Internet sales tax? yea or nay?

[PaulS1950]

I don't do much buying on the net so I am responding at the level of an outsider with no axe and no grinder:
Taxing internet sales will be an impossible nightmare and raise prices dramatically. You don't just pay the tax that the business has to collect and pay, you have to pay the tax plus a markup to cover the cost of collection and tracking, the process by which it is transfered to the appropriate state while at the same time the business now has to charge for his own state taxes on top of it.
That means that the price you pay will go up not just the amount of the tax (let's say 8%) but 8% plus the other state tax (say 8%) and the cost to collect, track and transfer the funds (say another 4%). Now instead of paying $10.00 for an item you will pay $12.00. Or instead of paying $100 you will pay $120.00 for the same item plus shipping which is already taxed and the taxes you pay for your internet connection each month.

Hey, we are only paying an average of 49% of our incomes in taxes openly and hidden taxes so why not another small tax just to make our interstate transaction fair. Then when you are on vacation why not charge you both the local and your home state taxes too! It is the same thing. You have to pay the taxes for the location you are in - not for the location in which you live. The same should be true of the internet. If they must tax the internet let the seller collect and pay their states taxes an dleave it at that.

 

[Underhill]

Sorry but that is silly.

There is already software (some retailers already use it) that simply takes your zip code and calculates tax rates. It is cheap and widely available. There are already states that require taxes from internet sales. So this could be easily implemented.

If they can calculate shipping to your zip code they can calculate taxes as well. It's not rocket science.

I believe neither of you have ever dealt with this in real life. I have. It's not the trivial exercise you think it is.

Even if the software doesn't exist (and it does), give me a list of the tax rates and my computer and I could make a automated spreadsheet in a few hours. Input the zip code and the sale price, hit a button and poof, it's magic.

We do much more complicated things everyday in my engineering department. Automated Excel spreadsheets that calculate wind loads on a large structure as one example, or failure rates based upon thermal and structural loads over time...

This is extraordinarily simple by comparison.

 

[Underhill]

I don't do much buying on the net so I am responding at the level of an outsider with no axe and no grinder:
Taxing internet sales will be an impossible nightmare and raise prices dramatically. You don't just pay the tax that the business has to collect and pay, you have to pay the tax plus a markup to cover the cost of collection and tracking, the process by which it is transfered to the appropriate state while at the same time the business now has to charge for his own state taxes on top of it.
That means that the price you pay will go up not just the amount of the tax (let's say 8%) but 8% plus the other state tax (say 8%) and the cost to collect, track and transfer the funds (say another 4%). Now instead of paying $10.00 for an item you will pay $12.00. Or instead of paying $100 you will pay $120.00 for the same item plus shipping which is already taxed and the taxes you pay for your internet connection each month.

Hey, we are only paying an average of 49% of our incomes in taxes openly and hidden taxes so why not another small tax just to make our interstate transaction fair. Then when you are on vacation why not charge you both the local and your home state taxes too! It is the same thing. You have to pay the taxes for the location you are in - not for the location in which you live. The same should be true of the internet. If they must tax the internet let the seller collect and pay their states taxes an dleave it at that.

If you want to lower taxes I can understand that. But charging sales tax on the web is no more difficult that I laid out. It's very simple.

It might cause a bit of chaos up front as stores figure it out, but in the long run it won't change anything other than leveling the playing field.

 

[LoudMcCloud]

I wonder if it will have an effect on small internet businesses.

 

[The Rabbi]

I wonder if it will have an effect on small internet businesses.

Not if they have under $1M in sales.

 

[The Rabbi]

Free software for tax compliance? There is no such thing.

Also - good luck squashing all the State, county and local taxes into one size fits all rates. For example, here in the Bay Area, some counties have an extra 1/4 cent sales tax to pay for BART. So what's the solution? Raising taxes for everyone.

One size fits all sales taxes are just as inane a DC idea as one size fits all health plans.

You didnt read the proposed bill.

Uh. Dood. Get with the program. Nobody reads bills before they are passed anymore. We have to pass them to find out what's in them.

And we make fun of liberals for their willful ignorance....

 

[Underhill]

I wonder if it will have an effect on small internet businesses.

So long as the government gave them enough time to implement the change I doubt it.

The biggest problem is on the back end, but its easy enough with electronic banking to deal with that too. Or you could simply deal with it the way truck drivers do with their fuel taxes. You pay the tax rate where you buy the fuel. Buy it in NY, pay ny taxes. Buy it in PA, pay PA taxes.

It would have the added benefit of forcing states to have competitive tax rates.

 

[Desperado]

So lets say this Internet tax does go through.
Now you have to pay sales tax to a state you do not live in.
Since some cities have a local sales tax would that apply to that too.
Why should someone from a foreign country have to pay a state sales tax?
Lets reverse it, Should you have to pay a sales tax to Germany if you bought something on a German site? Who would handle this the UN?
So I vote No internet sales tax

 

[Dot Com]

^ how do you propose to fund your government since online sales will be doubling < 6-10 yrs (states/localities will be losing more tax revenue)?

 

[Skull Pilot]

^ how do you propose to fund your government since online sales will be doubling < 6-10 yrs (states/localities will be losing more tax revenue)?

For one sales tax is state and local tax it has nothing to do with the federal government.

Secondly, if an on line retailer is located in say CT where the sales tax is 6.35% then everyone who buys something from that site pays the CT sales tax no matter where they live just as if they were buying it in person.

Easy right?

To force citizens into the employ of governments as tax collectors (for no compensation) in states they do not reside is ludicrous.

 

[Pop23]

^ how do you propose to fund your government since online sales will be doubling < 6-10 yrs (states/localities will be losing more tax revenue)?

That's easy, although not good.

State and local governments will raise property taxes, fees and occupation taxes. Taxes on gasoline and those sales taxes that can be collected from Brick and Morter will also increase.

I have to agree, I would rather see tax on internet purchases then the above. It would be messy, no doubt, but not sure I like the alternative either.

 

[eflatminor]

^ how do you propose to fund your government

Plenty of revenue to fund the enumerated powers. Anything else should not be funded. Free people making voluntary decisions in free markets always produce superior results compared to central planners and their bureaucrats that face no competition, no impetus to innovate or to be competitive.

 

[Dot Com]

Business' w/ < 1MILLION sales/yr would be exempt:

Tax-free Internet shopping jeopardized by bill

Businesses with less than $1 million a year in online sales would be exempt.

software would be provided for free:

Tax-free Internet shopping jeopardized by bill

But Sen. Dick Durbin, D-Ill., said the bill requires participating states to make it relatively easy for Internet retailers to comply. States must provide free computer software to help retailers calculate sales taxes, based on where shoppers live. States must also establish a single entity to receive Internet sales tax revenue, so retailers don't have to send them to individual counties or cities.

"We're way beyond the quill pen and ledger days," Durbin said. "Thanks to computers and thanks to software it is not that complex."

 

[Pop23]

^ how do you propose to fund your government since online sales will be doubling < 6-10 yrs (states/localities will be losing more tax revenue)?

For one sales tax is state and local tax it has nothing to do with the federal government.

Secondly, if an on line retailer is located in say CT where the sales tax is 6.35% then everyone who buys something from that site pays the CT sales tax no matter where they live just as if they were buying it in person.

Easy right?

To force citizens into the employ of governments as tax collectors (for no compensation) in states they do not reside is ludicrous.

I hate the idea of citizens being used in this manner, but it is so common now that people take it for granted.

The poor stiffs that work at the 7-11 are used as Police, and retailers are used as tax collectors.

Somthing is indeed wrong with this picture, but it is what it is.

 

[eflatminor]

software would be provided for free

No, it would be provided by taxpayer dollars. Yet another tax. Pass.

 

[Dot Com]

software would be provided for free

No, it would be provided by taxpayer dollars. Yet another tax. Pass.

someone could write the software for that in a weekend.

 

[Skull Pilot]

software would be provided for free

Now get this.

Software from 50 different states with hundreds of different sales tax regulations all integrated into one package that will seamlessly integrate with every available POS system.

And you believe the fucking government could pull that off?

My god you are fucking stupid if you do.

 

[eflatminor]

software would be provided for free

No, it would be provided by taxpayer dollars. Yet another tax. Pass.

link?

So you're saying this software is going to be written, distributed and maintained without any costs to the government? How exactly does that work?

 

[GHook93]

I'm undecided right now because on the one hand you can get some good deals but on the other, I'm short-changing mom & pop. brick & mortar stores & not contributing to the public purse for firemen, police, state's rainy day funds, etc...

Some states have internet sales taxes tacked onto one's purchases but the majority of states do not recieve any sales tax for internet sales right?

Give me your position & the reason you support it other than the standard response of "its cheaper"

Not how the Fed wants it. I like Kudlow's idea. Every business has to have a physical presence somewhere and in some state. If they sell to resident's where they maintain a presence or are incorporated then they pay that states sales tax.

Brick and mortar seem disadvantaged, but remember brick and mortar allow people to test the product, take it home instantly, don't have instant competition checking (which internet retailers have) and don't pay shipping costs! Brick and mortar have advantages over internet retailers also.

And let's be honest, this has nothing to do with leveling the paying field, this is another taxing scheme by the tax loving Obama administration!!!

What the fed should tax at a 15% rate is internet sales from foreign countries and Indian tribes!

 

[Dot Com]

the software would prolly be maintained on a centrally located website to be downloaded and updated to reflect any changes the legislature might make in the rates.