Faced with crushing deficits, depressed tax revenues, and a grim outlook for 2009, states across the country are taking another hard look at taxing interstate sales completed on the web. Once a strict "no tax" zone, those walls are now on the verge of crumbling.
for those interested:
This should be real interesting,in the near future!
As the brick and mortar retailers fall, I guess the E commerce stores will lose their advantage, and fall as well.
i dont get why out of state online buyers dont get taxed for certain things. im not thinking ahead now but can someone enlighten me on that.
If you feel you do not pay enough taxes, move here to Virginia, plenty to go around.
Tired of the IRS and the government taking your hard-earned wages? There is another way.
please visit www.fairtax.org and www.zaptheirs.com If you like. Mod, if this link is not allowed my appologies.
states across the country are taking another hard look at taxing interstate sales completed on the web. Once a strict "no tax" zone, those walls are now on the verge of crumbling.
Two years ago, when I purchased Winzip Self-Extractor (as an online download), it initially said "You appear to be in Europe and we have a legal requirement to collect 19% VAT on this transaction"!
Fortunately, I was able to utilise my super-human powers and swap continents, for the purpose of the sale
Yep...there's revenue the states are missing out on, so I'm sure that in the near future the joys of buying on the Internet and not paying tax will soon be a thing of the past.
If you're buying something that cost $500 and your state tax rate is say 6% that's $30 you're saving. That's considerable savings, like you're local retail store taking another $30 off. Years ago we bought a $2300 TV on the web. The savings can be huge.
Unfortunately, some of the sites I purchase from have already started adding state sales tax.
Online orders from places such as Walmart does charge sales tax. The way I understand it is, if the business has a physical location in the state they charge sales tax, even if it's only a warehouse. If I order from Ecost.com I pay no sales tax, a friend in TN does because they have a warehouse in Memphis.
As Don B. mentioned, the rule is if a vendor (business) has a brick and mortar location whether it's a store, warehouse or office in the state you're ordering from sales tax is charged. That tends to hit residents of states like New York and California especially hard since there are lots of warehouses, headquarters etc in those areas.
I used to pay tax on everything I purchased from Amazon and many other major sites (evey a lot of eBay businesses) when I was in California. Now that I'm in Arizona I don't seem to see tax on anything online (haven't tried Wal-Mart).
Does that mean a physical location in the state of the shipping address, or billing address? (or both?)
It depends on how the state has written and interprets its tax code. A mailing address is considered by many as "proof" of a physical location.
Alabama has a section on its state income tax return to report any purchases you made out of state or via the Internet. The idea is that you report the purchases, calculate the Alabama sales tax and deduct any out of state taxes you may have paid. It's pretty much an honor system, so you can imagine how successful it is/isn't. There are already a few websites that charge state taxes, but I try to avoid buying from them.
While it is true that only online stores that have a physical presence in your state are required to collect sales taxes, states are startign to twist the definition of physical presence. New York recently passed a law that if a web site has a person/business/entity in the state of New York that represents the web site, said web site has to collect sales tax even if the site itself has no offices or warehouse in the state. They are saying that busineses within New York that provide a link or AD to Amazon.com give Amazon.com a physical presence in the state and are forcing them to collect taxes. Amazon.com sued in court but the suit was thrown out. The Judge ruled there was no way amazon could win and dismissed the suit, but I might point out it was a state court that did this.
One problem for the internet retailer is the mix of taxes. They will have to collect the sales tax for your state, county and even city. Each entity taxes at a different rate and often taxes different products at different rates. This will make selling over the internet very difficult and expensive and will probably make many of the borderline online realters go under. Imagine waht will happen if sales on Ebay are subject to taxes?
I hate taxes.
Pennsylvania has that on the tax return also. As if I do not have enough to do, the expect me to keep track of all my out of state purchases so I can report them on my return and get taxed on those purchases.
One problem for the internet retailer is the mix of taxes. They will have to collect the sales tax for your state, county and even city. Each entity taxes at a different rate and often taxes different products at different rates. This will make selling over the internet very difficult and expensive and will probably make many of the borderline online realters go under.
It's very expensive to maintain this information as the communities raise their tax rates. The little guy can't keep up or afford the sales tax software.
Plus, it goes against the global objective of the internet. Globalism changes everything, and we have to just deal with it. Those who want local taxes collected on the internet are resistant to change.
hey do u guys remember the one day where there is no sales tax? is that an annual thing or just a rare thing that occurs???
Some states have a day or a few days "tax holiday" where you don't have to pay sales tax. That is an option by the state. Most seem to have them in late summer or early fall around back to school time.
Unfortunately my state doesn't have one.
me too...please join the party.
Unfortunately my state doesn't have one.
My state also has a tax free day, but it is only for clothing, school supplies and computers.
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