Online Purchases Soon To Be Taxed Nationwide...

[eflatminor]

So, I buy an item and ship it to the other side of my state. I pay shipping costs + taxes.

The guy in the next state buys and item in my state and has it shipped. He pays shipping costs but no taxes.

And this is equal treatment?

Only if the guy in the next state is willing to violate his state's tax laws. This is NOT the responsibility of the retailer in the other state.

Here, let me give you the list of people who actually pay taxes on out-of-state purchases:









OK, I'm done.

Now why shouldn't online retail sales face this hurdle?

One, you're wrong about those that pay taxes on out of state purchases. If you're buying on behalf of a business, you'll pay the tax no matter what. That said, I acknowledge that many individual buyers do not pay their own state's sales tax.

This is not the problem of online retailers selling across state lines. It is the problem of the states to collect from their own citizens. To put that burden on out of state retailers is not only morally wrong, it brings with it consequences that will bring great harm to small and new competition and it will force business off shore. It's a bad idea.

 

[Quantum Windbag]

Online and brick and mortar business must collect state tax on ONLY out of state transaction.

If that were to be the case, it would cause serious financial harm to smaller businesses. Imagine having to deal with 50 different state tax laws and thousands of different local sales tax laws, sort them ALL out at the point of sale, collect the appropriate tax and distribute it to the appropriate taxing authority. That would END smaller operations ensuring only the largest corporations could comply. An America with nothing but WalMart-like operations, wonderful.

By the same measure, requiring online retailers to collect taxes in this manner is ridiculous and will end small online business. An America with nothing but Amazon-sized operations, wonderful.

Changes will need to be made, but the hyperbole is over the top.

Software will be written, and all the business will need to do is plug in the state and the category of item...problem solved.

We collect plenty of tax revenue. Spending is the problem. Killing businesses in an effort to allow government to spend more is not wise policy, IMO.

I agree, I'm not arguing against that, but according to your argument, this isn't an advantage because this money is being paid...which is laughable.

The argument is, is this an advantage...and the answer is a resounding yes.

Then the question is, should tax policy benefit one entity over another...and the answer is no.

Especially against the interest of the state...it is in the states interest to keep money flowing INTO the state economy, not out of it.

This tax situation incentivizes exporting money out of the local economy.

That is an absurdly simplistic view. States raise and lower taxes all the time, which means that the business is going to have to make sure the software is up to date at all times. If it isn't, guess who is going to pay the penalty for it being wrong. If you really want a simple solution simply join with me in requiring all purchases be taxed at the point of sale. If you live in California and buy something from a retailer in Florida you pay Florida taxes, not California taxes.

 

[Care4all]

So, I buy an item and ship it to the other side of my state. I pay shipping costs + taxes.

The guy in the next state buys and item in my state and has it shipped. He pays shipping costs but no taxes.

And this is equal treatment?

Only if the guy in the next state is willing to violate his state's tax laws. This is NOT the responsibility of the retailer in the other state.

Here, let me give you the list of people who actually pay taxes on out-of-state purchases:









OK, I'm done.

Now why shouldn't online retail sales face this hurdle?

we do face the exact same hurdle, anything sold that stays within the State is taxed, even by online sellers and we have to send these taxes to the State.

WHY would you want to force online sellers to collect another State's sales tax for this other State, while never requiring a brick and mortar store to ever have to collect another State's sales tax for them? No brick and motar store is required to collect ANOTHER STATE'S SALES TAXES for them and send it to them...

It's downright unconstitutional!

 

[Quantum Windbag]

Oh, you really got me there smart guy! I bet your ex-wife is proud.



So, your answer to preferential treatment of items shipped out of state is to...

Continue to provide preferential treatment for items shipped out of state, primarily favoring businesses that do online sales instead of in-store sales?

OK then.

Items shipped out of state do not necessarily receive preferential treatment. It first requires a buyer willing to violate tax laws and then requires shipping costs to be lower than the sales tax they'd pay in state, which is not always the case. There is no preferential treatment with regard to taxes. Sorry, but it's true.

So, I buy an item and ship it to the other side of my state. I pay shipping costs + taxes.

The guy in the next state buys and item in my state and has it shipped. He pays shipping costs but no taxes.

And this is equal treatment?

If you don't like it tell your state to stop charging you more than they charge the guy in the other state.

 

[Missourian]

Is that what's being proposed though? I still haven't seen any actual proposed legislation.

Found this though...

Because of a 1992 Supreme Court decision, states cannot require companies that don’t have a physical location within their borders to collect sales tax revenue.

GOP governors bolster online sales tax push - The Hill's On The Money

So, it doesn't stand to reason that what's being proposed is to make online retailers collect sales taxes for all 50 states. That would appear to have been shot down already.
If what they've got in mind is that all customers should pay sales tax at the point of service, that seems reasonable to me.

That comes with it's own problems.

States that harbor the largest segments of the online market would make out like bandits, being the largest net exporters, while states that are the larger net consumers of online sales would get hosed.

 

[Quantum Windbag]

Ok, Care...you are a very honest debater, so if there is no advantage, let's turn the law around.


Online and brick and mortar business must collect state tax on ONLY out of state transaction.

Any in state transactions are up to the purchaser to report to the state department of revenue...(and therefore state sale tax can be easily avoided) whether the purchase is made online or at a brick and mortar store.

Now the lion's share of the brick and mortar businesses become for all intents and purposes, tax free....while conversely, the majority of online sales are more highly taxed.

Would that make it easier, or more difficult for an online business?

Even though the law appears evenly applied, would it not give an advantage to the brick and mortar store?

(Although I addressed this to Care, it is open to anyone for comment)

I understand that this gives the opportunity for the individual buying a great deal online to avoid state sales taxes, if there are any in that State....

But why IS THIS MY PROBLEM....?

WHY should I have to take time away from my business, which there is not enough time already to accomplish all that needs to be done, to collect ANOTHER 49 STATE'S SALES TAX FOR THEM, if I don't operate in that State? I have absolutely no stake in that State or what the heck these taxes are spent on in that State or any of that........? We are not talking about me being required to collect some sort of FEDERAL Sales tax....that goes in to the kitty for all States...

You are asking me to collect Sales taxes for all other 49 States that I am not even a citizen of, for goodness sakes! This has GOT to be unconstitutional!

Yes, I recognize States have a problem and they need more taxes...well, they need to change with the times WITHIN THEIR OWN JURISDICTION within their own State, and change their own tax codes to collect taxes differently....

And as said, NONE of that should be or is, my problem, as a Maine citizen....only Maine is my problem....you all figure out your own problems without trying to pull little ole me, from another State, in to it!

Care

Because you want to do business with them.

If you don't want the burden, you can choose to only do business within Maine.

You want her to chose her customers based on where they live? Isn't that discrimination?

 

[Oddball]

That comes with it's own problems.

States that harbor the largest segments of the online market would make out like bandits, being the largest net exporters, while states that are the larger net consumers of online sales would get hosed.

The people who will get hosed are the customers paying taxes in states where they don't reside.

Y'know, that whole "taxation without representation" thingy.

 

[Quantum Windbag]

So, I buy an item and ship it to the other side of my state. I pay shipping costs + taxes.

The guy in the next state buys and item in my state and has it shipped. He pays shipping costs but no taxes.

And this is equal treatment?

Only if the guy in the next state is willing to violate his state's tax laws. This is NOT the responsibility of the retailer in the other state.

Here, let me give you the list of people who actually pay taxes on out-of-state purchases:









OK, I'm done.

Now why shouldn't online retail sales face this hurdle?

California actually collects a few million a year from people that self report taxes on online purchases, I think your list is missing a few names.

 

[Missourian]

If that were to be the case, it would cause serious financial harm to smaller businesses. Imagine having to deal with 50 different state tax laws and thousands of different local sales tax laws, sort them ALL out at the point of sale, collect the appropriate tax and distribute it to the appropriate taxing authority. That would END smaller operations ensuring only the largest corporations could comply. An America with nothing but WalMart-like operations, wonderful.

By the same measure, requiring online retailers to collect taxes in this manner is ridiculous and will end small online business. An America with nothing but Amazon-sized operations, wonderful.

Changes will need to be made, but the hyperbole is over the top.

Software will be written, and all the business will need to do is plug in the state and the category of item...problem solved.

We collect plenty of tax revenue. Spending is the problem. Killing businesses in an effort to allow government to spend more is not wise policy, IMO.

I agree, I'm not arguing against that, but according to your argument, this isn't an advantage because this money is being paid...which is laughable.

The argument is, is this an advantage...and the answer is a resounding yes.

Then the question is, should tax policy benefit one entity over another...and the answer is no.

Especially against the interest of the state...it is in the states interest to keep money flowing INTO the state economy, not out of it.

This tax situation incentivizes exporting money out of the local economy.

That is an absurdly simplistic view. States raise and lower taxes all the time, which means that the business is going to have to make sure the software is up to date at all times. If it isn't, guess who is going to pay the penalty for it being wrong. If you really want a simple solution simply join with me in requiring all purchases be taxed at the point of sale. If you live in California and buy something from a retailer in Florida you pay Florida taxes, not California taxes.

See my response above.

Are you paying Florida's rate to Florida, or to California?

 

[Quantum Windbag]

Screwed by the phony Conservatives and Socialists/Progressives again.


Small companies who want to sell their products online are in real trouble. Some Republican governors, eager to enrich their thinning state coffers, are endorsing a tax that would be imposed on products sold online.According to the National Conference of State Legislatures Strapped, states could reap as much as $23 billion in new annual revenue.

Bigger chains are happy with the move. Scott Mason, a vice president at Lowe's Cos, who noted that Lowe’s has a 5 percent to 10 percent price disadvantage compared with online rivals, exclaimed, "Having one of the most recognized and widely popular Republican leaders take this position gives other politicians comfort that the online sales tax is fair and helps state budgets in crisis.”

Until recently, consumers could purchase items online without paying sales tax, a strategy that enabled consumers to shop at local stores but then order the same products online so they could avoid the sales tax. In order to level the playing field, there has been a push to tax the online purchases so local business owners could compete.

The giant Amazon.com, which initially viewed with disfavor the idea of a sales tax, has decided that they now like the idea. Why? Because Amazon plans to offer same-day delivery, which will mean it needs more local warehouses, and it will then get hit by state taxes anyway.

Small online competitors are upset. Steve DelBianco, executive director of NetChoice, a trade group representing eBay, Overstock.com and others, said, "Besides the Republican support, this position change is being driven by the millions of dollars being spent by the big-box retailers—and now Amazon—to push the sales tax through Congress."

States that already have an online sales tax are Kansas, Kentucky, North Dakota, New York, Texas and Washington. Other state that are planning to join them are California (Sept. 2012), Indiana (Jan. 2014), Nevada (Jan. 2014), New Jersey (July 2013), South Carolina (Jan. 2016),Tennessee (Jan 2014) and Virginia (Sept 2013)...

Read More:
Online Purchases Soon To Be Taxed Nationwide

Actually, 22 states already have "consumer use taxes" which require residents to report the amount of their out of state purchases for use in the state on their taxes. In Louisiana these purchases are subject to an 8% tax rate, half of which goes to the state and the other half of which goes to the taxpayer's local government. Having a nationwide tax in place of these use taxes would result in less tax cheating in these states.


I think that it was good for online businesses to enjoy the tax benefits of being online for as long as they did, because it helped the industry to come into being. Now its time they start paying the same taxes as brick and mortar companies do.

There are no tax benefits for being online, idiot.

 

[Quantum Windbag]

Is that what's being proposed though? I still haven't seen any actual proposed legislation.

Found this though...

Because of a 1992 Supreme Court decision, states cannot require companies that don’t have a physical location within their borders to collect sales tax revenue.

GOP governors bolster online sales tax push - The Hill's On The Money

So, it doesn't stand to reason that what's being proposed is to make online retailers collect sales taxes for all 50 states. That would appear to have been shot down already.
If what they've got in mind is that all customers should pay sales tax at the point of service, that seems reasonable to me.

That comes with it's own problems.

States that harbor the largest segments of the online market would make out like bandits, being the largest net exporters, while states that are the larger net consumers of online sales would get hosed.

Why is that bad? Is it bad that California has the largest share of the aerospace industry? Is it bad that New York benefits from being the financial capital of the world?

Just a thought, what if Congress passes a law for point of sale taxation on internet sales, and California responds by saying that they will not charge any taxes on any internet sales whatever. How long before Amazon moves most of its business to California?

 

[Quantum Windbag]

Changes will need to be made, but the hyperbole is over the top.

Software will be written, and all the business will need to do is plug in the state and the category of item...problem solved.




I agree, I'm not arguing against that, but according to your argument, this isn't an advantage because this money is being paid...which is laughable.

The argument is, is this an advantage...and the answer is a resounding yes.

Then the question is, should tax policy benefit one entity over another...and the answer is no.

Especially against the interest of the state...it is in the states interest to keep money flowing INTO the state economy, not out of it.

This tax situation incentivizes exporting money out of the local economy.

That is an absurdly simplistic view. States raise and lower taxes all the time, which means that the business is going to have to make sure the software is up to date at all times. If it isn't, guess who is going to pay the penalty for it being wrong. If you really want a simple solution simply join with me in requiring all purchases be taxed at the point of sale. If you live in California and buy something from a retailer in Florida you pay Florida taxes, not California taxes.

See my response above.

Are you paying Florida's rate to Florida, or to California?

I saw your post above, and answered it.

IF I buy something in Florida why would I pay taxes in California?

 

[Care4all]

can you imagine if the brick and mortar stores had to card every sbuyer and then charge them the sales tax of their own state, for every single purchase and then have these brick and mortar stores have to keep separate every single states sales taxes collected and send them to the 50 different states. You think walmart stores would have no problem with that just because they are big and have a brick and mortar store?

 

[Missourian]

I understand that this gives the opportunity for the individual buying a great deal online to avoid state sales taxes, if there are any in that State....

But why IS THIS MY PROBLEM....?

WHY should I have to take time away from my business, which there is not enough time already to accomplish all that needs to be done, to collect ANOTHER 49 STATE'S SALES TAX FOR THEM, if I don't operate in that State? I have absolutely no stake in that State or what the heck these taxes are spent on in that State or any of that........? We are not talking about me being required to collect some sort of FEDERAL Sales tax....that goes in to the kitty for all States...

You are asking me to collect Sales taxes for all other 49 States that I am not even a citizen of, for goodness sakes! This has GOT to be unconstitutional!

Yes, I recognize States have a problem and they need more taxes...well, they need to change with the times WITHIN THEIR OWN JURISDICTION within their own State, and change their own tax codes to collect taxes differently....

And as said, NONE of that should be or is, my problem, as a Maine citizen....only Maine is my problem....you all figure out your own problems without trying to pull little ole me, from another State, in to it!

Care

Because you want to do business with them.

If you don't want the burden, you can choose to only do business within Maine.

You want her to chose her customers based on where they live? Isn't that discrimination?

Not at all, she is choosing her service area based on the tax collection burden she is comfortable complying with.

 

[Care4all]

New Hampshire has no general sales tax....how do they collect enough money to pay the bills? Florida has no income tax, how do they collect the money to pay the bills? Same with Texas and no income tax....

Certainly States can figure out another way of taxation, or another way to penalize THEIR CITIZEN LAWBREAKERS without having to pull moi, a struggling business owner, from another State, in to it.......they can't make me collect the taxes from and for ANOTHER STATE. PERIOD. i get nothing out of their taxes....nada. I have no representation in their States, and they can not make me take in their State taxes for THEM. They can penalize all they want, their own law breakers or their own citizens with a tax they can collect within their State.

And my State, can not tax another citizen sales tax for a purchase never used within the State of Maine!

 

[Murf76]

That comes with it's own problems.

States that harbor the largest segments of the online market would make out like bandits, being the largest net exporters, while states that are the larger net consumers of online sales would get hosed.

The people who will get hosed are the customers paying taxes in states where they don't reside.

Y'know, that whole "taxation without representation" thingy.

That's a good point too. I think what I'm going to have to do is withhold judgment until I see the proposed legislation. Too many questions and not enough answers yet.

 

[Care4all]

I bought my new car in New Hampshire...no sales tax collected on it when I purchased it. Massachusetts, where I lived at the time, could not pass any LAW forcing the people of New Hampshire to collect Massachusetts sales taxes on my purchase from them.

so Massachusetts passed a law for us citizens that purchased cars in a State with no sales tax, to pay Massachusetts car sales tax on it when we registered it in the State of Massachusetts.

they could NOT force the citizens of the State of New Hampshire to collect Massachusetts sales taxes for them....but Massachusetts still found a way to collect the taxes on the purchase without involving the business owner in another State.

 

[Missourian]

That is an absurdly simplistic view. States raise and lower taxes all the time, which means that the business is going to have to make sure the software is up to date at all times. If it isn't, guess who is going to pay the penalty for it being wrong. If you really want a simple solution simply join with me in requiring all purchases be taxed at the point of sale. If you live in California and buy something from a retailer in Florida you pay Florida taxes, not California taxes.

See my response above.

Are you paying Florida's rate to Florida, or to California?

I saw your post above, and answered it.

IF I buy something in Florida why would I pay taxes in California?

Interesting concept, treat online purchases as though the purchaser had bought the item in person and shipped it separately.

That would nullify Consumer Use Tax, at least the way the Missouri law is written.

If you paid sale s tax to the seller, there is no CUT assessed.

I'll have to give it further consideration, but at first blush it seems to remove many inherent tax collection hurdles.

 

[Quantum Windbag]

I bought my new car in New Hampshire...no sales tax collected on it when I purchased it. Massachusetts, where I lived at the time, could not pass any LAW forcing the people of New Hampshire to collect Massachusetts sales taxes on my purchase from them.

so Massachusetts passed a law for us citizens that purchased cars in a State with no sales tax, to pay Massachusetts car sales tax on it when we registered it in the State of Massachusetts.

they could NOT force the citizens of the State of New Hampshire to collect Massachusetts sales taxes for them....but Massachusetts still found a way to collect the taxes on the purchase without involving the business owner in another State.

Exactly

 

[Missourian]

Excellent debate all around...many thought provoking perspectives from multiple posters and no one flew off the handle.

If only more USMB discussions could be like this one...

Rep for everyone.