Topic: Internet sales tax

[Johnnyherd]

I saw a peice on TV about it, lawmakers in DC are trying to find away to suck more tax money into their coffers.  Some say it might end up being 10% of total purchase.

They argue that it's not fair to local businesses that people can order online and skip state taxes.

Duh, what about shipping costs, that evens the playing field most of the time between ordering online or driving to the store.

I think it will really hurt the economy if goverment impeds internet commerce with taxes to the buyers.  It will hurt businesses, consumers and shipping companies, but it will certainly help the goverment.

[phillyherdfan]

Amazon and Walmart are the two lobbying the hardest for the law (which passed today).  The biggest issue is not the one you describe, but rather the small internet shops which won't be able to afford the infrastructure to make tax payments to every single state they sell to.

The government may tell us they're looking out for Main Street... But they're really eliminating competition for the big online players by killing the small guys.

[herdfan429]

I was under the impression that if I buy something that ships from California then I'd pay California sales tax not South Carolina tax where it is being shipped to.

[phillyherdfan]

I was under the impression that if I buy something that ships from California then I'd pay California sales tax not South Carolina tax where it is being shipped to.

Nope.   It's where ever it is delivered.  The challenge is there are thousands of taxes in the US that an online retailer will have to deal with and pay.  State, municipality, city, etc.

[spaldy]

Think the ruling elite will be subject to this law?   Probably not.  However,  they'll be happy to set up another billion dollar bureacracy that does nothing but fine and shut down any small company that does not get the taxes calculated correctly. 

Of course, Amazon and Walmart will be happy to sell you software that calculates these taxes for you. 

[phillyherdfan]

Think the ruling elite will be subject to this law?   Probably not.  However,  they'll be happy to set up another billion dollar bureacracy that does nothing but fine and shut down any small company that does not get the taxes calculated correctly. 

Of course, Amazon and Walmart will be happy to sell you software that calculates these taxes for you. 

The problem is not so much the software to calculate... it's having state and municipality tax ID codes, the costs associated with being licensed to operate (sell in those states and municipalities) and physically being able to make those thousands of payments.  It's far too unwieldy for a small internet retailer to adhere to.

What we will likely see is the smaller online retailers refusing to sell to low volume states/municipalities.  Which will in turn allow the larger online retailers (Walmart and Amazon, etc) to increase pricing in these areas as there will be little to no competition.  So, rural customers are VERY likely to see increased prices.

[herdfan429]

Just make it so business with less than 20 mill in sales excempt

[phillyherdfan]

Just make it so business with less than 20 mill in sales excempt

The current bill puts the "exempt status" at $1M.  EBay is pushing hard to make that number $10M - http://www.ebaymainstreet.com/campaigns/tell-congress-oppose-internet-sales-tax-legislation

[HERDFAN1999]

This tax is stupid.  Until the government can demonstrate they can be more responsible with our money we should not support new taxes at all for any reason.  They have plenty of money.  Taxation is not to make things "fair."  It is to provide for the minimum necessary to support our national, state and local priorities.  Even the suggestion of a new tax is just absurd based on how our economy is sputtering.

[Johnnyherd]

It really changes the economic decision between buying on the internet and going to the store.  

Why pay an extra 20-40 dollars per order for shipping and taxes?

[iherdya]

It really changes the economic decision between buying on the internet and going to the store.  

Why pay an extra 20-40 dollars per order for shipping and taxes?

Most online stores offer free shipping, or reasonable shipping.

Seriously, if you're buying a new iPhone you get free shipping, you'd have to pay 6% (WV) tax if you purchased online. You can order it anywhere, have it sent straight to your house. The other option would be to get in your car and drive, park, go in the store, get what you want, pay that same 6% tax, drive home, etc.

This bill just is incredibly unfair to small online stores, in the $1m-$5m annual revenue range. Big online stores like Amazon, Walmart, etc have an advantage, they have the resources to deal with the nationwide sales taxes. Small business brick and mortar have an advantage to in that they only have to focus on taxes in one state.

[spaldy]

Saw that this will go through this week.    The golfer's even going to stay off the course a couple of days to sign it.


Amazing that they can't pass a budget in 5 years but they ram through this in 3 weeks. 
 

[phillyherdfan]

Senate passed it today...
http://bigstory.ap.org/article/senate-bill-lets-states-tax-internet-purchases