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Senators Vow To Renew Bid For State Taxes On Remote Internet Sales

timothy posted about 2 years ago | from the coming-and-going dept.

Government 268

jfruh writes "A bipartisan group of U.S. Senators are working hard to make it legal for U.S. states to collect sales tax on any sales made to their residents, even if the sellers live elsewhere. They tried to add an amendment making the change to an unrelated defense appropriations bill, but the attempt was defeated. They have vowed to try again."

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Where's Grover Norquist when you need him? (0)

Anonymous Coward | about 2 years ago | (#42178371)

I'm going to assume none of these senators have taken the Norquist pledge?

Re:Where's Grover Norquist when you need him? (2)

Shavano (2541114) | about 2 years ago | (#42178565)

Allowing the states to collect a tax isn't the same thing as imposing a tax. Not quite. Besides it's either that or the states will have to raise income and property taxes.

Re:Where's Grover Norquist when you need him? (4, Insightful)

Anonymous Coward | about 2 years ago | (#42178671)

Or they could just not spend without restraint in exchange for votes. I know, that's not an obvious solution nowadays.

Re:Where's Grover Norquist when you need him? (2)

jythie (914043) | about 2 years ago | (#42178685)

I guess they could promise to cut taxes without restraint in exchange for votes instead....

Re:Where's Grover Norquist when you need him? (1)

sycodon (149926) | about 2 years ago | (#42178899)

But when they reach 0 tax rate, they have to stop.

OOhh... wait. unless you do an Earned Income Tax Credit, a negative tax rate, in other words...spending.

We have a fucking SPENDING problem.

Re:Where's Grover Norquist when you need him? (2)

cayenne8 (626475) | about 2 years ago | (#42179045)

At the very least, is there a list of the senators voting for this measure so we can all vote them out of office?

We don't need another fucking tax.....we got plenty.

Re:Where's Grover Norquist when you need him? (1)

cob666 (656740) | about 2 years ago | (#42179135)

Or they could just start enforcing the USE part of the Sales & Use Tax that most states already have.

Re:Where's Grover Norquist when you need him? (0)

Anonymous Coward | about 2 years ago | (#42178581)

Not that I agree with these Senator's methods, but Grover deserves to be ignored anyway.

Re:Where's Grover Norquist when you need him? (2)

medcalf (68293) | about 2 years ago | (#42179147)

Why so? If the problem is on the spending side (which appears almost beyond reasonable doubt), then raising taxe rates does nothing to fix the problem, instead just impoverishing the nation and, if we're on the right side of the Laffer curve (also almost beyond reasonable doubt), actually reducing the revenue generated by taxation. So where is the problem with Norquist, exactly?

Um... (5, Insightful)

jasper160 (2642717) | about 2 years ago | (#42178383)

We don't have a revenue problem, we have a spending problem.

Re:Um... (0)

akcpe (1438869) | about 2 years ago | (#42178467)

bump.

Re:Um... (0)

Anonymous Coward | about 2 years ago | (#42178471)

No kidding...these guys are desperate to raise revenue to give us more crap we don't need so they can buy votes next cycle. It goes like this...Johnny is going to take away your xyz freebie that we gave you. Vote for us, and we'll keep it. Oh by the way, your taxes are going up so we have more money to spend of the next thing you don't really need, but by gosh this is your right we are talking about. They should fix the damn potholes we already have in the road.

Re:Um... (-1)

Anonymous Coward | about 2 years ago | (#42178499)

Right. Instead of spending locally we spend online tax free. This is a problem and hopefully this bill fixes that.

Re:Um... (5, Insightful)

Anonymous Coward | about 2 years ago | (#42178701)

Right. Instead of spending locally

I live in the capital of California. A few months ago, I spent an entire day looking for an alarm clock. Note: Not a limited class Mercedes. Note: Not a one of a kind Van Gogh. A fucking alarm clock. The only alarm clocks to be found were shoddy, cheap pieces of crap without a brand name. The majority of them were ridiculous 'phone docks'.

Amazon? Ten minutes of searching, done.

Instead of spending locally? You know why we're not spending locally? Because brick and mortar stores are fucking clueless.

Aww, is da widdle Best Buy gonna close?

Fuck off. We live in a global economy. I've no duty to support your failed business.

Re:Um... (5, Funny)

emho24 (2531820) | about 2 years ago | (#42179155)

I live in the capital of California. I've no duty to support your failed business.

And a lot of us believe that we have no duty to support your failed state.

Re:Um... (-1)

Anonymous Coward | about 2 years ago | (#42178591)

The government doesn't have a spending problem, consumers, the financial sector, and the business sector have a spending problem, or to be more precise the business and financial sectors take a disproportionate amount of gdp(costs) without lowering CPI (price), while asking businesses and people to waste money on things that aren't needed or provide no utility. http://upload.wikimedia.org/wikipedia/commons/thumb/e/e0/Components-of-total-US-debt.jpg/800px-Components-of-total-US-debt.jpg

Re:Um... (1)

medcalf (68293) | about 2 years ago | (#42179187)

So the fact that the spending of the Federal government and most of the states vastly exceeds their ability is not a problem, but people undertaking voluntary exchanges of money they earned from working for things made by corporations are a problem? Well, Uncle Joe, you sure showed us. Time to go full Communist and shut down these wreckers and looters!

Re:Um... (0)

Anonymous Coward | about 2 years ago | (#42178603)

No, there is a revenue problem too. Specifically, the desire of some to keep decreasing it by all means possible regardless of consequences.

I would speculate that those who pretend spending is the only problem probably ignore much of the past 15 years of government action.

Re:Um... (1)

rickb928 (945187) | about 2 years ago | (#42178753)

Since increasing spending without regard for the consequences isn't really a problem, right?

Let's not forget one thing - when our repesentatives are largely categorized in only two ways, that is 1) those who keep increasing spending by all means possible without regard for consequunces, and 2) those who keep decreasing revenue AND increasing spending by all means possible without regard for consequunces, then we have a problem. The problem is our representatives actions. The solution? Obvious.

And no, sadly, the solution is not Ron Paul. I say sadly because he, I believe, would actually do what he says he would do. It's what he wants to do that I have trouble with, not the man's integrity or his motives, so far as I can discern them. He just seems to want to use some terrible methods to rein in our government, but I'm also afraid thaere is no other practical solution.

Re:Um... (4, Interesting)

Toonol (1057698) | about 2 years ago | (#42178819)

I would speculate that those who pretend spending is the only problem probably ignore much of the past 15 years of government action.

You mean the last fifteen years where spending has gone from 1.6 trillion to 3.7 trillion? Where total tax revenue is still at the highest it's ever been? Where we would have an instant surplus if we could simply bring the federal budget down to where it was in 2004?

Re:Um... (1)

alen (225700) | about 2 years ago | (#42178633)

is that like in california where the people are always voting in new spending via ballot initiatives but then vote on laws to limit property tax increases?

Re:Um... (1)

MightyYar (622222) | about 2 years ago | (#42178837)

I don't really understand this argument. Spending does not match revenue, that is the only problem we have. "We the People" can raise and lower taxes and spending at will. There is no "right" answer, so I'm not sure where you are going with this argument.

There are very good arguments to reduce the size of government, but there are also good arguments to boost revenue. I propose a compromise:

1. Raise taxes (rates, loopholes, whatever - it really only matters to partisans) to cover our debt service.
2. Freeze spending.

With spending frozen and revenue increasing, it will only be a matter of time before we start paying off debt. As debt service becomes cheaper, lower taxes accordingly until they are back where we are today. Spending can be unfrozen when our debt is down to a reasonable level (10% of GDP?).

Re:Um... (2)

medcalf (68293) | about 2 years ago | (#42179265)

And if raising tax rates reduces revenue, as it generally does on the right side of the Laffer curve? And if raising tax rates reduces economic growth, as it generally does once taxes go beyond a certain point far below ours? I agree we need to freeze or, better yet, dramatically cut spending. But there is no way short of an economic collapse that it's going to happen.

Re:Um... (1)

Impy the Impiuos Imp (442658) | about 2 years ago | (#42179209)

You want $4.3 trillion in spending this year? Of course you do. The only thing worse than you paying for it is your bratty grandkids. Oh, and taxing the rich, go for it, but you're still over a trillion short per year. Also, it is just an accounting gimmick anyway, you will still pay for it out of purchases.

The tax is technically on the buyers... (1)

MitchDev (2526834) | about 2 years ago | (#42178387)

Go after them. Here in MI we have a "Use Tax" on our State Income Tax forms for reporting your internet purchases for tax calculation. Usually cheaper to use the "based on your income" option to to add it all up and apply 6%...

Re:The tax is technically on the buyers... (0)

Anonymous Coward | about 2 years ago | (#42178767)

They have it in PA also. I stopped buying on sites that don't charge PA tax, because its a pain to keep every receipt.

Re:The tax is technically on the buyers... (0)

Anonymous Coward | about 2 years ago | (#42179185)

Taxing interstate commerce is unconstitional.

should be illegal (5, Insightful)

wbr1 (2538558) | about 2 years ago | (#42178399)

Unrelated riders on politically hot button bills and earmarks on important budget issues are how the most heinous of legislation is often passed. Should be illegal, but it will never be.

Re:should be illegal (5, Funny)

artfulshrapnel (1893096) | about 2 years ago | (#42178447)

Sure it will be. Eventually someone will slip a measure making it illegal onto a budget reform bill or approval for increased shoe wax allowance for interns. Then it will exist in a paradox state where it makes itself illegal.

Re:should be illegal (0)

Anonymous Coward | about 2 years ago | (#42178479)

Why not? Tag it on to an unrelated but politically hot bill and watch it ride through! :p

An idea... (0)

Anonymous Coward | about 2 years ago | (#42178413)

Find the state's average sales tax based on net sales and the rate. Let non-nexus businesses use that rate IF we're going to pass something like this into law. It should be less of a headache for small businesses then.

Re:An idea... (1)

Anonymous Coward | about 2 years ago | (#42178561)

I think it would just be easier to tax from the state that is selling instead of selling to. I wouldn't have an ideological issue with this, unlike states receiving the goods taxing companies cross state borders.

This would promote states wanting large retailers in their states for additional revenue, and companies looking for low tax states to place ware houses. If the wording isn't strict though, I could see shell warehouses in low tax states being setup and all purchases filtered through those.

Re:An idea... (1)

Smallpond (221300) | about 2 years ago | (#42179111)

Every internet business would buy server space in NH or AK with no sales tax and declare that their headquarters if it was by seller. I think it has to be on the ship-to state. A program for calculating sales tax based on street address would not be very difficult.

Whiny money-focussed politicians can FOADIAF (0)

Anonymous Coward | about 2 years ago | (#42178437)

If they want to collect sales tax for state->state transactions, then they can declare independence for their state and then they can do ALL the things they currently can only dream of doing.

Creates a near monopoly (5, Insightful)

CloneRanger (122623) | about 2 years ago | (#42178465)

By forcing web sites to collect sales tax for all 50 states and the territories will create an accounting nightmare. The only companies that can afford to hire the people to do it would be the dominant players like Amazon. So, all the small start ups would be stifled right out of the gate. The end result will be a near monopoly and very few start ups bringing new ideas to market.

Re:Creates a near monopoly (2)

paiute (550198) | about 2 years ago | (#42178569)

By forcing web sites to collect sales tax for all 50 states and the territories will create an accounting nightmare. The only companies that can afford to hire the people to do it would be the dominant players like Amazon. So, all the small start ups would be stifled right out of the gate. The end result will be a near monopoly and very few start ups bringing new ideas to market.

OK, independent of the question of good or evil, wouldn't that be an opportunity for a startup which offered that service to other startups?

Re:Creates a near monopoly (2, Informative)

Anonymous Coward | about 2 years ago | (#42178613)

these companies exist but are very expensive. Probably because it's a nightmare to figure out what to charge for which address at what time for which product.

The rules are beyond insane in one state alone for one company and one product, let alone trying to figure this out for a huge range of products. Also note that these tax zones are not split on zip code boundaries! Getting it wrong means huge liabilities...

Source: I take care of sales taxes for two states.

Re:Creates a near monopoly (2)

Overzeetop (214511) | about 2 years ago | (#42179093)

"these companies exist but are very expensive. Probably because it's a nightmare to figure out what to charge for which address at what time for which product."

No, they're very expensive because it's a nightmare to create it yourself from scratch. Once it's done once, it costs nothing to reproduce the tables/software. But because they know it would take $x to create from scratch, charging 0.25 x $x is a reasonable value proposition.

The only possible positive outcome is that by requiring everyone to do it, it may entice more solutions, which will bring the prices down to the reasonable level for small-medium business.

Re:Creates a near monopoly (4, Insightful)

cob666 (656740) | about 2 years ago | (#42179279)

It's not JUST calculating the tax. Every business would have to have a Sales Tax ID for every state that collects sales tax, those aren't free and some states require you to pay a yearly renewal for said privilege. Also, many states require you to file quarterly, but not calendar quarterly, quarterly based on the state's fiscal year.

Re:Creates a near monopoly (3, Insightful)

Attila Dimedici (1036002) | about 2 years ago | (#42178637)

So, in place of the many thousands of startups that will not get started because one more regulatory and financial hurdle has been put in their path, you are proposing that we settle for a single startup and call it a win?

Re:Creates a near monopoly (1)

bondsbw (888959) | about 2 years ago | (#42178833)

OK, independent of the question of good or evil, wouldn't that be an opportunity for a startup which offered that service to other startups?

It would. Many regulations are opportunities for somebody.

The net effect is that the government receives tax it once didn't receive, and the service provider receives money it didn't once receive. Don't forget that the service itself is taxed by sales tax, income tax, etc. So the government receives a relatively tiny sum more.

All this extra cost is passed on to the buyer, so the buyer has less money to spend on other things he may need or want. This isn't quite the same as the broken window fallacy [wikipedia.org] , as there hasn't been any value destroyed in the exchange. It seems the tax is fair, so the decision here is whether being fair to all is worth the cost passed to the consumer (the cost provided by the tax service).

Re:Creates a near monopoly (1)

bill_mcgonigle (4333) | about 2 years ago | (#42178587)

By forcing web sites to collect sales tax for all 50 states

45 States. What benefit do the residents of Alaska, Delaware, Montana, New Hampshire, and Oregon gain from expending Federal resources on enforcing particular States' tax policies? None, so this should not qualify as a Federal issue. Remember, retailers don't charge sales tax, they collect it. The taxes on delivered goods are 'owed' by the Residents of the States themselves - what the States have on their hands is a massive tax protest problem (and they're looking for a shortcut instead of dealing with it). If States want to require UPS and FedEx to declare the value of packages they deliver, they can do that themselves.

So, all the small start ups would be stifled right out of the gate. The end result will be a near monopoly and very few start ups bringing new ideas to market.

Works as intended, feature not a bug, marking WONTFIX. (whose lobbyists do you think are paying for the steak, whisky, and Cubans dinners to plan these regulations?)

Re:Creates a near monopoly (1)

xelah (176252) | about 2 years ago | (#42178601)

Except, of course, for the 'calculate US sales taxes for your online shop as an outsourced web service' startups, which will do quite nicely. Well, until Amazon invents the new AWS Sale Tax Calculator service.

Re:Creates a near monopoly (2)

ducomputergeek (595742) | about 2 years ago | (#42179243)

It's not the calculation that's the problem. There are already several services that offer sales tax tables for the US. I know, we used one in a point of sale application at the last company I worked for and it cost us about $12,500 a year for a license (IIRC). The problem for a small business is the accounting nightmare of having to keep your books straight an ensuring each state gets paid its due. After I sold that last company I started buying vintage and antique furniture from estate sales and opened a small private, sale by appointment only showroom. I sell some local, but a lot of my sales are to larger dealers and customers out of the area. I probably spend between 5 - 10 hours a month doing book work now. Mostly I have to keep extremely good records incase I audited by the state sales tax because of my $90k in sales this year, only about 20% of it was to local residents which I collected taxes on. The rest were out of state purchases from my website, mostly to other dealers. In my state I get to keep a percentage of the sales tax "to cover the costs of collecting for the state". But if a law like this gets passed suddenly am I going to have to know the taxing laws for every state? Right now my accounting is simple enough I have to pay a CPA $800 to review my end of year statements to ensure that I deducted what I thought I could and to provide some protection against IRS Audit. If something like this got passed I have a feeling that would turn into $800 a month. Well that's about $10,000 in accounting costs a year added to my business. Okay, I did $90,000 in sales, but my inventory cost me around $35,000. Rent, utilities, insurance, travel, hiring movers for some of the items, marketing expenses was about another $15,000. Add in another $10,000 in accounting fees plus the added time plus hassles and it makes me start to wonder if I really want to keep doing this or not.

Re:Creates a near monopoly (0)

Anonymous Coward | about 2 years ago | (#42178631)

While I don't think its a good idea in general, I don't think the accounting hurdles are what they're made out to be. Your'e talking about a max of 50 entities that will receive disbursements. Checking against a particular table to see the sales tax rate and then calculating it and adding it to a particular line item wouldn't be all that complicated.

I suspect that most sites are more against it due to the fact that many people see being "tax free" as an advantage of internet shopping over local merchants rather than worrying about the logistics of collections (not that its not a factor - I just don't think that's the dominate one).

Re:Creates a near monopoly (0)

Anonymous Coward | about 2 years ago | (#42178679)

While I don't think its a good idea in general, I don't think the accounting hurdles are what they're made out to be. Your'e talking about a max of 50 entities that will receive disbursements. Checking against a particular table to see the sales tax rate and then calculating it and adding it to a particular line item wouldn't be all that complicated.

Sales tax rates also vary by locality within a state and by the type of item purchased.

Re:Creates a near monopoly (1)

CloneRanger (122623) | about 2 years ago | (#42178693)

> Checking against a particular table to see the sales tax rate and then calculating it and adding it to a particular line item wouldn't be all that complicated.

Each state has a table. You have to look up the zip code to cross to a county to see what the county's tax rate is because some county's add 0.5 to 1% above the state's. Some cities have a tax, too, so this has to be taken into account. These tables change all the time. Then you have some goods that are taxable and some that are not. Florida, for example, does not tax foods. Then you also have "tax free" periods like back to school. Which state is doing that which weekend or week? Its a huge mess for any small company to deal with. Only the big companies can navigate this.

It would be a wise business strategy for the incumbents to back this idea/bill as a way of sealing off any new comers.

Small price to pay (1)

Comboman (895500) | about 2 years ago | (#42179211)

Its a huge mess for any small company to deal with. Only the big companies can navigate this.

And yet small companies do deal with it if they are brick-and-mortars (for there own state tax codes). Multiplying the complexity by 50 for the chance to access a market that is (on average) 50 times larger than your own state is a small price to pay. Since long before the internet, Canadian mail-order companies have had to deal with collecting both federal and provincial (state) sales taxes with a similar range of provincial tax rates and exemptions from coast to coast. Like dealing with shipping and credit card companies, it's just part of the logistics of doing business.

Re:Creates a near monopoly (0)

Anonymous Coward | about 2 years ago | (#42179195)

CloneRanger covered a lot of the issues, but there are yet more. The main difficulty is not the tax rates table: that's a pain, but you do it once and keep it up to date and everyone can use it (in theory). There's the other problem that different localities have different taxes for different categories of items and define those categories differently, so you can't just categorize your items and use a chart, you have to carefully check if your items fall under the proper categories for each relevant state.

Re:Creates a near monopoly (1)

MozeeToby (1163751) | about 2 years ago | (#42178657)

Alternatively, 3rd party accounting firms will spring up which specialize in solving the issue. So that many, many small business effectively pool their resources to solve the problem. On the one hand, no one wants to pay sales tax on the things they buy online. On the other, it's completely unfair to local businesses that do have to pay taxes, especially when there are players with the size and influence of Amazon that don't.

Re:Creates a near monopoly (0)

Anonymous Coward | about 2 years ago | (#42178663)

Accounting nightmare indeed. Why you'd need a 50-element array to keep track of that kind of thing. Everytime you sold something, you'd need to use the state listed on the billing address and figure out a way to look that up in the array, and then increment it by the amount of sales tax charged. My god, you'd need another array to keep track of the rates too, implying some kind of matrix of values! How fiendishly complex! I can't even begin to think how you'd program something like that.

Re:Creates a near monopoly (1)

stewbee (1019450) | about 2 years ago | (#42178831)

If only it were just a 50 element array. Using Illinois as an example, each county and sometimes city have their own tax rates. The sales tax on an item if I were to buy it in Cook county would be more than if I were to buy it in Lake or DuPage counties. I can't speak for the rest of the country, but I am sure there are other states which have something crazy like this too.

But this is where the burden comes, is that it would require more research than just what does each state have as its base sales tax.

Re:Creates a near monopoly (1)

digitalaudiorock (1130835) | about 2 years ago | (#42178997)

If only it were just a 50 element array. Using Illinois as an example, each county and sometimes city have their own tax rates.

Amen to that.

A software company I used to work for had a customer in the aviation business...mostly airplane repair. When they did repairs for someone they had to charge all applicable taxes based on where the owner lived. They had a dedicated system to handle it which required regular updates. All in, it apparently handled thousands of special cases.

...and lets not forget...collecting the taxes is the easy part. Properly submitting them to the states etc for which you're collecting them with all the proper documentation makes that look easy.

Let's be clear: forcing businesses to collect all applicable taxes would effectively end Internet commerce for the little guy...at least for any who want to operate within the law.

Re:Creates a near monopoly (0)

Anonymous Coward | about 2 years ago | (#42179133)

If only it were just a 50 element array. Using Illinois as an example, each county and sometimes city have their own tax rates. The sales tax on an item if I were to buy it in Cook county would be more than if I were to buy it in Lake or DuPage counties. I can't speak for the rest of the country, but I am sure there are other states which have something crazy like this too.

But this is where the burden comes, is that it would require more research than just what does each state have as its base sales tax.

Agreed. When I lived in Colorado, they had sales tax for large ticket delivered items based upon delivery location. When I'd go to buy e.g. a refrigerator, the store would have to look up my address to figure out how much sales tax to charge. It was a bit of a mess and I'm certain it was a pain in the a$$ for the stores.

Rather than having a merchant look up your local tax rate(s), how about a national VAT style tax? If it's a mail order/internet purchase, the merchant collects e.g. 5% national tax. That's sent to Uncle Sam with a list of dollar value shipped to each zip code. The money is then shipped at say 2% to the correct state, 2% to the correct county and 1% kept for Uncle Sam. Of course politicians would make it a lot more complex than that....

Re:Creates a near monopoly (1)

cdrudge (68377) | about 2 years ago | (#42179271)

You are SO under estimating the complexity of the requirement. There aren't 50 tax jurisdictions out there. There's about 11,000. There isn't one flat rate that covers the state. Many jurisdictions have different rates for general merchandise, food/beverage, grocery, clothing, medicine, etc. Some jurisdictions have progressive tax on some purchases, or exempt up to a particular value of the item. Add to that local county or city taxes.

Take all the above and then decide which taxing authority a particular person lives in. Can't go by zip code, as zip codes can span multiple jurisdictions. You need to have a fairly precise map of what the bounds for each of the 11,000 jurisdiction are, as they relate to addresses.

When remitting all these taxes, it's up to the company to document which tax jurisdiction the funds go into. The state doesn't do that for the company. This process needs to be repeated anywhere from once a year for very small sales volume, to monthly for even modest sales of a few thousand dollars annually.

So instead of a 50 element array, you're now tracking 11,000 elements that each may have multiple rates depending on the product type, as well as the geographical information of all 11,000 of those elements and every single address in the country. And you need to keep track of any changes to any of that information.

Now you see what a huge PITA sales tax is for electronic commerce.

Re:Creates a near monopoly (1)

jythie (914043) | about 2 years ago | (#42178715)

Eh, I suspect that if this became law we would see a whole crop of inexpensive middleware or other accounting apps that would automate the process, probably integrating right into Quicken or whatever. It would actually be the big players with their legacy home grown systems that would take a hit.

Re:Creates a near monopoly (0)

Anonymous Coward | about 2 years ago | (#42178731)

work just fine in europe, as long as a shops annual sales to a country is below a limit it can charge local(sellers) VAT (so it doesn't have to mess with VAT for just a few sales) when annual sales to a country go above that limit shop has to charge and pay VAT at the buyers country (so an internet shop can not gain an unfair advantage over local shops just by being located in a low VAT country )

Re:Creates a near monopoly (2)

V-similitude (2186590) | about 2 years ago | (#42179065)

As part of the bill, require any state that wants to participate to publish a public API that takes a dollar amount, a zip code (or address) and a product type and returns how much tax is owed. Done.

It's absurd to call this a "nightmare". It's trivially solvable.

Re:Creates a near monopoly (0)

Anonymous Coward | about 2 years ago | (#42179075)

I would suspect most part smaller sites will likely just pay a provider like Avatax to handle it in the same manner they pay a bank and or clearing house to process their credit cards.

Democrats said, "We will not tax the Internet!" (2)

Anonymous Coward | about 2 years ago | (#42178489)

Having heard, with my own ears, Democrat Senators and Congressperson tell the whole country that they would never support a tax on the Internet, I am surprised that they would so quickly change their highly proclaimed position.

Of course, they promised me that I could retire with full Social Security benefits and have changed that also--now that they have raised the retirement age.
They promised that Medicare would provide for senior health-care needs and the Democrat President is set to take $1,116,000,000,000 out of Medicare.
I guess the cost of "Obama Phones" is more than expected.

Those who propose and vote for Internet taxes have lied to the USA citizens and taxpayers. They have lost their morality (assuming that they had any to begin with.).

Re:Democrats said, "We will not tax the Internet!" (1)

Anonymous Coward | about 2 years ago | (#42178573)

They all do it in the One-Party-System. The only time those bozos get together and hold hands is when they're taking money from your pocket. They love your money enough to overcome their "differences."

Re:Democrats said, "We will not tax the Internet!" (1)

MozeeToby (1163751) | about 2 years ago | (#42178673)

It's not a tax on the internet, it's a tax on goods bought from an out of state seller. In other words, it's a tax that, from a purely legal standpoint, you're already supposed to be paying yourself every year when you file your taxes.

Re:Democrats said, "We will not tax the Internet!" (1)

MightyYar (622222) | about 2 years ago | (#42178895)

Much better would be to just establish a national tax rate for cross-border sales. Distribute the tax as you see fit. Requiring out of state sellers to know the tax laws of all 50 states is not fair, IMHO.

Re:Democrats said, "We will not tax the Internet!" (1, Flamebait)

Sponge Bath (413667) | about 2 years ago | (#42178795)

FTA: "Senators Dick Durbin, an Illinois Democrat, Mike Enzi, a Wyoming Republican, and Lamar Alexander, a Tennessee Republican"

Two Republican senators and one Democratic senator.

Having heard, with my own ears, Democrat Senators and Congressperson tell the whole country that they would never support a tax on the Internet...

Was that Democrat you heard with your own ears Dick Durbin? No? Then your comment makes no sense. You did not mention 2/3 of this group are Republican which makes even less sense.

I guess the cost of "Obama Phones" is more than expected.

Ahhh. Obama Derangement Syndrome. Now it makes sense.

Why is this a states issue?... (2, Insightful)

artfulshrapnel (1893096) | about 2 years ago | (#42178495)

Seems to me that the states shouldn't be trying to deal with the taxes on this, and instead congress should be doing it under the mantle of "Regulating Interstate Commerce". Pass a law that says all sellers must collect and report both federal and state income tax on sales as if the sale were occurring at the buyer's physical location, or the location to which the product is delivered. (Whichever is easier to make into an enforceable law).

Simple, clean, unambiguous, very few loopholes, and understandable to customers.

Re:Why is this a states issue?... (0)

Anonymous Coward | about 2 years ago | (#42178615)

Start your own business and see how much you like calculating "local sales taxes" for people in all 50 states. I ran my own part time, small time mail order business for 10 years, with customers all over the world. Just me. Add additional paperwork on top of the local, state, and federal paperwork that I had? Forget it. This will kill the small entrepreneur, or at least make them just want to go completely under the radar.

Re:Why is this a states issue?... (5, Informative)

howardd21 (1001567) | about 2 years ago | (#42178617)

Seems to me that the states shouldn't be trying to deal with the taxes on this, and instead congress should be doing it under the mantle of "Regulating Interstate Commerce". Pass a law that says all sellers must collect and report both federal and state income tax on sales as if the sale were occurring at the buyer's physical location, or the location to which the product is delivered. (Whichever is easier to make into an enforceable law).

Simple, clean, unambiguous, very few loopholes, and understandable to customers.

It is anything BUT clean - it is a complete mess for businesses to try and figure out what tax to charge and who it gets sent to. It is not just 50 states, it is as you suggested the buyer's physical location, so every other tax on top also must be calculated, collected, and paid to the local parish, county, city, district, etc. And add in some audits by each of these taxing authorities. Paying local taxes is is easy when Mom and Pop hardware is selling to it's walk in customers, they pay the city, county, state and federal govt. And it is almost workable for a large corporation that pays for a top tier ERP system and adds a tool like vertex (expensive and must be maintained by a team). But your proposal just cut off any small - medium business that wants to sell beyond the physical locations they occupy. I hep you like Walmart, because they and others sized like them will be your online provider of products.

Re:Why is this a states issue?... (1)

RattFink (93631) | about 2 years ago | (#42179173)

There are plenty of solutions on the market that don't require a full blown ERP or accounting packages for tax calculation and remittance. Off the top of my head I can think of Avatax but I know there are plenty of others. It really isn't THAT big of a deal.

Re:Why is this a states issue?... (2)

Attila Dimedici (1036002) | about 2 years ago | (#42178661)

And a boatload of work for small startup companies. You seem to be unaware that many states do not have a single sales tax rate. Instead some states have a rate that varies according to what municipality you are in at the time of the sale. This is not something that can be determined by zip code as zip codes are not divided by local municipality boundaries but are instead determined by what post office the USPS delivers mail to that address from.

Re:Why is this a states issue?... (2)

rickb928 (945187) | about 2 years ago | (#42178897)

Here in Arizona we have multiple taxes, at state, county, and municipal level.

But calling that a 'state' tax issue is misleading. It's the localities that really hose things up. And Phoenix goes one further, and taxes food at a different rate than merchandise. Yes, they tax food. And how they did it is even more disturbing than the fact that they do, but tha;'s the topic of several pages of posts, and not for this thread.

Re:Why is this a states issue?... (2)

rickb928 (945187) | about 2 years ago | (#42178869)

SCOTUS (especially the CJSCOTUS) seems to be willing to interpret the commerce clause fairly liberally. I have little hope of a solution there.

We are in a tax-it-all era. Expect your overall tax burden to grow linearly for the next decade unless some course change occurs.

Re:Why is this a states issue?... (1)

ducomputergeek (595742) | about 2 years ago | (#42178911)

We have a model for this, one that has existed for well over 100 years dealing with catalog companies. After all really what is the difference between a catalog company and an online retailer other than dead tree vs. electronic. The law states you only have to collect taxes in the states in which you have a physical presence in. I live in Missouri and if I have an online store, incorporated in Missouri, and have all my operations in Missouri I have to collect sales tax on Missouri purchases. If I sell to you in New York, Illinois, Kansas, Washington, I don't collect the taxes. Now some states have "use tax" but that responsibility is on the buyer, not the seller. To give you an example, many years ago if you bought a Dell computer online or over the phone they wouldn't charge you sales taxes. But then you'd usually get a tax bill for the computer from the state a few weeks later.

At a previous occupation we had an E-Commerce and Point of Sale solution. Most of our clients were small businesses with between one and five locations and usually within the same state, but we were getting more interest from some larger companies and looked at how to deal with the taxing side. Because we felt it was only a matter of time before some kind of Internet Sales tax was levied.

There are companies that sell sales tax tables and update them usually every 30 days for the approx. 11,000 taxing jurisdictions in the United Sates. But even then with things like TIF's, the taxes collected on one side of the street might be different from the other side of the same street. That is where the mess comes into play.

Re:Why is this a states issue?... (0)

Anonymous Coward | about 2 years ago | (#42179071)

Net sales need to be free of taxation. People with disabilities use net purchases to avoid the pain of shopping. Additionally people in smaller towns use the net as products are often not locally available or are very over priced due to no competition. We pay for delivery. If you add sales taxes on top of that the attraction of shopping online vanishes.
                          For example I often purchase sheet music for my euphonium. Unless you live in a major city and probably even if you do live in a major city you won't find any sheet music for euphonium at all. Go online and there is some available and you pay for it as well as a typical $4.95 shipping fee.
                          Notice that local merchants suffer no loss as they can not afford to carry music for euphoniums anyway. The state is enriched by a person being able to participate in a decent hobby. Just how is it moral to tax such items anyway? Look at what happens when an area becomes subject to taxation. Property taxes are a great example. Many people pay more to live in their own homes in property taxes alone than most people dream of earning. In my area there are homes paying very close to one million dollars a year just for property taxes. Who is the lunatic that allowed property taxes on homes to exist in the first place? For those forced to rent and not own the share paid of their rent to property taxes can be a crushing load. Yet corporations often pay no taxes at all. We could start by paying congressmen what we pay our school teachers and allowing them only the health care that Medicaid and Medicare pay for.

Big government to the rescue! (0)

Anonymous Coward | about 2 years ago | (#42178501)

Most Slashdotters must be thrilled, given that 99% of people here are fans of big government.

Sad times. (0)

Anonymous Coward | about 2 years ago | (#42178505)

There was a time one would vow when doing something against his/her will.

It was like acknowledging an obligation and actually a humbling act with the aim of taking responsibility.

Nowadays, people vow to do what they want. That's pretty lame by any measure...

This requires amending the US Constitution (0)

Anonymous Coward | about 2 years ago | (#42178513)

In the USA, states have to recognize the sovereignty of other states, and can't tax or regulate other states or their residents.

A state does not have the authority to force a business resident in another state to collect & remit its sales tax.

QED. End of story.

Re:This requires amending the US Constitution (0)

Anonymous Coward | about 2 years ago | (#42178625)

This requires amending the US Constitution

Not necessarily. It can also be accomplished through collusion. How about:
- One state passes a bill requiring any company that has a presence in its jurisdiction, or any ecommerce website that is hosted in its jurisdiction, to collect the appropriate sales tax for any sales shipped to any jurisdiction of the United States, if and only if that jurisdiction also has a similar bill.
- Another state passes the same bill.
- And another.
- Here we go!

Lamar (1)

Anonymous Coward | about 2 years ago | (#42178525)

3 out of 100 is barely a group, and it's barely bipartisan with Lamar being a progressive RINO.

The of the Websites! (0)

Anonymous Coward | about 2 years ago | (#42178531)

This will eventually fall into the laps of the websites that are selling the goods. For small websites this is going to turn into a nightmare. What is or isn't taxable in which states? It's not the same everywhere.
  * some states tax items that others don't.
  * some states tax items in certain categories of merchandise if they are over a specified dollar value.
  * some states have a temporary 'sales tax amnesty' on certain categories of merchandise at specifies times of the year.
  * with some states requiring tax on shipping/delivery charges.
  * there's more out there than I can remember, let alone image.

What makes it unrelated? (1)

Shavano (2541114) | about 2 years ago | (#42178541)

Can't the Pentagon buy stuff from discounttankoutlet.com?

Re:What makes it unrelated? (1)

Attila Dimedici (1036002) | about 2 years ago | (#42178677)

The Pentagon does not pay sales tax.

States just want somebody else to be the bad guy. (2)

lfp98 (740073) | about 2 years ago | (#42178611)

If the states really wanted to collect all that sales tax, all they would have to do is enforce current law (requiring residents to pay the tax themselves) and increase the penalties for evasion. Random audits would reveal massive infraction - supposedly less than 1% of taxpayers in states requiring it report any internet or other purchases where the vendor did not charge tax. But they won't do this, they're too scared of the backlash from voters. In short, they want somebody else to do the dirty work for them.

What about (1)

rossdee (243626) | about 2 years ago | (#42178619)

What about the interstate commerce clause in the constitution?

Anyway this sort of thing will cost jobs in this country - since companies can set up offshore and sell stuff without having to collect US state taxes - especially for non physical goods (mu7sic, videos, software, subscriptions etc.

If the States need more money, they can increase sate income tax, of have a state lottery (a tax on the mathematically challenged)

Re:What about (1)

Attila Dimedici (1036002) | about 2 years ago | (#42178719)

You are correct that it would cost jobs, but offshoring would not get around it. It would be trivial for Congress to pass a law collecting from businesses that sell to consumers from outside of the country and equally trivial to enforce it against any large enough to be a shell for a company that is actually located in the U.S.. The problem is that this law would make it harder for a small business to get started. Existing regulations have made it difficult to start a brick and mortar retail business as a small, fully legal side business, this would extend that difficulty to being an online retailer.

Re:What about (1)

rickb928 (945187) | about 2 years ago | (#42178919)

Why wouldn't states seek additiknal revenuw from nonresidents, whenever possible? Stop thinking benevolently, and think like a bureaucrat.

Won't work. (0)

Anonymous Coward | about 2 years ago | (#42178723)

So if I buy a $15 gadget from China online, how exactly are they even going to charge me those taxes, unless the foreign stores/countries decide to agree to this stupidity?
To me this is another example of old dumb people who are asking for the impossible while not knowing how the internet works and are just shouting "make it work!".

Customs. (0)

Anonymous Coward | about 2 years ago | (#42179293)

That gadget you buy direct from a Chinese website, has to get shipped here somehow (usually Fedex or UPS, they've both got huge shipping/receiving operations in Shanghai dedicated for that), then when it arrives in the US it has to clear Customs. Both Fedex and UPS have large facilities now in Anchorage, AK set up to expedite the Customs processing for stuff coming from China before the merchandise gets loaded onto another plane destined for the lower 48 states. It will be at these Customs facilities in Anchorage where your merchandise will become held until taxes for all the individual states are collected on them before they're released. No taxes, and Customs will keep the goods. Yes, this will be federal enforcement of state tax collection. After all, we keep needing more and more and more, bigger and bigger and bigger federal government now, right?

People don't remember the nightmare (1)

Anonymous Coward | about 2 years ago | (#42178739)

It's not just state sales tax that the brick-and-morter stores have to collect, it's all the sales taxes: state, county, town, and special districts like recreation, area improvement, fire, police, and so forth. It's not 50 different tax rates, it's thousands. It's not writing 50 checks, but hundreds of checks or more. One of the many prior attempts at defining a national "long arm" statute was to simplify the collection of out-of-state tax to minimize the accounting nightmare.

The reason that the buyer-based tax was levied on the brick-and-morter stores in the first place was that the tax applied to where the store was, and therefore where the transaction took place. That meant the store only had to pick up 10-15 taxes, which were usually remitted to a single taxing authority with one page of paperwork so that the money could be distributed to the taxing districts appropriately.

Mail order and Internet shopping broke this model, because the "point of transaction" is the ether, or the United States Postal Service. The original proposed fix, to have the seller collect local tax, was struck down by the Supreme Court. So the alternative was to collect tax based on the buyer's location...which means the seller has the nightmare. The patch was to apply "use tax", so that the buyer's taxing districts would receive the money from the buyer directly, which means that scofflaws are not going to be paying and there isn't all that much the taxing districts can do to enforce the collection, for how do you find out that use tax is owed and isn't being paid?

The right thing would be to go with a new business model...but that's not going to happen either.

Texas: Always looking to the future! (0)

crazyjj (2598719) | about 2 years ago | (#42178759)

Brick and mortar businesses, NASA, secession from the Union, anti-immigration and anti-gay laws--Texas always has its finger on the pulse of the future!

Yeah, you do that. (1)

Anonymous Coward | about 2 years ago | (#42178801)

And when I buy more expensive items, I'll have them shipped to a friend in Sweeden, who will then ship it to me.
Easy tax dodge. If billionaire assholes can do it with their bank accounts, I can do it with this.

Interstate sales tax needed (1)

aurizon (122550) | about 2 years ago | (#42178871)

They need to impose an interstate commerce tax. This tax will be made up of three components. One is 33.3% of the tax rate of the ship to state, and the other is 33.3% of the tax rate of the shipped from state and the third is the federal tax, which is set at 3%. All states will have a single number (none of these city extra sales taxes). This interstate tax will mean each state gets tax coming and going. Sales within the state are taxed in the normal state way. The feds will collect this tax and remit each states share quarterly for most and monthly for high volume sellers.
States that have no sales taxes, will not get $$ in this plan.
States will then get money on all sales into and out of their state. Currently they get only what is sold in the state by in-state vendors, and nothing externally, and they get little for items sold into the state - except for things like cars which get registered.

So it will give money to each state and the feds and will acts as a leveling agent, which is needed.

Re:Interstate sales tax needed (0)

Anonymous Coward | about 2 years ago | (#42179237)

None of that is needed. Go away.

Re:Interstate sales tax needed (1)

Overzeetop (214511) | about 2 years ago | (#42179281)

No, congress needs to specify that, for items where the transaction is not placed in person but originates in the US, the sale is defined as occurring in the state where the corporation is registered. (That would make for some interesting corporate jockeying, because though Delaware doesn't have a sales tax, they do have a gross receipts tax)

Go the EU way... (1)

havana9 (101033) | about 2 years ago | (#42178875)

In the European Union VAT is different in each state. If you're buying as a personal customer, ie. you don't have or don't use the VAT ID, you pay the VAT and other taxes valid on the seller's country, except for alcool and tobacco. If you're buying as a professional customer, using the VAT id, the regulations are different due the compensations but the same basic rule applies most of the times except on some cases.

Interstate Commerce.... (1)

realsilly (186931) | about 2 years ago | (#42178905)

I like anyone else hate taxes on levied upon me, but I also understand taxes are necessary. The United States is a very large country with many governments: local, state, and federal. While I'm sick to death of our tax dollars being wasted by our leadership, I also believe that if our tax dollars weren't wasted people tax rates would be much smaller and this would be a non-issue.

If I pick up the phone and call a company and purchase a product from that business in another state other than the one I live in, I'm expected to pay their sales taxes, which may include local and state taxes. So why would this tax assessment be any different for a product I purchased via the internet? It should not be different. If by using the web to make my purchase, I am not taxed, the is discrimination against those who make phone transactions. Now, the State from which I reside is not entitled to tax me for the product I purchased. The product was not bought in my state. If this is where this proposed bill is going then it's wrong and I oppose it at it's very core.

If this is an issue that cannot be resolved without double-taxing the consumer then this would provide support for a different tax system. I've heard of the flat-tax system, and I am not horribly opposed to this, as long as everyone pays the same % of tax and all loopholes are gone. But someone else has mentioned to me a straight up Consumer Tax plan. No more income taxes, but taxes exist on any and everything we consume. That plan has some merit to it's structure also, but I think this would be more likely because people will always find away to avoid taxes.

This of course it only one person's opinion, and with limited facts. I'm sure with more facts I'd have a different opinion.

Re:Interstate Commerce.... (0)

Anonymous Coward | about 2 years ago | (#42179223)

I like anyone else hate taxes on levied upon me, but I also understand taxes are necessary.

That may be true, but why should you pay jack shit when the officials don't do their job.
What job you ask, Oh I don't know somewhere in the constitution, it says something about regulating the monetary system.
So Treasonous oath breaking scum fucks, who have not arrested one bankster, are going to now demand more taxes, without cutting anything.

That's going to work out well. No wonder they don't want veterans to have guns.
It isn't the PTSD (although the new DSM sure wants it that way), it's the fact veterans took an oath to put a stop to this treasonous fucking shit.

So, taxes are necessary, but GDP to DEBT is fantasy, taxes are necessary, but auditing CAFR for fraud is not.
We need to pay more so they can give more free shit to ISRAEL and AIPAC (Dear Jews I don't hate you, I hate your zionist fuckwad leaders)

ClusterFuCK of Oath Breaking Scumbags fuckwads (-1)

Anonymous Coward | about 2 years ago | (#42178907)

Yeah yeah, sneak shit through, that's the ticket.

SNEAKING
Trying to HIDE their unmoral, fascist shit
They SPY on your data for profit

Spy Spy Spy, Exploit Exploit Exploit

Not even the COPS follow the Constitution: Cops to Congress: We need logs of Americans' text messages

Dear COPS you sure don't need American's logs.
The LOGS you really need, but refuse to look into are the LOGS of the Banksters, and Oath Breaking Officials in CIA, NSA, DOJ, DHS

Dear President Obama,

You want to create JOBS?
ARREST THE FUCKING BANKSTERS ALREADY!

ARREST the god damn SENATORS for failing to regulate the MONETARY SYSTEM
Quit butt bucking with Americans, with this cock sucking unconstitutional shit.

Or are you an oath breaker too?
Sure is funny how law enforcement wants ALL MY INFORMATION
But when it comes to YOU, you have a fake name, fake ssn, fake birth certificate.
Is there anything real about you? Besides breaking your oath to defend the CONSTITUTION against DOMESTIC enemies, while simultaneously about to start WW3 with your oath breakers supporting AL Queda death squads in Syria

Where's that Obama Truth Squad. THOSE FUCKERS DARE NOT TREAD HERE!!!

Instead they will bury this post. Fucking pieces of SHIT.

I see they got the DSM changed just in time for all the people they pissed off and now are going to claim that being pissed off is a mental problem.

I'll say it again, keep passing this unconstitutional bullshit, and the first time someone crosses my path with this unconstitutional shit it will be WAR ON with that party. You want to call that CIVIL WAR, because you don't like people like me speaking truth to TREASONOUS POWER.

What about B&M stores (0)

Anonymous Coward | about 2 years ago | (#42178985)

The B&M stores complain that Internet stores don't pay the taxes they do and want a level playing field. To make it level, B&M stores should have to collect taxes from their customers that don't live locally and submit it to the jurisdiction where the customer resides. That is what this bill would ask Internet stores to do. The Internet stores would have to keep tabs on literally thousands of state and local tax codes as well as submit the tax receipts to those same thousands of tax authorities. Additionally they could be audited by any one of them or all of them at any time. If the B7M stores really want a level playing field they should also have to be subject to this same administrative nightmare.

Could be Simple, but Won't (1)

CanHasDIY (1672858) | about 2 years ago | (#42178991)

This could be a very simple process - the business would charge whatever the sales tax rate is for where it is headquartered (i.e., Walmart online customers would pay Bentonville, AR sales tax). This would work, for the most part, and be fairly easy for the vast majority of online retailers to implement.

Of course, this is the "lowest approval rating ever" Congress we're talking about. The same guys who claim to be able to fix the current fiscal mess (they created), but can't give us any details.

Expecting them to do the smart thing and follow Occam's Razor is like expecting a tree to grow wings and fly - not gonna happen.
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