One Step Closer To Sales Taxes On All Internet Purchases
from the is-that-really-necessary? dept
On Friday, Congress came one step closer to imposing a federal “internet sales tax” on any internet purchases by agreeing to amendment that more or less indicates strong support for a more comprehensive internet sales tax down the road. This kind of tax has been pushed for years mainly by two key constituents: (1) big box offline retailers who think that the online guys are only beating them because they don’t have to charge a sales tax for out of state purchases (2) local state governments who think they’re being ripped off by not being able to collect such taxes. There are still some hurdles in the way, but it’s becoming clear that this kind of tax is inevitable. The amendment passed 75 to 24, so it’s got plenty of support. Max Baucus, who heads the Senate Finance Committee which could kill such a bill if it had less support, has already noted that his state, Montana, has no sales tax at all, and he’s a bit ticked off that Montana residents may need to start paying sales tax online. Still, as the article above notes, Baucus’s ability to block the bill via the Finance Committee is limited due to the size of the support among other Senators. I’ve yet to see a compelling argument for why such a tax makes sense — other than random state governments insisting they need the money — but at this point it seems almost inevitable that it’s going to happen.
Comments on “One Step Closer To Sales Taxes On All Internet Purchases”
Ugh. No. Don’t pay it anyone. Just don’t.
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I don’t know if this is just about the tax. I think it’s another way to reign in the freedom of the net using payment processing.
There’s a system already in place where Paypal, Visa, etc. report to states on certain purchases made online so they can collect the tax by contacting the individual directly, such as tobacco products. I imagine this will be expanded to verify proper taxes were paid (including international).
As it is, payment processing has become a tool of enforcement against industries, trades, technology that someone didn’t and they’ve been very happy to comply. Mp3’s from Russia, MegaUpload, file hosts (cyberlockers) – what’s next? VPN service – or a distributor based in China? Bitcoin? Anonymous pre-paid cards?
This might be an easy way to gain oversight or all online purchases. That may seem extreme, but I’ve never known a US corporation that didn’t “want it all”, including viewing the food stamp program as “competition” (Citibank) when there might be a buck they could make.
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I’ve observed over the last decade that very few bills that get support are actually written by lawmakers anymore. I think most bills were handed to representatives that were originally written by some corporate lawyer, often a piece of a puzzle from a corporate think-tank, and with not so obvious results/consequences.
Who actually wrote this bill?
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I think it’s another way to reign in the freedom of the net using payment processing.
Rein in. As in horse’s reins.
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In fairness taxes are generally about reigning as well.
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In fairness taxes are generally about reigning as well.
Reigning, but not reigning in.
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My state (Michigan) actually has a ‘use’ tax that is the same amount as our state sales tax (6.0%). You are supposed to list on your state income tax forms any purchases that you made while present in the state from retailers that didn’t charge you sales tax and pay that amount then. I don’t know many non-business owners or accountants who even know about this tax let alone pay it.
Or you know you could stop wasting tax dollars on dumb programs and such.
Get over it. In the UK we have to deal VAT at 20% which means you pay a tax on most goods regardless of channel, including imported goods.
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Get over it. In the UK we have to deal VAT at 20% which means you pay a tax on most goods regardless of channel, including imported goods.
And indeed throughout europe and in much of the rest of the world.
Seems to me there are two issues here.
i) Do sales taxes make sense?
ii) Do local sales taxes make sense?
It is clear that whatever your answer to i) the answer to ii) is clearly no.
When the UK reviewed local taxation a few years back it was pretty clear that local sales tax was not viable in the modern world.
If the US wants sales taxes then they have to be national. Anything else is just an invitation to load of anomalies.
In the long run the only viable local tax is a property (real estate) tax – because you can’t move a house over the border.
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The issue with this is the fact that the constitution doesn’t forbid the states from levying taxes. This means that the federal government can’t pass a law stating that the states cannot levy a sales tax. A state can say that its counties/cities cannot levy local sales tax but they often don’t. For example in Chicago, IL the general sales tax is 9.25%. The state of Illinois charges 6.25%, Cook County charges 1.75%, and the city of Chicago charges 1.25%. It was higher but it’s dropped for the last couple years. That’s probably the most complicated example but it’s a result of the fact that the United States was built as a union of sovereign states and even though many of those features have since gone by the wayside, many of the powers that other western governments maintain at the federal level devolve to the states since the 10th Amendment states (in full), “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” So, technically, if the Constitution doesn’t say that the federal government can do something, it can’t.
There is an interstate commerce clause (Article I, Section 8, Clause 3: [The Congress shall have Power] To regulate Commerce with foreign Nations, and among the several States, and with the Indian tribes;) that gets used, quite often actually, to grant the government the right to do things outside the specific scope of the Constitution but I don’t think that forbidding the states from levying a sales tax on business that occurs within their borders would fall inside of that clause.
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In the UK we have to deal VAT at 20%
Does that include tea? If it does you should follow your what the Colonies did.
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no, tea (along with most other foodstuffs) is zero-rated
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A 20% tax wouldn’t seem so bad if I didn’t have to pay so much for healthcare.
Apples and Oranges. Governments typically don’t just charge taxes without typically giving something in return.
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A 20% consumption tax wouldn’t seem so bad if it was tempered with a 20% reduction in income tax. I mean, really, why don’t more people have issues with money being taxed at both ends (and all points between)?
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I mean, really, why don’t more people have issues with money being taxed at both ends (and all points between)?
I think maybe they’re actually willing to pay for the services they want from their government, unlike the citizens of the US.
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Were I a resident of the UK I’d be asking my representatives why we were paying so much more for ‘services we want from our government’ then, say, the swiss.
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Actually there’s an idea for a 23% (or so I can’t exactly remember the exact amount) national sales tax to be used in place of income tax. It comes up every couple years but never seems to go anywhere.
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Governments can’t collect money for free either…
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Misery loves company ehhh.
Re: Response to: Anonymous Coward on Mar 26th, 2013 @ 1:07am
Two things:
A VAT is not really a sales tax.
Who cares if taxes are exorbitant in the UK or EU? That’s no reason to make taxes more oppressive in the US.
and inevitably it will stop or at least slow down internet sales, making it less attractive to shop on-line. that is the whole aim of ‘the big boys’. just like the entertainment industries, they not only cant compete, they dont want to compete, preferring to stifle innovation and shut down sites in the hope that people will flock back to the stores! and, yet again, thick fucking politicians do what is asked, rather than what they should. the attitude seems to be that ‘we must have economic growth, we must have more alternative options. compete with the big boys? you’re not allowed to do that! you have to be stopped!!’
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I wish we could remove all the darn politicians. I keep trying to vote out the bad ones but my state keeps re-electing the aholes.
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You are telling me that sales tax is you make-or-break point on online shopping? You sit there with a calculator and figure out how much you would have paid in a store and then masturbate over the difference?
Look, there will be a tax on internet purchases. This is as certain as the sun will rise tomorrow. Now, you can stand defiant on your hill and scream hatred at the storm. Or, you can get ahead of it, and work to kee it as low as possible. Congress will enact the tax, and Congress will set the rate. Get the rate set low; get the tax targeted at a problem, like gas and cigarette taxes are; like maybe the national debt, or national healthcare, or infrastructure improvements, or wifi coverage for municipalities, or free Girl Scout cookies for everyone. Or, you can piss and moan about life sucks, and then when they inevitably roll over you, you are beaten and fucked
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You are telling me that sales tax is you make-or-break point on online shopping?
Pretty much. I don’t buy much from Amazon anymore if I have an alternative (I go directly to Amazon Marketplace vendors’ sites) because Amazon has started charging sales tax in Texas.
So, yes, it can be a make-or-break point.
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“Or, you can get ahead of it, and work to keep it as low as possible.”
The trick is staying ahead of it once it’s implemented. Once its imposed, raises are also inevitable. Fighting it out of the box is the most efficient response.
Tough talk with the “you can piss and moan” comments, but the pissers and moaners have been around the block a couple more times than you.
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That would be very ill advised. The difficulty is highest when implementing a new tax. Keeping the rates low for all time is much much harder than stopping a new tax. Your advice is so bad and so opposite the best course I have to wonder if that was the point all along.
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My thought exactly – just like the entertainment industries. The big box stores are kidding themselves though. I was recently in Walmart and thought I’d buy a cable that I needed. But I stopped short, because it was over 9 times the price of what I usually pay online from a US company (not even directly from China, and I’m in Canada). The big box stores have just had a long run of the gravy train and they’re in denial that it will come to an end.
Come to think of it, how can a tax be collected if the goods are coming from another country – say China for example? Will they monitor all courier, mail, or shipping services?
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Come to think of it, how can a tax be collected if the goods are coming from another country – say China for example? Will they monitor all courier, mail, or shipping services?
Come on a trip to the UK. Now buy something direct from the US. You will find out that the answer to that question is (unfortunately) yes.
The solution to the US problem is to introduce a national sales tax and abolish the local sales taxes. Then redistribute the proceeds to the states. That way you will get a level playing field whilst continuing to raise the revenue.
Re: Re: Re: You think?
We have the GST set at 10% and every year we have a bun fight between the states and the federal government over how much should be allocated to each state.
You have 50+ states and the bun fight will just be bigger.
Re: Re: Re:2 You think?
Yes, but the interesting thing about a flat sales tax is that it hits everyone, and the poor disproportionately. However, it’s guaranteed revenue. That’s why sales taxes are so popular with polticos, whilst being unpopular with the general populace.
Having said that, it does solve the crazy sales issues you sometimes get from state to state.
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We are talking about taxes here. No matter how much sense it may make to say that a national tax will replace a state or local tax, the reality is, no taxes go away. So, by agreeing to a national tax, we are agreeing to another tax.
For you guys in places that have always had another tax (Vat), that’s your own damn fault. Just like the cameras on every corner and other intrusive laws, you have yet to have a public consensus to fight these things or stop them in the first place. Just because you have always had a tax doesn’t mean it is right. Just as the US has severe problems to fight/fix, you guys are leading the charge into a police state. I really wish the US could resist the lure of making a law for everything.
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I don’t think there are many people here in the UK who have much of an issue against VAT (apart for the size of it at the moment).
Somewhat ironically, in my eyes at least, the reason we don’t mind it is because you can choose whether to buy something or not – and so you can choose to pay the tax or not. I say ironically, because I thought that was the argument many americans had against have a nationalised health insurance/service as we do in the UK.
What also happens is that, if set nationally, the sales tax will be included in the price, so you won’t spend time worrying about it. Service compris.
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You should really get out more.
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This is just another example of how the interwebs are seen as different from reality.
Dick Durbin is pictured in the article. So if you live in Illinois, you can look forward to a minimum of 15% federal income tax, then 10% sales tax on most of your purchases, and now what will probably be another 5-10% federal internet sales tax. So basically 30-40% of your income.
The federal government has been trying to figure out how to make a national sales tax palatable for a long time. Seems like the web is so different from reality that it makes sense.
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They will collect tax through payment processors; Visa, Paypal, etc. Most of them already report to states on some purchases. The system is already in place.
The anonymous pre-paid credit card will go the way of the do-do. People will have to register and verify them somehow.
What disturbs me is that payment processing is a gateway point. If payment processors are told to stop accepting charges for something, they do without question. This includes services that are entirely LEGAL but some industry doesn’t like. It’s a new form of “law”, without debate, without representation, without due process, without oversight or accountability.
How is that different than a toleration regime via online sales? If they don’t want you buying from India or China – your payment can’t be processed even using a foreign exchange service or Bitcoin.
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We’ve always had to pay sales tax for online purchases, and the online shops are still running circles around the physical ones.
TBH, I don’t see why the delivery channel should matter on whether you pay taxes or not.
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The delivery channel matters because if the far end of that channel is in another country, the government on the receiving end cannot control the sale, and is left with having to monitor the arrival of the taxable item.
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which they do for international sales anyway. It is was customs does.
Try to buy a boat in Canada and see for yourself 😉
btw, it should really be called ‘buyer’s tax’, since the side that makes the purchase pays it (either directly to the shop, or in the case of international sales, at the border)
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Actually, lobbying legislators is part of the competition.
But online buyers have to pay shipping – even if it’s so-called “free” because it’s been wrapped into the price.
This is anti-competitive. I buy online because I can’t find the selection available at a retailer. They are living on another planet if they think I’m going to walk into a big box store, after wasting gas, time parking and then wait for service, wait again to check out, during the hours convienent for them – and half the time, I’m told I need to order what I want online anyway and have it shipped to the store. Wow. I just wasted several hours for that?
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EXACTLY !!! besides the fact that 90% of the time the local stores DO NOT have what i want IN STOCK…
i can’t tell you how many times i WANT to buy from local sources, but they don’t have the selection…
crap, i live near a small metro area, but it STILL can take HOURS to drive around to find out no one is stocking what i want/need…
…vs 5 minutes of googling/amazon ? ? ?
who are you kidding, Big Boxes, gtfoh…
if i hear -one more time!- that ‘we can order that for you you and have it in a week or two’, i’m going to go postal…
no shit sherlock, I CAN ORDER THAT SHIT ONLINE TOO, and save myself the aggravation AND extra money you will charge…
not to mention, sales droids DO NOT have better knowledge, expert advice to -you know- actually HELP me… the only reason they are there, is to pressure me into bullshit service/maintenance/replacement contracts, and generally rip me off…
gee, why don’t i want to deal with them ? ? ?
more selection, cheaper, delivered to my door, no fucking annoying sales droids…
WHY do i want to shop at your crappy stores again ? ? ?
oh, i don’t…
art guerrilla
aka ann archy
eof
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not to mention, sales droids DO NOT have better knowledge, expert advice to -you know- actually HELP me…
No kidding. A while back when micro SD was new I called a certain blue and yellow electronics store to see if they had the size of micro SD card I wanted and he said yes. I get there and it turns out no, they do not have it. I call another store and he says yes. “Now this is micro SD not mini SD, right?” “Oh, um…” Another five minutes on hold and no, they don’t have it either.
I pretty much just shop online now.
Oh boo hoo. We already have this in the UK, it’s called 20% VAT.
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Yes and because the UK has it we should too! That is the most ridiculous argument around. We are not the UK and the UK is not the US.
The problem as a couple others here stated, is this will be a NEW tax on top of the sales tax states already collect. So the consumer/taxpayer will be worse off as old taxes do not go away and do not diminish.
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um, sales tax is ALREADY due on online purchases. Most online stores don’t pay it due to jurisdictional squabbles, so a federal law actually makes sense. Have the law state that the site must collect any sales tax due based on the state the item is to be delivered in ( delivery address seems the fairest way to do it- it bypasses the issue of proxies, while not allowing online stores to put their servers in sales tex-free states to avoid paying sales tax. Yes, I suppose you could arrange for delivery to a tax-free state and have it send to your actual address, but you can do something similar with brick-and-mortar stores.
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You confuse “sales tax” with “use tax.” It’s easy to do, as that is the intention. Because the dormant commerce clause of the US constitution prevents individual states from interfering with interstate commerce, they can not tax the sale, they must tax the use of an item within the state. And the use tax applies to everything bought intrastate, but it is offset by the sales tax. Therefore, use taxes actually apply to all purchases and sales taxes only apply to in-state purchases. So there is a difference and your argument might be just a scosh more compelling if you demonstrated knowledge of that fact.
yep.
I feel thoroughly disenfranchised. The fact that internet tax was put on hold and the people NOT once complained, proves everything. I don’t know what how much more evidence you need that shows democracy is a sham.
Re: yep.
Maybe you’re so obsessed with measures to combat infringing that you ignore things that will really impact you.
“”On Friday, Congress came one step closer to imposing a federal “internet sales tax” on any internet purchases by agreeing to amendment…””
Sorry if I’m wrong, but shouldn’t that be “” by agreeing to an amendment…”” ?
Even if they imposed a tax to try and encourage people to go to brick&mortar it’s still not better.
It’s still cheaper, faster, more convenient and more efficient and better to shop online.
All the Gotcha pure profit items (700% markup) are cheaper online.
It’s much easier to find a product in a search bar than in a store with constantly changing placements and generic labeling.
You don’t have to drive to Amazon.com
You have a wider selection of choices. B&M stores typically have fewer brands. Even worse when it comes to lower spotlight items such as adapters.
User Reviews (Never shop without knowing what you’re getting yourself into)
Sometimes intuitive designs. Did you know that item you’re trying to buy might not work properly without this other item? Or might not work with your setup? Or hey, it might even work better with this other item.
There are only two areas in which B&M stores beat out online shopping. Demo units and shipping time (which is to say, there is none).
So unless this proposed tax is ridiculously high to the point of Boston Tea Party revolution, it’s not going to deter people from online shopping in the slightest.
FFS, it's not an "internet" tax
FFS, it’s not an “internet” tax. It applies just the same to mail-order, phone-order, or any other way of ordering goods not for resale over state lines. States have been wanting to do this well before the internet.
Yes, I realize that the largest impact will probably be to online retailers, but I wish there was a SINGLE article about it that didn’t call it an “internet” tax.
As a side note, yes, “random state governments” are complaining; they’ve budgeted for that sales tax revenue in their budgets, and they’d like to collect it. I’m not sure why their voices should not be considered important; after all, it’s state taxes that are the subject of the discussion. Not collecting it results in a revenue shortage. Whether or not they spend their revenue wisely is an entirely separate discussion.
Re: FFS, it's not an "internet" tax
My standard response to increased taxes: If you can show that for all practical purposes you’ve eliminated waste, and you still don’t have enough money for what the taxpayers want you to do, then raise taxes. Otherwise, go back to the books and find money that I’ve already paid you and stop throwing it down the toilet.
Re: Re: FFS, it's not an "internet" tax
Re: FFS, it's not an "internet" tax
I’m sure that muggers have budgeted income from mugging for their crack habit and they would like to collect it. How dare you ignore their voices, after all, it’s the theft of your money with no visible return that is the subject of discussion. Not mugging you results in a crack shortage for them. Whether or not they buy crack or fortified wine is an entirely different discussion.
The fact of the matter is that taxes were based on the supposition of some value for those being taxed. Sales tax was in return for providing a favorable business environment with roads, and police and laws protecting buyers and merchants. Interstate commerce benefits from almost no state expenditures. However, some how the argument has been turned into taxes as some sort of medieval fealty to the local feudal lords and their power structure. Now they simply decide to spend money so they are entitled to shake their serfs by the ankles until all the change falls out of their pockets. Basically, you are arguing that we are back to indentured servitude working our masters’ lands. How did that come to be?
Re: FFS, it's not an "internet" tax
“Just give us money, we’ll talking about how we use it after you’ve given it to us!”
Please.
So any of these mofos used the the “For the Children!” excuse yet to justify this?
MAJOR tax actually NEEDED is transaction tax on Wall Street.
Chicago merc too of course. Stock trades are at present entirely untaxed. That allows for sheer speculation (among the traders, not you; they charge you for each trade), which destabilizes the market (with computers they make literally millions of speculative trades), besides is totally unfair and unproductive. No other such large pool of trading goes untaxed, and as those grifters just skim value from producers without adding any, it’s unconscionable.
But Ivy League Mike is FOR allowing Wall Street to remain untaxed. Those are his pals, and he too no doubt gets unearned income sheerly from being born having capital, not from anything resembling productive work.
By the way, Wall Street and Chicago BOT are anachronisms that should be done away with now. Not needed for either start-up capital or trading, it’s become sheerly a casino.
1% TRANSACTION TAX ON WALL STREET will go a long way towards limiting The Rich from skimming off the rest of us.
Re: MAJOR tax actually NEEDED is transaction tax on Wall Street.
I don’t know if you’re the real Blue, but if you are, must you lace EVERY comment with an ad hominem attack?
It instantly destroys all credibility your statement may have gained.
Re: MAJOR tax actually NEEDED is transaction tax on Wall Street.
Wow – minus the stab at Mike, you actually make sense for once.
head implodes since he actually agrees with ootb
Re: Re: MAJOR tax actually NEEDED is transaction tax on Wall Street.
Nothing he said makes sense. First he conflates arbitrage (millions of trades made by computer) with speculation (betting on future prices) then insists they destabilize the market, which they demonstrably don’t. Then he claims this goes untaxed which is also completely false as they’re actually taxed twice, once when the money is earned initially and again whenever this is a capital gain. He also pretends that capital investment has no effect on value and that value comes entirely from ‘producers’ which is also demonstrably false. But the truly crazy part is that a transaction tax would hit index funds, like the ones that make up wide swaths of the middle class’ 401k or other such retirement accounts, pretty hard as well as making it harder for markets to recover after a dip which is bad for everyone.
Re: MAJOR tax actually NEEDED is transaction tax on Wall Street.
1% TRANSACTION TAX ON EVERY MONEY TRANSFER EVERYWHERE EVER
and abolish each, every and all the other taxes forever.
Re: MAJOR tax actually NEEDED is transaction tax on Wall Street.
Wall Street is already taxed. It is called Capital Gains.
Re: MAJOR tax actually NEEDED is transaction tax on Wall Street.
Except this wouldn’t effect the rich much, but would rather create a barrier of entry with stock purchases for people who don’t have the money to pay the tax, so this would likely just help the class divide along.
Re: MAJOR tax actually NEEDED is transaction tax on Wall Street.
Stock trades are at present entirely untaxed.
But the gains from them are not. What problem are you trying to solve by taxing trades as well as gains? High frequency trading?
Re: Re: MAJOR tax actually NEEDED is transaction tax on Wall Street.
The problem where he feels that anyone with any amount of money is a priori a thief so no matter what you do to them it’s ok.
Re: MAJOR tax actually NEEDED is transaction tax on Wall Street.
That’s baby blue, your class warfare screed was sorely needed here. Please repost it again on the next article that comes up regardless of subject.
I live in Oregon and if there is an internet tax our economy will be one of the best in the world. With no sales tax and there will never be (we won’t allow it, not like the other sheep) we will have such a rich economy because we will not shop online. I already don’t purchase anything I have to pay shipping on. If I have to pay both shipping and or taxes the internet will become too costly to do business with. Montana and Oregon will flourish as a result. And NO we don’t want you moving here! We are exactly the right size.
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I already want to move to Oregon, so stop tempting me even more. Why, you might ask? Ron Wyden. Enough said.
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we will have such a rich economy because we will not shop online.
I’m guessing you live in Portland? Do you think everyone in the smaller towns and rural areas that don’t have the same wealth of shopping options will feel the same way that you do?
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“Do you think everyone in the smaller towns and rural areas that don’t have the same wealth of shopping options will feel the same way that you do?”
We do. I live in one of those rural towns. Oregonians are united on this.
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The plural of anecdote is not data.
Re: Oregon
Good on you – and for those of us who simply can’t afford to live in your state due to the income tax and regulatory burdens, we’ll wish you well.
Obedient Big Box Stores
They argue that online retailers, which in some cases aren’t stolen from through force (or threat thereof) at checkout, enjoy an unfair competitive advantage over big box stores that do submit to said theft/coercion. Like a good and obedient slave, instead of speaking out against the immorality of State theft/coercion, the individuals who run the big box stores are advocating for the State to engage in the same theft/coercion against the individuals running online retail business’s that the big box stores are subject to.
If the individuals who run the big box stores truly wanted “fair competition”, they would speak out against all forms of theft and allow individuals to engage in consensual voluntary exchange.
Re: Obedient Big Box Stores
You’re right on the same page with John Boehner there, he also thinks taxes are theft.
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The only thing that makes them not theft is that they’re legal.
In other words, they’re not theft, at all. 🙂
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That’s the point of using other words.
Abusive monopoly is illegal, but we often call a certain class of abusive monopoly “copyright”.
Theft is illegal, but we call a certain class of legalized theft “taxes”. The only reason no one is punished is because we authorize them by proxy by re-electing those who impose them on us, thereby consenting.
When that taxation is imposed without representation, people get mad. America isn’t too far gone yet, but it’s not looking good.
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Theft is illegal, but we call a certain class of legalized theft “taxes”.
That’s nonsensical. If it’s legalized, then it isn’t theft, by definition. It’s not a special class of theft, it’s just not theft.
All in all, this goes to show just how much contempt congress has for the internet and the free market. They would rather establish new sources of revenue than do the hard work of cutting wasteful spending.
Failure to understand
I doubt a national sales tax, which will need to affect all retailers or risk being tossed out as unconstitutional, will affect purchasing decisions. There are several solid reasons to buy online such as selection, user reviews, lower prices, and ease of locating a product from different vendors. Comparison shopping with a browser is much more convenient than going store-to-store. Advantages for a B&M store – easier to verify sizes/fit, immediate delivery from stock, and perishable items can be inspected before purchase. Also, a B&M store could with properly trained staff could justify higher prices by having much better service and support. Sales tax avoidance is not the primary reason for shopping online. Shipping costs and delivery time are probably more important factors.
In one sense online retailers such as Amazon are doing to Wal-mart and others what they did to small chains and local merchants before. I would not be surprised if B&M retailing returns to specialized retailers who focus on what B&M can do better than an online retailer. The problem Big-Box and discounters have that an online vendor can have a much wider selection and significantly lower prices simultaneously than can ever be displayed and stocked in a store.
Online stores take advantage of things like roads and public infrastructure that the brick and mortar stores use. They couldn’t be a business without those stuff, that’s why they should charge a sales tax.
Better Than the Present Arrangement.
I pay my sales tax. Each year, I go through my checkbook and my bank statements, and the saved Amazon invoices in my e-mail folders, and put together a spreadsheet ledger to compile numbers which I can plug into the appropriate places on my state income tax return, making distinctions between food items and non-food items. That is the single biggest item of paperwork involved in doing my taxes. Item, a used book, at Amazon’s minimum price, four dollars, inclusive of shipping, on which twenty-four cents (6%) are owed to the Governor, that kind of thing. The tax due doesn’t come to very much money. At this point, the paperwork is much more irksome than the tax. The two most numerous items in the ledger are payments to Amazon, and periodic payments to AT&T for long-distance service. It used to be that the local telephone company collected and remitted one’s long-distance charges, but that was too simple.
As I understand it, the bill calls for a standardized federal classification matrix, and an exemption for firms doing less than a million dollars of business. I presume there would be some kind of mechanism to report tax-paid, so that the consumer does not wind up paying the tax twice for the same item. My observation is that the Internal Revenue Service is much more competent than the state tax offices generally. It would probably be harder to get a “fiddle” past the IRS, but if you are honest, it is much less trouble to deal with them. So my thinking is “The More Federal, the Better.”
The things I spend a relatively large sum on, eg. fresh salad, cannot be mailed, and have to be gotten locally, specifically across the road, within convenient walking distance. Five or ten dollars of salad, if otherwise packaged, would be fifty or seventy cents worth of canned vegetables. What you are paying for is the mostly local labor of keeping the vegetables fresh enough to eat raw. Once one slices up an onion, that increases the surface area, and various chemical reactions start to happen in the presence of air. So the best salad is prepared by someone wielding a knife before the customer’s eyes. There is a general principle that, if something can be shipped, it can be subjected to a cost-reducing process at the place of manufacture, and the tax on it is not likely to be worth arguing about.
The real primary emphasis of the internet will always be people giving information away, not selling it. Each year, there has been a promise that this will be the year of the micropayment, and each year, it turns out that this is not the year of the micropayment after all. Free content is not subject to sales tax. Internet purchases will be largely confined to the narrower sphere of physical things which are readily shippable.
Time to proxy up those Amazon purchases!
Can congress do that?
From article 1, section 9:
No Tax or Duty shall be laid on Articles exported from any State.
Re: Can congress do that?
Can congress do that?
I don’t think they really care anymore. When Congress passes a law regulating growing a plant in your backyard and using it yourself, and the Supreme Court says that’s OK because that’s interstate commerce, they’ve pretty much given up with sticking to what the Constitution actually allows the federal government to do.
Re: Can congress do that?
Yes, the jerkoffs will just put a line through it.
Our politicians (so much for their oath) want to circumvent the original purpose of the Commerce Clause, which was to guarantee free trade among the states. Instead, the bill would allow states to levy taxes on goods crossing into their state, which is not what our Founding Fathers intended. In the process, they will see how many idiots stand by and watch as they chip another piece of our Constitution away.
Ask yourself, are we worthy of a document that protects us when we don’t try to protect it?
Call your Congressman. Stand up and say WTF..
Yay for Bitcoins!
I’m against sales taxes on the Net. This has come up in the past and has always been defeated. Surely we can defeat it again.
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The only good news was that this was attached to a budget that will probably never see the light of day.
Short-sighted at best.
State & Local governments have thought for years that the internet is somehow made of gold. As an employee of such an organization, it obvious that legislators believe there’s an untapped gold mine out on “Them thar Intarwebz”.
There’s already a means for states/locals to collects sales taxes: The Streamlined Sales Tax Board/Initiative/Whatever, it provides reciprocity to jurisdictions in levying sales taxes provided they align their laws with a common set to make it (slightly) easier on the business.
What they’re all missing is that by levying sales taxes on Amazon (for example) they’re making it more likely for Amazon to have “nexus” in your state/neighborhood. Which means that Amazon can now set up warehouses nationwide and offer same-day delivery.
Think that might compete with local retailers?
Is there not an argument that....
having a sales tax on “non directly purchased” goods would benefit actual physical shops? People complain that their local stores don’t have what they want; but many stores had to downsize their product lines because they couldn’t compete with the internet on price.
(TBH, I don’t know how it is in the US, but a secondary tax credit on purchases bought on the high street would likely improve customers shopping experience, leading to more sales at small businesses. As it is now, Amazon is taking a large proportion of sales and is not paying corporation taxes.)
Re: Is there not an argument that....
As it is now, Amazon is taking a large proportion of sales and is not paying corporation taxes.
Do you mean to say that Amazon customers generally aren’t paying sales tax, or are you claiming Amazon doesn’t pay corporate income tax?
Re: Re: Is there not an argument that....
Corporate income tax…
Amazon, Google and Starbucks accused of diverting UK profits.
It’s the inherent problem of globalisation – companies can pick where they pay tax and where they don’t.
I feel like I have been paying sales tax on online purchased items for more than a decade already.
Fuel taxes are very high in Western Europe and here in Uruguay, and I agree with that. Instead of charging for internet sales, the American Congress should tackle the energy issue and raise fuel taxes.
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Instead of charging for internet sales, the American Congress should tackle the energy issue and raise fuel taxes.
Raising fuel taxes is an immensely unpopular thing to do here.
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I’m sure of that! But I’d prefer that to other taxes.
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The United States consumes a quarter of the world’s energy and produces a tenth of the world’s road vehicles. Yes it matters to me.
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In New Zealand we pay 15% on all sales except this does not apply to offshore online retailers. I am not convinced at all that a sales tax is a good idea as it is a particularly regressive form of taxation and neither do I think that charging online retailers sales tax will solve all problems for brick-and-mortar retailers but if you are going to have a sales tax then I feel it should apply to all sales and not act as competitive advantage to those operating offshore
Are they going to start taxing non-internet orders as well? If I call up a company and place an order over the phone, will I still get taxed? What if the company doesn’t have a web site that you can order from?
Why do I get the feeling that even with such a tax, states are still going to be crying that they’re bankrupt and businesses are still going to be closing left and right?
Re: To: Rekrul, #78, Non-Internet Purchases
Well, if you read the bill:
http://thomas.loc.gov/cgi-bin/query/z?c113:S.336:
The bill doesn’t say anything about how the order is placed, or paid for, only about a seller who is out of state, and does not have locus, but does business on a sufficiently large scale to have lost his amateur status. Also, the out-of-state tax rate has to be the same as the in-state rate, and the state’s tax code has to be “harmonized” with the new interstate code, so that an out-of-state seller doesn’t have to operate according to a bunch of different rules. Amazon is happy with the bill, and they wouldn’t be if there was anything seriously discriminatory.
Realistically, Amazon is becoming the means by which one buys from a small mail-order seller who is not entirely businesslike. At a distance, I cannot determine whether someone like that is trying to cheat me, or is merely un-businesslike. Amazon knows enough to draw lines. As Amazon gets its new robots, it will probably require more sellers to deposit their merchandise in an Amazon warehouse, and will handle the fulfillment in-house. That way, Amazon knows the merchandise actually exists, and knows when or if it has been shipped. EBay is fundamentally flawed because it persistently refuses to take this kind of responsibility. In competition with a Kiva robot, a human is worth about fifty cents an hour. People who are not in a position to spend half a million dollars on a Kiva robot system probably should not be in the business of inventory and fulfillment.
Of course, a state-of-the-art telephone order system has Caller ID, and is tied into telephone directories, etc., so they know your full particulars as soon as they answer the telephone, and they just ask, is this so-and-so, of such and such an address, for confirmation. From there on, it’s in the computer.
Paying for things by check, sent by mail, could offer complications, but there is a reasonably workable solution. Back in the 1980’s, I sometimes bought stuff mail-order from J.C. Penney, notably bookcases, which were heavy enough that I didn’t want to have to get them home by myself. J.C. Penney had a complicated system for computing shipping charges, but I found that if I just sent a check for the price and approximate shipping, plus about ten percent extra, they would work out the correct figure and send me a refund check. If someone who does a million dollars of business or more per year doesn’t do refund checks, and takes over-payments as free gifts, then at that point, you have to question his honesty. Reputable mail-order merchants do refunds all the time for items which turn out not to be in stock. Cutting a refund check is an automatic process.
Re: Re: To: Rekrul, #78, Non-Internet Purchases, Edward R, Hamilton.
I should like to add something about the way Edward R, Hamilton, the long established mail-order bookseller, handles refunds. They send you a refund check which is a perfectly valid check– you can put it in the bank if you like. However, the check also carries a notice to the effect that if you use it as full or part payment on a subsequent order, they will waive the usual $3.50-per-order shipping charge. A desirable customer can always go through a catalog find something else he likes, so in practice, Edward R. Hamilton doesn’t have to pay out the refund checks through the bank very often. For some reason, Edward R. Hamilton doesn’t like to do credit card transactions– they are quite pointed about telling you that if you want to use a credit card and buy through the special auxiliary website for credit card transactions, they will have to charge you extra.