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Tuesday, Jan. 17, 2017

To whomever is promoting the new internet sales tax, please stop.

Posted Monday, July 19, 2010, at 8:59 AM

I made the headline because I can not tell anymore where the party lines stop between Democrat and Republican. If the GOP is really conservative and pro-business, they need to get back on track,but ......

ANYWAY this is about the proposed sales tax on internet sales. If you have a location in a given state, it is nothing new that you have to collect sales tax for sales within that state, but this law will change everything.

I could has it out here, but this article says some good things so http://host.madison.com/wsj/news/opinion...

When you consider the rising costs of mail or shipping the savings by not having to pay tax was a small benefit, but never got close to the expense. It is not unusual for our customers to pay much more than the item originally cost them for shipping.

I believe our internet edge is the convenience of not having to go to the item and being able to sit in your pajamas while you shop, or run a quick shopping errand from your desk during lunch. (Yes, I know. Some do much more than that and take away from productivity at work.)

Any thoughts on this?

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

So many people purchase items over the internet, including myself, because we simply cannot get to the store that we are shopping for, or the sales are alot better than shopping in person. I also use alot of gift cards for stores that are only online or are cities away. I am totally against the internet sales tax. It's just more money that we are having to give the government so they can spend it on needless things.

I have been using iTunes for a few months and was never charged any tax on my purchases. If the song was $.99 then that was the total price of purchasing it. But last week they had a note pop up saying that they were going to have to start charging tax. Amazon also charged sales tax on a couple of movies that I recently rented from them. *Thanks to all of the movie rental places closing up :( *

-- Posted by PrpleHze on Mon, Jul 19, 2010, at 9:35 AM

Not mentioned so far is also the logistical nightmare of trying to pay taxes to all the governments involved. Everyone will surely want their cut. If someone in Texas sells to me in Bell Buckle, will Bell Buckle get their share? (even though I am not really in Bell Buckle?)

I can see new software expenses for small business who will HAVE to buy it to manage our taxes. Yuck!

-- Posted by stevemills on Mon, Jul 19, 2010, at 9:58 AM

Already expecting this to happen, I already have my taxes setup in my webapp for my online business. Just need to activate it when it passes. Yes this is a nightmare.

-- Posted by Evil Monkey on Mon, Jul 19, 2010, at 11:24 AM

Hey EM,

You've created an app to calculate taxes for each state or something else?

-- Posted by stevemills on Mon, Jul 19, 2010, at 11:41 AM

I asked someone whose opinion I respect about this recently, and this is the reply I got:

"The affiliates don't have the obligation to collect and remit sales tax, only the actual seller.

Amazon had no physical presence in NY: no office, no employees, and no equipment. NY made the argument that using affiliates based in NY (likely meaning the affiliates' servers were in NY) that Amazon was "doing business" and had "nexus" with NY, requiring the collection of sales tax.

If you are in the business of selling tangible personal property, and you have affiliate relationships where you pay a commission similar to Amazon's Affiliate program, yes talk to your accountant.

On the other hand, if you ARE the affiliate, collecting a small commission for these passive links, then I don't think you need to worry - or collect sales tax for out of state sales."

But then, there's all those corrupt governments we need to subsidize overseas, so it'll probably pass. Sorry...I just work way too hard for way too little and this completely disgusts me, especially when I see a certain country monopolizing a certain eCommerce site, and getting the royal treatment. Odds are they'll never see THOSE taxes. :X

-- Posted by cats4me on Mon, Jul 19, 2010, at 11:59 PM

Is there someone out there who supports this? It obviously has support, so maybe someone will speak up about why this is a good idea in their way of thinking?

Will the States see this sales tax or is in strictly Federal? If the State see it, in what form? Will the State portion come with controls and rules as other government programs?

I would bet it starts out small. Just 1-2% to "ease" into the program, but once the tax process is in place, it will be much easier to nudge it up.

-- Posted by stevemills on Tue, Jul 20, 2010, at 6:41 AM

*feels headache coming on*

-- Posted by cats4me on Tue, Jul 20, 2010, at 2:39 PM

The e-seller would have to collect the sales tax that is applicable in the buyer's State then send the tax to the buyer's state.

The seller may have to send it to a tax department in the city it is mailed to, so the city can get it's cut? I would imagine the cities lose out and only State/Federal get the tax.

This is what makes people liable for a tax. If you collect a tax from someone for anything, you must pay that tax to the state involved.

The States then pay and keep the proper share of the tax.

It will put a big burden on the seller because he/she would have to know where to send this tax money in each of the several States and the proper amount of tax for each State, not to mention the extra cost of paper work and mailing. Oh my, internet shopping prices just went up. So much for saving online!

-- Posted by Unique-Lies on Tue, Jul 27, 2010, at 1:11 PM

I understand the position of small businesses that sell online to avoid collecting sales taxes for every state. However, small bricks and mortar businesses have to collect these taxes. Sales tax introduces a price disparity that hurts local businesses. State and local sales taxes are voted on by local voters (or indirectly by the politicians that local voters put into office). Their intent is to collect money based on purchases, and use those funds to pay for local services such as police, fire, parks etc. Now that more business occurs online, those intended revenues have rapidly dwindled. An argument is often made that collecting taxes would be a huge burden for online sellers. Technology has made it easy for sellers to manage inventories, shipping, targeted marketing etc. And there are companies that can automate the sales tax collection process. Our company, Fed-Tax.net, offers such a service (called TaxCloud). It is completely free to the online retailer. It is certified to comply with the Streamlined Sales Tax Agreement, which means that TaxCloud calculates the tax due for any transaction in the US, and offers merchants advantages in terms of tax amnesty and tax indemnification from States that participate in the Streamlined Sales Tax initiative.

I think that some of the voices in this debate are spinning this as a 'new' tax. In my opinion it is simply adjusting existing legislation to catch up with the reality that so much business is now being conducted online.

-- Posted by BVaccaro on Tue, Jul 27, 2010, at 2:32 PM

99% of our sales are out of state and 40% of that is out of the country. It is not hurting our local sales tax base because anything sold in-state we collect & pay taxes.

Brick & mortar stores collect and pay sales tax to one authority, the State of Tennessee. I been there and done that. Local is calculated by the State and returned to the local community based on their tax rate. B&M stores do not collect tax and pay 49 other States.

I am sure you know the cost of shipping today. It equals and often surpasses the local and state sales taxes so the internet buyer does not really save anything because of not paying taxes. Free shipping, is not free. It is paid by someone.

I could sell a $0.99 to someone in my store and the local buyer would pay 10 cents tax. My internet buyer could pay $3.00 or more in shipping. The buyer does not save and I the seller could have probably made a few extra bucks, but the buyer had to figure the shipping cost into the overall purchase price.

The benefit of the internet to me is that I have millions of potential customers where the local B&M store has their local population and most do not walk through their doors each day. Another benefit is low overhead and my store is open 24 hours a day.

The lost tax might have some merit if I bought my everyday purchases online but I don't because shipping has to be paid by someone and it will most likely be me.

The tax inequality argument does not add up to me either. The big loser in this tax collection scenario is the seller and the shipping companies. The big winner, big government. Of course, it will also require more people to administrate the programs, so they can claim to be lowering the unemployment. They will spin it.

My local Post Office sees well over a thousand from our sales alone each year. Multiply that times the number of small sellers out there and the Post Office takes a hit when my sales drop off, then raise prices AGAIN because they are not making money.

Your software can separate the state, city, and county taxes, and make payments to all the different tax authorities, and you do it free? That could be something to check out if it comes down to it. Thanks for the info.

I realize that your company might not do as well if it does not become law, but it looks like someone is going to lose, either way.

It is late and I could probably ramble on for more hours. I guess the bottom line is that I just don't trust more taxes going to a government that can't control their own spending.

-- Posted by stevemills on Tue, Jul 27, 2010, at 11:04 PM

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Steve Mills and his wife have one daughter. 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.