Tax on online GPS receiver orders

I have been paying sales tax on Amazon purchases for a long time. Not happy about it - sometimes I look for other sellers that do not collect the tax.

Heck in NY you pay for the polluted air you breathe, don't know who is "worser" mayor Bloomquat or Gov. Jerry Moonbean

6.5 percent is ASSEMBLY labor cost. 42.5 is material. Is material really mineral ore laying in the ground? No. Is material a pot of molten metal? Is it a sheet of steel? No. Material is a finished part and in most cases a sub-assembly. It could be a radiator cap or a stamped & welded frame. The labor cost to produce the material is significant and must be included.
I won't quibble about the specific product mentioned in the study. If I conducted a study about the price of cordless drill, I would arrive at a different conclusion.

What would you consider an acceptable source for the data?

Do you actually believe this?

California (and America) has exactly the kind of elected officials the want and deserve. There are NO bad politicians-- only bad voters. Idiots elect other idiots.

The more money you make, the more places you have to hide it. It's a fact.

As for your second post, I'll avoid a caustic answer as Miss POI doesn't like political discussions on the board.

Let it suffice to say, the world's voters seem to make the same mistakes over, and over.

All politicians need to be put on a short leash; every last one!

I am wondering why people think that internet businesses should not be required to collect and remit sales taxes.

I live in Tennessee and the previous governer worked out a deal with Amazon to site several distribution centers in the state with the understanding that Tennessee would not require Amazon to collect sales tax. Thousands of new jobs are involved.

The current legislature is trying to pass a bill that would require Amazon to collect sales tax. Amazon is saying they will not build the centers in the state if that happens. Legislators are saying they would honor the previous governor's deal for only a few years.

When I live the sales tax rate is 9.25%

I tried to make up my mind what I thought about this issue. Here is the thought experiment:

Let's say that I set up a new internet business in one of the many buildings vacant because the previous business failed. All I really need is a drive through window and shelf space. I intend to buy a local product (which is well known and liked with proven value) at distributor rates. If you want this product, you order it through the internet using a credit card. You will get a confirmation number. Come to the drive-in window, give your name and confirmation number and you will be given your product.

Since I have an internet based business, your bill will not include the 9.25% sales tax you would pay if you bought the product down the street at a retail store.

Your call: does that seem fair to the other businesses selling this product?

Amazon collects taxes from people in Washington State.

...time will tell.

the Constitution states that the Government will be responsible for providing a common defense, regulating interstate commerce, promoting the general welfare, etc. These things cost money and in adopting the framework the Founding Fathers enacted

Section 8. Clause 1. The Congress shall have Power to lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States.

The 16th Amendment permits an income tax, though many dispute its legitimacy.

Basically, your choices as an American are to pay up, move, ignore the law and face prison or work to amend the Constitution to deny government the power to tax.

It's not the fact the government taxes me that gripes my a$$ so much as the wasteful b$ they spend our (not their) money on like bailouts and welfare and the funding art projects like "Piss Jesus"...hey, I love art as much as the next guy...I have a nice collection of original art and pottery...but I pay for my tastes, I don't make others do so.

JM2CYMMV

Your premise is flawed as Amazon does not maintain any outlets to which the ultimate consumer has direct access. So your " Internet business" is a local business that only accepts orders from across the state rather than handling cash transactions at the point of presence.

My business will allow people from Georgia and Alabama to easily pick up the product.

I had hoped to set up the scenario well enough to get to the question of whether "internet" sales should be exempt from tax but I knew it would be hard.

Tell you what: can you come up with an internet business that competes with local businesses that have to charge sales tax?

I have come to the conclusion that the playing field should be level; otherwise, jobs will be lost from local areas.

Amazon, Overstock, New Egg, Tiger Direct...
Large warehouse, order processing staff, no direct contact with clients. If an order is fulfilled for a resident of the state where the warehouse is located, then tax would have to be collected as the business has a local presence. That's why you maintain multiple warehouses so an order from a state that a location can be filled from another location.

So, in my expanded example, I would have to charge sales tax to TN residents but those who came from AL or GA would not be charged sales tax.

But if the AL or GA residents shopped at the business done the street, then they would be charged TN sales tax.

That puts the business down the street at a disadvanage simply because my AL or GA customers ordered through the internet.

Note that if those same AL or GA customers called me on the phone and placed an order to be picked up at my drive-in window, I would have to charge sales tax.

Not the first, nor the last time California will try to make this happen. Always will be interesting to see if it sticks, but even if it does it won't mean new tax revenue for the State of California like they think it will. Amazon will cancel all affiliate relationships and spin off its CA-based subsidiaries into independent companies through which they contract services to avoid paying tax by eliminating the nexus. The cost of taking these steps would be less than the business they would lose from charging sales tax to CA residents.

I bought a kitchen gadget on ebay from a guy called, "truckloadcheap." I did not pay sales tax. USPS tracking showed that it was shipped right here in Illinois, not far from me.
It seems this would fit into your scenario.

How about retail stores (such as Pennys and Macys) that also deal in interstate commerce? In fact, they have treated local customers (taxed) and out-of-state customers (no sales tax) different for a long, long time.

Real example: 40 years ago, I went to a major metropolitan area in a state where I am not a resident. I made a major purchase. The item was physically small enough that I could have taken delivery at the retail store. However, the clerk told me that if I had the item shipped to my home, there would be no sales tax. Also, given the amount of the purchase, shipping would be free. There were, and are, no such benefits for local purchasers. It was also difficult at that time for small local businesses to match the larger store's shipping policies.

The internet has leveled the playing field for all businesses. There are few retail sellers, large or small, who do not engage in both local and internet sales. They collect tax from locals and ship tax-free to out-of-state purchasers.

It would be unfair to expect internet sellers to collect taxes on out-of-state purchases when retail stores engaged in interstate commerce do not have to collect sales tax.

Selfruler wrote

Are you sure about that?
..Blain's Farm & Fleet always charge me tax on jeans shipped from Wisconsin because they have retail stores here. Penny's catalog also charges tax.
Selfruler

I experienced the very same thing when buying jewelry out of state. However, that merchant did not have a store in my state.

In the instance you describe, a small local retailer (mom & pop with one location who also sells on-line) would have a sales tax advantage over a large retailer with locations in multiple states.

I still believe the situation is better now a local retailer than it was 40 years ago or than it would be if internet sales were universally taxed.

fish4fun - Don't you think those people whose incomes are lower than middle class should pay taxes also? I've read that 51% of the people in this country do not pay Federal income tax. I don't particularly think that's fair. People in high income brackets pay their fair share of taxes and then some. I don't like it when people who have no Federal taxes withheld can file a tax return and get a "tax refund" (ie- Earned Income Tax Credit). I don't consider myself to be rich. I earn a 6-figure income, but it's nowhere near the $250,000 that the President thinks makes you wealthy, yet I have taxes withheld from my pay and I pay quarterly taxes as well. I think everyone in the country who earns an income should pay income tax at the same rate (ie - a flat tax). That's the only fair way to collect taxes, in my opinion.

i agree with this; that said, i do think amazon ought be paying taxes in ca.

Amazon will not be paying taxes. Their customers will.

May be hard to believe but is not Mom & Pop doing the lobbying but "evil" Walmart the one behind the push.

Walmart has a large website and is required to collect sales tax on the on-line sales because they have at least one store in every town.

http://bit.ly/lCW0ZO

http://read.bi/m1wEyo

You mean manufacturing instead of service economy.
I agree. We should make it here if possible.

The Chinese are complaining about the value (valuelessness) of our money.

No kidding, dollars are worthless.

But we buy from them and pay in dollars, so they're stuck.

What does "Made in America" mean anymore? Quality? Not necessarily Profits going to Americans? Not necessarily.

But not necessarily inferior quality either. I suspect that Juggernaut was suggesting that we all begin to seek out products that are made in America/Canada AND THAT ARE SOMETHING THAT WE THINK ARE OF GOOD ENOUGH QUALITY TO BUY.

I support that suggestion.

As to profits going to Americans/Canadians, we need to dig a little deeper before we disparage where the profit goes. Consider the new Volkswagen plant in my area. It will provide over 2,000 direct jobs at the plant and, they say, some 5,000 ancillary additional jobs in support industries to our local economy. Yes, the final profits might be repatriated to Germany, but it might also be re-invested in adding to the plant and generating additional jobs.

Help us out by seeking good American/Canadian value.

This is the right way to think about this. Rather than bemoaning the small part of the purchase price that may go to ownership elsewhere, celebrate the majority of the money that goes to local workers, local suppliers, local municipal support via taxes and the local economy.

Some states have a line on their state tax forms for the taxpayer to enter how much they spent on internet purchases and to enter the amount of sales tax they need to pay the state.

Unless the seller is collecting the tax I don't see everyone jumping on the bandwagon to volunteer to police themselves in this regard.

It is worded somehow to get around the federal law/rule that internet sales cannot be taxed.

They Will Find A Way... to get the last penny.

http://www.nolo.com/legal-encyclopedia/sales-tax-internet-29...

Ny will wait a few years to get in touch with you, so they can charge interest on the sales tax. They never give up. Years ago my father gave me his old car (very low book value)
When I went to get plates, Even though his name is the same as mine) The clerk would not believe me it was a gift. I then got a bill of sale for $1.00. Then they were happy to charge me $0.05 in tax.
At least they got something.
I told the clerk I felt sorry for him as his parents probably sold him his birthday presents.

It won't be long be for all the Ebay sellers get an eye opener / wake up call to collect and report sales tax with every state's revenues now in the dump.

The original idea about Ebay was like a garage sale on the Internet. If you still treat it like is. California does allow you to have a sale a couple times a year without business license nor paying sales tax.

Maybe CA will start forcing people paying for business license before start selling on Ebay. That's even more juicy than just collect sales tax.

Ultimately, my purchase decision criteria starts with highest quality/value. Where it's made comes in second, but all things being equal, I will purchase the American-made product.

They already got the one for the IRS, starting this year or next, I think. That will be a PITA, ebay is gonna have to send an informational return (1099-K) to the IRS for all your ebay sales, maybe exceeding $20,000 annually.

The IRS then will have to figure out if those sales are included on your tax return or now. I dunno how they are gonna do that.

When you file the return in CA,there is a box-- "Did you purchase items from out of state"

I would think that in order for Ebay to report sales to an individual then Ebay would have to submit your tax payer ID and in most cases that would be your Social Security number. That is private information that most would not be willing to give Ebay.

What is your source of this rumor?

I'm pretty sure this refers to ebay "sales", not "purchases". That is if you sell stuff on ebay then you'll have to provide the necessary information, I can't see this applying to purchasers. This is for income tax, not sales taxes.

You won't have any trouble finding the reference. I did.

So just who IS #1?

Tax hire on everything.

And they even used red light camera to pocket your hard earn money.

No wonder people leaving California.

Ohio sent out notices this that the "Use Tax" has been on the books for many years, but will no longer be ignored. Use Tax is the same as the state/local sales tax, except it is on any and all items that were purchased without paying sales tax. They are offering amnesty to anyone that bought anyting that they did not pay sales tax on, if they report and pay the use tax, they will not get a penalty. But, if they don't pay the use tax, they will be pursued legally. How they are going to get the information on what I bought on-line from out-of-state companies, they have not said....

A few years ago NY went after people that bought cigarettes on-line from NC & SC. A federal judge signed an order for MasterCard to divulge the names of all NY residents that purchased smokes from those firms. It withstood an appeal. MC rolled over. NY residents paid the tax and steep penalties. I don't know if criminal charges were filed.

Coming from a family with several teachers in it, I have been distressed for many years that our educational system is in decline. Once our educational system was the envy of the world. As such, others tried to improve and the US went into decline because we thought we were the best and did not have to work at it anymore. The world changed and we did not.

We did away with many vocational schools thinking that everyone should be given the same type of education.

My two cents worth is that if we do not quickly improve the quality of our educational system, we will fall into second rate status.

We are number in in lots of areas. We spend more than any country on health care (but unfortunately do not have the best health outcomes).

You can't win them all.

Too bad we will all have to pay pretty soon.

"Amazon will begin collecting sales tax in California starting late next year, after it struck a compromise deal with lawmakers to delay tax collection by a year in return for abandoning the company’s referendum campaign against the levy."

http://www.ft.com/cms/s/0/b3767ed8-dcab-11e0-8654-00144feabd...

It amazes me that Amazon caved. I guess they plan on having a tax collection/payment relationship with every state, city and town in the country.

That's the issue, you know. Why should Amazon have to collect and fill out tax returns for thousands of jurisdictions? Some cities, like New York City, have their own income tax, wonder if they have their own city sales tax that Amazon will now be paying to them?