Internet sales tax

Then you are buying from the wrong people in Hong Kong. I regularly order items from Hong Kong. Some I ordered on a Thursday and received the following Tuesday. My brother had a similar experience ordering a laptop out of Singapore. The longest I usually wait for an item is a couple of weeks. For the difference in price, I can afford to wait.

Regards,
--Lee

Whenever I made a purchase on the internet (including Amazon) that charged sales tax, it ALWAYS factored in the local sales tax.
The NY State sales tax is 4%, the county I live in is 8.625%. New York City sales tax is 8.875%.

Surely this will cause major problems for small companies doing business on the internet.

Amazon has stopped opposing nationwide Internet sales taxes, which might seem odd, especially since they used to fight them tooth and nail of course. Amazon is not volunteering to pony sales taxes up even if the bill doesn't pass, but they're not fighting the bill. They would actually like to see sales taxes imposed on *all* Internet sales in all states that collect sales taxes, because Amazon now thinks it would work to their advantage in terms of their long-term strategy. Here's why:

Amazon sees a ton of future growth in its sales with same-day delivery. Smaller web sales firms would have trouble competing with them nationwide on same-day delivery. But to do it, Amazon would need a lot more warehouses set up for delivery, which means footprints in every big state, so they see it as inevitable that they'd have to be collecting and paying sales taxes in most states anyway. If smaller firms that can't do same-day delivery also lose the sales tax price advantage along with Amazon, that puts Amazon in a better position. Even losing their sales tax price advantage over local retailers, they'd still have a price advantage over brick-and-mortar chain stores, because retail stores are more expensive than warehouses to build and maintain.

Makes sense from Amazon's point of view.

All taxing districts. The number I've seen bantered around is 9600.

If they collect it via check or Credit Card it must be turn in however how much is turned in do to record keeping remains to be seen.

My point was that the retailer's software already has some sort of tax calculation capability built in, depending on the software. I recall buying an upgrade module once for QB to include payroll taxes, an equally complicated and location-specific process. It will require an upgrade to expand whatever tax functionality that they have now.

The hard part won't be in calculating the taxes. The difficulty will be in making payments to a myriad of state agencies.

In any event, you can safely surmise the price of goods will increase because of the added burdens of segregating and handling the different taxes back to the various parties. Remitting taxes back to the individual states will require significant manual effort in addition to all the help from software. Right now you have only been looking at one part of ne face to the coin. What about the added labor and personnel required at the state end to process these checks and transfers from all the different sellers? Will accounts have to be set up for each? The issue is a lot more than just collecting a sales tax from a few, if it is extended to all businesses doing Internet or Mail Order, then the burden on the state may outweigh the revenue received. Sometimes you just have to be careful what you ask for - you might get it and a whole lot more that you didn't factor into the initial scheme.

TN has a deal in place with Amazon that allows them to operate in TN without collecting taxes for a period of time.

The bill passed in the Senate. It faces a tough fight in the House.

Don"t you love those politician they have a brain how to get into your pocket.

The bill has passed the Senate.

However, it doesn't seem that it would affect the small sellers or even all states. Here's a snippet from an article I was just reading on the Atlantic Wire:

"the new law would force retailers with over $1 million in revenue to charge sales tax in the 45 states (plus the District of Columbia) that require it."

The article is located here: http://tinyurl.com/d5uh82k

NOTE: URL shortened for easier posting.

Reminds me of the scam the photo stores in NYC used years ago. You could buy a high ticket item; they would ship it's empty box to an address in NJ, and you would not pay NYC sales tax.

I hate to realize that now I'm now counting on the Republicans in the House (a crazy bunch they are) to block that monstrosity!!!!

There goes one of my favorite shopping sites.

I hope it fails in the House.

Write your Representative!
http://www.house.gov/representatives/find/

Done

I emailed my rep and asked him to help pass the bill.

Well, Im under a mil a year, so personally, I don't care .

That will be the next thing they tax.

Amazon started collecting PA sales tax within the past year, even with the tax most of the stuff I buy from Amazon is still cheaper or can't be found elsewhere so I still use it.

Now it is up to Congress to review, amend, pass it or knock it down.

Good luck to all.

If the seller is a brick and mortor business then the sales tax will be forwarded.

I'm from Wisconsin. If I cross the boarder into Illinois and make a purchase at a brick and mortar store, they do not collect and forward Wisconsin sales tax.

Yet if I travel virtually to Illinois and make a purchase, the online retailer is supposed to collect Wisconsin sales tax and forward it back to Wisconsin.

How is that fair? The B&M store only has to keep track of and collect taxes from one taxing district - the online store has to assess and collect taxes for around 10,000 taxing districts.

What's good for the goose is good for the gander. If online stores need to charge sales tax based on where the purchaser is from, then so should the B&M stores.

If I shop in Illinois at a brick and mortar store I pay 7.25% sales tax and in Wisconsin I pay 5% to the state and .5% to the county. There is a Farm & Fleet store about four miles from me in Illinois and another one about twenty miles from me in Wisconsin. It would take a little over a gallon of gas to shop at the Wisconsin store so for most purchases I shop the Illinois store.

Tax is about 9.5 down here in Cook County. Since I have a car that gets very good mileage, it's cheaper on higher ticket items to drive up to BB in Kenosha and pick things up. It's 40 miles going up the back way to avoid tolls, so that's about 2/3 gallon each way. If I need an electronic item and I'm going to buy local, I will cross the state line because it saves me a lot of money by doing so, in addition to putting the screws to the state of IllAnnoy.

Come to New York! We are the Progressive State and it ain't getting any better here. I have finally set the timer running and hope to be out in four years. My next door neighbors gave up, are under contract to sell their house and are moving to Florida, hopefully before July 1st so they cannot be considered full time New York residents for tax purposes.

If both the seller and buyer are in IL, it has been my experience that State tax is charged by the commercial seller.

Ron

I bought an Apple MacBook Air from an online store in California to be shipped across the country to New Jersey to avoid the local tax imposed to Californian residents (S&H + online tax = 28%). It was cheaper to then pay the bulk postage to get it back to California from a New Jersey residence.

I guess the government needs another way to get more revenue!

I wouldn't mind it so much if they used it properly!

I'll see your ban on 16oz soft drinks, and raise you with Maryland's 'rain tax'.

It's a giant race between Bloomberg and OWEmalley to see who can be the greatest progressive. Maryland has the edge in maggots sucking on the government teet, but New York has Bloomberg's billions to spend.

It's a madhouse. A maaaaaaaaaaaaaaaaaaaaaadhouse.

at least you 'own' the water lot of places out west, whom ever owns the water rights to the land, owns the precipitation that falls on it.

New York, just remember the sales tax in New York was supposed to be 'temporary' that was about 40 years ago

I see no logic in paying sales tax say to the state of California if I buy from Washington state. Many small businesses don't have the ability to know thousands of local tax rates so they know what to charge. Large companies like Amazon will profit by charging a fee to use their data bases on local tax rates.
The bottom line is more money taken out of the economy and given to the government who can't properly spend what they get now. Large companies and the government will get the money while small businesses will suffer.

I understand the Marketplace Fairness Act differently than you seem to. I would say that small business will profit from the passage of the Act because they will not be at as much of a price disadvantage as they are now.

It is neither fair nor efficient to require brick-and-mortar sellers to collect sales taxes while their on-line and mail order competitors effectively sell sales tax-free. In many states, people are supposed to pay sales tax to their state on items that they purchased from out of state internet vendors - but most people do not pay, not the least because they do not know they are supposed to pay.

The Marketplace Fairness Act is a bill with bi-partisan support and the support of retailers (see http://www.marketplacefairness.org/support/). It would establish fairness in the marketplace by imposing on out-of-state internet and mail order sellers the same sales tax withholding requirements now required from in-state brick-and-mortar businesses.

This bill exempts small businesses. It would only permit states to require sales tax collection on internet and mail order firms who have at least one million dollars in out-of-state sales.

It really annoys me that each time a vehicle is sold, the new owner must pay sales tax in my state of NY.
Using the figures below for selling a vehicle in my county four times, the state is laughing all the way to the bank.

Purchase Price Tax Rate Tax Collected
$20,000.00 8.625%= $1,725.00
$15,000.00 8.625%= $1,293.75
$10,000.00 8.625%= $862.50
$5,000.00 8.625%= $431.25
$4,312.50 Total

That's an additional $2,785.50 from the original tax of $1,725.00.

As quoted from the news article..

"There are about 10,000 taxing jurisdictions in the U.S., with many different rates of sales tax and many different lists of what's taxed and what's not."

Nuvi1300WTGPS

If we are discussing a tax on a "sale", why should purchasers after the initial purchase be exempt?

I buy a lot of stuff from Amazon, almost all my shopping is online.
When Texas did the tax thing to Amazon I said I would not buy from them. But, looking for stuff, and with Amazon's price, and their free shipping, I was still paying way less at Amazon. So even if they have to collect the tax Amazon is still the best place to shop on line for my stuff.

In California we only pay the sales tax on the car once. Paying sales tax again would be unfair. Sooooooo.......... in California they call it "use tax" and do the same dang thing. Isn't semantics great?

My daughter lived in Montana and bought a car. Then she had problems in her relationship and moved to California. The state of California declared that, since she had purchased the vehicle shortly before moving to California, she had only bought the car in Montana to avoid the California use tax. They insisted she owed the state of California the tax. What a racket.

I buy a lot from Amazon & eBay.
I want to pay taxes to keep our local government going so I hope I can pay tax and still buy from Amazon & eBay.
As long as I don't have to go to Walmart I am good.

I do like the Eco-friendly packaging from Amazon. My local WM encapsulates items in bullet proof clamshell plastics.

In the end just follow the money. Whoever gets the extra tax revenue, that's the real reason they're doing this.

This is called nexus. Always has been. Anyone that charges sales tax has to display their state tax license.

Doesn't matter how many taxing jurisdictions there are. Businesses use tax services that provide tax files for this purpose. Whenever you purchase something online, or from a brick and mortar, and you enter your zip code, the order entry software accesses the tax software provided by that service to determine state, county, and local tax rates, as well as what is, and what is not taxable.

It is not simple for a company, or a person, to charge tax. You need to collect the tax, put it somewhere, fill out a different form for each of the 50 states, and every municipality in every state has a different tax rate.
Get it wrong and you are suddenly a criminal.

There is a huge cost to companies just to administer the tax.

Most states (except Deleware) have some form of Sales Tax. Thus, almost every business collects taxes now. It would not, in my opinion, be a "huge" problem to collect a new jurisdiction tax.

BUT, if the Marketplace Fairness Act passes, ONLY businesses with over a million in remote sales will be required to collect new taxes. If they have that much sales, I think they can handle it.

You are missing the point. *Collecting* the tax is probably not all that hard, given that there are software programs to handle it. The *problem* for a small business comes when you have to *send* those funds to 9600 different tax districts. Of course, hardly anyone will have to send taxes to all 9600, but having to send taxes back to a couple thousand jurisdictions is not hard to imagine at all, and will likely be common. It is not hard to realize that for small purchases, the small business will spend way more money in postage and labor accounting for and sending back tax to a given jurisdiction than the actual amount of the tax. How is this good for the economy in any way? Because if these small jurisdictions get a bunch of small checks from internet vendors, I would be willing to bet that their costs at the jurisdiction of keeping up with these checks and processing them would cost more than the checks themselves are worth.

This, to me, is very discriminatory toward internet businesses. Why? Imagine a local store in your town. In many cases they will not sell anything on the internet. Thus, when they collect taxes, they only have to keep track of the state+local tax rates, and send the taxes they collect to probably 3 jurisdictions at most (city, county, and state). However, an internet business will have to send checks out to up to 9600 jurisdictions. That's a huge increase in overhead for a small business, which will probably require one or more new employees dedicated to this task, which in turn will result in higher prices for the goods sold.

Also, $1 million in sales might seem like a lot of money to many people, but there are a lot of small businesses that sell expensive items, just not many of them, which will end up totaling more than $1 million a year. Just because you're selling more than $1 million a year doesn't mean you are rolling in piles of unattended cash, or that you have a huge staff.

Regards,
--Lee

I believe that all taxes are sent by money transfer now. I haven't had a business for years, but I sent all the tax money to Sacramento. They sent Santa Ana & Orange county their share. So I'm thinking that only 50 accounts will be required.

I understand the vendor's wish for a standard internet tax. If they sold products to people in 50 states, they would have to know each states sales tax and be able to calculate it into the final bill. However, if they do have a standard internet tax, would that replace the state sales tax that some vendors already charge or would it be an add-on.

No matter what happens, the buyer will be paying more. Even if the seller does not have to collect the tax, they can still charge for the tax and pocket the money. the seller would never know. In NY, caterers have been doing something similar by charging a service fee on top of their ordinary charges. Most people thought that the service fee went to the service provider. However, the catering companies were not turning over to the service staff, but were pocketing the money, adding to their overall revenue.. .