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United States The Almighty Buck Your Rights Online

New U.S. Sales Tax Regime For Internet Sellers? 295

Posted by timothy from the mmm-taxes dept.
morganew writes "As reported last week on Slashdot, States are pushing for new sales tax rules that would force Internet sellers to collect taxes for up to 7500 jurisdictions. Legislation has been introduced. The House Judiciary Committee held hearings today; here's CNet news on the bill, and here's a report (PDF link) on what it could mean to internet sellers."
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New U.S. Sales Tax Regime For Internet Sellers? More

New U.S. Sales Tax Regime For Internet Sellers?

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  • Death of eCommerce (Score:4, Insightful)

    by Anonymous Coward on Wednesday October 01, 2003 @06:22PM (#7109049)
    ...well, not exactly. But once the price advantage of no sales tax goes away, goods that incur a shipping charge will be better bought locally, all things being equal.
    • And the drawback to this is?

      • Death of Small eCommerce Sites (Score:5, Insightful)

        by yintercept ( 517362 ) on Wednesday October 01, 2003 @08:31PM (#7109922) Homepage Journal
        The small, independent, one and two man ecommerce sites are the ones that will be hit the hardest with a new tax system. They really won't have the resources to figure out the tax system. It will pretty much wipe out those silly little independently coded ecommerce web sites that you see here and there.

        This is a loss for Linux, as it is easy to talk these small sites into using unsupported ecommerce software running on Linux. Gearing up for a big nex tax will require a type of support the free software business will not be able to deliver.

        It is also interesting to see that the government is talking about big increases in taxes at this point of the business cycle.

        Greenspan has been pursuing massively inflationary monetary policy for awhile, there's been a gradual devaluation of the dollar. Just about every part of the market is really geared for a big spurt of inflation...except, of course, wages.

        Workers and small businesses should be prepared for some very serious belt tightening in the years to come.
        • "Loss for Linux" - Please! Don't by so shortsighted. Ever hear of Apache? XFree86? If there is enough need developers will band together to create an open source solution (or several). A generic backend to handle all the hassle of figuring out localized taxes. With a config file containing all the data and rules that change, so keeping up with it is easy. It will just be another push for open source software.
        • The small, independent, one and two man ecommerce sites are the ones that will be hit the hardest with a new tax system. They really won't have the resources to figure out the tax system.

          Actually, services like Yahoo! Store will probably skyrocket in popularity, where, for a monthly hosting fee, all the taxes and CC infrastructure is taken care of. So, even if taxes are forced down our throats, small businesses can eek out of the pain for $60/month.

    • Re:Death of eCommerce (Score:4, Interesting)

      by stratjakt ( 596332 ) on Wednesday October 01, 2003 @06:26PM (#7109093) Journal
      The convenience, and ability to comparison shop by seeing prices from a few dozen retailers side by side for that new video card, is still there.

      It still beats living in a town that has only Best Buy and a ridiculously overpriced little shop that sells second rate chinese hardware.

      Even with tax and shipping I can get that Radeon 9800 almost 100 bucks cheaper online.
    • What about the benefit of running low overhead with a web based company? The ability to advertise and sell direct to customers worldwide? From your post you make it seem as if all this flies out the window because you have to pay sales tax that is already owed to states and counties in the first place.
      • Bought anything from Europe lately? Do you realize what a nightmare VAT is? Now we are going to try imitating that in the States?

        It will kill most of the small retailers. Can you imagine collecting tax for 7000 different localities?

    • Re:Death of eCommerce (Score:5, Insightful)

      by NanoGator ( 522640 ) on Wednesday October 01, 2003 @06:37PM (#7109180) Homepage Journal
      " But once the price advantage of no sales tax goes away, goods that incur a shipping charge will be better bought locally, all things being equal."

      That's not necessarily true. Not everybody orders online because it's cheaper. Amazon comes to mind. It's much easier to buy gifts for people throuhg Amazon than it is to go to a bunch of stores, find the items, and then giftwrap them.

      Businesses are another example. It's problematic to send an employee out to buy office supplies. Delivery is a nice feature.

      And, for a third example, there's the whole "if I have it delivered, I can order it from work." aspect of it that most ppl won't admit to.

      I agree that the tax will cause problems, may even cause some places to fail. No argument there. But it's an exaggeration to say that it'll kill off eCommerce. If mail-order is still around, then eCommerce is still around.

    • But once the price advantage of no sales tax goes away, goods that incur a shipping charge will be better bought locally, all things being equal.

      More specifically, they'll be bought online and then picked up at the store.

    • You've obviously never shopped locally in California. It'll still be worth paying the shipping on from the east coast then to pay the prices they want here. There is more than just taxes that drive up the prices in this State. All the mandator social BS is driving companies out of the area left and right with minimum wage hikes and outrageous workers comp/unemployment insurance requirements.
      • All the mandator social BS is driving companies out of the area left and right with minimum wage hikes and outrageous workers comp/unemployment insurance requirements.

        It is highly ironic that what was one of the fastest growing economies in the world elected Democrated leadership. Did they shoot themeselves in their feet just out of curiousity? Now that they are bleeding and in pain, did they learn their lesson?

  • International orders? (Score:5, Interesting)

    by grub ( 11606 ) <slashdot@grub.net> on Wednesday October 01, 2003 @06:25PM (#7109080) Homepage Journal

    Will this put US online sellers at a disadvantage to, say, Canadian ones for importing? For example an amazon.com [amazon.com] order plus the taxes verses an amazon.ca [amazon.ca] order with shipping and the exchange rate differences?

    • Re:International orders? (Score:4, Insightful)

      by epiphani ( 254981 ) <epiphani@dal . n et> on Wednesday October 01, 2003 @06:36PM (#7109169)
      Along those same lines - is california making a killing in taxes because most of the buisness online is located there? What about the state that a lot of companies register for incorporation in (is that meriland? (sp))?

      If the taxes are "leaving" one state, someones' making up for it somewhere. Either you're in for globalization, or you're not. Creating new taxes just because globalization doesnt fit your model of buisness is rather short-sighted. Same thing happens when countries start adding tarrifs because they cant compete with the imports.

      If money is leaving the state (or country), its because something outside is better than whats inside.
      • actualy it's not a new tax, most states have a sales/use tax and if you buy something where the sales/use tax isn't collected for you by the bussiness, your supposed to pay them yourself, usualy on your state income tax form. Nobody of course does it unless they have to be squeaky clean, or its a very well advertised purchase. I think the i remember that the CEO of Tyco got in trouble for not paying the sales/use taxes on a painting he bought from $20M or something like that.

        what is new is that a bussiness
    • "For example an amazon.com order plus the taxes verses an amazon.ca order with shipping and the exchange rate differences?"

      Unless the goods you are ordering originated in the NAFTA zone (ie. not made in China, Korea, et al), then I have two things to say to you: "duties" and "excise taxes." The money you don't pay at amazon.ca will be collected at the post office.
  • They are trying to turn internet shopping into something similar to ordering out of a magazine...

    I like ordering things online because you know your getting what you order(if you go to the right place) and its almost always cheaper, even if you include shipping costs.

    This will wreck havoc on all of that though, take away the main advantage of online sellers...

    Sigh, net may turn into place to buy specialty items, Best Buy or whatever for non obscure things. I find that kind of depressing really
    • This will wreck havoc on all of that though, take away the main advantage of online sellers...

      But wouldn't that make things a little more fare? Why should we designate one group to be taxed, and another not? Even the Internet deals in physical things (warehouses, items, shipments, servers, etc), so I don't think the jurisdiction argument holds. After all, what is different from the Internet than mail-order in that regard?

      I will miss avoiding taxes by buying online, but, at the end of the day, it was un

      • sorry dude I hate to be the one to break the bad news to you but just because a retailer wasn't preeded into service to collect taxes on your purchases, doen't mean that you don't owe them your self

  • Oh for god's sake (Score:3, Insightful)

    by Anonymous Coward on Wednesday October 01, 2003 @06:25PM (#7109086)
    They would have better luck legalizing and taxing drugs (and it would be more moral) than trying to enforce crazy e-commerce regualtions across state lines. Seriously, the money gets taxed once as income in the state is is spent from and once as income in the state it gets spent in. Isn't that good enough? Why try to put a brake on the great whell of e-commerce that is just starting to get our economy spinning again?

    Legalize and tax drugs, don't tax e-commerce. Are you listening, Dean?
    • No Republicrat or Demican will support the legalization of drugs. Join the Libertarian party, legalize and taxing drugs and a whole host of other "victimless crimes" would create a Tax Boom like one never seen before.
      • There is no such thing as "Victimless crimes". I was just using the typical leftwing kneejerk terminology. Well, isn't that "Its my body, I can do whatever I want to it" crap you hear from the likes of Woody Harrelson and the Abortion crowd?

        Self Inflicted harm is mostly victimless, except the victim has only themselves to blame.

      • More importantly, abolishing prohibition would eliminate the violent crime which is an inevitable side effect of prohibition. During alcohol prohibition, murder and violent crime rates skyrocketed. When alcohol prohibition was overturned, the crime rates dropped right back down to what they were before prohibition.

        Just as alcohol prohibition gave rise to organized crime, "modern" prohibition gave us the Bloods, the Crips, and drive-by shootings. We don't see people gunning down each other in the street ove
    • I remember that there is a federal tax on marijuana, $10.00/oz for medical usage, and $100.00/oz for non-medical useage.
    • They would have better luck legalizing and taxing drugs (and it would be more moral) than trying to enforce crazy e-commerce regualtions across state lines. Seriously, the money gets taxed once as income in the state is is spent from and once as income in the state it gets spent in. Isn't that good enough? Why try to put a brake on the great whell of e-commerce that is just starting to get our economy spinning again?

      What makes you think it would be so difficult to pull this off? Even if there were 50,00
  • Obviously, current tax rates are too high. The last 100 years has brought tax rates vastly greater than at any point in history.

    Does anyone make estimates on what portion of our tax money goes to absolute waste, kickbacks, bribes, and war?
    • You need to define taxes. If you look at history, they way they have taxed things in this country has changed over the years. Income and sales taxes are relatively recent inventions. But before them, there tended to be outrageous duties on imported goods. Or look at American history. Read about the excise, poll, and property taxes of the revolutionary era. The revolution was based on outrageous taxes on legal documents, aka the Stamp Act, and the more famous tea tax.
  • Well, seeing as how I already pay 8% sales tax online in California (since most online retailers are based in CA), this might have the effect of LOWERING the tax I pay. It depends, of course, on the tax rate they choose for this "Unified" system. If the rate is lower, will CA join up seeing as most places sell from CA and the state already gets a ton of money?

    • Re:California (Score:3, Informative)

      by _avs_007 ( 459738 )
      Unless I'm smoking some bad crack, (and I could be ;) , I read that the unified tax system was nothing more than a set of guidelines defining how things get taxed, not if things get taxed.

      For example, Orange Juice gets taxed as a beverage as opposed to fruit. But that doesn't say anything about if food items are exempt or not. In some jurisdictions it just plain depends. For example, oregon has no sales tax, but in southern oregon, there is a fast-food tax.

      I know when I lived in LA, LA county and Orange c
      • I also remember a while back, it was posted that in Colorodo, some items are only taxable at certain times of the year. I think there was some special holiday where that particular class of item was not taxable or something like that.

        We have had that in Texas the last few years.

        In my opinion, it's a good time to stay out of the stores. You might save a couple bucks, but the irritation of dealing with all those crowds isn't worth the aggravation.

  • no valid basis for sales tax (Score:5, Insightful)

    by frovingslosh ( 582462 ) on Wednesday October 01, 2003 @06:30PM (#7109137)
    When I (in North Carolina) buy something on the Internet from, say, Oregon, where does the sale actually take place? I would certainly say Oregon. Add to that the concept that any extra tax on it by North Carolina certainly is an unconstitutional infringement on Interstate trade. The state provided no benefits to such a sale (one can argue, although lamely, that they provide things like police and fire protection to "real" stores), their only claim on taxing the sale is greed.
    • "When I (in North Carolina) buy something on the Internet from, say, Oregon, where does the sale actually take place? I would certainly say Oregon."

      North Carolina would argue that they get the tax because they lost taxes from local business.

      I'm not sure which side I'm on here. Each one has it's ups and downs. Tax based on where the custommer lives, and you have a complex system. Tax where the company is, and one state will become the haven for all of these businesses.
      • In the later case, wouldn't it then become a self-correcting situation?

        Those states that want to tax such online corporations will either collect the money and lose the company or not tax the company and get money that filters into their economy. As long as there's at least one state willing to bet that the latter is better than the former, the companies will have a reason to move, and if the states want them, they too will have to barter in taxation to keep them.

        Kind of a free-market equation for taxati
      • Tax based on where the custommer lives, and you have a complex system.

        Tax based on where the customer is and you'll have remailing services set up in states with no sales tax. People will get their goods shipped there, pay no tax, and the remailing services will ship products to the consumer. This would only work on big ticket items where the potential sales tax would far outweigh the extra shipping and service fee, but it could effectively foil the system.

    • Interesting you pick Oregon. I'd like to see how this nets out for us, seeing as how we don't have a sales tax.

      I believe the state of the buyer collects normal sales tax, as I've never had to pay sales tax when buying things from out-of-state.

    • Though I think I agree with you that NC provided nothing for you (with the possible exception of road maintenance for the delivery company), that's just not how it works, right now. Technically, sales tax or value added tax, depending on where you are, is collected because of where the product will be used. Now, whether that's right, I won't argue.

      But that is why you can get reimbursed for this tax when you leave a country you've been visiting. When I went to England, if we'd had all our receipts in ord

  • Supremely Bad News for Small Sellers (Score:5, Insightful)

    by Schlemphfer ( 556732 ) on Wednesday October 01, 2003 @06:33PM (#7109153) Homepage
    I've been following this issue, and it seems to me that the real story here is the potential for sales tax to make Mom & Pop Internet stores impossible.

    It seems there's some controversy in how this thing would be implemented. The authors wanted stores with annual sales of less than about $5 million to be exempt from the tax, since keeping track of sales tax for fifty different states is incredibly cumbersome. Amazon, however, wants a much lower limit. They're trying to force businesses who take in at least 25 or 50 grand each year to pay sales tax.

    I think it would be a real shame if this thing goes through, with taxes kicking in at sales in the tens of thousands of dollars. As Amazon must well know, setting up sales tax collection and payment for 50 states would be an absolute nightmare for small sites.

    I mean, what a disaster. You're running a site with $55,000 in sales, and now you've got to administrate collecting and routing sales tax for 50 different states, even though you only take in 1500 orders a year. Think of all the paperwork and hours lost, all for the sake of, say, $60 tax per state.

    That explains why sites like Amazon.com would be willing to endorse a proposal that cuts into their profits. It's obviously worth losing a few percentage points on the bottom line, if doing so creates new barriers of entry to tiny upstarts.

    • It may be complicated for a mom & pop store to manually calculate sales tax for 50 states, but it's trivial for them to purchase or download software which does 98% of the work automatically. I could see this being an issue before software was cheap and readily available, but do you really think it's a problem today?
      • It may be complicated for a mom & pop store to manually calculate sales tax for 50 states, but it's trivial for them to purchase or download software which does 98% of the work automatically. I could see this being an issue before software was cheap and readily available, but do you really think it's a problem today?

        In a word: Yes. Taxes suck. Many trees die. Having to do them under 50 sets of state rules would be a nightnmare. I frequently purchase things for a University Organization. At tho

    • My reaction was identical as the one you expressed until I did the unslashdot thing and read the article (bill in this case). The tax does not apply for companies with less than $5M in sales. whew! that sounds like this bill maybe a boon to ma and pa.

  • Small Entrepreneurs (Score:3, Interesting)

    by annielaurie ( 257735 ) <annekmadison@hotmai[ ]om ['l.c' in gap]> on Wednesday October 01, 2003 @06:36PM (#7109172) Journal
    Just after reading the CNet article, this looks as though it could cause real headaches for small business owners.

    Let's see. Small scale businesses would be collecting sales taxes for virtually every jurisdiction in the country, dealing with the choking amounts of spam, fending off people who want to steal the domain or commit other mayhem, paying the self-emplyment tax, and contending with all the other paperwork. Where's the incentive to keep going (much less the time to devote to the actual goods or services)?

    We could probably save a bundle by doing away entirely with the Small Business Administration. At this rate, they won't have much to administer.

  • U.S. Constitution Article I Section Nine (Score:5, Informative)

    by Anonymous Coward on Wednesday October 01, 2003 @06:36PM (#7109177)
    "No Tax or Duty shall be laid on Articles exported from any State."

    That about wraps it up.
    • Sadly, thanks to 200 years of deliberate mis-application and resulting precedents, the Interstate Commerce Clause trumps it.
    • "No Tax or Duty shall be laid on Articles exported from any State." That about wraps it up.

      Since when have lawmakers started reading and obeying the Constitution?
    • doesn't apply, because the tax is exactly the same for a in state sale as for an out-of-state purchase, for use in your home state. the short version, you are taxed for what you use, not where you bought it.

      the court said that a third party, the retailer couldn't be expected to be able to collect taxes for 3700 different jurisdictions, from the purchaser, unless the retailer had a physical presence in that jurisdiction and therefore the expertice to collect the tax in that juricdiction. If I have a store i

  • Instead abolish sales tax for everyone (Score:3, Interesting)

    by bizcoach ( 640439 ) on Wednesday October 01, 2003 @06:38PM (#7109186) Homepage
    Traditional brick-and-mortar retailers also have their eyes on lost money. They said they stand to lose money as shoppers turn to tax-free Internet purchases.

    In a globalized economy, taxing e-commerce isn't going to work well. For the sake of fairness, traditional brick-and-mortar retailers shouldn't have to suffer from sales tax either. Time to move to a totally different tax system; I'd propose to tax energy consumption and nothing else (not even income tax); calibrate it so that the total tax burden remains unchanged.

  • Printable order form (Score:3, Interesting)

    by MacDork ( 560499 ) on Wednesday October 01, 2003 @06:38PM (#7109193) Journal

    So what is to stop internet sellers from simply putting up a printable order form? If you have to snail mail in your order, it is mail ordered and exempt. No different from the situation now, but it takes a little longer. Certainly worth the effort on bigger ticket items.

    But how is it that mail order would be exempt and internet sales would not be exempt in the first place? I'd love to know how they are going to just explain away

    "No tax or duty shall be laid on articles exported from any state."

    "No preference shall be given by any regulation of commerce or revenue to the ports of one state over those of another: nor shall vessels bound to, or from, one state, be obliged to enter, clear or pay duties in another." (Article I, Section 9 of the US Constitution)

    I think that speaks for itself, or shall we have the revisionist telling us that 'vessels' meant spaceships, just like 'the people' means the National Guard in the Second Amendment? Maybe some of our fine lawmakers should have taken the time to read our Constitution at it's recent unveiling.

    • What will force e-tailers in foreign nations to collect a tax and send it our way? Either they won't collect or they may happily collect it but never send it to the US. Really, what can happen to you for breaking US tax law in China? Either way, it will be real incentive for e-tailers to leave the US for foreign nations since most of the crap we buy is made over there anyway. Are we going to have provisions in this law to abide by local taxes globally? A 'we collect for you if you collect for us' kind

  • How is this Constitutional? (Score:5, Informative)

    by Experiment 626 ( 698257 ) on Wednesday October 01, 2003 @06:40PM (#7109202)

    I asked about this in the previous thread, but got no explanation, so I'll try again... how can such a law be reconciled with what is explicitly specified in the U.S. Constitution?

    "No tax or duty shall be laid on articles exported from any state." (Article I, Section 9.5)

    That is, after all, exactly what these laws mandate, for merchants to collect a tax on some State's behalf on goods that they are exporting out of the state. How is this legal?

    AnotherBlackHat also pointed out another relevant provision:

    "No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing it's inspection Laws: and the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States; and all such Laws shall be subject to the Revision and Controul of the Congress." (Article I, Section 10.2)

    I am genuinely bewindered as to how proponents of such a law can think it would pass Constitutional muster. If anyone could explain the legal rationale behind such legislation, I'd really appreciate it.

    • Re:How is this Constitutional? (Score:4, Informative)

      by JayBlalock ( 635935 ) on Wednesday October 01, 2003 @06:59PM (#7109325)
      You said it yourself:

      No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports

      They're currently seeking the Consent of Congress.

      And beyond that, sadly, the Interstate Commerce Clause can be used by the Feds to trump the states on any issue.

  • I for one welcome our new taxing government overlords/
  • We're taxed WAAAY beyond reasonable proportions already... it seems like every week now, governments are inventing new ways to steal our heard earned money. In this case, I say "let 'em do it". Go ahead states, and tax internet sales. Do it. Why? Because there will be at least a few states (NH) that choose not to rape and pillage their people and guess where the business will go? If businesses are smart, as they usually are in a "free market", they'll move to the states that offer them the best advant
  • Reading through the replies, I see that this is almost universally seen as a bad idea, motivated by little more than greed. So I say, do something about it. This is still being drafted, it hasn't even come up for vote yet. So much the better time to contact your representative [house.gov] and kill this thing preemptively. Read over the replies above and below, since many of them make good points about this idea. Include these ideas when you contact your rep.

    If we make enough noise, they will listen.
  • I buy something from a Company in california, my credit card company is in south carolia, and the server is in New York. Can someone explain to me why MAryland, my home state, expects a cut of the deal? Unless they are going to set up border check points, and search cars for shoppinb bags form out of state, id say they can go fuck themselves. Sigh. Time to start buying from other countries. HELLO NEXT AMERICAN DEPRESSION!!!

  • Read the Bill (Score:3, Informative)

    by Pinky3 ( 22411 ) on Wednesday October 01, 2003 @06:57PM (#7109313) Homepage
    I know this is ./, but geesh!

    The bill doesn't talk about taxing internet sales, it talks about taxing remote sales. Sales includes mail order, phone order, internet order, any order.

    The bill only applies to states that agree on a unified, simplified tax system. The same items will be taxed in every state that agrees.

    Let's see. I have a computer. I input the zip code of the person who has placed the order and it tells me the tax. Hasn't anyone reading slashdot heard of computers? They sometimes can be used to do computations for people.

    Once a quarter, I fill out at most 50 forms and send 50 checks. A burden? Yes, but not that great. If the system is truly simplified, my computer should be able to fill out the 50 identical forms for me for the 50 different states.

    The bill as introduced only applies to those with more that $5,000,000 in "gross remote taxable sales." Note it does not include local sales or sales of non-taxable items.

    I don't know about your mom and pop, but mine don't take in more than $5,000,000.
    • The bill doesn't talk about taxing internet sales, it talks about taxing remote sales. Sales includes mail order, phone order, internet order, any order.

      This somehow makes it better?

      The bill only applies to states that agree on a unified, simplified tax system. The same items will be taxed in every state that agrees.

      And I would tend to think that if Congress OKs this potentially HUGE source of income, they'll all come to some agreements but quick.

      Let's see. I have a computer. I input the zip code of

    • There is not a one-to-one correspondence between ZIP codes and taxing jurisdictions. It's a really ugly problem to solve.
    • One thing that is not in the bill, but is being pushed by Amazon is a provision that would make selling through eBay count as an "affiliate" program. which would _exclude_ you from the $5 mill exemption. Worse, they want to drop the exemption to $25,000.

      Additionally, if your total Nationwide sales are $5 mill, you are by no means a big business.

      That's right, eBay would be like your parent company in the eyes of the government.

      Take a look at this story in the Washington Post [washingtonpost.com]

      relevant quotes: Amazo

  • Here's laughing at you all... (Score:4, Funny)

    by weave ( 48069 ) on Wednesday October 01, 2003 @06:59PM (#7109328) Journal
    Greetings from Delaware, no sales tax here!

    Shout outs to my peeps in Oregon and New Hampshire too! :)

  • Now let's use this extra tax revenue so we can cut taxes for the rich again! :-)
  • Well, as greedy states will most likely base collection on the destination address (all legalize on where the purchase is taking place aside), it means that mail forwarding services in No Sales Tax states will get busy. You get yourself a nice forwarding address, and buy and ship your next SLR Camera there. It gets forwarded to your home, but hey, that's not a purchace at this point.
    No sales tax. Insignificant shipping difference. Savings for consumers. Angry tax people.

    Perhaps there will be even "one time
    • Sales tax is based on the location of the buyer, if the seller has a physical presence in that location.

      If the seller has no physical presence in that location, there's no sales tax. This is because it's unreasonable to ask a seller to keep track of 2,000 different local tax rates, file 2,000 different tax forms, etc. But it's reasonable to ask a seller to file tax forms for locations where he's got an office.

      This new law is simply an attempt to collect sales tax from out of state companies, because the s
      • You have intentionally or unintentionally hit upon the exact need and motivation for this law. The courts determined that the burden to collect from every jurisdiction was too great, and therefore if the seller did NOT have a physical presence in the state he/she would not be required to collect taxes.

        The states set up something called the "Simplified Sales Tax Project" which is supposed to work out differences between state tax systems (like, is a candybar food or candy?). Once this "simplification" was
  • This tax is unlikely to be set up in a fashion simple enough for small businesses to easily deal with it. There should not be 7500 different sets of rules for 7500 different taxing regions.

    If it must be done, then online retailers should be required to register with one state, and that state would collect a tax from the retailer based on a nationwide rate.

    Tax revenues should be pooled and aportioned amongst the states based on population. States should then be required to further divide the revenues amo

  • You can't always figure out the sales tax rate (Score:4, Interesting)

    by eric76 ( 679787 ) on Wednesday October 01, 2003 @09:20PM (#7110208)
    You can't always figure out the sales tax rate based on the zip code.

    Many of those who do charge sales taxes depend on the zip code to determine how much to charge. I hate having to argue with them every time I buy something.

    For example, the Texas sales tax rate at my office is 8.25%. But at home, it is 6.25%. Both are in the same zip code, but my office is in town and I live 20 miles out in the country.

    The odd thing is that if Fed Ex drops off my package at the office because they don't have the foggiest idea how to get to the house, the sales tax rate is still 6.25% since the official delivery destination has no local sales tax component.
  • This bill isn't the answer. The state sales tax situation is a complete and utter mess, and local sales taxes make things even worse.

    How does this propose to handle county or city sales taxes? It doesn't.

    F'rinstance: in Blount County, TN, purchasers at local stores are subjected to a 6% state sales tax and a 2-3/4% local (county, IIRC) sales tax. Purchases made on the Internet, or via mail order, from outside of the state are not subject to sales tax, either county or state. This bill would subject sai

  • More states w/ out sales tax (Score:3, Informative)

    by Maskirovka ( 255712 ) on Wednesday October 01, 2003 @11:05PM (#7110848)
    No state sales tax in Alaska, or Montana.
  • I don't buy mail order just because it's cheaper, it's because of everything else I don't have to do. No crowds, selection, price, no driving (it's 45minutes to the mall each way), and no BS. The no tax is a bonus. For some odd reason I don't like paying (8.25%) money to the Liberal Scum that run California like it was their own little private business. If they would do something other than squander it, I might be more inclined to pitch in. Even if they manage to start collecting taxes from stuff I buy
  • Using this as an oportunity, someone could start pitching a national sales tax. As much as the states will try, there won't be a law making it legal to tax items purchased in another state. I know that here in Wisconsin we are technically supposed to pay sales tax on out of state purchases via our personal income tax. Anyway, back to my point.

    While cash strapped states might not like the idea, the federal government could impose a federal sales tax on ALL items. I would find this ideal over our current
  • Businesses could just not ship to addresses in states the collect the tax. Or just just charge a tax hassle fee of $20 to compensate for the paperwork time. Just my 12.5%
  • This is where I like Bush: any bill to create a broad new tax is likely to get vetoed. Bush is still haunted by his dad's "read my lips no new taxes" comment.

    Be very concerned if you are an online retailer, or make your money from ecommerce development if Bush looses in 2004. Most democrats wouldn't hesitate to tax the snot out of us.
  • B&M stores believe that they're losing business to internet stores because of they have to enforce taxes while the internet stores don't.

    While that is a plausible story, I just don't think that is the reason for people shopping on the internet.

    If I want a DVD that is available at Circuit City, I'm not going to order it online just because I don't want to pay tax (especially if they're the same price).

    But if I find some equipment for $100+ LESS on the internet... well obviously I'm going to buy that.
  • Even as an end user, if this goes into effect I'll happily pay the exchange rate and overseas shipping just to avoid having to figure out the damn tax implications for buying $300 from one state and $200 from another. We're already taxed on income, the seller is already taxed for the sale as their income... wasn't one of the main reasons we declared independance from England double-taxation???

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