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Internet Sales Tax Vote This Week In US Senate 434

Posted by timothy
from the what-the-market-will-bear dept.
SonicSpike excerpts from CNet's coverage of the latest in the seemingly inevitable path toward consistently applied Internet sales taxes for U.S citizens: "Internet tax supporters are hoping that a vote in the U.S. Senate as early as today will finally give them enough political leverage to require Americans to pay sales taxes when shopping online. Sens. Mike Enzi (R-Wy.) and Dick Durbin (D-Ill.) are expected to offer an amendment to a Democratic budget resolution this week that, by allowing states to 'collect taxes on remote sales,' is intended to usher in the first national Internet sales tax." There goes one of the best ways to vote with your dollars.
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Internet Sales Tax Vote This Week In US Senate

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  • NOOOOOOO (Score:5, Funny)

    by cod3r_ (2031620) on Thursday March 21, 2013 @02:47PM (#43237475)
    OH wait amazon already charges me taxes.. So who cares?
    • by Anonymous Coward

      If it can be taxed, it will be taxed. That's just how humans do things.

      Unless they are rich, of course, in which case they have a large list of ways to avoid paying taxes.

      • Re:NOOOOOOO (Score:5, Insightful)

        by noh8rz10 (2716597) on Thursday March 21, 2013 @03:06PM (#43237731)
        I'm cool with the tax. Itthe current system puts brick and mortar at an enormous disadvantage, especially with commodities such as TVs with really thin margins. It used to be that sales tax balanced with shipping costs, but amazon effectively solved thee shipping cost problem. It's time to play on level playing field!
    • by hedwards (940851)

      Mostly brick and mortar retailers and retailers that have a presence in most states. They've been at a competitive disadvantage to online retailers that don't collect the sales tax. Around here sales tax is 9% and that's rather significant when you realize that in many cases that's more than the cost of shipping.

      I'm not even sure how I would go about paying the sales tax on those purchases as my home state doesn't have an income tax so we don't fill out any state tax forms where one might normally declare t

      • by Baloroth (2370816)

        This tax would be collected from the retailer, just like a normal sales tax, not from the end purchaser. Technically, at least a few states already require you to pay a "usage" tax on things bought online or over the phone (from out-of-state), but that requires the purchaser to pay the tax, not the seller, so it ends up not being paid. Thats why the states want to go after the retailers: because then it becomes much easier for the state to enforce the taxes, which they currently cannot.

        • by hedwards (940851)

          You missed the point, there is no tax form for that in this state that I know of, and without really digging for it and keeping records it would be impossible to pay. The burden very quickly adds up to being more than the taxes that I would be on the hook for.

          Yeah, legally we're supposed to, but the burden is far lower if the retailer just collects the tax and remits it to the state, AFAIK, they're permitted to keep a small portion to help cover the cost of collection.

      • What's more it's unduly burdensome on the consumer to have to keep track of such sales for the state.

        Then maybe you should get your state legislators to change your tax laws. Why should somebody in another state have to keep track of the tax laws in every municipality in every state in the country? If you think it is an unreasonable burden on you to keep track of sales tax, think about the burden on a small, one-person business that sells a couple hundred dollars a year in merchandise over the Internet.

  • by MightyYar (622222) on Thursday March 21, 2013 @02:49PM (#43237511)

    If the tax crosses state borders, then it should be collected by the Feds - or at least the rules should be national and consistent. Collect, say, 5% from everyone and then distribute it according to billing address. Making merchants deal with 50 different tax codes is onerous. I hope this bill is defeated.

    • by CoolCash (528004)
      If they have an up to date database of all the sales tax codes its not a big deal. Merchants already do this with shipping. It should be even easier since they already have a sales tax field, they just need to compare a database of zip codes to the database.
      • by Todd Knarr (15451)

        Won't work. Here in San Diego we have several ZIP codes where there are 2 sales tax rates within the ZIP code depending on the exact address. Parts of the ZIP code are within a city, subject to city sales tax, and parts are outside the city and city sales tax isn't due. To get the rate right you need to know not just the ZIP code but whether that particular address is inside or outside the city limits. And the state of California can't tell you which it is, the state doesn't know the exact city boundary. I

        • Re: (Score:2, Interesting)

          by Anonymous Coward

          I remember someone posting to slashdot years ago explaining you had to do it by recipient, not even house. They lived on an Indian reservation, and were not part of the tribe. So they paid higher sales tax than their neighbors who were members of the tribe.

          Expecting anyone to collect sales tax based on shipping or billing address is foolish. What's going to end up happening if the Feds don't just set an easy to compute rate, is that there will be one or two new companies that will spring up to collect th

      • by MightyYar (622222)

        Multiply the cost of that database and the time used to hook your systems into it and the cost of submitting all those taxes by the number of businesses shipping goods and you have a pretty big number, I suspect. The alternative is you could have a single simple rule for everyone that captures 90% of the problem.

      • by omnichad (1198475)

        You mean like an API that's handled at the federal level? That's the only way the collection side might work. But remitting the actual sales taxes will still be terrible. - especially sending tax payments of $0.43 to some random municipality that charges city sales tax (if that's included in the bill).

      • by Attila Dimedici (1036002) on Thursday March 21, 2013 @03:01PM (#43237667)
        You mean an up t odate database all the states and all of the municipalities within those states that collect sales tax...and don't forget that you need a map that tells you which taxing municipality every address in every state is in. Admittedly you do not currently need to know that for the states that do not charge sales tax at any level. Oh yeah, you also need to know what items sales tax applies to in every sales tax charging municipality in the country and don't forget those special tax holidays that many of them pass each year that only apply to certain types of items out of those they otherwise charge sales tax on.

        And, sorry, but a database of zip codes does NOT match up to the boundaries of taxing jurisdictions.
      • by CoolCash (528004)
        What I should have said. How does Dell, Apple, Amazon do this? They already have a nationwide database of sales tax rates based on location. There are services already setup to do this.
      • by Feyshtey (1523799)
        How do you propose that small businesses ensure that they are in compliance with all state tax codes? This doesnt hurt companies like amazon that already have a team of software engineers to run their online presence. It hurts a used bookstore run by a 60year old whose son in law puts a website up for him. At that point that business has to weigh the amount of money and time that will need to be invested to ensure they are (and remain) compliant, against how many online sales they even make. Does that encou
    • Making merchants deal with 50 different tax codes is onerous.

      I dare say that's exactly the point. Why do you think brick-and-mortars are so happy about it?

      • Making merchants deal with 50 different tax codes is onerous.

        I dare say that's exactly the point. Why do you think brick-and-mortars are so happy about it?

        Fifty codes is nothing. I can keep 50 codes taped to the side of my server. It's all those city/county/Enterprise Zone/speciality business/foo-nonfood/tax holiday/special assessment rules that's onerous.

        Give me 50 codes, and I'm happy.

      • by Jaysyn (203771)

        I dare say that's exactly the point. Why do you think brick-and-mortars are so happy about it?

        They probably won't be for long. Actually, they probably just legislated their own death certificate. Amazon's next plan is to put warehouses in major metro areas & provide same day or one day delivery. Residents with a PC (or smartphone) & a bank account will never have to drive to a "big-box" store ever again if they don't want to.

      • by nabsltd (1313397) on Thursday March 21, 2013 @03:35PM (#43238127)

        Making merchants deal with 50 different tax codes is onerous.

        I dare say that's exactly the point. Why do you think brick-and-mortars are so happy about it?

        Because they're stupid?

        Amazon is supporting this bill because of their new "same-day delivery" that is being rolled out. It requires them to have a presence in every state, so they'd have to collect sales tax anyway. This bill would put all other online stores at the same disadvantage of having to collect taxes, but without the advantage of actually having a point of presence in every state.

        If this bill passes, it will give Amazon another reason to accelerate the roll out, and eliminate the one advantage that B&M stores currently have.

    • by hedwards (940851)

      The problem with that is that around here the sales tax is 9.5%, which would mean that the city and or state would be losing revenue that they're entitled to collect. Considering the state of the nation, it's not that burdensome, what would likely happen is they would just contract out the work of tracking such changes to a contractor.

      It's not just 50 states, it's all the municipalities that are entitled to collect sales tax in various states. In Seattle that's about 3% on top of the state sales tax of 6.5%

      • by MightyYar (622222)

        The problem with that is that around here the sales tax is 9.5%, which would mean that the city and or state would be losing revenue that they're entitled to collect.

        Right now they are getting 0%. Something tells me they won't complain that loudly. I'd argue that since the business has no local presence, it is not using any state services and should not be paying full tax anyway.

        It's not just 50 states, it's all the municipalities that are entitled to collect sales tax in various states.

        That would bring the total up to 10,000 different tax codes, then. I think my point is even stronger in that case.

        Don't get too hung up on "5%". I just pulled that number out of my ass.

        • by hedwards (940851)

          What you're talking about is a pretty substantial violation of states' rights. The Supreme Court has already ruled that states can assess these taxes, just that the method of collection can't be unduly burdensome, and that ruling is 20 years old and done prior to the point when it was trivial to set up a database for all the retailers to reference.

          And yes, they will complain loudly about it. My home state has no income tax, and OR has no sales tax. So, OR would see no difference at all from this, but my hom

          • by MightyYar (622222)

            What you're talking about is a pretty substantial violation of states' rights.

            How is this not "Interstate Commerce"?

            Quote from Article 1, Section 8:

            "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;"

            Sound familiar? :)

            And then a few lines down:

            "To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;"

            So I'm pretty sure we are on firm

    • If the tax crosses state borders, then it should be collected by the Feds

      Why insert more ham-fisted bureaucracy when it isn't necessary? Vendors can issue tax payments directly to the states, instead of having vendors collect taxes, send it to the Feds, and then have them send it to the states? I'm not in favor of an internet sales tax, but if it's going to happen, I'd rather not have the feds involved at all, as that will just turn into another cash-grab opportunity when they decide we need a national sales tax.

      • by MightyYar (622222)

        Why insert more ham-fisted bureaucracy when it isn't necessary?

        How is suggesting interacting with a single bureaucracy worse than dealing with 50?

        Vendors can issue tax payments directly to the states, instead of having vendors collect taxes, send it to the Feds, and then have them send it to the states?

        I could get on board with that. I still want a single rate that applies to everyone. I, personally, would hate to write 50 checks and do 50 sets of paperwork every year, but I'm sure Intuit will get right on it.

        • How is suggesting interacting with a single bureaucracy worse than dealing with 50?

          How difficult is it to query a database for transactions based on sales by state, multiply that total by the tax rate and EFT a payment? Yes, it will be slightly more complicated than that, but it really shouldn't be. From a programming standpoint, it should be fairly trivial. The one way that the Feds could be helpful would be by requiring standardized reporting for the states.

    • by Baloroth (2370816)

      If the tax crosses state borders, then it should be collected by the Feds - or at least the rules should be national and consistent. Collect, say, 5% from everyone and then distribute it according to billing address. Making merchants deal with 50 different tax codes is onerous. I hope this bill is defeated.

      It's not 50, it's closer to 10,000 (according to TFA). Different counties can have different tax rates (even a zip code doesn't guarantee a single tax rate).

    • by dywolf (2673597)

      These are state and local taxes, not federal. The biggest reason this has gone so long is by which party do you determine the tax to apply?

      IE, the legal question is in what location is the sale considered to have occured when between two parties in two physically seperate locations?

      The simplest solution is to have it based on the sellers location, since they are also the one responsible for collecting applicable taxes. then they only have to apply their local applicable taxes , rather than keep tabs on ever

    • Last I heard it was about 6700 tax codes, after figuring in all the state, county, and local taxes and various classes of specially-tariffed items.

      But the heaviest burden would be on merchants in States that have no sales taxes. They'd be suddenly required to collect sales taxes for other States, which they're not equipped to do, all because those other States don't feel like enforcing their own tax codes.

      That's not how a Republic of Republics works.

  • Getting the rates (Score:5, Insightful)

    by Todd Knarr (15451) on Thursday March 21, 2013 @02:54PM (#43237577) Homepage

    I'd be OK with sales tax on on-line sales, on one condition: states be required to provide a standard way for merchants, at no cost to the merchant, to ask what the sales tax rate for a given address should be, with the answer being the legally binding rate (if the merchant charges the rate given in that answer then the merchant cannot be held liable if that rate turns out to be wrong, and if the service failed to answer for any reason then the merchant can't be held liable for failing to charge sales tax).

    • by omnichad (1198475)

      That makes collection easy. But say you have to collect city sales tax. Only one customer bought anything from you from Midnwhere, AR. You have to spend $0.46 to pay 2% collected city sales tax amounting to $0.36 to that town. That's just insane, and illustrates the true problem.

      • by omnichad (1198475)

        $0.46 is the price of a postage stamp. I meant to say that.

      • by Todd Knarr (15451)

        I'd say that's not the merchant's problem. If the state wants to have out-of-state merchants collect sales tax for it, then the merchants just remit to the state according to the rate the state sets. It's up to the state to distribute anything due to entities under it's jurisdiction like counties and cities. Or if the state doesn't want to collect taxes at that level, it can fight it out with the cities and counties. If it turns out the state wants merchants to collect city and county tax and remit it separ

    • by N7DR (536428)

      Yes, I find that more than half the time I am charged the tax rate for the city in which the post office that serves my address is located; which is about triple the tax rate that actually applies at my address. I put this down to the use of some database somewhere that uses 5-digit ZIP codes instead of 9-digit ones to determine the tax rate.

      And the vast majority of the companies that overcharge me in this way simply ignore requests to fix the problem. I vote with my dollars, and tell them that I'm doing so

    • by dywolf (2673597)

      charge sales tax based on the vendors location rather than the buyers.
      then its just business like normal for the vendor.
      downside is it means "your" tax dollars go to other locales instead of your own...but it does mean vastly simpler collection system, no database required (and no location verification needed)

    • Delaware and New Hampshire do not charge any sales tax. If the tax is charged to the billing address and someone purchase an item from those states and has it delivered to another state than there would be no sales tax. What would stop someone from Delaware from setting up a business where the products were purchased from that state but delivered to another. They could just split the sales tax between them. Sales tax is a regressive tax as it does not depend on the purchaser's income. It would be total
  • but I hardly think that an amendment to a provisioning bill passes sufficient legal muster for it be enforced. First of all, I am already required to pay local and state sales taxes for entities operating out of my state. So no change there.

    But for extra-state sales, this will have to survive a 10th Amendment challenge and well settled legal precedence dating back to the 18th century. Not saying that it can't but a short blurb in a different, unrelated law doesn't seem sufficient on its face.

    For an "interne

    • by DaHat (247651)

      But for extra-state sales, this will have to survive a 10th Amendment challenge and well settled legal precedence dating back to the 18th century

      Not really... many states have forms of 'use tax'es which kick in when you purchase something out of state and then bringing it into state... and depending on how much tax you paid out of state.

      Here in Washington (state for instance)... if one take a drive down to Oregon and purchase a couple thousand dollars worth of electronics sales tax free (because OR has no s

      • by H3lldr0p (40304)

        Not really... many states have forms of 'use tax'es which kick in when you purchase something out of state and then bringing it into state... and depending on how much tax you paid out of state.

        Which is what I was saying. It's a well defined legal area that's been administrated by the states for a very long time now. For the Feds to step in with a new law, they'd have to show (to whatever court this gets taken to) some sort of legal authority over it where none existed before both as in the US Constitution as through well settled and aged legal precedence.

        It's not as easy as saying "Interstate Commerce lets us" as it's never before been defined as such. Doesn't mean that it won't get upheld on tha

  • There goes one of the best ways to vote with your dollars.

    I can still make political campaign donations to my heart's content. That's what you mean by "vote with your dollars", right? Right?

  • by Synerg1y (2169962) on Thursday March 21, 2013 @02:58PM (#43237639)

    That we really need to close this loop hole. I'm not in favor of raising taxes or anything, but by making this law, we'd be going back to a revenue model that we know. The ripple effect would be we wouldn't get tax hikes in other places I'd imagine.

    And the government does need the money... it would be nice to see them get it internally, but that's idealism. We need pot holes fixed, bridges replaced, and maybe we could throw money at some of the issues we're behind the rest of the world on.

    Another ripple would be brick and mortar stores would regain some traction against online retailers, the argument used to be that shipping > tax, but that's dramatically changed over the last decade with free shipping being pretty easy to get as online firms compete against each other.

    The downside is of course less money for the savvy consumer, but history has taught us loop holes never end well, so I think the benefits outweigh the downside.

    • by Dan667 (564390)
      brick and mortar stores are pushing for the internet tax, but no one is going back to them that buys online. I can click a few buttons and they bring it right to my house or go deal with clueless sales people and bad service. No contest.
      • Re: (Score:3, Insightful)

        by Synerg1y (2169962)

        Two words: instant gratification .

        If you're not saving money anymore, you'd be surprised how much more justifiable it becomes to get something today rather than in a week. Most people leave their homes for work / errands / social occasions, so swinging by a brick and mortar is less of a big deal for some than others.

    • Corporate Taxes? (Score:5, Insightful)

      by nickmalthus (972450) on Thursday March 21, 2013 @04:28PM (#43238791)
      Interesting that Congress is focusing on tax loop holes that individuals take advantage of while leaving in place loop holes that allow corporations to hide hundreds of billions of dollars in tax havens. Equally interesting is that all these states that are groveling for additional revenue grant egregious tax breaks to said corporations in the hopes of luring their facilities for fleeting benefit until the inevitable better deal comes along. Who does Congress represent again?
    • by Hatta (162192)

      And the government does need the money

      Then they can get it from the rich, who are doing better today than they were in 2008. Those of us whose budgets are stretched already can't pay more in tax without cutting back purchases elsewhere. This will hurt the lower classes, and it will hurt the economy and the country as a whole.

  • by Anonymous Coward

    This is a State decision, not a Federal one.

  • You may have to wait a little longer, but people will start buying from Canada or other places without taxes.
    • You may have to wait a little longer, but people will start buying from Canada or other places without taxes.

      I really doubt that. Based on what I see on other forums, most US consumers refuse to buy almost anything if they have to buy it online. I see people all the time who shlep down to their local brick and mortar store to pay more money, spend more time and get a worse quality product than something they could buy cheaper and of higher quality online. Ever been the grocery store or Wal-Mart and noticed how many people refuse to use the self-checkout line? I rest my case.

      • Based on what I see on other forums, most US consumers refuse to buy almost anything if they have to buy it online.

        If that were true, then the problem solved by this bill would be too trivial to make it worth the bother.

    • by CRCulver (715279)

      You may have to wait a little longer, but people will start buying from Canada or other places without taxes.

      Besides the fact that international shipping (even from Canada) is quite expensive, you may have to pay import duty on certain items and/or items over a certain value.

  • by Lumpy (12016) on Thursday March 21, 2013 @03:07PM (#43237745) Homepage

    As it will cover all Ebay sales and Craigslist sales.

    They want to charge you tax on even items you are not making money off of. Next up, Evil Garage sales and Flea Markets, how can we tax this scourge to the economy?

    • As it will cover all Ebay sales and Craigslist sales.

      They want to charge you tax on even items you are not making money off of. Next up, Evil Garage sales and Flea Markets, how can we tax this scourge to the economy?

      Ebay yes. Craigslist no. Craigslist does not make sales, the people interacting directly do, and the overwhelming majority of these are local.

  • by scorp1us (235526) on Thursday March 21, 2013 @03:14PM (#43237843) Journal

    "No Tax or Duty shall be laid on Articles exported from any State." - Article 1, US Constitution.

    It seems to me, that any such legislation would be a tax being exported from one state to another. I don't believe a distinction can be made from those being exported and those being imported, since it is only matter of perspective. A tax on imports to a state is a tax on the same article being exported from another. There is no limit to the prohibition. It could also read: "All taxes and duties are prohibited on all articles being exported from any State."

  • by Dan667 (564390) on Thursday March 21, 2013 @03:27PM (#43238019)
    the government gives billions and billions in tax breaks to extremely rich companies that don't need it, but anytime their is some perceived tax breaks for families they go out of their way to squeeze the nickel out of those who are the least able to afford it.
  • Figure out some way to disburse to states based on shipping address. As posters have noted, there's not a current way consistent with the Constitution to charge state tax on interstate commerce.

  • by andreMA (643885) on Thursday March 21, 2013 @03:48PM (#43238267)
    Folks are just going to drop-ship to sales-tax free states by having a friend or relative there order for them.

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