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US Senate Passes Internet Tax Bill 69 To 27

Unknown Lamer posted about a year ago | from the amazon-is-the-new-walmart dept.

Businesses 678

schwit1 quotes The Washington Post: "The Senate aimed to help traditional retailers and financially strapped state and local governments Monday by passing a bill that would widely subject online shopping — for many a largely tax-free frontier — to state sales taxes. The Senate passed the bill by a vote of 69 to 27, getting support from Republicans and Democrats alike." schwit1 adds "Unfortunately online businesses could be in for a rude awakening when it comes to the law's interpretation." Passage in the House is not certain, and companies like eBay are lobbying to raise the minimum sales required to collect state sales tax to $10 million instead of $1 million per year.

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678 comments

bollocks (3, Insightful)

DFurno2003 (739807) | about a year ago | (#43651925)

Total Garbage. Just what I expect from the U.S. Government. Can't balance our budget, find more ways to tax consumers.

Re:bollocks (4, Insightful)

Anonymous Coward | about a year ago | (#43651945)

Or rather find ways to collect the tax that consumers already owed.

Re:bollocks (4, Insightful)

Anonymous Coward | about a year ago | (#43651989)

We are taxed when we earn the money, and double taxed when we spend it.

Re:bollocks (3, Funny)

JustOK (667959) | about a year ago | (#43652067)

Don't spend your money.

Re:bollocks (4, Insightful)

ganjadude (952775) | about a year ago | (#43652091)

if you dont spend your money you got people claiming you are not paying your fair share. there is no winning anymore. your money is not yours, its the governments, they just let you have some to keep you content.

Re:bollocks (4, Informative)

gstoddart (321705) | about a year ago | (#43652279)

if you dont spend your money you got people claiming you are not paying your fair share

That's because the entire school of thought which is trickle-down economics requires it.

If people aren't spending their money, then the entire theory behind Reagonomics is a fiction, and tax cuts for the rich don't work. ;-)

Since the entire justification for those tax cuts is to get people out spending, you need to do your patriotic duty and get out there and spend like a mad fool or risk invalidating an entire economic theory. It's your job to stimulate the economy and get us out of this down turn by buying stuff.

If they cut taxes and people didn't spent, people might start to think economists don't have a clue.

If you're not gonna spend it, they'll need to tax it. So start spending, or we'll have to try Socialism. :-P

Re:bollocks (4, Interesting)

MatthewCCNA (1405885) | about a year ago | (#43652381)

If you're not gonna spend it, they'll need to tax it. So start spending, or we'll have to try Socialism. :-P

What do so many Americans have such fear/hatred of Socialism?

Re:bollocks (-1, Troll)

arfonrg (81735) | about a year ago | (#43652431)

Because socialists have this nasty habit of killing LOTS of people.

Re:bollocks (5, Insightful)

Gamer_2k4 (1030634) | about a year ago | (#43652477)

What do so many Americans have such fear/hatred of Socialism?

Because we like to think we deserve to use the money we earn in the way we choose.

Re:bollocks (3, Insightful)

Anonymous Coward | about a year ago | (#43652497)

Indeed. Socialism is not a bad thing. I was born an American and have lived in not one, but three countries that have socialist economies. All three countries have a higher quality of life than the US, all three have universal healthcare, all three have very inexpensive university systems through the PhD level, the list goes on.

The average American with a family pays ~$5000 for the "right" to have health insurance. Taxes for better, actual guaranteed healthcare in other countries is far less, on average ~$2600.

Americans want the government far removed from their healthcare, but think nothing of letting their child's mind be marinated in a government-run school system for 12 years.

Americans want the government far from their money, but love Social Security, clean air, pot-hole-free highways, safe air travel, clean water, etc. All of the above are paid for with tax dollars.

A civilized, democratic society uses taxes for the benefit of all, especially the least of these. Anything less is greedy, evil, and inhumane. It isn't about getting wealthy, or shouldn't be, it's about everyone having a decent life.

Re:bollocks (0, Insightful)

Anonymous Coward | about a year ago | (#43652321)

Thanks you for saying what no one else seems to be able to grasp.

Sorry folks, but I don't work my ass off so you can have a better life/health insurance/nice things/whatever... Once all you commie bastards figure that out and realize the path to a better life lies only within you, things will start to be good again. Until that time we are all fucked.

Re:bollocks (0)

Jawnn (445279) | about a year ago | (#43652391)

if you dont spend your money you got people claiming you are not paying your fair share. there is no winning anymore. your money is not yours, its the governments,

Uh..., no. The government operates at our will, so the money is still "ours". Yes, one might make the case that it's more like "at the corporations' will" but we could, if we gave a shit, undo that damage and see that our money is spent on things that are in our best interests.

Re:bollocks (1)

Captain Hook (923766) | about a year ago | (#43652437)

there is no winning anymore.

We live as part of a community, tax is a way of paying for the collective costs of that community, who do you think you were winning against before?

Re:bollocks (0)

Anonymous Coward | about a year ago | (#43652137)

If you don't spend it, then what is the point of having it?

Re:bollocks (1)

Anonymous Coward | about a year ago | (#43652467)

We are taxed when we earn the money, and double taxed when we spend it.

No no, that is the tax for when the companies earn money. But since the government does not tax corporations, it taxes the people a second (or third or fourth) time, instead.

Re: bollocks (0)

Anonymous Coward | about a year ago | (#43652015)

Use tax?

Re:bollocks (5, Insightful)

oh_my_080980980 (773867) | about a year ago | (#43652235)

No one owes taxes on purchases made from companies that do not have operations in your state. That's how state sales tax works.

Re:bollocks (5, Insightful)

pla (258480) | about a year ago | (#43652343)

Mod parent up! It disgusts me to hear US Senators not "get" that point.

The customer may owe use tax in their state. The merchant has (or "had", if this turd of a bill passes the house) an obligation only to the states in which they have a physical presence.

And this whole "level playing field" BS? Seriously? How many mom-n'-pops (and don't give me any lip about the $1M threshold, your corner convenience store easily has gross receipts 2-3x that) have to deal with the individual sales tax structures of every US state, countless counties, and even individual towns? And as if that doesn't get messy enough, figuring out which products fall into which tax categories in each of those jurisdictions?

This won't hurt Amazon. This will merely annoy Amazon. It will destroy smaller online merchants, however - If not up front, then when the owner goes to prison for screwing up some obscure detail of NYC taxes on imported llama-hair socks.

Re:bollocks (1)

Anonymous Coward | about a year ago | (#43652425)

And how many people actually paid that use tax? Is it not better to have rules that are consistent with reality?

Re:bollocks (2)

Dr Damage I (692789) | about a year ago | (#43652261)

By requiring online retailers to file sales tax nearly 50 times per year when they could have accomplished exactly the same thing by requiring online retailers to pay sales tax in their home state for all sales. They've vastly increased business costs, most of which will go not to the public purse but to wealthy accounting firms. I wonder whose idea that was.

Re:bollocks (0)

Anonymous Coward | about a year ago | (#43651953)

Or simplifies tax that already existed.

Re:bollocks (1)

Anonymous Coward | about a year ago | (#43651987)

The problem with the West is that all its governments are currently having their treasuries siphoned off to various private concerns from defense to private medical contractors. There are three ways to fix the budget problem:

i) Stop tax avoidance and evasion - being done here;

ii) Stop paying private companies to do state business. Either you decide it's within the remit of the state, in which case the work should be done by state employees at cost, or you decide it's a private concern, in which case the state should not be sponsoring it;

iii) Bump up penionsable age in line with life expectancy. No choice here, I'm afraid. Reduced working hours (we can do fine on a 4 day work week) would help toward this.

Re:bollocks (2)

Rockoon (1252108) | about a year ago | (#43652119)

The problem with the West is that all its governments are currently having their treasuries siphoned off to various private concerns from defense to private medical contractors. There are three ways to fix the budget problem:

i) Stop tax avoidance and evasion - being done here;
ii) Stop paying private companies to do state business. Either you decide it's within the remit of the state, in which case the work should be done by state employees at cost, or you decide it's a private concern, in which case the state should not be sponsoring it;
iii) Bump up penionsable age in line with life expectancy. No choice here, I'm afraid. Reduced working hours (we can do fine on a 4 day work week) would help toward this.

i) That has nothing to do with "various private concerns" and the so-called loopholes are there on purpose, as otherwise the U.S. finds itself with the highest corporate taxes in the world.

ii) Are you suggesting that a State maintain a crew of bridge builders during periods where they don't need bridges built? I agree that the amount of private contracting needs to be cut back, but its because I think spending should be cut way back and not out of a vague notion that private contracting is bad. I think the government should have even fewer direct employees than they do now, and that includes dumping current public workers and finding private contractors to do the work those public workers do.

iii) How about we simply end public pensions? The problem with public pensions is that todays promises never get paid for/funded today. The government would have to offer higher wages to remain competitive with private sector positions that do offer pensions, but at least then whats promised today is paid for today rather than being allowed to become a big budget problem 30 years from now.

At $10 million companies would "outsource"... (4, Insightful)

Chrisq (894406) | about a year ago | (#43651961)

to collect state sales tax to $10 million instead of $1 million per year.

I predict that if the limit is raised to $10 million then companies will "outsource" sales to wholly owned subsidiaries. For example "Your order has been filled by Amazon West Houston INC"... which has sales below the threshold. At $1 million a year it would be debatable whether the large organisational overhead would be worthwhile for larger companies, but an $10 million it probably would be.

Re:At $10 million companies would "outsource"... (2)

Etherwalk (681268) | about a year ago | (#43652249)

The text of the legislation specifically provides that organizations doing this are not exempted. The people who draft bills are not (usually) morons.

Re:At $10 million companies would "outsource"... (5, Funny)

Anonymous Coward | about a year ago | (#43652485)

The people who draft bills are not (usually) morons.

You'll have to provide a reference for that.

Republicans control the house (-1)

Anonymous Coward | about a year ago | (#43651963)

There's no way Republicans will allow a tax increase if it affects millionaire bankers, and millionaire bankers are exactly the sort of people who buy a lot of stuff on the internet. So this will die in the house.

Yes I did just point the finger at Republicans for the huge deficit, take a look:

http://www.washingtonpost.com/blogs/wonkblog/files/2013/02/parfait.jpg

That big thick orange stripe that is increasing over time, is the amount added on to the debt by the Bush tax cuts for the rich. As long as the Republicans won't let rich people be taxed, that big thick strip will get thicker.

Borrowing money is not a viable long term 'low tax' policy because the interest is piling up too. The states need sales tax, because companies like Microsoft won't pay corporation tax.

Re:Republicans control the house (1)

Chrisq (894406) | about a year ago | (#43651979)

There's no way Republicans will allow a tax increase if it affects millionaire bankers, and millionaire bankers are exactly the sort of people who buy a lot of stuff on the internet. So this will die in the house.

Aren't they also exactly the sort of people who will buy it through some sort of tax-exempt holding company and therefore not pay it anyway?

Sale tax isn't easy to dodge (0)

Anonymous Coward | about a year ago | (#43652025)

If they did that, then *they* wouldn't own it, their tax exempt company would own it, and if they had exclusive use of it, then it would be a benefit in kind and taxable.

The super rich *do* dodge taxes, (e.g. there's a fund manager who makes $8 Billion a year or so, and makes *zero* tax), but sale tax is not so easy to dodge.

Buying from offshore doesn't save you, because you need more paperwork, and get charged the missing sales tax on receipt.

Re:Republicans control the house (1)

Anonymous Coward | about a year ago | (#43652037)

Do remember that the effect of this tax collection would fall most heavily on those with the least resources. Huge companies like Amazon and WalMart would benefit with this tax collection; it is small business and small buyers who would bear the onerous burden. Beware your wanting to blame the Republicans! The Republicans in the House are the ones most likely to end this nonsense.

Re:Republicans control the house (2, Interesting)

Anonymous Coward | about a year ago | (#43652041)

That orange line is ALL Bush era tax cuts, most of which went to the middle class. And by "most" I don't mean 51%. I mean over 80% of the Bush tax cuts went to the middle class.

Nice try though. I don't know why you're complaining. Obama already undid most of the Bush tax cuts for high earners anyway.

Re:Republicans control the house (2)

Anonymous Coward | about a year ago | (#43652289)

I appreciate that this is an anonymous coward asking another anonymous coward, but you need to back up that 'over 80%' with an independently verifiable report. Can you? Seems like an unsupportable claim to me, even putting aside that the remainder of your claimed 80% is still too much tax to cut off the obscenely wealthy.

Re:Republicans control the house (2)

ganjadude (952775) | about a year ago | (#43652191)

congress has the purse strings

note the large increase in spending took place once the democrats took control of congress. It has nothing to do with the bush tax cuts.

...wont make me shop at "traditional" (5, Insightful)

cgiannelli (2740647) | about a year ago | (#43651973)

Shopping at home is more convenient and less stress inducing. Societal courtesy is low, people wander about stores aimlessly blocking isles, screaming kids, yelling parents. Store personnel that ignore you, and if you ask for an item seem annoyed. 10 registers and 8 people in line but only a single register is ever open. It feels like an interrogation when you go through checkout "have our store card? want our store card? Did you know about this special? fill out this form? Zip code please, credit or debit?" and I just say "can i just pay and leave please?".

Traditional retailers want business? Change their service, train staff better, have more registers open, kick out the rabble who just hang out in stores and never buy stuff. Most of all lower prices. Even with shipping and sales taxes, I've bought quite a few items online far cheaper. It adds up. Time saved, gas saved, not desiring to punch a moron, or rude person. Despite our need to be around people, malls and shopping just sucks. It's not the same pleasant experience it used to be.

Re:...wont make me shop at "traditional" (2)

adosch (1397357) | about a year ago | (#43652039)

Couldn't agree more. I do prefer online purchasing for those very reasons myself. I think it also comes down to simply getting the 'best' deal, and if that's brick-and-mortar or online with 2-day S&H, that's what it is. I think there's also some convenience in there, too, especially if there's something you want. It's all what you are willing to pay for that item you want, need or can't live without. I know it's not going to break the bank for me to pay the 5-7% sales tax on items online, I just hope that the prices online still stay competitive and don't stick it to the consumer, otherwise it honestly won't make a bit of difference to me anymore.

All in all, I'm indifferent on the sales tax dilemma and I've came to the conclusion that this internet place isn't really a fun place anymore...

Re:...wont make me shop at "traditional" (1)

Nrrqshrr (1879148) | about a year ago | (#43652087)

Exactly. If traditional retailers are struggling to compete with the internet model, maybe it's because the traditional model is now obsolete and should just be left to die. I know there is the whole jobs and outsourcing issues, but we cant keep the dying breed on life support forever because people are depending on it.

Re:...wont make me shop at "traditional" (3, Interesting)

Shavano (2541114) | about a year ago | (#43652221)

If local retailers go out of business, you will regret it because sometimes you need that new gooseneck or pair of shoes right now. Two day delivery doesn't cut it when you have an immediate need. It's fine for stuff that you DON'T need. It also doesn't work at all well for the kinds of thing where you need hands and eyes on the product to decide whether it's the thing you want.

The kinds of sales where online works well are when you either know exactly what you want (down to the model number) or don't particularly care because a wide variety of items fit the bill.

Re:...wont make me shop at "traditional" (3, Insightful)

davidbrit2 (775091) | about a year ago | (#43652099)

So what you're saying is that they should reduce marketing, spend more on training and staffing, and shrink the clientele, while at the same time lowering prices? Interesting strategy, but I don't think "reduce revenue and increase operational overhead" would have the desired result.

Re:...wont make me shop at "traditional" (3, Interesting)

pla (258480) | about a year ago | (#43652237)

So what you're saying is that they should reduce marketing, spend more on training and staffing, and shrink the clientele, while at the same time lowering prices? Interesting strategy, but I don't think "reduce revenue and increase operational overhead" would have the desired result.

The sooner stores realize who actually spends money at them, the better. The vast majority of businesses would do far, far better if they could shed the bottom 10-20% of their customers - The coupon cutters who tie up lines for half an hour and end up paying $6.99 for 30x that value in groceries and then count out pennies one... by... one... to pay (and then end up $0.04 short); the medicaid customers who "can't afford" that $2 copay but buy smokes in a separate transaction; the "window shoppers" who just use the physical store as a gallery.

On the flip side, when I walk into a store, I know beforehand what I want, I walk immediately to it, I take it to the register, and I have some appropriate form of payment ready before the cashier wants it. And while the necessity annoys me, I even have a "No!" handy to each BS upcharge and bit of personal info your marketing department has forced the poor cashiers to beg for this week. Bam, in and out in a minute and a half, and quite likely one of your most profitable customers of the day in terms of what you had to do to get my money.

If you kick out the former so I don't find every visit to your brick-and-mortar an entirely loathsome experience... Y'know, I'd honestly rather not wait a week for shipping. But, as long as I can get a better experience online - Well, don't complain that the online stores have killed you, when in reality, you've pulled the equivalent of a slow suicide by eating nothing but crappy fast food.

Re:...wont make me shop at "traditional" (3, Insightful)

dhermann (648219) | about a year ago | (#43652451)

Tell me more about this "rabble" to which you refer. Can we easily identify them to make ejection procedures? Do I need to print out a Whole Foods shopping list to show to security personnel? Will there be a credit check at the door to ensure that a potential customer can afford to shop at Crate & Barrel? Or perhaps you would prefer to filter by skin tone?

Re:...wont make me shop at "traditional" (1)

axl917 (1542205) | about a year ago | (#43652125)

Traditional retailers want business? Change their service, train staff better, have more registers open, kick out the rabble who just hang out in stores and never buy stuff. Most of all lower prices.

I don't disagree per se, but how do you expect them to invest in better training and hiring, increased staff, etc...while lowering prices? If anything, that added cost would be passed down to the consumer via higher prices.

Re:...wont make me shop at "traditional" (1)

amber_of_luxor (770360) | about a year ago | (#43652395)

The simple solution is to terminate all existing brick and mortar employees.

Install touchscreen kiosks, that are nothing but a wiki of the products that the store offers for sale. Let users browse that wiki. If they have specific questions, let them touch something that connects to a call center in, say, Walvis Bay. (A call center there costs roughly half the price of a call center in India.)

Hire one person, whose function is to ensure that the self-checkout registers are working correctly. Make that five employees, so the store can be open 7/24. Add five more employees, whose sole function is to clean the store every shift. (One person per shift to control the cleaning bots.)

If the local Walmart did that, their customer service would go up several orders of magnitude. That store would also be several orders of magnitude cleaner.

If Pennys did that, customer service would go up by several thousand orders of magnitude.

If Radio Shack did that, customer service would go up several million orders of magnitude.

Amber

Re:...wont make me shop at "traditional" (3, Insightful)

jbmartin6 (1232050) | about a year ago | (#43652147)

I said roughly the same thing when the Best Buy CEO was complaining about people using BB as a showroom for the Internet. I thought "You are really complaining that people are coming into your store?" That chump wanted to blame everyone else when people who WANTED to buy something were in his store and left empty handed. That's called opportunity, how do you get to be a CEO without recognizing this? Instead of looking into the top reasons people don't buy in the store, which you mentioned, and doing something about it. I was just in Target the other day looking at TVs and the only employee around was hunched over a laptop off in the corner studiously ignoring everyone. Well I guess an online retailer gets the sale. I wanted a big red button under the TV that I could press if I wanted to buy it. And no I don't want the goddamn Spanish Inquisition about club cards and extended warranties. Those last two are the sort of crap you get when you put stock analysts and accountants in charge of the company.

Re:...wont make me shop at "traditional" (0)

Shavano (2541114) | about a year ago | (#43652169)

Misanthrope any?

Re:...wont make me shop at "traditional" (1)

Anonymous Coward | about a year ago | (#43652183)

I hate to break it to you, but the people collecting your money (government) could care less about your shopping preferences. They just want your money.

Sales Support SUCKS nowadays (1)

RobertLTux (260313) | about a year ago | (#43652263)

A few things that would improve things a lot in stores

1 issue the staff scanners with barcode and CC readers so they can ring stuff at the racks

2 keep a better track of whats in store

3 have a buy in store send from warehouse service ( invert the ship to store thing)

4 have at least one person in the store keeping the sales folks going

oh and as to the "riff raff" sometimes they do actually buy stuff (or bring folks that do buy)

Re:...wont make me shop at "traditional" (2, Insightful)

140Mandak262Jamuna (970587) | about a year ago | (#43652365)

You shop where you find it convenient. Traditional or the net. But the tax is due either way. Eithter you allow the retailer to collect the sales tax and remit it or you track it cleanly and file the taxes yourself. If you are going to take the route, "Come and collect the taxes if you can". Then you are simply a tax dodger and a tax cheat. All this protestations about traditional marketers are thin veneer for the show. Basically you want to dodge the tax.

Re:...wont make me shop at "traditional" (1)

Jawnn (445279) | about a year ago | (#43652435)

Traditional retailers want business? Change their service, train staff better, have more registers open, kick out the rabble who just hang out in stores and never buy stuff.

I guess you missed the point of TFA. It's about state and local government wanting their tax revenues lost to Internet sales, not business wanting to recover the revenue lost to Internet sales. Sales tax is a stupid idea, for many reasons beyond the mess that is trying to enforce it's collection in this age. How about we leave the local merchants to figure out, or not, why they've lost so much business, and instead, task our representatives with finding realistic ways to replace the revenue once gathered in sales tax?

Re:...wont make me shop at "traditional" (1)

jareth-0205 (525594) | about a year ago | (#43652487)

This is an often-heard trivialisation of the problem. Amazon currently provide *no* customer service, and you still shop there... Customer service with real people who know about their products costs money, and couple that Amazon don't provide this with their reduced costs advantage of taxation, economies-of-scale, lack of shop rent, and local retailers really don't stand a chance.

Physical retailers might not be doing the best job that they can, but saying that it's entirely their fault and completely within their control to fix is ludicrous.

Easy to dodge? (0)

M3.14 (1616191) | about a year ago | (#43651985)

How hard would be for those large companies to just offshore the sales to avoid paying this tax? I mean they are already doing it to dodge other taxes anyway. Wouldn't this just affect smaller shops that do not have an army of lawyers and "tax optimization" specialists.
Fortunately this is US only (for now) but it's a very bad example for other goverments. I can already see other country politicians smiling and thinking: "Hey - we can do that too, right?"

Re:Easy to dodge? (1)

Shavano (2541114) | about a year ago | (#43652239)

How hard would be for those large companies to just offshore the sales to avoid paying this tax? I mean they are already doing it to dodge other taxes anyway. Wouldn't this just affect smaller shops that do not have an army of lawyers and "tax optimization" specialists. Fortunately this is US only (for now) but it's a very bad example for other goverments. I can already see other country politicians smiling and thinking: "Hey - we can do that too, right?"

They'll be just asking for imposition of tariffs if they do that.

Re:Easy to dodge? (1)

smooth wombat (796938) | about a year ago | (#43652247)

How hard would be for those large companies to just offshore the sales to avoid paying this tax?

This is not about a company paying a tax, this is about companies collecting the taxes for the states, just as a brick and mortar store does now.

National Sales Tax (-1)

bill_mcgonigle (4333) | about a year ago | (#43652003)

Let's be clear - legally it's a National Sales Tax - "Internet" is just the wrapping paper it's in. Only a fool would expect it to not be expanded in the future, should it become Law (and survive the Constitutional challenge filed the next day).

If a State does not want to enforce its own sales tax laws, that's not the burden of people in other States, nor do the Feds have the authority to impose it. Well, assuming the US Constitution still has any validity.

Re:National Sales Tax (2)

EmagGeek (574360) | about a year ago | (#43652053)

The US Constitution has not had any validity in some times - probably not since Wickard v. Filburn, and to a lesser extent Gibbons v. Ogden, which basically gave the Federal government unlimited authority to regulate anything and everything, including where you can go, and what you can do with your own land.

Re:National Sales Tax (5, Insightful)

Anonymous Coward | about a year ago | (#43652055)

"Congress shall have the power to regulate commerce among the several states". Maybe you should actually read the Constitution before you spout off your talk radio style nonsense.

Re:National Sales Tax (3, Insightful)

SuricouRaven (1897204) | about a year ago | (#43652069)

This may be a very rare thing indeed: The commerce clause being used as intended.

Re:National Sales Tax (1)

dkf (304284) | about a year ago | (#43652269)

This may be a very rare thing indeed: The commerce clause being used as intended.

Congress also has got the power to levy taxes; the SCOTUS ruled on that recently, so don't expect any change there for quite a while. If Congress choses to introduce a national sales tax, challenging its legality would be really hard. (It would also encourage harmonization of in-state sales taxes, as vendors will prefer to have one tax rate if they can't have zero taxes, but that's by-the-by.)

Re:National Sales Tax (1)

bill_mcgonigle (4333) | about a year ago | (#43652439)

Maybe you should actually read the Constitution before you spout off your talk radio style nonsense.

Perhaps you should read your history and the Federalist Papers before you decide what the purposes of the Federal Government and the Interstate Commerce clauses are. Hint: Interstate Commerce was being taxed, and this was considered a big enough problem to justify a Federal government.

Re:National Sales Tax (1)

SJHillman (1966756) | about a year ago | (#43652127)

The Fed already has jurisdiction over interstate commerce, so it seems like this would fit right in with what they already do. It also seems unlikely that states wouldn't want to collect more revenue, especially if the Fed is the one paying to put the system in place.

Personally, while I really don't want to pay more taxes, I don't see this as a bad thing (depending on implementation). You're already supposed to be paying this tax, so it's not a new tax but it does put the burden of reporting it on the company and not the individual.

Re:National Sales Tax (1)

Charliemopps (1157495) | about a year ago | (#43652333)

Taxes are always a bad thing. What are they going to use the money for? They could easily remedy this entire situation by just getting rid of sales tax all together and raising income tax... or better yet, just reduce spending.

Re:National Sales Tax (1)

bill_mcgonigle (4333) | about a year ago | (#43652413)

The Fed already has jurisdiction over interstate commerce, so it seems like this would fit right in with what they already do.

Taxing power is delegated separately from the Interstate Commerce power. In fact, one of the rationales for the Federal Government in the first place was to prevent the States from assessing taxes on Interstate Commerce, as they did under the Articles of Confederation.

You're already supposed to be paying this tax

No, I'm not, I live in one of the five States without a sales tax. The Feds would like me to be a tax collector for other states. That's anathema to Federalism - collecting the taxes from their citizens is the other States' problem.

Re:National Sales Tax (1)

Shavano (2541114) | about a year ago | (#43652255)

Let's be clear - legally it's a National Sales Tax - "Internet" is just the wrapping paper it's in. Only a fool would expect it to not be expanded in the future, should it become Law (and survive the Constitutional challenge filed the next day).

If a State does not want to enforce its own sales tax laws, that's not the burden of people in other States, nor do the Feds have the authority to impose it. Well, assuming the US Constitution still has any validity.

The slippery slope argument doesn't really apply when ENTIRELY NEW LEGISLATION would be required for each and every step. The slope just isn't slippery.

Re:National Sales Tax (0)

140Mandak262Jamuna (970587) | about a year ago | (#43652335)

Federal government clearly has the authority to regulate interstate commerce.

BTW, constitutionally, the Government can tax anything for any reason. The power of taxation is absolute. There are no constitutional questions here.

It is funny this all powerful internet was created by the government investment and R&D and support. The companies that are the beneficiaries of these long term investment in infrastructure and R&D bitch and moan when they are asked to pay a small part of their income to fund the next generation of such R&D and infrastructure. These internet companies are simply selfish unpatriotic tax cheats.

Re:National Sales Tax (2)

bill_mcgonigle (4333) | about a year ago | (#43652367)

BTW, constitutionally, the Government can tax anything for any reason. The power of taxation is absolute. There are no constitutional questions here.

That's 100% wrong. There are specific types of taxes the Federal Government is allowed to implement, as specified by the Constitution. Read it.

What if the 'sale' was via an offshore subsidiary? (2, Interesting)

schwit1 (797399) | about a year ago | (#43652007)

The web front end and credit card transactions are in Bermuda, but the shipments are from a warehouse in the states? Is the seller obligated to collect state taxes.

Re: What if the 'sale' was via an offshore subsidi (0)

Anonymous Coward | about a year ago | (#43652081)

"The web front end and credit card transactions are in Bermuda"

Is it a Verisign TLD? Evidently that makes it U.S. enough to try extradition regardless of the server's physical location.

Re:What if the 'sale' was via an offshore subsidia (0)

Anonymous Coward | about a year ago | (#43652109)

in a nutshell, yes they are.
The legal term is "nexus" which is defined differently in different states. Some states require a physical presence (store, warehouse, salesperson's home) and some required much less. In some cases, if someone from the company travels to the state, that is enough for the state to demand sales tax.

The real kicker is not that online companies will have to start collecting tax from all 50 states, but they are going to be responsible for the tax rules from (IIRC) about 19,000 different tax jurisdictions: city, county, state, etc.

Re:What if the 'sale' was via an offshore subsidia (2)

Creepy (93888) | about a year ago | (#43652407)

Yes, is true, but I think there is a bit of a loophole. If you set up a PayPal like system in the Cayman Islands, you could funnel money into it (your "bank") and then because taxation is from the point of purchase (buyer's address) not the point of delivery, you could bypass tax law by making all purchases through that location. Basically, purchase by proxy through a Cayman's web site. The caveat is whether you owe gift tax or if it considered an overseas purchase, but once again you're right back in the unpaid Use Tax problem they are attempting to fix.

Also the average tax jurisdictions is thought to be about 9800, though there is a highball number in the 19000s. The real problem is there are something like 120 changes a day on average according to a news report I saw on it. If you have the resources to track 9800 different jurisdictions and 120 changes a day without a major impact to your bottom line, well I commend you Wal-Mart, but most businesses don't.

Re:What if the 'sale' was via an offshore subsidia (1)

Anonymous Coward | about a year ago | (#43652117)

Yes. Is most states is has to do with physical location of the business not the online store. If you have a distribution center in North Carolina... you are subject to their taxes.

Re:What if the 'sale' was via an offshore subsidia (1)

Etherwalk (681268) | about a year ago | (#43652265)

But if you'd drop-shipping from a third-party within the state, I'm not sure that that's still true.

Re:What if the 'sale' was via an offshore subsidia (0)

pesho (843750) | about a year ago | (#43652173)

The web front end and credit card transactions are in Bermuda, but the shipments are from a warehouse in the states? Is the seller obligated to collect state taxes.

No, but the customer will have fun time with US customs when the package arrives.

Bipartisan (5, Funny)

stewbee (1019450) | about a year ago | (#43652009)

I for one am glad to see that congress can come together on such an important bill.

Figures (0)

Anonymous Coward | about a year ago | (#43652031)

Well... time for Amazon et. al. to move to India...

Full and final sale price (0)

Anonymous Coward | about a year ago | (#43652063)

So what now stands in the way of obligating brick and mortar stores to post that actual final price of goods on their price tags? The argument I invariably hear against it is that there are so many tax jurisdictions that it's unnecessarily onerous for a business to manage that. Obviously that isn't the case anymore, is it?

im just glad to see this (2, Insightful)

nimbius (983462) | about a year ago | (#43652075)

bipartisan effort working together to screw the common american. Major multinational corporations are entirely exempt from burdens like taxation, while wageslaves enjoy a cornucopia of arcane, recursive taxation. That some how we're not supposed to talk about class warfare, why we all make shit-tier pay, or what sand encrusted foreign clusterfuck our taxes are being shoveled into.

it leads me to believe Hollyoaks has it all wrong. That Tony Stark only runs around fixing problems he created in the first place. that Batman is just the billionaire boilerplate we've come to recognize as our perpetual prison industrial complex. That should a revolution ever befall this great nation it will start with a flaming Wal-Mart, and not stop until every mansion and chateau from marthas vinyard to kennebunkport is reduced to a smoldering pile of ash twisted wrought iron.

Re:im just glad to see this (1)

140Mandak262Jamuna (970587) | about a year ago | (#43652275)

Well, Happy to seem Karl Marx being able to access the internet from the "beyond".

alibaba? (0)

Anonymous Coward | about a year ago | (#43652085)

Time to switch to Alibaba instead of Amazon...

ulimately this will erase barriers (1)

BroadbandBradley (237267) | about a year ago | (#43652095)

that there are 50 states and 50 different tax laws, and that's just domestic commerce is a huge problem. The benifits of internet commerce will ensure that online retailers don't go away, but ultimately there will emmerge a new system of state taxes that erases barriers between interstate comerce. The power of the internet is not going to be ignored, rather the world will eventually adapt to several billion people becoming virtual next door neighbors.

Re:ulimately this will erase barriers (0)

140Mandak262Jamuna (970587) | about a year ago | (#43652259)

The powerful internet was created by the government investment and R&D support. But the beneficiaries kick, scream, bitch and moan when they are asked to shoulder their fair share of the burden of paying for the governement.

Increase over seas orders (0)

Anonymous Coward | about a year ago | (#43652097)

Looks like this will make people order directly from China. Decreasing our jobs more and other BS.

The tax is not new. (0)

140Mandak262Jamuna (970587) | about a year ago | (#43652105)

This is not a new tax. Al the states have laws that state that the citizens must declare their out of state purchases and pay taxes voluntarily. Most state income tax forms have lines asking for this information.

But, everyone knows, it is very difficult to enforce and people will lie or "mis remember" about their out-of-state purchases. People who denounce this new move as onerous, bad, etc are tax cheats to dodge the tax or benefit by aiding and abetting tax dodging.

I see no reason why the internet businesses, whose existence came in because of long investments by the government in R&D and infrastructure, now denounce the government. If they get this tax law watered down, I wish the brick and mortor businesses push for a new tax on all internet companies to out of state sales, be levied a new federal tax to recoup the investment the federal and state governments (dont forget the state universities R&D contributions). They will be given a rebate equal to the amount of sales tax they have collected on behalf of state governments, all other federal sales should be charged a flat 6% federal tax. The Federal government might redistribute the money based on population or sales volume per state.

Re:The tax is not new. (1)

oh_my_080980980 (773867) | about a year ago | (#43652285)

It is a new tax. The so called "use" tax was created a couple years ago. It was created because States could not lawfully charge sales tax on purchases made out of state. So instead they claimed, residents needed to pay tax on purchases made out of state. The Federal government banned States from compelling on-line retailers from collecting the "use" tax so it was up to residents in each state to claim the tax on their state income tax form.

Do some research before you post....

Re:The tax is not new. (0)

140Mandak262Jamuna (970587) | about a year ago | (#43652493)

The use tax is constitutional. Pay it.

Re:The tax is not new. (1)

thaylin (555395) | about a year ago | (#43652475)

This is not a new tax. Al the states have laws that state that the citizens must declare their out of state purchases and pay taxes voluntarily. Most state income tax forms have lines asking for this information.

But, everyone knows, it is very difficult to enforce and people will lie or "mis remember" about their out-of-state purchases. People who denounce this new move as onerous, bad, etc are tax cheats to dodge the tax or benefit by aiding and abetting tax dodging.

Gotta love when someone starts with a logical fallacy.

I see no reason why the internet businesses, whose existence came in because of long investments by the government in R&D and infrastructure, now denounce the government.

I think you are using the word denounce wrong.. They are denouncing the bill, not the government.

If they get this tax law watered down, I wish the brick and mortor businesses push for a new tax on all internet companies to out of state sales, be levied a new federal tax to recoup the investment the federal and state governments (dont forget the state universities R&D contributions).

Just because the R&D takes place at a state university does not mean it was state money that funded it. Most such research is paid for by businesses or federal grants.

They will be given a rebate equal to the amount of sales tax they have collected on behalf of state governments, all other federal sales should be charged a flat 6% federal tax. The Federal government might redistribute the money based on population or sales volume per state.

How do you distribute money for the states that have no sales tax, or will this be like the copyright levies on CDS in some countries, it goes to benefit the collector and not the creators.

As long as (1)

Anonymous Coward | about a year ago | (#43652113)

...this is merely to collect existing State Sales tax, that is fine. If they are trying to sneak an additional "federal sales tax" in as well however. Time to take up the torches and pitchforks and overthrow a tyrannous government

Re:As long as (1)

oh_my_080980980 (773867) | about a year ago | (#43652305)

No it is not. Use tax is not existing...it was a newly created tax to tax on-line purchases made out of state.

This is a good idea. (3, Insightful)

sidragon.net (1238654) | about a year ago | (#43652121)

Some big online retailers charge you sales tax, some patchwork of others do. Currently, I have to dig back through receipts to report unpaid sales tax come April and it's a hassle. How about some of you stop your whining and accept that a tax code should be consistently applied.

Re:This is a good idea. (2)

ducomputergeek (595742) | about a year ago | (#43652291)

Sales taxes haven't been applied to catalog businesses for decades. What's the difference between a dead tree catalog and a catalog on the inter webs?

Re:This is a good idea. (1)

MMC Monster (602931) | about a year ago | (#43652445)

Sales taxes haven't been applied to catalog businesses for decades. What's the difference between a dead tree catalog and a catalog on the inter webs?

Scale. Catalog businesses never had 1% the volume of current online cross-state businesses.

Plus, purchasing via catalog didn't make you exempt from paying taxes. It just put the onus on the individual to calculate and collect taxes, rather than the business. This law just puts the onus back on the business.

I like the $1 million dollar floor, if it's on online gross. It allows small mom-and-pop businesses to have an online presence, and when they grow a bit they'll have to use tax software to help them out. $1 million gross seems like a reasonable number to me. You start collecting more than that you should be able to pay for some infrastructure to collect taxes. We increase that too much and big companies will be incentivized to break up their businesses to smaller units to slip under the radar.

Re:This is a good idea. (1)

Shavano (2541114) | about a year ago | (#43652317)

They were obligated to under state laws already. It's just that the states had no way to enforce their laws on businesses with no physical presence in their borders. (There was nobody to arrest for tax evasion and no property to seize within their jurisdictions.) However, you will see an immediate legal challenge if this law passes. Not sure on what basis, but there's too much money at stake businesses to not try to kill it with a lawsuit.

Re:This is a good idea. (0)

Anonymous Coward | about a year ago | (#43652337)

It's not even being consistently applied even with this. If you're making a phone or snail-mail order, it doesn't apply.

SO... SHUT THE HELL UP.

All I can say is... (1)

axl917 (1542205) | about a year ago | (#43652131)

god bless sales tax-free New Hampshire.

I question the "free software" part of the bill (1)

Anonymous Coward | about a year ago | (#43652167)

OK, the state supplies software. Can you integrate it into your shopping cart software at no cost? If you bought shopping cart software, do you now get a free upgraded version that supports state tax software, or more likely, will you have to spend money for V2.0?

And how much detail do you have to report to the state tax office? Can you get away with:

Sales to your state: $XXX.XX
Tax sent: $X.XX

Or will they do like normal governments and ask for tons of other hard-to-get-after-the-fact information, used for [insert Deity here]-knows-what?

New Hampshire's new burgeoning online empire (1)

CheesyMoo (655560) | about a year ago | (#43652189)

Selling all of NH's cultural relics like Vermont maple syrup and Maine lobster's, delivered fresh to your doorstep.

Not 50, but Thousands of Taxing Jurisdictions (5, Interesting)

Ron Bennett (14590) | about a year ago | (#43652271)

Among the challenges of collecting sales tax is there are thousands of taxing jurisdictions. And often the boundaries don't correspond to any zipcode nor even a particular municipality. In addition, sales tax jurisdictions can and often do overlap - ie. city and county.

Even a state that doesn't levy a sales tax itself may allow local authorities to do so, such as some local Alaskan towns do.

To make matters worse, there are numerous categories and exceptions in what's taxable depending on what it is, the amount purchased, the location / manner in which it's sold (ie. food item purchased in a convenience store verses supermarket; consumed on premises or take-out) and when (tax holidays, etc).

And then there's the matter of filing dozens of state sales tax returns - some will expect filings every month, some quarterly, etc. And the time-frames will often differ, so one could find themselves filing sales tax forms practically every month or even more often depending on sales volume. And that's not even getting into dealing with compliance checks that states may perform at any time.

Bottom line is sales tax is far more challenging to collect than many realize. It's not 50 states, but rather thousands of taxing jurisdictions with numerous different rates, rules, exemptions, etc.

There is talk of simplifying the collection process for on-line retailers, which would lessen the burden, especially to small businesses.

Re:Not 50, but Thousands of Taxing Jurisdictions (2)

oh_my_080980980 (773867) | about a year ago | (#43652355)

The Bill is suppose to centralize the taxing authority with one State entity in each state. So they would collect the tax and audit each retailer. But the bill is not clear as to whether or not other government agencies, like local governments, could ignore letters from other government agencies.

I support online tax (0)

Anonymous Coward | about a year ago | (#43652313)

I frequently buy from Amazon and other online companies however it is blatantly unfair that these companies don't have to collect sales tax, while regular brick and mortar companies do. Either do away with sales tax completely (which I'd prefer) or add it to online sales.

Re:I support online tax (2)

oh_my_080980980 (773867) | about a year ago | (#43652371)

Brick and mortar pay state sales tax because they operate a business in that state. On-line retailers do not because they don't operate a business in that state. Where on-line retailers do operate in a state, they pay state sales tax.

Do some research before posting.

Thank the Gods I Live in NH! (1)

ClippyHater (638515) | about a year ago | (#43652363)

Other than property taxes, we have no income nor sales tax.

Will probably LOWER my taxes (0)

Anonymous Coward | about a year ago | (#43652457)

I currently pay the "safe harbor" amount of the use tax on Massachusetts income taxes. Why? Can't be bothered keeping track of the online purchases, and afraid if I put down 0 for the use tax I'd be audit-bait (and penalized). But I'm not convinced I'll come out behind if this passes...

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