Here come the Internet taxes

Posted Monday, August 4, 2008, at 1:04 PM

Since we operate as a business currently, the recent IRS rules slipped in to the "housing rescue package" won't change the way that we operate, but it sure seems to be a devious way to get the changes made. The rules are outlined in the new Foreclosure Prevention Act of 2008.

I heard rumors of this legislation but saw very little coverage from the media. Is that because it is of little interest or not widely known? It will certainly affect my students as they grow their online business and is the beginning of taxing the internet.

Apparently the new rules are found in the Foreclosure Prevention Act; Title III--Revenue Provisions, Subtitle B, starting in Sec. 3091, but I do not have a copy. Can anyone confirm that?

PayPal and other online payment processors will have to report annual gross receipts for most Internet sellers. The new law will not go into effect until 2011, but the Government hopes to raise $9.5 billion over the next decade in tax revenue and this is not the end of it. You can bet that as soon as these reporting methods are in place, the states and other government bodies will be standing in line for their cut.

The law states that Internet third-party payment intermediaries pass information on to the IRS, reporting such "name, address, and TIN of each participating payee to whom one or more payments in settlement of reportable payment transactions are made, and the gross amount of the reportable payment transactions with respect to each such participating payee." From what I understand, those reports would be triggered after the amount exceeds $10,000 and/or more than 200 transactions.

Now, what does that have to do with foreclosures?

Comments
Showing comments in chronological order
[Show most recent comments first]

Devious is the norm I guess. I do not mind the federal income tax being regulated. I have claimed ebay since it became my sole income and believe anyone who sells a lot should, regardless of the enforcement laws. I also think the limits you stated are reasonable. If you are selling more than $10,000 on the internet, it may be more than a hobby. I am more concerned about the states and sales tax. That is where the larger issue lies in my opinion.

-- Posted by memyselfi on Tue, Aug 5, 2008, at 1:06 AM

We currently charge State tax on our in-state sales, but I believe this new law will help other states start asking for a share as well. That would not be so bad if they also develop an easy way to declare and pay those taxes.

Currently I work another business that pays employment taxes to all the different states that our employees work in and it is a nightmare. We cover most of North America, and set up a Canadian company just to handle the work done there.

-- Posted by stevemills on Tue, Aug 5, 2008, at 9:15 AM

Steve -

This has nothing to do with your post, really, but is the internet group still meeting?

-- Posted by cfrich on Tue, Aug 5, 2008, at 1:56 PM

Well Chantal, I don't know. I missed a meeting while I was at eBay Live in Chicago and that seems to have been the end of it.

I would love to see it continue but if it relies on little old me to keep it going, I might as well let it die now. I have classes scheduled on the weekends and I can not reliably be there.

The Weed'em and Reap garden club continues regardless, so that one has "taken root". By the way, it meets again this Friday at the Hong Kong restaurant. We miss you and hubby.

-- Posted by stevemills on Tue, Aug 5, 2008, at 3:22 PM

We miss those meetings but we're kind of embarassed that we never got around to planting much of anything - and what I did plant was weed whacked (accidently) by the lawncare guy.

-- Posted by cfrich on Tue, Aug 5, 2008, at 5:53 PM

We don't make anyone check their garden at the door Chantal. Please come see us again.

-- Posted by stevemills on Wed, Aug 6, 2008, at 10:12 AM

Steve;

About E-Bay & the Government. Hope any of us don't have Gold filings in our teeth. They'll have some way to extract them from us some how.

-- Posted by framestraight on Wed, Aug 6, 2008, at 4:03 PM

Hmmm, I forgot what in have in there. If I have any, I better put them in my will.

-- Posted by stevemills on Wed, Aug 6, 2008, at 4:25 PM

Bedford Ramblings

Steve Mills

- Recent posts
- Archives
- Blog RSS feed

- Comments RSS feed

- Send email to Steve Mills
- Login

Steve Mills and his wife have one daughter and live on a farm outside of Bell Buckle. They previously owned two coffee/ice cream shops, currently operate an internet sales company and teach classes, but his primary job involves the paper industry worldwide. Hobbies and interests lie in gardening, photography, recorded music and of course, their pets.

Hot topics

Weed'em and Reap this Friday at a new location!!
(1 ~ 6:25 PM, Jul 30)

Wartrace Walking Horse Show is coming up this weekend!
(4 ~ 3:43 PM, Jul 30)

Do you remember the singing duo Mr. & Mrs. Garvey?
(16 ~ 10:25 AM, Jul 24)

Double Rose of Sharon "blues" or in this case black.
(1 ~ 10:02 AM, Jul 24)

Got your BUZZ on? Then reconsider wearing yellow in the garden.
(8 ~ 1:17 PM, Jul 23)

Home