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The Almighty Buck The Internet Government Politics

States Push to Collect Online Sales Tax 395

Posted by Zonk 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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States Push to Collect Online Sales Tax More

States Push to Collect Online Sales Tax

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  • Direct URL to SSTP web site (Score:5, Informative)

    by xmas2003 ( 739875 ) * on Friday September 30, 2005 @11:58AM (#13685482) Homepage
    Here's a direct link to the StreamLined Sales Tax website [streamlinedsalestax.org] which is confusing as all get out with their last press release being in 2002; makes you wonder how "legit" these guys are. BTW, should this be filed under "The Mighty Buck" instead of Politics?!? ;-)

    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)

      by hsmith ( 818216 ) on Friday September 30, 2005 @12:02PM (#13685532)
      If i recall correctly, this is actually a company that is trying to sell their taxing product to the several states and they have a good few states lined up. The guy in charge was on a talk show i listen to a few months ago. Basically, they wrote the software to do all the taxing and now they are going and getting the clients (individual states). So once they have enough states they are "in business" so to speak.

  • California charges it (Score:3, Informative)

    by JoeCommodore ( 567479 ) <larry@portcommodore.com> on Friday September 30, 2005 @11:59AM (#13685490) Homepage
    They call it a "Use Tax" on thier tax form, been doing it for two years now. :/
    • They aren't alone, I think a LOT of states do it, but there's 0 enforcement. Just like the MA optional higher tax rate, who's seriously going to volunteer to give more money to their state gov?
      • who's seriously going to volunteer to give more money to their state gov?

        listening to all the people complain about bush's tax cuts then roughly half of the population should be giving more money to state and federal coffers. its not like you are being forced to pay less now. i think many people only want higher taxes to screw people they perceive as 'ultra-rich' as my favourite congresswoman calls any family that earns over $85,000 a year. i would call that decently middle class considering that u.s. per

    • Massachusetts does the same thing.
    • Use tax == sales tax
      The term Use Tax refers to when you, as a retailer, buy something as if you were to re-sale it, but later consume it yourself. It is not specific to on-line sales. I do use it for such though and to make my on-line business easier I do as follows:
      Flat price for everyone. If the end buyer is (delivery is taken) in CA then I simply pay the "use tax" on the item. The customer never sees a sales tax entry. While this lowers my profit on CA purchases, the bulk of my business comes from o

      • If the end buyer is (delivery is taken) in CA then I simply pay the "use tax" on the item. The customer never sees a sales tax entry.

        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

  • It is only a matter of time (Score:3, Interesting)

    by hsmith ( 818216 ) on Friday September 30, 2005 @11:59AM (#13685500)
    I think the fed hasn't implemented some sort of online tax as of yet because they haven't figure out how to. They tax everything they possibly can, internet sales are the next logical step. I think the biggest issues are, if you live in TX and order something from MD, where do you pay sales tax? What if you order something abroad? It is insane to think you would have to pay sales tax for the state you reside and the state you are purchasing from.

    But if you can dream it, they can tax it.

    • Re:It is only a matter of time (Score:5, Interesting)

      by morgan_greywolf ( 835522 ) on Friday September 30, 2005 @12:07PM (#13685594) Homepage Journal
      Oh, it gets worse than that. For instance, what if you're a college student and you live in, say California, so your billing address is there. You use, say, Amazon.com to order a gift for someone's wish list who lives in MD, but you go to school in Texas, so that's where the transaction took place.

      NOW who gets the tax?

      • Re:It is only a matter of time (Score:4, Insightful)

        by Alex P Keaton in da ( 882660 ) on Friday September 30, 2005 @01:21PM (#13686423) Homepage
        The tax goes to where the item is delivered, or "used"
        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.

    • Re:It is only a matter of time (Score:5, Interesting)

      by EmagGeek ( 574360 ) on Friday September 30, 2005 @12:08PM (#13685608) Journal
      I don't see how any of this gets around the fact that no State has the right to tax interstate commerce. Call it whatever kind of tax you want to; Sales, Use, Excise, whatever, it is still a tax on interstate commerce and a State has no right to collect it.
      • I imagine that, when you are thinking of regulation interstate commerce, you are thinking of Justice Marshall's ruling in Gibbons v. Ogden [wikipedia.org]. That talks about the power of states to limit navigation of commerce between their borders. That ruling did not adress the legaility of a sales tax (a tax on consumption).

      • Re:It is only a matter of time (Score:5, Interesting)

        by zippthorne ( 748122 ) on Friday September 30, 2005 @12:37PM (#13685926) Journal
        Yet, many states have already been doing exactly this. My home state of RI argues that sales tax is a tax on its citizens (and visitors i guess). therefore, they have a right to tax (last I was there 7%) your purchases regardless of where you bought them.

        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.
    • State sales tax is unrelated to federal taxes.

    • Buying from abroad (Score:3, Interesting)

      by grahamsz ( 150076 )
      Typically import duty and associated collection charge will dwarf sales tax.

      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
      • One thing I'd like to say about the VAT: Holy crap!

        I just got back from Ireland (17.5%) and I have to say that people around here complaining about the 5.5% sales tax have nothing on those guys. I couldn't believe how awful the sales tax was, it's no wonder the poor need so much assistance over there with a regressive tax that massive.

        • 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

    • Actually this is not a calculating issue as the taxes would probably only be off by a small percentage. It's more of a political issue. No president wants the interest rates to fly upwards on their watch. No president wants to add internet tax on their watch either.

      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.

    • question... what is the existing taxation system for mail-order purchases??? or items ordered via telephone on things advertised on the television???

      Sales over the internet should be treated exactly the same.

      • Yup, that's exactly what they want. Technically if you live in Maine and tele-order from Ca you are SUPPOSED to declare it and pay a Maine Use tax (many/most other states are same-same). That is, tax is paid where you live/product is shipped to. Now most people do not comply and tele-order USED to be a small percentage of all traffic in a given state so non compliance had little real tax impact. Along comes the Internet and amazon.com, ebay, and a host of other large tele-order business. Suddenly a few
    • If one lives in Alaska and orders a gift for some one in Michigan do they have to pay Michigan's sales tax. I do not see why it would be different from buying it a a local store and than shipping it to them. So why couldn't they just set up a business in Alaska where they would accept orders from people in high sales tax states and than order the products in the no sales tax state. I would think that if they charged 1 or 2 per cent they could make millions.
    • It is insane to think you would have to pay sales tax for the state you reside and the state you are purchasing from.

      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)

    by TJ_Phazerhacki ( 520002 ) on Friday September 30, 2005 @12:00PM (#13685507) Journal
    Or are the only states on that list that don't appear to be blatent Tax-Farmers Texas, Nevada, and Washington? Why is it that none of the other states appear to contribute significantly to e-commerce, yet they think they need to tax for the products or services rendered elsewhere?

    Thank God you can still lie to servers about your location (sheesh...)

    • Thank God you can still lie to servers about your location (sheesh...)

      Do you lie on the address form too? You can use my address if you want.

    • Re:Is it just me... (Score:3, Insightful)

      by killmenow ( 184444 )
      Thank God you can still lie to servers about your location (sheesh...)
      Yeah, but...if it bases the tax calculation off of shipping location, how do you lie to it and still get your purchase delivered to where you are? Are you gonna ship to a drop location in the Cayman Islands and re-ship it to your true location? You'll end up paying a lot more in shipping than sales tax for most cases.

      • Re:Is it just me... (Score:5, Interesting)

        by BlewScreen ( 159261 ) on Friday September 30, 2005 @12:34PM (#13685902)
        Or you could ship to Alaska, Delaware, Montana, New Hampshire or Oregon.

        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

  • It's bad already (Score:4, Interesting)

    by Rorschach1 ( 174480 ) on Friday September 30, 2005 @12:00PM (#13685511) Homepage
    Couldn't be any worse than what California already puts me through. They want you to report sales for each individual tax district in the state. Most of my sales are out of the state, and probably half are out of the country, so I've got very little to report there - I wind up paying 6 cents to one county, 12 cents to another, and so on. Or at least, that's how I'm supposed to do it. In reality I just go nuts and grossly over-pay them all - 50 cents for everyone!

    So I'm a little skeptical about just how 'easy' they consider a reasonable system to be...
    • So I'm a little skeptical about just how 'easy' they consider a reasonable system to be...

      Well, did you happen to see this part of TFA:

      Architects of the Streamlined Sales Tax Project are devising a computer program that tracks the tax rates of the 18 states and their localities and automatically adds that rate to the bill of every online purchase.

      (emphasis added)

      Apparently, they're going to just give us all a nice "computer program" to handle everything for us. Yeah, right, that's the ticket...

      So

  • Wait just a darned minute (Score:5, Interesting)

    by $RANDOMLUSER ( 804576 ) on Friday September 30, 2005 @12:02PM (#13685535)
    Mail order (catalog or phone) items which cross state lines have never been subject to sales tax; only if the shipper and reveiver were in the same state was sales tax charged.

    How is ordering over the Internet different?

    • Not quite (Score:5, Informative)

      by dreamchaser ( 49529 ) on Friday September 30, 2005 @12:09PM (#13685621) Homepage Journal
      Prior to online sales, the rule was that if the seller had what is called a 'nexus' (meaning a busines presence basically) in a given state, then sales tax applied. The buyer and seller did NOT have to be in the same state if nexus could be established.

      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.

      • Re:Not quite (Score:4, Insightful)

        by swillden ( 191260 ) <shawn-ds@willden.org> on Friday September 30, 2005 @12:17PM (#13685712) Journal

        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.

    • Many states, Ohio being one, tax all purchases that are made out of state and shipped to an Ohio address. There is even a special line on the Ohio income tax form especially for reporting the amount of goods you've purchased online, through mail order, over the phone, etc.

      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.
    • It's a pervasiveness issue, exactly the same reason no one cares people illegally copy casette tapes, but a lot of peope care that people illegally copy CDs. There's a LOT more of it going on, so a LOT more tax money is in issue.

      But remember, them not taxing mail orders doesn't mean they didn't have every legal reason not to, just that they didn't, it was a gift ( according to sales tax law) not a right.

      Same thing applies here. While no one may like it, being taxed on online purchases is no different to t
    • How is ordering over the Internet different?

      volume Volume VOLUME!

    • Mail order [across] state lines have never been subject to sales tax...How is ordering over the Internet different?

      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

    • Mail order (catalog or phone) items which cross state lines have never been subject to sales tax; only if the shipper and reveiver were in the same state was sales tax charged.

      How is ordering over the Internet different?

      It isn't. The constitution prevents one state from taxing activities in another state, with interstate commerce being deemed the domain of the federal government. This should cover all sales across state lines regardless of the medium by which the order takes place. Prior to e-commerce

  • Entice. (Score:5, Funny)

    by Tackhead ( 54550 ) on Friday September 30, 2005 @12:03PM (#13685546)
    > The states will also entice online retailers to collect state and local sales taxes by offering amnesty on taxes the retailers haven't collected in the years since the Internet retail boom began.

    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.

    • 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.

      Sounds like a threat to me. If you don't do X, I'll do Y.

    • If you drive a car, I'll tax the street
      If you try to sit, I'll tax your seat
      If you get too cold I'll tax the heat
      If you take a walk, I'll tax your feet

      Disclaimer: This post is obviously a blatant violation of the DMCA

  • Some of them it's understandable (Score:3, Funny)

    by HangingChad ( 677530 ) on Friday September 30, 2005 @12:03PM (#13685548) Homepage
    Washington, TN and Texas don't have a state income tax. It's understandable why they need the sales tax revenue.

    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.

    • TX's sales tax rate, after state, local, regional, whatever, additional rates are still pretty low given that. I paid more in MA which has a state tax.
      • TX's sales tax rate, after state, local, regional, whatever, additional rates are still pretty low given that. I paid more in MA which has a state tax.

        The rate in Texas may be partially dependent upon the type of goods that are taxable. For example, I seem to recall that Texas charges sales tax on all clothing purchases. Does Massachusettes do the same? If MA does not, then you would probably have some explanation as to why MA has a higher sales tax--it taxes fewer goods.

    • Hey now... (Score:5, Funny)

      by modi123 ( 750470 ) on Friday September 30, 2005 @12:42PM (#13685991) Homepage Journal
      Hey now.... We Nebraskan's have a few things going for us. First off, we are a "red state" (both in politics and in football). Next we elected a college football coach to Congress. Third we were featured in SouthPark a few seasons back (when Ike was shipped off to our State by his Kyle because Ike wasn't his adopted brother). Fourth... ahm.. well.. *breaking down* *crying* Oh we got nothing. It really sucks being trapped in this hole. Over a hundred in the summer, below zero in the winter... Not to mention the exodus of young, educated people from the state to cooler states. *sniffle* Well at least our school boards didn't ban evolution from public schools - I am looking at you Kansas.
    • Well, I live in NE, and I can tell you that my county also has a thing called a Wheel Tax. We have to pay a 10 bucks per wheel tax every time we renew our registration.
      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)

    by tnk1 ( 899206 ) on Friday September 30, 2005 @12:04PM (#13685565)
    Well, it sucks that they are getting around to figuring out how to tax online purchases. However, I can't really fault them for doing it. As more and more sales go online, there is a real issue with decreasing tax revenues. It probably won't be a critical issue for decades, but the fact is that governments need taxes to operate and I've always tended to prefer sales taxes over income taxes.

    • ...I've always tended to prefer sales taxes over income taxes.

      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)

        by Civil_Disobedient ( 261825 ) on Friday September 30, 2005 @01:02PM (#13686217)
        Trash the income tax and just tax what people buy!

        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).
        • That's actually very easy to get around. And that is the most common argument against a single sale tax. The solution is to just tax items based on their value (or use).

          Examples:
          Food, usage = eating, so tax will be 0%.
          Ferrari, usage = extreme luxury, so tax will be 25%

          Ok, but that presents problems on how to classify items. Is a caviar luncheon considered food or luxury? Well, we can also introduce a per cost system.
          Cost is less than $5 per item, probably means it is some sort of daily necessity, so tax wil
    • I've always tended to prefer sales taxes over income taxes.

      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)

    by soulsteal ( 104635 ) <soulsteal@@@3l337...org> on Friday September 30, 2005 @12:05PM (#13685569) Homepage
    Here's to being from Mississippi, where they aren't smart enough to know to tax this here Inter-Net. ;)

  • North of the Border (Score:3, Interesting)

    by TheSpoom ( 715771 ) * <{ten.00mrebu} {ta} {todhsals}> on Friday September 30, 2005 @12:14PM (#13685671) Homepage Journal
    The unfortunate thing with living in Canada is that 90% of the stuff you order online will come from the states, which means the Canadian government can tax the living hell out of it as soon as it crosses the border. UPS and Fedex do the same thing, adding on nice brokerage fees for no apparent reason. It was quite a shock a few years ago when my laptop arrived with an apparent COD charge of over $400.
  • I read the article and noticed that the reason behind this plan actually seems to be well-reasoned. The Supreme Court stated that it'd be too difficult to force online retailers to calculate all the different types of tax so they shouldn't be forced to do so. This new plan prevent the difficulty, so there's no more reason to argue from a standpoint of difficulty. I'm still not convinced that I should be paying local/state taxes on goods purchased over the internet, but at least this plan addresses the "m
  • It makes you wonder if that for the states that don't want any involvement in the SST Project, whether they care that they are losing tax money for purchases in their state (regardless of how its collected). I would think that the money that states collect via the standard sales tax, goes quite a long way for the benefit of the state, and when you consider the fact that the number of people purchasing online is growing with each year, thats money being lost (or not collected I should say) ... what does it t

  • A most welcome development (Score:5, Insightful)

    by csoto ( 220540 ) on Friday September 30, 2005 @12:20PM (#13685736)
    For years, there was a myth that online sales were "cheaper" because you didn't pay sales tax. Rather, the truth is that states, counties and municipalities were being cheated out of collecting legal sales and use taxes.

    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)

      by YesIAmAScript ( 886271 ) on Friday September 30, 2005 @01:33PM (#13686587)
      That says they have no ability to tax or regulate interstate commerce?

      The supreme law of the land does mean something, you know.
    • Because state taxes are supposed to be taxes in the state! I.E. Michigan sales tax is on sales that are in Michigan, not on sales that are in California.

      And also, states, counties, and municipalities are not being cheated out of anything. The money of the people belongs to the people, not the government. The people are being cheated out of their property.
  • We don't have a push to do this.

    It's because we have this assinine 'use tax'. If you buy something at a lower tax rate or with no tax, you're on the hook to remit the 7% to the state when you file your yearly taxes.

    The problem I have with this is that it violates interstate commerce rules. But RI sidesteps that by saying they are not taxing the purchase of the item, but the use of said item.

    But then this is Rhode Island. They used to call Massachusetts by the name Taxachussets but RI has since take

  • Charging tax is truly hellish technically (Score:5, Insightful)

    by br00tus ( 528477 ) on Friday September 30, 2005 @12:23PM (#13685779)
    I have been running "e-commerce" sites since 1997 when I set up a site that used Broadvision (and Taxware on the backend). Right now I run a site using osCommerce.

    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".

    • Another one is different counties charge different taxes - in New York state, Queens county and Nassau county have slightly different tax rates

      I used to live in Ohio, where they have 88 counties and potentially 88 different tax rates. Now I live in New Hampshire. No sales tax. No income tax. 8% "rooms and meals" tax applied at restaraunts and hotels and that's it. Of course they just eliminated the highway tokens for half-price tolls in favor of SpeedPass, but at least they didn't put the gates back up

  • More of our Constitution erodes (Score:5, Insightful)

    by Anita Coney ( 648748 ) on Friday September 30, 2005 @12:25PM (#13685803) Homepage
    Article. I, Section. 10., Clause 2 specifically forbids states from collecting intrastate tariffs. But, for some strange reason if they call it a "use" tax it's ok. I'm also guessing that if the south reinstituted slavery under the term "Happy Fun Work" it'd be legal.

    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.
  • I'm moving to F*CKING Delaware...

  • Were these e-tailers to move their internet operations to New Hampshire, a State with no sales tax (and no justification for ever participating in such a scheme) they'd be able to avoid this matter all together.

    Were lawyers to think this through, they'd initiate a class-action lawsuit to protect people from illegally-collected sales tax, as the sale did not occur within the offended State. Were these State legislatures to actually do some creative thinking, they'd redefine the tax as a usage tax instead of

  • I run a small online book publishing business based in California. This year I had about $9,000 in gross sales, but almost all of that was wholesale or out of state --- i.e., almost none of it was subject to sales tax --- and this year I paid $45.96 in local business taxes and $17.00 in sales taxes. My understanding is that if I make a retail sale out of state, the customer is theoretically responsible for filing a tax return in his state and paying "use tax" at his state's rate. I assume they don't actuall
  • Well, passing the law is one thing...enforcing it is a whole other thing. How are they going to monitor all these transactions that happen? And as someone else mentioned, which state is going to be the one to collect this tax. And all this at a time when a new tax system proposal is gaining prominence? Good luck.
  • States need to get funding from somewhere...and taxes are inevitable, so consider the following:

    If your tax dollars go to Washington D.C., you have roughly one vote in 250 million to direct how it gets spent. If your tax dollars go to your State government, you vote is between One in 34 million (California) and one in 600 thousand (North Dakota.)* How much influence would you like to have? What do you want to fund today? A War? Stem Cell Research? Highways?

    *Disclaimer, I live in North Dakota.
  • What the morons in those state governments seem to not take into consideration is that they are going to put e-tailers out of business by doing that. Why? Because it is only slightly cheaper in most cases to purchase something over the web, (once you add in shipping). If tax is added back in, it becomes more expensive and most people will buy it off the store shelf instead. Sure they will collect more in sales tax that way, but at what cost to the economy?
  • This is why i never buy from California online. I've noticed that i get hit with tax from their stores and its insanely high.

    Not to mention the distance California is from New York, which means shipping takes longer. If i want it faster, i have to pay even more money for faster shippping...

    Point is.. If California wants to make money, i suggest they kill their Use Tax for online sales because its just not worth the money to order and wait for ground shipping from California while being hit with an insanely

  • The states are NOT losing any money. (Score:3, Insightful)

    by windowpain ( 211052 ) on Friday September 30, 2005 @12:45PM (#13686019) Journal
    The article says "states and local governments will lose $18 billion in online sales tax in 2005".

    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.
  • I have a really simple solution:
    1. In a transaction that crosses state lines, the customer pays sales taxes at the lowest tax rate in his entire state. So for example if I run an online business in California, and I make a sale to someone in Massachusetts, I just have to know a single tax rate for Massachusetts.
    2. Any business with less than $100,000 in sales in a particular state pays the taxes to his own state instead. So for instance, if I have $37.09 worth of sales in Massachusetts this year, I compute t

  • No sales tax (Score:3, Interesting)

    by lar3ry ( 10905 ) on Friday September 30, 2005 @12:58PM (#13686177)
    Living in NH (Live, Freeze, and Die) has its benefits, among them no state sales tax. I cannot see how any e-tailer can possibly levy any such tax on me, since there is no sales tax in my jurisdiction that would apply... unless the "tourist tax" (hotels and restaurants) applies.

    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)

    by Anonymous Cowpat ( 788193 ) on Friday September 30, 2005 @12:58PM (#13686178) Journal
    (or this one at least) that seems like an utterly crazy system of taxation, wouldn't it be easier to set it at (say) 5% for everyone which goes to a central pot and is then distributed to the individual states based on population or estimated online sales or who-needs-it-the-most (or whatever)?

  • Quit taxing our hard-earned wealth! (Score:5, Insightful)

    by tbone1 ( 309237 ) on Friday September 30, 2005 @01:33PM (#13686590) Homepage
    They tax you when you make it, they tax you when you save it, they tax you when you spend it, they tax you when you win it, they tax you when you invest it, they tax you when you inherit it, they tax you when you buy food, they tax you when you buy clothing, they tax you when you buy shelter, they tax you when you do anything. In short, we are taxed for living until we are taxed to death.

    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.

  • Color me confused (Score:3, Insightful)

    by razmaspaz ( 568034 ) on Friday September 30, 2005 @03:34PM (#13687866)
    I'm confused. How is buying something on the Internet (when the company is in another state no less) not INTERstate commerce? And since when did the constitution stop explicitly forbidding states from taxing interstate commerce? Now maybe it is arguable that the spirit of that law was that Nevada could not put a tax on goods passing from California to Utah, but I don't think the artlcie spells it out in those terms. I am pretty sure that no state is allowed to tax goods that pass across a border. Of course IANAL so I can't say for sure.

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