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Businesses Government The Almighty Buck United States Politics Your Rights Online

Congress Takes Up Online Sales Tax 297

Posted by samzenpus
from the pay-up dept.
head_dunce writes "A bill introduced Thursday by a bipartisan group of U.S. lawmakers seeks to make it easier for states to collect sales taxes stemming from online purchases. Amazon is among the e-retailers supporting the proposal, while a lobbying group representing eBay and Overstock.com stands opposed. From the article: '"Small businesses and states alike are suffering from the inability to collect due -- not new -- taxes from purchases made online," said Rep. Steve Womack, R-Ark., adding the legislation is a "bipartisan, bicameral, common-sense solution that promotes states' rights and levels the playing field for our Main Street businesses."'"
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Congress Takes Up Online Sales Tax

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  • Amazon's strategy (Score:5, Insightful)

    by crazyjj (2598719) * on Friday February 15, 2013 @08:47AM (#42909339)

    I've been noticing that Amazon has been spreading out physical presence in a lot of states in recent years, and in the process cutting deals [politico.com] with those states to suspend sales taxes specifically on them (though a few states wouldn't play ball). So it makes sense to me why they might actually support this. As a big employer in a lot of states, Amazon can continue to create and extend special deals to exempt themselves at the state level, while sticking competing online retailers who don't have so much local presence with a new tax burden. Plus, it also standardizes the now chaotic process a little more at the federal level.

  • by Bigby (659157) on Friday February 15, 2013 @08:57AM (#42909451)

    And yet they still benefited. Several people had jobs and were paid for 10 years and they paid income taxes and spent their money mostly in local places, which was sales taxed. The area didn't benefit as much as it could have, but it still benefited.

  • by Farmer Pete (1350093) on Friday February 15, 2013 @08:59AM (#42909485)
    If your choice is Amazon builds a warehouse and hires 500 people but you don't get sales tax on Amazon sales or Amazon doesn't come to your state and you don't get sales tax...The choice is pretty easy.
  • by crazyjj (2598719) * on Friday February 15, 2013 @09:10AM (#42909611)

    People tend to romanticize "Mom & Pop" stores. But having worked in a Mom & Pop grocery store growing up, I'm under no such illusions. The people I worked for were just as greedy and treated their workers just as shitty as Walmart or any of the big box stores. There is nothing inherently noble or morally superior about being a small business on Main Street. It just means you're small, and also on Main Street.

  • by darjen (879890) on Friday February 15, 2013 @09:12AM (#42909631)

    Even if Amazon doesn't get special tax deals, it will still hurt smaller online retailers more. Due to their large size, Amazon is better situated to handle the extra overhead and cost these taxes will bring. Amazon has essentially been handed a blank check by investors to get by with extremely low profit margins, as evidenced with their stock price. This could be just the extra bump Amazon needs to put their competition out of business.

  • by Anonymous Coward on Friday February 15, 2013 @09:20AM (#42909717)

    We shouldn't even be looking at sales tax as a revenue source. The reason sales tax is so acceptable is that people don't notice it until it's too late. They don't realize how regressive it is. In fact, people are so oblivious to this tax that it's become the fashionable way to pay for multi-million dollar stadiums. That reason alone is why I buy things online. Because of all these projects, sales taxes in "major" metro areas are approaching 10% and exceed that for hotels, car rentals, bars and restaurants. That's money that's taxed after you've already paid income tax on it.

    Would anyone here take a 10% cut in pay? Yet we gladly pass sales taxes that do the same thing.

    The U.S. should go back to its roots and use tariffs as the only source of revenue.

  • Re:Capitalism (Score:5, Insightful)

    by Attila Dimedici (1036002) on Friday February 15, 2013 @09:23AM (#42909749)
    Small businesses will suffer because the expense of keeping track of the sales tax they need to collect from every municipality around the country will add one more cost of doing business. For Amazon, that cost is minimal. For a company that is run out of someone's basement by that single individual, it will likely be the difference between being profitable and a waste of time. Small retailers who think that this will make it easier for them to compete with Amazon are dreaming. It will mean that they will never be able to afford to open a website to sell their goods directly to consumers at a distance.
  • by illusio26 (2794573) on Friday February 15, 2013 @09:25AM (#42909769)
    No, their not. Those 500 employees will all pay income tax and the employer will all pay payroll tax. Then, those employed people will all go out into their community and spend money at local stores, restaurants and other places, thus generating even more sales tax. That's not even taking into account the constructions crews that will be building the warehouse, or the utility companies that will benefit from the new warehouse. All that more than offsets a few years of not collecting sales tax by amazon.
  • by wisnoskij (1206448) on Friday February 15, 2013 @09:30AM (#42909819) Homepage

    So say you go with the deal. Now 6 months down the line Amazon has driven 50 more small businesses who employed 5000 people out of a job.

    Pretty easy choice.

  • by TheRaven64 (641858) on Friday February 15, 2013 @09:46AM (#42909995) Journal
    Did they benefit? How many other companies went out of business because they couldn't compete with a big company that had a tax exemption? How much did they actually pay per job (some tax breaks for datacentres have worked out to about $1m of tax exemption per job - even over a decade that's unlikely to be a good deal).
  • by Viewsonic (584922) on Friday February 15, 2013 @10:02AM (#42910229)

    I still think the sales tax from Amazon would outweigh that easily. People buy everything online these days from $500 lawn mowers, to $2,000 speakers. There is a reason Amazon is making those deals, they know the business they pull in from states is that large.

  • by jareth-0205 (525594) on Friday February 15, 2013 @10:03AM (#42910247) Homepage

    Personally, I'm against online sales taxes. When you buy something online, you are already paying a "tax" of sorts and that is your _time_. That is a tax or cost to online purchases as it takes up to five days for your products to arrive. If you want your products that same day, you pay an extra (and real) tax by buying local.

    You keep using that word. I do not think it means what you think it means.

  • Re:Capitalism (Score:5, Insightful)

    by Attila Dimedici (1036002) on Friday February 15, 2013 @10:22AM (#42910513)

    A. It's called a cost of doing business. B. There's this stuff called "software" that is really good at tracking numbers automatically.

    So, how much is it going to cost me to get that software? Who is going to update it every time one of those many municipalities changes their tax laws? How much will that cost me? Do you have a clue how complicated it is to keep track of the sales tax laws all throughout the U.S., with different municipalities charging sales tax on different things? Not everything is taxable in every municipality and what is taxable, or not taxable varies from location to location. In addition, How do I keep track of what tax jurisdiction a customer is in (hint, zip codes won't do the trick)?
    Sure, you can say, "That's a cost of doing business," of course when you say that what you are saying is "I don't mind stacking the deck in favor of big business."

  • by Mr. Slippery (47854) <tms AT infamous DOT net> on Friday February 15, 2013 @10:33AM (#42910669) Homepage

    The choice is pretty easy.

    It sure is. Say "fuck you" to Amazon and other large corporations that push for a race to the bottom, and make policy that supports the growth of local small businesses that keep the wealth they created in the community rather than drain it away to far-off absentee owners ("stockholders").

    The "let's kowtow to big business" strategy has failed so completely and so consistently that the choice would be easy...in a well-informed and non-corrupt political system.

  • by ShanghaiBill (739463) * on Friday February 15, 2013 @10:37AM (#42910737)

    I think you're the only person on the planet who thinks that "Equal protection" should mean "equal taxes".

    "Equal protection" does not mean "equal taxes." It mean equal application of the law. If a company is given a tax break for "creating jobs", then the same tax break should be available to any company that meets the same criteria.

  • R-Arkansas (Score:3, Insightful)

    by MattGWU (86623) on Friday February 15, 2013 @10:38AM (#42910761)

    Surprise! The Congressman representing (3rd District, encompassing Bentonville, where Wal-Mart's HQ is located) the largest brick-and-mortar retailer in the world is pushing for sales tax on sales made by their main competitors.

  • by Common Joe (2807741) on Friday February 15, 2013 @10:45AM (#42910861) Journal

    Not only that, but there is another issue at stake in all of this also: if $BIG_COMPANY should get a tax exemption because it is good for the state, why is it not good for a $SMALL_COMPANY to get the same tax exemptions? If tax exemptions are good, then why not do away with them and just lower the taxes on everyone?

    My wife had her own small business in the U.S. for about 8 years. Why was she supposedly paying more taxes than Amazon? I have yet to hear any politician answer that question.

  • by Anonymous Coward on Friday February 15, 2013 @10:57AM (#42911023)

    Yes, I would like my Taxes to be equal.

    I'd like my tax bill for this year to equal Mitt Romney's 2011 rate: 14% of my total income.
    I'd like my tax bill for this year to be equal to Teresa Heinz' 2003 rate: 12% of my total income.
    I'd like my tax bill for this year to be equal to Warren Buffett's 2010 rate: 11% of my total income.

    All of those would be less than what I pay now. And I'd bet that were there to be a single flat tax on all income received, to meet the same amount of revenue collected, my overall tax rate would go down, not up. Not to mention the joy I'd experience at not having to spend lovely evenings being the government's accountant in preparing my taxes.

    But in the context of the article, my Utopia would be an end to all local / county / state taxation, and adoption of a national Value Added Tax.

  • by cayenne8 (626475) on Friday February 15, 2013 @11:02AM (#42911085) Homepage Journal

    Now, I don't think that there should be equal taxes, and I don't think that there should be tax breaks for certain businesses.

    I don't believe there should be tax breaks or deductions for anything.

    No one gets deductions for home mortgages, children, expenses, etc...nothing.

    Simplify the tax code...you make $x this year...you pay 7% of that in. Simple.

    I'd even go for the national sales tax in place of income tax...it would catch everything, and I believe..in the long run with either method, over all taxes would be lowered for everyone.

    And besides, the govt shouldn't be in the business of trying to alter human behavior through taxes. Taxes should be there ONLY for the funding of vital govt services.

  • by Kelbear (870538) on Friday February 15, 2013 @11:28AM (#42911417)

    I support it...for businesses with high enough revenues. Small online shops are too small to bother with and the state tax calculations are too cumberson

    States need tax revenues. Physical retail locations collect sales taxes, that provides tax revenues to the state. If online retail is able to bypass state taxes, that puts the retail locations at a disadvantage, and sales tax revenues drop for that state.

    The State ends up with lower sales tax revenues, but they still need tax revenues. So they just end up raising my property taxes again, and physical retail continues to get screwed over. They're going to get their tax revenues one way or another because they have a budget to pay for, if high taxes are a problem we should fight them on their budget.

    So in the meantime, we should just level the playing field with regards to collecting sales taxes. If physical retail should go out of business because it's inefficient, let it. But it shouldn't get pushed out of business by unfairly granting an advantage to online retailers. We're going to pay the same total amount of tax either way.

  • by Kelbear (870538) on Friday February 15, 2013 @11:37AM (#42911539)

    Continuing from my post above:

    There's another alternative: get rid of state sales taxes for physical retail stores too. That'll level the playing field too. It's a regressive tax anyway. There's other ways for states to collect the taxes they need to operate.

  • by Aqualung812 (959532) on Friday February 15, 2013 @12:42PM (#42912471)

    National sales tax is a stupid idea. It makes goods bought in the USA cost more, and it does not take into account the benefit of living in the USA.

    If I made $1,000,000, I have benefited by living in the USA to the tune of $1,000,000. The amount I owe the USA is some function of that. The infrastructure of the USA allowed me to earn that money, and the armies of the USA protects it.

    However, if I only have to pay sales taxes for things I buy in the USA, I can:

    -Buy things from other countries (this already happened before with yacht sales & luxury tax)
    -Not buy as much stuff (Bad for the economy)
    -Only buy what I need to live (Unfair for those that make less, as my spend will be a fraction of my income, while theirs may be all of their income)

    However, flat-tax is great. Establish a poverty line, perhaps even a per-person allowance for caretakers. This should be the minimum amount required to live, and adjusted each year based off of the value of the dollar.
    ALL income (even capital gains) above this line is taxed at the same level. No deductions for mortgages, charity, etc. Now, we're being fair.

  • Re:Capitalism (Score:4, Insightful)

    by Attila Dimedici (1036002) on Friday February 15, 2013 @12:49PM (#42912573)

    and get the tax rules based on zipcode.

    FAIL. Zip codes do not follow municipal boundaries. If you use zip code to determine what tax rate to apply, you will get it wrong a significant percentage of the time. Just because someone has a particular city zip code does not mean that where they live is subject to the tax rate of that city.

  • by ehiris (214677) on Friday February 15, 2013 @12:51PM (#42912625) Homepage

    Your idea of taxing the fundamentals of capitalism is dumb. We need to promote the exchange of goods and tax it as little as possible. What needs to be taxed more is hoarding of wealth. You can't assume that someone who spends very little money yet has assets valued in the billions should be paying as much tax for protecting those assets as someone who spends and has no assets or probably just a lot of debt to the people who own the assets they spend money for to use.

    Oil companies are a perfect example. We are giving away a lot of our income tax money to support their shitty business strategies, which involve making foreigners hate us, while they pay no or very little tax.

    It's straight up feudalism.

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