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States Push to Collect Online Sales Tax
Posted by
Zonk
on Fri Sep 30, 2005 10:56 AM
from the but-i-like-my-bulk-cheerios-on-the-cheap dept.
from the but-i-like-my-bulk-cheerios-on-the-cheap dept.
Carl Bialik from the WSJ writes "On Saturday, 18 states will implement the Streamlined Sales Tax Project, which will make it easier to collect local and state sales taxes on purchases made over the Internet while offering amnesty on uncollected taxes. In their longstanding opposition to collect sales tax, many online retailers 'have cited a 1992 Supreme Court ruling that said that it would be too onerous for e-tailers to calculate all the permutations of differing state and local tax rates,' the Wall Street Journal reports. 'One goal of the project was to remove the ruling as a key defense for online merchants.' Is your state involved? 'The states that have signed on are Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Nebraska, New Jersey, North Carolina, North Dakota, Oklahoma, South Dakota and West Virginia. Five more -- Arkansas, Ohio, Tennessee, Utah and Wyoming -- are in the process of finalizing the requirements needed to join, while Washington, Texas and Nevada are in earlier stages.'"
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Direct URL to SSTP web site (Score:5, Informative)
BTW, there's been a noteable increase in Wall Street Journal stories on Slashdot - certainly has improved the quality - kudo's to the editors and Carl Bialik from the WSJ [carlbialik.com]
halloween webcam is coming [komar.org]
Re:Direct URL to SSTP web site (Score:5, Informative)
Parent
California charges it (Score:3, Informative)
Re:California charges it (Score:3, Insightful)
Re:California charges it (Score:3, Informative)
Use tax =/= sales tax.
Use tax is assessed on any item purchased by the end user. There are many exemptions but the primary one is the end user is exempt from paying use tax if the end user has already paid sales tax.
If you are paying the "use tax" for the customer and not showing taxes paid on the receipt then CA may go after the customer for use tax. The customer can't prov
Re:California charges it (Score:5, Insightful)
Combining federal tax tables and state tax tables, I'd guess your income is at least $146,000 a year (33% federal + 9% state). If you are working 10-12 hours a day you are spending too much time at work. Scale back your lifestyle a bit. I make $47,000 (working eight hours a day) and am happy doing it.
Parent
Re:California charges it (Score:3, Insightful)
My attitude is simply that if we are going to act like socialists (which we do), and pay taxes like socialists (which we do), then I want plenty of socialist programs (like universal healthcare) as enjoyed by other western countries.
It would make the states more competitive in terms of cost of labor, I can tell you that.
Re:California charges it (Score:3, Insightful)
No. First, this is America; you can earn in the top 3% of world income and qualify for poverty benefits here. And yes, America's cost of living is higher, but this is also a land where opportunity knocks, rings the doorbell, and looks in the window to see if you didn't hear. And while I don't mind helping people, I do mind being forced to help people, particularly those who wet their own nests. Then
Re:California charges it (Score:3, Interesting)
By the way, there are quite a few countries with nationalized health care
It is only a matter of time (Score:3, Interesting)
But if you can dream it, they can tax it.
Re:It is only a matter of time (Score:5, Interesting)
NOW who gets the tax?
Parent
Re:It is only a matter of time (Score:4, Insightful)
It is the same way with counties and cars (and other big ticket items) here in Ohio- If I but a car in Cuyahoga County where the sales tax is 8%, but I live in Summit COunty where the tax is 7%, I pay 7% tax on the car....
Technically, If you live in a high tax county, and buy stuff in a low tax county, you are supposed to send the county/Sate gov't the difference each year. But of course if you live in a low tax county and shop in a high tax county, you dont get a refund at the end of the year.
Parent
Re:It is only a matter of time (Score:5, Interesting)
Parent
Re:It is only a matter of time (Score:3, Insightful)
Re:It is only a matter of time (Score:5, Interesting)
Since the state is so small, anyone in the state could (and often did) drive an hour and a half to Massachusetts and buy things like cars, appliances, etc. for only 5% sales tax. (ah the boon of living in small state country) You're supposed to declare what you've purchased and pay the difference to RI. Of course, nobody did, so the clever legislature monkeys (who had recently voted themselves a salary increase from $300 to $10k) made "deals" with large-ticket businesses just across the border to report you even if you don't.
This has been challenged many times and upheld on the grounds that the tax is applied equally to both in-state and out-of-state purchases. and so isn't an interstate tax at all.
Tricky lawyering no doubt, but then if they can argue about the definition of the word 'is' they can argue pretty much anything.
Parent
Re:It is only a matter of time (Score:4, Insightful)
Parent
Buying from abroad (Score:3, Interesting)
In the European Union you pay the sales tax of the country which the product was purcahsed in. If i'm in the UK and buy something from Finland over the net, then i'll pay 22% finnish sales tax and nothing to the british government. Even though the british rate is only 17.5%.
This works in europe since it's an EU wide practise.
If this is implemented on a state-by-state basis, then it'll generate revenue for the states who implement it
Re:Buying from abroad (Score:3, Insightful)
it's no wonder the poor need so much assistance over there with a regressive tax that massive.
In VAT's defence, at least for the UK, when it was set up it was intended to be a luxery tax - a tax on cars, perfumes, colour teevees, etc. Even today certain things, like children's clothing, is VAT-exempt, and other things, like electricity (don't know about gas, etc) is VAT-rated at only 5%.
But basically you're absolutely right - VAT's a regressive tax these days. Maybe we could argue that there's a case
Re:It is only a matter of time (Score:3, Insightful)
If they matched internet tax with sales tax, then I can see a mega boom for online stores in Alaska, Delaware, Montana, New Hampshire and Oregon.
Re:It is only a matter of time (Score:3, Funny)
Since when is sanity a constraint on what the government does, especially when it sees the chance to grab more money?
Is it just me... (Score:3, Insightful)
Thank God you can still lie to servers about your location (sheesh...)
Re:Is it just me... (Score:3, Insightful)
Re:Is it just me... (Score:5, Interesting)
No state sales tax there.
If you don't already live in one of these states, you may live close enough to set up a mail drop. If not, maybe you should consider moving - this was the intent of allowing states to set up their own laws - anyone that wants can "vote with their feet".
Yes, I realize this is considered impractical to most, but at what point should we finally say "enough"?
-bs
Parent
It's bad already (Score:4, Interesting)
So I'm a little skeptical about just how 'easy' they consider a reasonable system to be...
Wait just a darned minute (Score:5, Interesting)
How is ordering over the Internet different?
Not quite (Score:5, Informative)
While I disagree with this arguement, it *could* be argued that the Internet creates a presence in every state, far beyond the old days of mail order catalogs.
What it really boils down to is politicians on both sides of the aisle hate seeing money being exchanged that they can't get their greedy hands on.
Parent
Re:Not quite (Score:4, Insightful)
While I disagree with this arguement, it *could* be argued that the Internet creates a presence in every state, far beyond the old days of mail order catalogs.
Seems like a pretty shaky argument. Because the buyer and seller can swap IP packets the seller has a local nexus? Exchanging messages over the Internet seems precisely analogous to exchanging bits of paper (catalogs and order forms) via the postal service.
Parent
That varies from state to state (Score:3, Informative)
Of course no one I know of that lives in Ohio has ever put any amount there other than a 0. Nonetheless, it isn't accurate to say that interstate transactions are not subject to and have never been subject to sales tax.
Good News for No-Tax States (Score:3, Interesting)
It's not, which should have mail-order retailers worried about this move, because it would almost certainly end up affecting them.
One way to apply this is to charge it based on the state of origination. It is a sales tax, not a purchase tax, even though the purchaser pays that tax for the seller. The seller would pay the tax on all sales to their home state, no matter where the product is
Re:Wait just a darned minute (Score:3, Interesting)
Well, to be fair, many times shipping & handling is >= sales tax. Plus, for many items, it is highly preferable to buy something locally, even though the same thing is available online (so long as the price is similar). There are a number of reasons for this. Among them are:
Re:Wait just a darned minute (Score:5, Insightful)
Parent
Entice. (Score:5, Funny)
A guy named Guido broke my leg last week. He said that if I paid this year's protection money, he wouldn't break it three more times for the last three years I've been in business. In other words, rather than threatening or extorting, Guido enticed me into paying my protection money.
Entice. They keep using that word. I do not think that word means what they think it means.
Some of them it's understandable (Score:3, Funny)
But you guys in Nebraska. You already have high property taxes, a state income tax and now they're trying to add this. Plus really crapass weather in the winter. Just doesn't seem fair.
Hey now... (Score:5, Funny)
Parent
Re:Some of them it's understandable (Score:3, Funny)
And let me tell you, our potholes are shinier than ever, the traffic lights are designed to stop the traffic, not to move it smoothly, and the old people, oh the old, people still drive ever so slowly.
(And you forgot that in adittion to the state income tax, we also have a sales tax.)
On top of that L. Ron Hubbard was born in NE.
How I love Sou
Goodbye free lunch (Score:5, Insightful)
Re:Goodbye free lunch (Score:3, Interesting)
I agree wholeheartedly. Trash the income tax and just tax what people buy! Simpler, less expensive overall (bye bye, IRS...), and allows the average citizen to see very directly just *how much* tax they're paying (25% sales tax?! WTF?! Write the Congress(wo)man!).
Problem is, that whole "trash the income tax" thing just doesn't seem to be pursued very agressively. This is just one more tax -- another liability and barrier to entry for small on
Re:Goodbye free lunch (Score:4, Insightful)
This would put a far larger burden on those with lower incomes. For instance, the family making $50k a year spends most of it in living expenses (if not all of it, considering our outrageous consumer debt). But once living expenses are covered, the rest is "gravy". Certainly, those who pull in more money a year are going to be buying more expensive things (bigger homes, nicer cars, etc.) but by the large, they can also use that extra wealth to leverage more money (through investments, real-estate, etc.) Thus the rich get richer, while the poor and middle class stay in "their place."
"So what!" you may decry. Well, unfortunately that creates a system where you start getting largely centralized accumulations of wealth. And as the saying goes, "It takes money to make money". The United States is already set up to give enormous advantages to those with cash (easier to raise capital, lower interest rates on loans, etc.); this would enable those "have's" to rapidly force those "kinda-have's" into "have-not's", and the "have-not's"--well... they haven't started charging rent for prison (yet).
Parent
Re:Goodbye free lunch (Score:3, Insightful)
Sales taxes always seem to be better at first glance. However, they do tend to have some pitfalls:
1) They are regressive, especially if there is a sales tax on food and clothing. The poor pay a higher percentage of their income on sales tax than do the rich.
2) They are not as "stable" as property taxes or even income taxes. When the economy goes downhill, the first thing that happens is that consumers stop buying goods. When that happens,
Awesome! (Score:4, Funny)
North of the Border (Score:3, Interesting)
A most welcome development (Score:5, Insightful)
If you don't like sales tax, then fight your local/state sales and use taxes on principal. But as long as 7-11 down the street has to charge it, why should a company that's in another state be exempt?
because of the Constitution? (Score:4, Insightful)
The supreme law of the land does mean something, you know.
Parent
Charging tax is truly hellish technically (Score:5, Insightful)
The article mentions how some states consider candy different than other food as an example of the many little differences in tax code. Another one is different counties charge different taxes - in New York state, Queens county and Nassau county have slightly different tax rates. And then these tax rates change every time a new law is passed. So you have to update your tax tables whenever that happens. Most people who are truly concerned about this pay thousands to get regular Taxware updates. Luckily, right now I only have to worry about one state.
Now in general terms, I would not mind if some flat, national tax were charged on items going from me to a consumer. I could just say "add x.y%" to every sale, just like everyone else would be doing. But the way this is being done is ridiculous. What has happened in the US is that federal taxes have remained the same, I suppose to pay for the increased military spending for the war in Iraq and whatnot, while money the federal government used to give to the states was cut. So now the states are all scrambling to get money, and since the politicians don't want to go after locals, they are fighting to gouge out of state people for taxes. So we have this mess. And it doesn't effect Amazon.com who can afford to pay for Taxware updates and whatnot, it hurts the small businessman like me, who now has a lot more work to do and may have to buy expensive Taxware updates to be in compliance with this. If one steps back and looks at the whole country, this is a ridiculous way to do things. It's not even that I have to pay the tax, if everyone else had to, it's that now I have to be concerned about not just the tax laws of each state, but the tax laws of each county in each state. It's ridiculous. So much for "state's rights".
More of our Constitution erodes (Score:5, Insightful)
Surely if I got to California and buy something, take it back to my state, I'm not obligated to pay a sales tax back here. And if I asked my brother to buy me something and bring it back from California, I wouldn't have to pay my state's sales tax. But for some reason, could it be greed?!, if I pay FedEx to bring it to me, suddenly I have to pay.
I have NO problem paying sales tax. I think that if I buy something shipped from California, for example, California's sales tax should be added to the order. But I see no reason to flush the Constitution merely because states are greedy.
The states are NOT losing any money. (Score:3, Insightful)
They're not losing that money. It's staying in the pockets of their citizens for them to spend or save as they see fit. All that's happening is that the money is not being filtered through the sticky fingers of the politicians on its path to supposedly benefit those citizens.
No sales tax (Score:3, Interesting)
I'm interested in this only in an academic sense. I think sales taxes in general are regressive and hurt the poor hardest. Income taxes with varying rates based on income are more fair, but could be taken to extremes, such as how Britain used to require 95% withholding on the richest people. Property taxes, luxury taxes, estate taxes (let's not go into that stupid term "Death Tax") and every other tax you can think of each have their own share of problems.
We'll need to face it, there isn't any way that governments can make money that somebody isn't going to consider unfair. The days when the government could survive simply by collecting customs duties (NO TAXES!) are long gone.
see, to us non-Americans (Score:3, Interesting)
Quit taxing our hard-earned wealth! (Score:5, Insightful)
When is enough enough? I know we need taxes for things like policmen, firemen, the military, the courts, roads, etc, but fer cryin' out loud, when I have to work until July 1 just to pay my income, property, sales, gas, ticket, etc etc etc taxes, I'm ready to spend the winter at Valley Forge. If a politican and bureaucrat are getting less of our money to waste because there is no on-line sales tax, and they complain about it, then I for one am against any internet tax.
*sigh* Sorry, I'll go cheer myself up by reading some Thomas Payne and James Madison ... until the government tries to ban those books.
How do you define a conservative? (Score:3, Funny)