be in stock. Cutting a refund check is an automatic process.
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Re: To: Rekrul, #78, Non-Internet Purchases, Edward R, Hamilton.
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