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The End of Tax-Free Internet Shopping?

timothy posted more than 5 years ago | from the awaiting-a-60-cent-refund-check dept.

United States 784

Mordok-DestroyerOfWo writes "If a little-known but influential alliance of state politicians, large retailers, and tax collectors have their way, the days of tax-free Internet shopping may be nearly over. A bill expected to be introduced in the US Congress as early as Monday would rewrite the ground rules for mail order and Internet sales by eliminating what its supporters view as a 'loophole' that, in many cases, allows Americans to shop over the Internet without paying sales taxes."

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which state(s)? (5, Interesting)

pak9rabid (1011935) | more than 5 years ago | (#27600153)

Ok...so which state will the taxes be going to? The state in which the business operates out of, or the state in which the purchase was made in, or both?

Re:which state(s)? (5, Informative)

aoteoroa (596031) | more than 5 years ago | (#27600245)

Here in Canada we have always had to pay sales tax on internet purchases. The tax is based on the purchaser's province.

Re:which state(s)? (0)

Anonymous Coward | more than 5 years ago | (#27600291)

Not exactly. You have to pay tax if the seller is operating (or has operations) in your province. Otherwise it's free!

Re:which state(s)? (1)

joelmax (1445613) | more than 5 years ago | (#27600433)

Not exactly. You have to pay tax if the seller is operating (or has operations) in your province. Otherwise it's free!

Not at all correct actually. I live in New Brunswick, and if I order from an online retailer (I'll use www.ncix.com as an example as I order there often and they have NO OPERATIONS IN NB), I pay my required 13% tax. If I order from Newegg.ca (Canadian portal operates out of Ontario), I pay 13% tax. The only way you would NOT pay tax on it is if it is a sale or else not a legit operations (Not necessarily bad, but a good chance they are just some little op out of their basement and aren't reporting to the gvmnt.

Re:which state(s)? (3, Insightful)

danwesnor (896499) | more than 5 years ago | (#27600591)

I think a lot of Americans just got grateful for our low state taxes. We pay 4% state and another 4% city/county.

Re:which state(s)? (3, Insightful)

vux984 (928602) | more than 5 years ago | (#27600477)

Not exactly. You have to pay tax if the seller is operating (or has operations) in your province. Otherwise it's free!

Not exactly.

Obviously, in Alberta and the territories where there is no provincial sales tax, you don't pay the tax.

In the HST provinces, you generally pay no matter where in Canada the seller is, because he has to collect GST and, that usually means collecting HST if he's selling to and HST province.

In the individual pst provinces, BC, SK, MB, ON, QC, PE the out of province seller isn't obligated to collect it... but you are still legally obligated to pay it. That means you are supposed to self assess the PST you owe and send it in yourself. In practice, nobody does this, except businesses (who get audited regularly to make sure they are self assessing pst on imports and consumed goods).

Individuals get nailed much more infrequently, unless its an item where they have to register the transaction. (For example, if you sell a car privately in BC for example you wouldn't normally collect PST from the buyer, but the buyer gets nailed for it anyway when he registers the car for insurance.)

Re:which state(s)? (1)

plague3106 (71849) | more than 5 years ago | (#27600533)

How many provinces are there? Can each arbitrarly define what is candy, or junk food, or a meal (that is, 3 or less donuts is taxed as a meal, and 4 or more is bulk and thus food not taxed)?

Re:which state(s)? (2, Interesting)

The Grim Reefer2 (1195989) | more than 5 years ago | (#27600279)

Ok...so which state will the taxes be going to? The state in which the business operates out of, or the state in which the purchase was made in, or both?

That's a good question. If it's the state of the purchaser, then I suspect that Delaware could end up becoming a popular place to live, or at least claim residence. Oregon would be a more interesting question since the sales tax is set on a local level rather than by the state. If it's the state of the seller, then there could be incentive to set up call centers to receive orders in either of those states, or perhaps even Montana as it probably has the lowest sales tax of states that have it.

Re:which state(s)? (2, Interesting)

flitty (981864) | more than 5 years ago | (#27600527)

I have a sneaking feeling that Shipping costs are going to drop approximately 7% of the entire cost on a lot of purchases. We all know that those shipping costs have built in wiggle room, now we'll start seeing retailers reduce them as to not cause sticker shock.

Re:which state(s)? (5, Funny)

Samschnooks (1415697) | more than 5 years ago | (#27600299)

Ok...so which state will the taxes be going to? The state in which the business operates out of, or the state in which the purchase was made in, or both?

What?!? You expect a simple solution from the politicians?!

It'll probably be a complex formula that depends on: the card holder's state of residence, where the items were shipped, where the company does business, whether or not the person makes over $250,000 per year, which states the item passes through when it goes from the retailer to the purchaser, and I'm sure some lobbyist will make some other horse shit that I'd never think of in a million years.

Re:which state(s)? (4, Interesting)

plague3106 (71849) | more than 5 years ago | (#27600595)

Heh... the company I work for sells products. If we send the invoice to CA, but the product anywhere else, we pay CA tax. If we ship the product to CA, we pay CA tax. If the person that made the order is in CA, but it's being billed and shipped elsewhere.. we pay CA.

We also had NY make us pay sales tax because we DROVE THROUGH NY to delivery products ourselves to PA.

Re:which state(s)? (2, Insightful)

Dotren (1449427) | more than 5 years ago | (#27600305)

Ok...so which state will the taxes be going to? The state in which the business operates out of, or the state in which the purchase was made in, or both?

Probably both. Everyone that really matters (i.e. NOT the consumer) is happy and retail stores use the "double" online sales tax as a marketing point for you to buy at their physical stores.

I can almost hear what they're thinking right now and it kinda sounds like "CHA-CHING CHA-CHING CHA-CHING".

Re:which state(s)? (1)

theturtlemoves (932428) | more than 5 years ago | (#27600355)

Highly unlikely, since retailers are probably far happier with online sales than with their physical stores, and will lobby like hell against imposing an additional penalty for doing business online.

Re:which state(s)? (0)

Anonymous Coward | more than 5 years ago | (#27600335)

From the article

California residents, for instance, are now burdened with a sales and use tax of at least 8.25 percent. State law is strict: if Californians travel to a state with a 5 percent tax and shop there, the law requires them to cough up the 3.25 percent difference when they return. Online purchases are taxed as well.

So if they go the route Cali did it sounds like some sort of messed up system to make sure you're taxed to the highest percentage of the two states involved.

Doesn't it make sense though that the state of California--who had nothing to do with the sale or purchase of my vehicle in Nevada--should receive 3.25% of its price when I return to California?

Re:which state(s)? (0)

Anonymous Coward | more than 5 years ago | (#27600517)

You did import this car in California instead of buying it at 8.25% there, so yes it does make sense in a protectionist way. If you want a real free market come to Europe, I guess.

Re:which state(s)? (3, Insightful)

Trahloc (842734) | more than 5 years ago | (#27600543)

Don't apply logic to law, you'll only hurt yourself.

Re:which state(s)? (4, Informative)

NeverVotedBush (1041088) | more than 5 years ago | (#27600399)

And it's not just state taxes. There are city/local taxes as well. And since these vary widely, either some database will have to be compiled and maintained or the tax levies will have to be made uniform. Or state taxes will be made uniform and there won't be local taxes. Or it will end up being governed by the state the business operates in - but then imagine states wheeling and dealing with tax rates to get certain businesses to locate in them. Or, you could make the buyer responsible for local taxes - maybe through reporting all mail order / internet sales to the government along with descriptions of what is bought since some locales don't tax food or prescription items.

Or, maybe they could do like what the RIAA and MPAA do and get some kind of royalty built into every item sold that then gets divvied up later however the states decide to divide the spoils.

Yep, the possibilities are endless!

Re:which state(s)? (1)

aztektum (170569) | more than 5 years ago | (#27600601)

I'm curious about this too, since I live in a state w/o a sales tax (Oregon). I can't imagine that if I buy from Amazon I'd have to pay WA sales tax (or wherever the item comes from).

Amazon's going to shit a brick on this one (1)

elrous0 (869638) | more than 5 years ago | (#27600155)

This is seriously going to hurt a lot of online retailers. State politicians who are loathe to raise income and property taxes (lest they be called a L I B E R A L !!) are going to take it out on a lot of still-nascent online businesses.

Re:Amazon's going to shit a brick on this one (2, Insightful)

geekoid (135745) | more than 5 years ago | (#27600347)

No they won't. 5% directly passed onto the consumer isn't going to destroy these businesses.

This is a tax people have been paying all the long.
well, they were supposed to be paying it, they could be criminals and just whining because the can't commit their crime any more.

Re:Amazon's going to shit a brick on this one (2, Interesting)

maxume (22995) | more than 5 years ago | (#27600549)

In Michigan, the use tax (which is the sales tax companion here) is (roughly) 0.04% of AGI for the sum of purchases of less than $1,000 (the purchases can optionally be itemized, but that only makes sense if you have high income and low purchases). So someone earning $100,000 and purchasing, say, $2,000 of online goods, would go from paying $44 of use tax to paying $120 of sales tax.

So I agree that it won't destroy the businesses, but it isn't quite the case that consumers should have already been paying the same amount of tax.

Re:Amazon's going to shit a brick on this one (0, Flamebait)

jav1231 (539129) | more than 5 years ago | (#27600523)

Well there's a liberal in the presidency and it was conservatives who fought it off all these years. Sounds like a snug-fitting shoe to me.

The big question that must be answered (4, Insightful)

netruner (588721) | more than 5 years ago | (#27600169)

How will this mesh with the Sears decision by SCOTUS? My understanding (I'm not a lawyer) is that taxing interstate commerce is prohibited by the constitution (the root of all US law).

Any law geeks out there want to pick this one up?

Re:The big question that must be answered (0, Redundant)

fataugie (89032) | more than 5 years ago | (#27600225)

prohibited by the constitution (the root of all US law).

HAHAHAHA, that's funny. You think THAT is going to stop these guys?

HAHAHAHAHA

I have to wipe the tears from my eyes....and it's not from laughing

Re:The big question that must be answered (1)

MSTCrow5429 (642744) | more than 5 years ago | (#27600235)

Give a case cite, or at the very least the parties involved, and maybe we will.

Re:The big question that must be answered (0)

Anonymous Coward | more than 5 years ago | (#27600327)

Sears decision

I'm going to guess Sears was involved. And since we know it's about sales taxes and interstate commerce, it looks like you have more than enough info to JUSTFUCKINGGOOGLEIT!

Re:The big question that must be answered (4, Informative)

mkettler (6309) | more than 5 years ago | (#27600513)

I'd have to suspect that the case being referred to is:

NELSON V. SEARS, ROEBUCK & CO., 312 U. S. 359 (1941)

This case basically established the way sales taxes for "out of state" orders are handled now. (taxes collected if any in-state branch exists, otherwise not)

This law would appear to contradict the interpretation of constitutional limits on the power of states made in this case.

Re:The big question that must be answered (4, Informative)

Buelldozer (713671) | more than 5 years ago | (#27600263)

I may be confused but I thought the regulation of INTERstate trade was one of the powers specifically enumerated as belonging to the Federal Government?

Re:The big question that must be answered (0)

Anonymous Coward | more than 5 years ago | (#27600321)

I may be confused but I thought the regulation of INTERstate trade was one of the powers specifically enumerated as belonging to the Federal Government?

I concur, I think there is a mix up here between INTERstate and INTRAstate. The Feds can't tax INTRAstate commerce. Didn't stop FDR from trying though.

Re:The big question that must be answered (1, Flamebait)

timeOday (582209) | more than 5 years ago | (#27600375)

"My understanding (I'm not a lawyer) is that taxing interstate commerce is prohibited by the constitution (the root of all US law)."

Individual states cannot tax interstate commerce, no. That's why this legislation is being introduced at the US Congress. There's certainly nothing to stop the federal govt from passing laws to tax interstate commerce.

I have to question the probability of success given all the bru-ha-ha over taxes and "tea parties" yesterday. Though, really, those protests mean nothing unless the protesters are united in which govt. services to cut, or who should take up the tax burden, to relieve their supposed "overtaxation." What I really think we're about to see is conservative whites in America learning what it's like to be a minority in a democracy - what they derided as "whining" by blacks and other minorities for all these years.

Re:The big question that must be answered (1)

GNUbuntu (1528599) | more than 5 years ago | (#27600403)

No, that decision said that Congress could pass legislation to require sales tax to be collected, but as the law stood at the time that sales didn't have to be paid unless one had significant presence in the state of the purchaser. Big difference.

Re:The big question that must be answered (1)

Samschnooks (1415697) | more than 5 years ago | (#27600439)

My understanding (I'm not a lawyer) is that taxing interstate commerce is prohibited by the constitution (the root of all US law).

Of course you're not. No one is. Everyone on the internet isn't qualified to make any opinions because if we were, we wouldn't be giving them away for free online: we'd be paid big bucks for our knowledgeable opinion and wouldn't be here.

I'm just tired of reading the qualifiers. Even if you were, it wouldn't matter. For example, in my business law class, a classmate brought in his employment agreement that his new employer wanted him to sign. The lawyer looked at it and said, "Sign it and forget about it. It isn't enforceable in this state." Then the lawyer said, "Some companies have their general council write these things for all of their offices when what they write may be legal in their state, but it isn't in others. When seeking legal advice, only use a lawyer that is a member of the BAR in your state."

That's just where I'm coming from. Unless you're a member of the BAR in my state, I will take whatever you say with a grain of salt - and that includes all of you who are actually lawyers.

This already occurs in NYS (2, Insightful)

hbean (144582) | more than 5 years ago | (#27600171)

Overtaxed as we are already, this has been occurring in NYS for quite some time now. Some retailers like newegg resisted, but Amazon and others charge it even though they're not legally inside NYS's jurisdiction.

I personally don't shop from amazon any less, but I've never been one to buy things off the internet I can't get locally (to impatient to even wait for overnight shipping).

Re:This already occurs in NYS (2, Insightful)

gapagos (1264716) | more than 5 years ago | (#27600373)

Overtaxed as we are already

Overtaxed? Are you kidding me? If anything, Americans are extremely UNDER taxed.
Have you looked at your deficit recently? Have you ever compared your personal income tax rates to any other country's other than tax heavens? I didn't think so.

Re:This already occurs in NYS (5, Funny)

XxtraLarGe (551297) | more than 5 years ago | (#27600481)

Overtaxed? Are you kidding me? If anything, Americans are extremely UNDER taxed. Have you looked at your deficit recently? Have you ever compared your personal income tax rates to any other country's other than tax heavens? I didn't think so.

That's like saying John Doe is a nicer guy than Joe Sixpack because Joe beats his wife three times a week and John only beats his wife twice a week.

Re:This already occurs in NYS (-1, Redundant)

Gospodin (547743) | more than 5 years ago | (#27600501)

Have you ever compared your personal income tax rates to any other country's other than tax heavens? I didn't think so.

Hey, just because you guys are even more overtaxed doesn't mean we're not overtaxed, too. We're overtaxed together.

Your argument is sort of like this: (1) The murder rate in our country is too high! (2) Are you kidding me? It's way too low! Look at America's murder rate!

Re:This already occurs in NYS (1, Insightful)

Anonymous Coward | more than 5 years ago | (#27600593)

Tell your government to stop overspending YOUR taxpayer dollars, and you'll have a valid argument. As it is now, you're spending so fast that at your current income tax rate you'll NEVER pay back what you owe. But if that's your intent, perhaps other countries should take that as a hint and stop lending it to you in the first place eh?

Re:This already occurs in NYS (4, Insightful)

Jane Q. Public (1010737) | more than 5 years ago | (#27600541)

Wrong. The deficit is not from undertaxation, it is from overspending. There is a big difference.

Americans in general are not unwilling to pay for government... they just want less of it.

Re:This already occurs in NYS (2, Insightful)

geekoid (135745) | more than 5 years ago | (#27600381)

Overtaxed, what the hell does that even mean?

People shouldn't focus on taxes, they should focus on services and their costs. Taxes are just how you get money to cover those costs.

Re:This already occurs in NYS (2, Insightful)

Gospodin (547743) | more than 5 years ago | (#27600579)

People shouldn't focus on taxes, they should focus on services and their costs. Taxes are just how you get money to cover those costs.

You'll see the error in this line of thinking when you apply it to the private sector. Would go like this: "People shouldn't focus on PRICE, they should focus on services and their costs." In other words, the $100,000 price tag of that new fully-loaded BMW is perfectly fine. Look at all the car you get!

Use tax (3, Informative)

DoofusOfDeath (636671) | more than 5 years ago | (#27600179)

Here in Rhode Island we have a "use tax", which basically says if you buy something from out-of-state you need to pay a tax on it which, concidentally, is the same rate as our state sales tax.

I pay it, but one thing bothers me. I thought only the federal government is allowed to tax interstate commerce. Isn't a state "use tax" like the one in Rhode Island doing that very thing, even though they claim they're not? Has this kind of "use tax" been challenged in court on Constitutional grounds?

Re:Use tax (0)

Anonymous Coward | more than 5 years ago | (#27600199)

Come on, when has the Government let itself get hung up on anything like the Constitution??

Re:Use tax (1)

ATestR (1060586) | more than 5 years ago | (#27600261)

In North Carolina there is a Use Tax too... and you are assumed to have spent a percentage of your gross income on out-of-state purchases. Sure, you can declare more out-of-state spending, but what do you think the State say's if you declare zero-out-of state spending?

Re:Use tax (1)

hurfy (735314) | more than 5 years ago | (#27600407)

lol

oh well, at least they got it more accurate than WA. We don't have an income so there are no forms you get on which to declare use tax. So you have to hunt down a form to voluntarily pay (if you are not a business collecting sales tax)....surely that is working well, i wonder if it gets over 1% compliance from consumers ;)

Re:Use tax (1)

MBGMorden (803437) | more than 5 years ago | (#27600421)

Here is South Carolina they don't say a thing. I don't know a single person who as ever put anything but 0 in that box. The returns always go through just fine. I'm guessing it's a burden of proof issue. If you lie about a deduction or your income, you're responsible for providing documents proving those numbers. All the work lies on YOU. If you declare no out-of-state expenses, then the absence of receipts or documentation only proves that number. It'd be up to the state instead to go out and research that information, and it's likely not worth their time to pursue on an individual basis.

Of course, my tax return is about as uninteresting as they come. I'm single, I rent, I have no children, and I don't itemize (the few times I've looked into it the standard deduction was larger). The only thing I get as a deduction over standard is the interest on my student loans. As such, my return isn't likely a candidate for auditing.

Many people do have zero (2, Informative)

davidwr (791652) | more than 5 years ago | (#27600451)

For more than half of the years of my adult life, my out-of-state purchases excluding hotel rooms, restaurants, and other things used out of state were either zero or so close to zero as to be not worth the paperwork.

Most states that have use taxes exclude small items you personally carry into the state such as trip souvenirs and all or almost all exclude items used out of state such as meals or lodging.

The "out of state" sales tax problem has been around as long as there has been both the sales tax and catalog-only sales companies. I wonder if your grandmother bothered to pay use taxes on her mail-order seeds and other domestic items she bought from mail-order-only companies?

When your parents bought their "Greatest hits from the 1950s 8-Track $19.95 TV Offer" tunes 35 years ago, did they bother to declare it and pay taxes? Most people did not.

This is nothing new.

Re:Use tax (3, Informative)

idontgno (624372) | more than 5 years ago | (#27600429)

But it's not a tax on commerce. It's a tax on use. "Use" and "Commerce" look nothing alike. They aren't pronounced the same at all. "Use" taxation is on the basis that you use that thing you brought across state lines. And how do we valuate that property that you're using? Hmm... maybe, what it sells for. A percentage of the sales price in the state you brought it in from. And since you bought it there, you even have the receipt that tells you what the basis of taxation will be!

Yes, the reasoning is specious, fatuous, and bogus. But the shallowest of rationalizations seem to work out just fine in matters of taxation, as long as the government is the one doing the rationalizing.

I wonder what happens if you buy a thing in one state and never use it in your state of residence. Will they charge non-use tax?

Re:Use tax (1)

JPLemme (106723) | more than 5 years ago | (#27600551)

I suspect the reason it's OK is because they're taxing the use of the item--not the transaction itself. Having just filed my RI taxes a few days ago, the Use Tax is assessed on goods that will be "used or stored" in RI, regardless of where they were purchased.

And then the sales tax is assessed on any money spent in RI, regardless of where the item will be used or stored. State workers need to feed their families too, ya know.

I wish, I wish, I wish that Rhode Island had a legitimate opposition party. Healy could have started one, but no man who looks like Richard Stallman will ever be elected to public office.

Oh thank goodness (5, Interesting)

Deosyne (92713) | more than 5 years ago | (#27600203)

I was beginning to worry that I might actually be able to spend the remainder of the money that that the government lets me keep each payday without having them take more from me. I'm so glad that they're working hard to prevent that from happening.

Re:Oh thank goodness (1)

timeOday (582209) | more than 5 years ago | (#27600547)

The irony of all the current tax resentment is that Americans don't even come close to paying for all the services we receive and expect to receive down the road. What's gone around is coming around for both sides - higher taxes and reduced services, at the same time - either voluntarily or otherwise.

End? (1)

Waffle Iron (339739) | more than 5 years ago | (#27600205)

There never was any such thing as "tax-free internet shopping". The only thing this would be an end to is scofflaws.

I still wont shop retail. (3, Insightful)

stei7766 (1359091) | more than 5 years ago | (#27600207)

9 times out of 10, shopping online will STILL be cheaper than retail.

If big box retailers think this will save their ass, they're in for a nasty suprise.

And I agree with the FP, sounds like this is going to be a mass of red tape. Think of the fights over who gets the sales tax from amazon...

Sounds DOA to me.

Re:I still wont shop retail. (0)

Anonymous Coward | more than 5 years ago | (#27600265)

People buy food more often than they buy anything else. It is far, far cheaper to purchase food in person than it is online. So no, 9 times out of 10 it is NOT cheaper to buy things online, and to say so is to invite ridicule.

Re:I still wont shop retail. (2, Funny)

stei7766 (1359091) | more than 5 years ago | (#27600369)

You're absolutly right. Because since food is cheaper in the store I should stop shopping at amazon/newegg/tiger direct.

I've been so foolish this whole time.

Re:I still wont shop retail. (0)

Anonymous Coward | more than 5 years ago | (#27600443)

Fights over Amazon sales tax? My state has been insisting I pay it since day one. Now that might just have something to do with their headquarters being here. Clearly Washington should get all the tax revenue! How else are we going to pay to run that giant fan that blows all the rain south?

Make the Business pay the tax, not the Customer (4, Interesting)

janeuner (815461) | more than 5 years ago | (#27600211)

The difference?
Price Tag: $2.99
Total: $3.15

- versus -

Price Tag: $3.15
Total: $3.15

Ding Ding Ding! (1, Insightful)

Anonymous Coward | more than 5 years ago | (#27600383)

I live in NH, which has no sales tax, but the issue you mentioned is by FAR my single biggest pet peeve, and the only complaint I have about any taxation in our country.

It's inconvenient. I dont like to drive 10 minutes to Mass, see something that says $5, and be asked for $5.20 ... regardless of any semantics over who "pays" if the price tag said $5.20 my objections would vanish...

Re:Make the Business pay the tax, not the Customer (5, Informative)

Anonymous Coward | more than 5 years ago | (#27600385)

That's how it's done in the EU. Advantage: Truth in advertising. You know what it's going to cost you. Disadvantage: The sales tax is hidden, so there's less opposition to sales tax hikes. Sales tax is comparatively high in the EU.

Re:Make the Business pay the tax, not the Customer (1)

geekoid (135745) | more than 5 years ago | (#27600417)

It seems like the same thing, but it isn't.
Financially it balances differently, and impacts getting loans, and makes it difficult to compare costs of the item.

I'd prefer (0)

Anonymous Coward | more than 5 years ago | (#27600419)

Make the business pay for the product, and the Customer pay the tax.

Re:Make the Business pay the tax, not the Customer (0)

Anonymous Coward | more than 5 years ago | (#27600597)

That's what they do in Europe. Sellers or products and services, i.e. just about all business transactions charge VAT in their pricing, making them a collection agency. The purchaser, under the right conditions (operating as a business expense) declares what they paid in VAT and deducts if from what they themselves collected. It's a pretty simple system, even taking into account the more complex areas I've ignored.

Over here, we're used to seeing prices sans sales tax, over there, the price shown on the shelf already include VAT.

A congressional bill is NOT the answer. This is: (1)

Smidge207 (1278042) | more than 5 years ago | (#27600215)

Rob Malda (aka Cmdtaco) is not what many would consider "the ideal candidate" for a dot-com start-up. He started his career as a C++ coder for a major manufacturer, but then quit to pursue a mathematics degree in Canada. That didn't quite do it for him either, as he then dropped out to pursue something far more interesting: canoe from Calgary to New Orleans. But after 1,200+ miles of rowing, his journey ended in Minneapolis with a cracked butt and a frozen river. Temporarily, of course, as he plans to pick up and continue south someday soon.

All that said, Malda was pretty excited when he received his first response to all the resumes he'd been sending out to various tech companies. He immediately called back to schedule an interview and was pleasantly surprised at how flexible the interviewer was: Malda could "stop by any time."

After shaving his pubic area smooth and putting on his interview clothes (leather pants, leather boots and leather vest, steel nipple rings and nothing else), Malda hopped on a bus, transferred to a few other busses, and, after almost two hours, finally reached his destination. It was a residential apartment complex that had obviously seen better days.

When he knocked on the door of "Suite 318," Malda was greeted by Michael Simms, a spry-looking man in his 50's with glasses precariously perched on his conical head and a face a few days past shaved. Upon entering the squalid apartment, the first thing Malda noticed was the rotten stench of ejaculate-stained underwear haphazardly strewn across the living room. There and a blue tarp hung over the south-facing window, blocking the sun and a view of the Mississippi river. "For my little get-togethers" Michael Simms explained using quote marks with his fingers. "Can't have the neighbors looking in now can we?" The second was Michael Simms sitting down on a computer, firing up a popular MMO. He was completey nude. Malda stared unabashedly at the sight; Michael's tumescence was incredible.

"You see this," Simms said, avatar running towards the closed city gate, "when you get to the door you have to wait while the game loads the next area. You should just be able to see out through it."

Taking this as the "technical" portion of the interview, Malda started to explain about how he would implement dynamically loading regions. Malda was very clear that, while he had never written something like that before, he was certainly aware of the basic concepts involved.

"Now, look. He just runs right through the tree. Right through it! You see that?" He harrumphed and turned toward Malda with a look like someone died. "Motherfucker! I'll fucking kill you!" Rob shouted.

"Now now, Rob, that will never do. You'll suck my penis to erection and then take it in your sweet little anus until it's time to dump a load of Uncle my special sauce down your slick throat, and you'll like it!"

With this Simms cocked the hammer of his gun and pointed it at Rob's mouth and began forcing his jaw open with the barrel as he poured the JÃgermeister, thick and dark and brown, into Rob's mouth. He trickled some onto his bush and penis for good measure and jammed his thin cock into Rob's mouth. Rob took it to the hilt.

"That's a good little faggot. You take all of Uncle Eric's junk and you like it!" Eric said as he began pumping his cock in and out of Rob's mouth. Simms's bulbous white gut hovered menacingly over Rob's face like a full moon and his ruddy pubes tickled Rob's nose. The gun barrel wavered at Rob's eyes.

Rob moaned as Simms grunted his pleasures into the back of Rob's throat.

"Now Rob, I want you to look me in the eyes. Rob's beady eyes connected with Michael's pale blue irises, tears welling in his eyelids as Simms's crotch continued its assault. "I have with me a funnel, Rob, and you're going to take it in your ass. This old cock of mine needs a little lube and we're going to pack your rec-room full of something quite slippery!" Simms said as his eyes grew wide. He shook his bottle of JÃgermeister again as he helped Rob pull his pants off.

With a pop Michael removed his pulsating cock, slick with spit, from Rob's hungry mouth as Rob turned over onto all fours, his back arched and ass swaying in the air. Simms's little orange funnel entered Rob's anus without complaint as he began pouring the brown fluid. Rob shivered.

"Good boy, Rob. Good boy." Simms moaned as he rammed his dong home into Rob's familiar rectum. "Reeeal goooood..."

Rob cried out in pain as Simms put his full weight into each and every thrust, Rob's hairy ass-cheeks spread further and further apart with every push.

"OK, Rob, I want you to say hello to my little friend!" Simms said with a maniacal laugh. Rob hissed as he felt something cold and metal begin to enter his asshole right beside Simms's rigid cock. "What's the barrel of my .44 feel like up there, Rob?"

"I can't take this anymore! I was done with this when I moved from Ann Arbor! I just want to have a normal straight life with Kathleen, I justâ"" Rob said through sobs and grunts as he continued his battering ram assault. "I just want to live a straight lifestyle and leave my gay days behind!" He grunted one last time, withdrew his gun and cock from Rob's bloodied anus, and shoved Rob onto his back.

"Get ready to take my load, boy!" he yelled as he jacked his crooked cock into Rob's mouth. He kept his .44 focused on Rob's forehead as he began pouring the brown liquor into Rob's mouth. A few drops of the spirit hit Simms's dick and he lost control. His butt cheeks tightened and his hips thrust forward and backward like a piston as his scrotum tightened.

"You little fucking Linux faggot, take my load!" Simms shouted at the top of his lungs. Spurt after spurt of sickly yellow hacker semen erupted from Simms's straining purple cockhead into Rob's gullet, the JÃger splashing Rob's face and mixing with the cum into an infernal homosexual cocktail. Rob gagged and flailed his arms.

Rob laid gasping and spitting after Simms climbed off of his spent form. Rob turned and looked at Simms as if in a trance. Blood and semen and JÃgermeister leaked from his sullied lips and collected in his goatee. Sweat and more JÃgermeister covered his brow. His eyes, bloodshot from the alcohol, strained to make out Simms's pudgy form shuffling in the darkness. Rob started but then cried out in pain as his ass spasmed. His hand went to his sore, puffy anus and he rolled around in his soiled sheets. His eyes were glazed over, almost catatonically. He began crying again, his whole body wracked in weeping.

Simms pulled up a website with a few 3D models on it and asked, "what does 100,000 polygons mean? Hey, could we just have the program write whatever text we wanted over these signs so we could sell ads in-game?"

Malda felt at a disadvantage since he hadn't done any 3D programming since toying around with POV-Ray work a decade ago. He struggled through an explanation about how models are essentially a web of triangles with a flat texture projected onto them, and that in-game ads should not, in fact, be difficult.

"Really? Golly." Simms said. "Okay, they tell me we can finish this in six months if we work part-time, so we can probably finish it in three if we work full-time."

He had been describing a game as complex as Spore.

"I'm outsourcing most of the work to the Philippines. They're willing to work on a royalty basis. You can transmit the technical requirements to them, change my words into code they can understand."

"Change... your words... into code... they'll understand..." Malda gibbered.

"Really, you can do that?" Michael Simms peered through his glasses.

At that point, Malda had given up all hope that a decent game could be made. But he still wanted to know how much money he could get out of this guy...this queer chicken-hawk. "So... how much would I be getting for this?"

"$75,000 per month," Michael Simms said, with no hesitation.

Malda blinked. "That's, um, after the game's done, right?"

Michael Simms pulled up a spreadsheet. "A popular game gets about 250,000 players. At $15 a month, that means they pull in... $3,750,000. They tell me to pay about 10% of that to the developers. I'd give you 2%. That's... $75,000." He smiled at the screen.

"But, ah, nothing until we're pulling in that kind of money?"

"We'll offer advertising in the game," he said. "For gay sex. Don't you think companies like Google would like to get in on this, advertise in our game?"

He blinked again. "I'm not sure Google really needs that kind of exposure." Deciding to go on the offensive, Malda said "Okay, a friend of mine, Calvin, worked for five years on his game, Venture the Void. Go ahead and pull it up at venturethevoid.com."

He started typing in the address bar: "venture of the void". Malda corrected him and soon colorful planets and spaceships swirled on the monitor. It was a gay site to behold.

"Okay, see he's generating all these planets automatically. No two are the same, they've got times of day, automatically generated weather, plants... You see that spaceship? No two of them in the game are identical, even over multiple plays. All that and guess how many paying players he got?" Malda paused. "Twenty-five."

"Oh," Michael Simms said, "but did he advertise on this site?" He navigated to the third or fourth hit on Google for "MMO". It was some portal for MMO games with reviews, news, and all sorts of things.

"I'm not sure," Malda hesitated, "Calvin submitted it lots of places."

He just shook his head. "All that work and he didn't even advertise in the right places. If he just would have advertised here, he could have been rolling in the money."

It was pretty clear that Malda wasn't going to get any money out of this engagement, so he decided to cut his losses and make the long journey back to his own apartment. As he stood up to end the interview, Michael Simms casually blurted out "I never leave the apartment."

Malda raised an eyebrow.

"I've got an idea every day," he said. "I'll just be doing something then, POW! An idea! That's why you need me. Now, look at this."

Michael Simms walked over to his closet and took out one of those massive wargames from the 70's. He told him about a "compare and contrast" essay he had in college, "comparing tic-tac-toe to checkers to chess to games like this with thousands of pieces." Ten years ago, he presented investors the idea of developing a series of games like this on the computer. "âIt's just like printing money!' they told me."

Not one game chit had been popped from its original cardboard. Malda couldn't help but wonder if any investors had sprung for this free money.

"Have you ever played the computer game Civilization?" Michael Simms asked. Before Malda could even nod affirmatively, he continued "One time I was playing and a chariot parked in the mountains defeated a howitzer! That's just never going to happen. One time I just sat down and started writing down things that were wrong with the game. POW! I had a list of ninety things, just like that."

It was time for him to go. Malda wished Michael Simms luck, but told him frankly what he thought of his enterprise...that it was shit. After his two-hour ride home, the first thing he did when was email his friend Calvin the link to the magical money-making MMO forum, asking for only 2% of his proceeds. He expects to be rolling in money any time now.

=Smidge=

good - It's about time (-1, Offtopic)

Anonymous Coward | more than 5 years ago | (#27600229)

This subsidy is no longer necessary.

People already know that stuff is often cheaper online.

It's time online retailers paid their fair share.

Also, is it any coincidence that the Pirates in Africa are black?

Niggers love to steal and be violent. It's in their nigger genes.

Kind of like those crackers that steal using bit torrent on The Pirate Bay. Crackers were born to steal.

Re:good - It's about time (5, Insightful)

larry bagina (561269) | more than 5 years ago | (#27600461)

You raise an interesting issue. Let's say you download some music, software, movies, etc from teh pirate bay. Today, that's not a crime (uploading -- distribution -- is). But tomorrow, you may be charged with tax evasion or conspiracy to commit tax evasion.

So how does that work for imports and exports? (2, Interesting)

Yvan256 (722131) | more than 5 years ago | (#27600237)

If someone from Canada buys something, does he pay the state taxes? That would be stupid.

And if a company in Canada sells something to someone in the USA, does he have to collect the state taxes? Good luck with that.

The only sane way to do this is charge taxes based on the shipping address, from sales within the USA only.

Re:So how does that work for imports and exports? (1)

LordEd (840443) | more than 5 years ago | (#27600583)

When I buy something from the US, I usually get hit with duty charges, which is labeled as GST/PST in addition to whatever brokerage costs.

I don't know if the US does the same thing. It becomes customs' job to collect tax in these instances.

If this is a loop hole (2, Insightful)

avandesande (143899) | more than 5 years ago | (#27600239)

This 'loop hole' has been in existence since the beginning of the mail order business.

Re:If this is a loop hole - Justification for tax? (3, Interesting)

watermodem (714738) | more than 5 years ago | (#27600333)

What is the justification for sales tax on an internet purchase?
Did the state or county provide some service or infrastructure that supported the internet sale?
Did the state or county or city bring anything to the table?

No?

Why then they should bug off!

Re:If this is a loop hole - Justification for tax? (0)

geekoid (135745) | more than 5 years ago | (#27600599)

"Did the state or county provide some service or infrastructure that supported the internet sale?"

Yes.

"Did the state or county or city bring anything to the table?"

Yes

Any other questions?

Re:If this is a loop hole (1)

geekoid (135745) | more than 5 years ago | (#27600457)

Correct. Time to close it.

Inernet-Tea Party? (0)

Anonymous Coward | more than 5 years ago | (#27600259)

So, do we start to post 'Tea-Bag' on product comments now in protest? Figure if we annoy the businesses enough they will lobby against taxing their sold goods online if it's costing them money like it would us.

Welcome to Hope and Change (0, Flamebait)

Anonymous Coward | more than 5 years ago | (#27600271)

Funny how "Hope and Change" ended up being "Tax and Spend"

Re:Welcome to Hope and Change (0, Flamebait)

Dan667 (564390) | more than 5 years ago | (#27600563)

Better than whiny and lazy as seen in the tea bag protests. (make an actual policy? that is someone else's todo)

Not a problem (4, Insightful)

clang_jangle (975789) | more than 5 years ago | (#27600283)

I really don't have a problem with paying sales tax, or taxes in general. Of course, I may not be thrilled with how my tax money is spent, but that's another matter. Taxes still play a major role in implementing civilization. And I ,for one, prefer civilization to the freedom-only-for-the-rich promoted by libertarians.

Re:Not a problem (1)

mackil (668039) | more than 5 years ago | (#27600349)

I don't have a problem paying sales tax either. It's just the principle that my money should be taxed by my home state no matter where I spend it. We pay a gas tax for road repair. That makes perfect sense. We pay a sales tax for services that our government provides. Fair enough, except why should we pay taxes on items not purchased in our home state?

Well, in that case... (0)

Anonymous Coward | more than 5 years ago | (#27600289)

Who's ready to move to Canada for shopping?

So all my money belongs to them? (3, Insightful)

mackil (668039) | more than 5 years ago | (#27600297)

From the FA:
"California residents, for instance, are now burdened with a sales and use tax of at least 8.25 percent. State law is strict: if Californians travel to a state with a 5 percent tax and shop there, the law requires them to cough up the 3.25 percent difference when they return. Online purchases are taxed as well."

This kind of thing really bothers me. It's as if all our money, wherever we spend it, belongs to our home state. I'm sure not many people actually "cough up" the difference, but just the principle of it really burns me up.

Tax Free NH (1)

asicsolutions (1481269) | more than 5 years ago | (#27600309)

Glad I live free or die! No state tax or sales tax(*)! (*) until more MASSholes move up here and vote one in.

Re:Tax Free NH (1)

casualsax3 (875131) | more than 5 years ago | (#27600571)

Yes but then you have to live in New Hampshire...

Interstate compact is a better way to go (1)

davidwr (791652) | more than 5 years ago | (#27600313)

This is exactly the type of thing Interstate Compacts were made for.

States which currently or in the future impose "use taxes" could agree with each other to collect the taxes from their own state's vendors then remit the money to the destination state, less a processing fee.

The rates collected and the processing fees if any should be negotiated between the participating states, not in Washington.

When a resident buys something from a non-participating state, he would be responsible for declaring the user tax and paying it himself, the same as today.

What WOULD make sense at the Congressional level is reporting: Require vendors to report the annual per-person or per-address total of all out-of-state purchases to the various state tax departments so the tax departments could bill the taxpayers. But Congress should not be requiring the actual collections.

Only if you make over $250,000 (5, Interesting)

ArcherB (796902) | more than 5 years ago | (#27600317)

  "I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes."

"You will not see any of your taxes increase one single dime."
-- Barack Obama

Re:Only if you make over $250,000 (0, Flamebait)

geekoid (135745) | more than 5 years ago | (#27600441)

This isn't part of his plan. It's congress closing and loophole. This is a TAX THAT ALREADY EXISTS, DUMBASS.

Re:Only if you make over $250,000 (1, Flamebait)

ArcherB (796902) | more than 5 years ago | (#27600519)

This isn't part of his plan. It's congress closing and loophole. This is a TAX THAT ALREADY EXISTS, DUMBASS.

And by closing that "loophole", taxes will go up. He didn't say "No NEW taxes." He said taxes will not be going up, not "one single dime!" Here it is again since you were unwilling to read it the first time.

"I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes."

"You will not see any of your taxes increase one single dime."
-- Barack Obama

Re:Only if you make over $250,000 (2, Insightful)

MozeeToby (1163751) | more than 5 years ago | (#27600565)

First, taken in context it's pretty clear that he was talking about taxes coming out of your paycheck. Even politifact agrees with that sentiment (http://www.politifact.com/truth-o-meter/promises/promise/515/no-family-making-less-250000-will-see-any-form-tax/ [politifact.com] )

Second, this isn't really a tax increase at all since you're supposed to be paying taxes on online purchase as it is. It's called a Use Tax and just because you haven't been paying it doesn't mean it doesn't exist. Besides, there is no reason why purchases made online should be tax free other than it is difficult to enforce. I would even say that it gives online vendors an unfair advantage over local stores.

Re:Only if you make over $250,000 (1)

Sponge Bath (413667) | more than 5 years ago | (#27600581)

President Obama does not control state sales tax.
President Obama's plan does not introduce legislation to allow collecting state sales tax on internet purchases.

So within the realm of what President Obama can control and what he has proposed, he has completely fulfilled his pledge.

It's All Greed (4, Interesting)

Nom du Keyboard (633989) | more than 5 years ago | (#27600323)

It's all about greed. The internet company operating outside the state (if they're in the state they're already paying taxes) isn't using any of the infrastructure that the taxes pay for. If anything, they should be paying taxes in the state where they do the business, but then you have customers in other states paying out-of-state sales taxes which don't benefit them and aren't fair either.

The current system has worked well for many years. What hasn't worked well over that time is politicians controlling their spending of other people's money in their attempts to buy their way into continued future paychecks. Now they're out trying to steal even more from you.

If we threw out these politicians trying to vote this in as just yet more Big Taxers and Spenders then this stupid and unfair idea might actually go away for a while.

And it goes without mentioning the problems any Internet company would face in computing the proper state, county, city, and even borough taxes properly and paying them to all the proper taxing authorities. This is MANY TIMES the burden any local business faces. Talk about an attempt to kill internet companies - you couldn't have come up with a better scheme.

And think of the companies (FedEx, UPS...) which depend of them for a large chunk of their business. Raise prices, kill off companies, are you really trying to make this recession worse!

I wonder how many Tax LOVING Democrats never paid (1, Insightful)

zymano (581466) | more than 5 years ago | (#27600339)

any taxes on their internet purchases.

LOL.

They talk a good game though.

Re:I wonder how many Tax LOVING Democrats never pa (1)

jhoger (519683) | more than 5 years ago | (#27600577)

Probably about as often as tax cheat Republicans paid their tax on internet purchases.

APO/FPO (1)

BigDork1001 (683341) | more than 5 years ago | (#27600343)

I'm currently stationed overseas and have an APO mailing address. I do a lot of my shopping via the Internet. I'm highly curious to see how these proposed changes will affect myself and all other overseas military members. These changes would definitely affect my shopping habits as I would probably just special order through the Base Exchange for certain items and wait the extra time, not paying sales taxes.

Boston Tea Party Time? (2, Insightful)

S7urm (126547) | more than 5 years ago | (#27600371)

OK,
My money has been taken out of my check, automatically, without my permission, and being used to pay for services I will never be able to benefit from. I then pay MORE taxes, to even more agencies for infrastructure maintenance that I have no say over what gets fixed, or when. THEN I get to pay even more taxes on the goods I purchase with what little money I have left after all those previous taxes, and now they've found ANOTHER whole new way to tax me.

I understand the whole "taxation without representation" thing, but this is getting as bad. Why am I paying into programs that, because I'm 27, will never be able to use because they'll be long bankrupt by the time I'm old enough to benefit from them?

Also, how are they going to dictate who gets this tax, and how is it reported? and what do they do in an international purchase? Will I have to pay tariffs for items purchased overseas? Will they charge me another tax, to pay for the foundation of this new taxation system?

America is going tooooo far with what is expected of it's citizens to pay already!!!
We've somehow now become endebited to the banks, because we'll get stuck paying for the bailout. Though it would have been CHEAPER to just hand every American Citizen over 10 Million dollars a piece. We're seeing record highs in unemployment across the board, it is becoming more and more frequent that companies are cutting cost of living increases and merit wage increases, not to mention bonuses, 401k matches, etc.

How do they expect us to now pay MORE with LESS? It's incredible that people are ignorant enough to think that it is somehow OK in this nasty economic climate to impose even MORE cost on normal citizens for something we already can't afford!!!

California Sales Tax (1)

Pinky3 (22411) | more than 5 years ago | (#27600423)

In California, the sales tax is a tax on the seller. The seller has the option of listing the sales tax as a separate item on the bill presented to the buyer, but is not obliged to. Even if the seller does not list the sales tax separately, the seller is obligated to pay the sales tax. When you buy popcorn in a movie theater for $5.50, the tax is not listed separately, but the theater pays the tax to the state. If you buy from out-of-state, you are required to pay a use tax, which coincidentally is equal to the sales tax.

This law would require sellers in other states to collect the use tax and transmit it to the state. It does not impose a new tax, but acts like withholding from your paycheck, making sure you don't forget to pay your use tax. 8=)

Going to be fun (1)

Todd Knarr (15451) | more than 5 years ago | (#27600463)

I can see this getting fun when Amazon, Newegg etc. ask the state tax departments to provide them with a definitive answer as to what the sales tax rate is for any given address in that state, and the tax department doesn't have an answer ready. Were it me, the next thing would be a request for declaratory judgement that my business didn't have to collect the tax until the tax department could give me that answer.

And no, ZIP-code-level doesn't work. I know places around San Diego where part of a ZIP code's within a city and part isn't, and addresses in the part that's outside the city do not owe city sales tax.

RIAA definition of "loss". (3, Insightful)

argent (18001) | more than 5 years ago | (#27600467)

State law is strict: if Californians travel to a state with a 5 percent tax and shop there, the law requires them to cough up the 3.25 percent difference when they return. Online purchases are taxed as well.

But compliance is spotty at best. California's Board of Equalization estimates the state lost $1.34 billion in 2003 because residents aren't paying use taxes--and attributes $208 million of that to online purchases.

This reminds me of the RIAA's definition of "lost revenue". The state didn't lose anything... with a law as badly thought out as this, any money they did collect should be treated as a windfall. When you create a law where the only possibility of any compliance at all is people's innate honesty, just be glad that so many people are basically honest and bank what you can.

Every stupid political idea is also an opportunity (1)

Locke2005 (849178) | more than 5 years ago | (#27600475)

If taxes are charged based on the location of the seller, this would be a good time to invest in office and warehouse space in those states that DO NOT charge sales tax, e.g. Oregon. If taxes are charged based on the location of the buyer, I see a big future in people renting PO Boxes in those same states, and having them re-ship their purchases or just drive across the border to pick them up. A 10% VAT us a huge psychological barrier; as the sales tax exceeds that amount, people are much more willing to take gray market measures to avoid the tax. Seattle sales tax is already 9.3%; faced with a multi-billion dollar deficit, it will inevitably go even higher.

Re:Every stupid political idea is also an opportun (2, Insightful)

geekoid (135745) | more than 5 years ago | (#27600553)

What? reship becasue of a 5% increase?
It would cost you more money, a lot more money.

Complexity for Online Businesses (4, Insightful)

mackil (668039) | more than 5 years ago | (#27600479)

I work for an online retailer here in the state of Washington. Recently, our state passed a law forcing all state business to collect sales tax based off local jurisdiction, instead of our home jurisdiction. They then allowed only two companies to actually handle all that info, with whom you are required to deal with in order to collect the proper amounts. Needless to say, the complexity involved was not fun. Not to mention the thousands of dollars it costs to deal with the "government approved" sales tax info vendors.

Having this kind of thing go nationwide makes me quake with fear.

New York (1)

zubikov (1172699) | more than 5 years ago | (#27600489)

New Yorkers already pay an online tax of 8.625% for many retailers who operate within the state (Amazon Tax). It really sucks! It's not fair to introduce this tax in the current economic conditions to the rest of the country; people have little disposable income as is. The only good thing is that it sort of levels the playing field for mom-n-pop shops with no online storefront.

You still have to pay (1)

Chris Deckard (138) | more than 5 years ago | (#27600497)

Internet retailers are not required to _collect_ the taxes, but you are still _required to pay them_. Internet shopping is not tax free.

Odd timing.. (1)

powerslave12r (1389937) | more than 5 years ago | (#27600559)

It would be highly ironic if this rule is introduced now. Driving the cost of online purchases up would have reduced the cost difference between buying online and brick-n-mortar, which MAY have saved the likes of Circuit City and BestBuy from going bellyup, if this rule was introduced earlier. Either way, the government wants our money.
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