State Coalition Approves Internet Sales Tax Plan 450
An anonymous reader submits this story about the U.S. states banding together to figure out a way to tax mail-order transactions.
This discussion has been archived.
No new comments can be posted.
State Coalition Approves Internet Sales Tax Plan
Related Links Top of the: day, week, month.
"Life is a garment we continuously alter, but which never seems to fit." -- David McCord
thats horrible (Score:5, Interesting)
How? (Score:4, Interesting)
Taxes (Score:1, Interesting)
There already is a sales tax, no need for double! (Score:5, Interesting)
That's why I have to pay Texas sales tax on my crucial.com purchases even though they are not in Texas. If, on the other hand, I buy something from NewEgg.com, which is in California, I pay no sales tax because they do not have a business presence in Texas. California residents do pay sales tax.
Internet sales are just like mail-order catalogs, and the same tax rules apply. We have no need for new laws on this.
Re:Yeah, as if that will change anything. (Score:2, Interesting)
Sorry, from the the article
When 10 states agree, they can force the remaining 40 to follow their whims.
I'm not an expert on the US constitution - anyone know what it has to say about this scam?
State Budget Deficits (Score:5, Interesting)
This is unconstitutional! (Score:5, Interesting)
States can tax sales within their borders, but interstate commerce is up to the federal government. States have no right to do this.
Re:Online Shopping similar to Catalogs (Score:3, Interesting)
Most places don't do this already because it would be an absolute nightmare to figure out what tax to charge. Say you're an online retailer in California. Are you saying you think you should need to know the local county sales taxes for Ohio residents? I don't know how other states do it, but here in Ohio, every single county determines their own sales tax rate. There are at least a hundred different counties. My sales tax is 7% but if I drive 10 minutes south of my home the tax is 5.5% in a different county. The state expects me to send them a 1.5% "Use tax" in April when I pay my taxes because I somehow profited by buying my goods in a county that charges 5.5% instead of 7%. How fucked up is that? Basically I give a big old finger to them all and buy everything out of state mail order now (which you're also expected to report and pay a 7% use tax.. I of course do that.. riiight). The only way to get around this shit is a nationwide sales tax. Abolish the IRS and put a flat rate tax on all goods. Then divy that up among the states and federal government. Probably need a 20-25% sales tax for it to work though. Ouch.
A better solution (Score:5, Interesting)
I don't buy anything online from within my own state due to the sales tax issue. Everything is out of state. If this passes, I won't buy anything online anymore. There is little incentive when you are paying sales tax AND SHIPPING.
I just wrote a lengthy email to the TigerDirect CEO on this. You have to contact Senator George Allen, and any Senators that are not pro tax, pro big government, pro heavy social spending. And contact the CEO's of the online companies you use to make purchases. Think about my take on this, then contact them if you think it is good:
Internet sales tax collection is coming, and soon. The states will be demanding bailouts from the federal government for all of the deficit state budgets. This will be a bone that the federal reps will throw them, instead of having to hand out money from the federal kitty. The fight on this will be more ferocious this coming year than in the past because of the slowdown in the economy.
Shipping charges make up a large percentage of an online purchase. Excepting some of Amazon's sales (and they are not profitable yet), shipping is not free. You are either charged for it outright, or it is built into the price. Or the company doing the selling is a house of cards that will collapse sooner rather than later.
The brick and mortar stores cry that the online sellers have an advantage because they don't charge tax. But I get charge shipping on my purchases. Further, returns are a hassle. I still have items here because I didn't return them in time, including a power supply/ups that was incorrectly described in catalog and is useless to me, which cost over $100.
My solution, something that I could live with? Make the shipping costs directly deductible from the tax owed. $20.00 shipping cost? $35.00 tax? $15.00 gets remitted. $20 shipping cost? $15.00 tax? nothing gets remitted. The states will get more than they are getting now, but less than they want now. I'll be able to stomach making an online purchase, and most business will still remain. Otherwise, if this tax plan goes through, why would I buy anything online anymore? I'll go to my local computer shop, and buy everything there. I already do that with my hard drives, due to the ease in changing them when they fail (lots of GXP failures here). I have to pay taxes now on out of state purchases? Forget it.
I contacted TigerDirect today about my idea on deducting shipping costs from the taxes owed. Anyone else want to step in, help save our internet purchases by contacting your favorite reseller, and your Senator and Congressman? Don't bother with the tax loving, high spending, union backed, reps, stick with reps that consistently vote against tax increases. After all, if the rep likes spending, they'll support anything that doesn't come out of their spending kitty.
Please help by emailing your reps and online management today with this idea, or with a better one if you have it. I'm contacting another one of my online sellers now. Please do the same. Thanks.
Why should the Internet be different? (Score:2, Interesting)
Re:How to implement? Trivial. (Score:5, Interesting)
Zipcodes are five digits long right? That's a lookup table of 100,000 tax rates. The tax rate for each cell in this lookup tables comes from one of approximately 50 entities, or about 2,000 zip codes per state.
100,000 tax rates and say 4 bytes per tax rate. That's a 400K table. Pretty small table overall.
Each state probably has at most 100 different state tax rates. That I am sure is a gross overestimate. I bet it's more like 10.
This seems like a pretty easy job of data asembling to do.
You can have each state make their own particular lookup table made available from their secretary of state, or available with their digital signature available from the state website.
Then start with one zipcode to state lookup table published by the USPS and available online, signed, at some well known URL.
The rest is a smop for the sophomore programmer.
If you're a legacy (*nix, windows) publisher, you assign an intern to call up each 50 states and get their tax rates tables and stick that into your legacy app.
OR, if you're an ASP/VSP, you can make one website surf the state urls for updates and make that available as one interface (SOAP, XML-RPC)
Pretty easy. I never understood the arguments that this was too hard to implement.
Re:We don't have to pay taxes (Score:2, Interesting)
Why don't you stop paying your income tax and see what happens in a year or so?
Better yet, just refuse to pay sales tax next time you drop by the grocery store.
The part that really sucks... (Score:5, Interesting)
My little website [pjrc.com] is just one of thousands of tiny little businesses that are run part-time, or just barely pay the bills for one person to run it.
It's absolutely unbelievable what a lot of companies charge for "e-commerce" software. How likely is this to be a $49.95 turbo-tax package? Nope, it'll be targeted at businesses and a few blood-sucking companies will see this as a big opportunity to rake in the dollars from every on-line merchant. We've seen lots of this mega-expensive software, and we manage to get by and make customers happy without any of it. It's unheard of to be _required_ by law to purchase some particular (extreemly expensive) software. And with some special gov't appoval/certification process, you can be sure it'll be plenty expensive...
But for the little guys (like me), that money just isn't there. We can't spend thousands on software, or just about anything else for that matter. It looks like the company these states are working with is Taxware [taxware.com]. Go visit their site and take a wild guess at what they're going to charge for this sort of software. It ain't gonna be cheap.
The fact is that there are many thousands of very small on-line merchants. VERY small. Filing 45 tax returns is going to suck. Paying for expensive software, or consulting fees to some "approved" company will only add injury to the insult. Our accounting software budget includes a new version of Quickbooks for next year. That's about all we can afford software-wise.
And it goes against all other tax paying practice to require specific approved software. You don't need special software from a specific "approved" vendor to file taxes. You do need to know how to do it, of course. My partner is a CPA and she knows ordinary sales tax very well (even though we live in Oregon where there is no sales tax). Why should we be held hostage to purchasing special software? Why does it need to be from specially approved vendors?
If the tax can't be paid by a company with an ordinary CPA, and some special software is required, and that software is so special that vendors need to be certified by some special approval process, they certain't haven't made great strides towards making this a simple enough process. Special software isn't required for paying normal taxes, and requiring a special certification process for tax calculation software is totally unheard of. It reaks of a back-room deal between GovOne (the makers taxware) and these states... if some complicated certification process is required for anyone else trying to enter the market for this new software that every on-line merchant is compelled to buy, guess what the prices will be in the first year when Taxware is the only product available and everyone is REQUIRED to buy it?
Well, enough ranting for one day. Maybe it won't be so bad. I'm just in a bad mood because a customer refused to pay the tax/duty on a package we shipped to the UK (and now we need to do something about it, and all the options suck....)
Which states? (Score:5, Interesting)
Re:I think I have a better solution... (Score:3, Interesting)
Basically, it is that shipping charges must be made deductible from the taxes owed. I can live with this. If I have to pay both shipping, and taxes, forget online purchases. I can find everything I purchase online locally. I wrote to TigerDirect today with this idea, emailing their CEO. I am going to contact my local computer shop that sells the vast majority of their items online, and who would probably close because of this legislation (small seller), and I am also going to contact Quill, as I buy a lot from them as well. I'll be contacting my legislators with this idea as well.
Read my post linked above, and if you think the idea is good, please help out by contacting your favorite online seller with the idea. Ask to have the email forwarded to the CEO, look at the about page for relevant email addresses. Please help out. This idea needs to be implanted into the minds of the legislators, and the online merchants who will be fighting the bill. They states may go for it if they see they won't get what they want with any other method. Please send those emails today. If you care at all about online buying, and preserving a wide choice of sellers, please help out. Thanks.
Living In Pittsburgh , Pennsylvania (Score:3, Interesting)
Several of my friends order things online via eBay, and other various sites. The recent one that has become popular is cigarettes, they raised the taxs in the state to at least a dollar per pack. This raises most packs of popular cigarettes to 5 or 6 dollars. Now my friends resort to importing cigarettes for far less money, sometimes it is between states and some of them import them internationally, and actually now prefer the international ones because they are smoother they say, but I digress. Personally I disagree with this idea to tax online sales but I guess that deals mostly with me being a libertarian and wanting peace, a small military, and a small government.
Idea makes sense- good luck with implementation (Score:3, Interesting)
While it's true that the lack of sales tax has been responsible for much of the growth of mail-order and internet shops, Internet shops generally can offer things at lower prices than the local brick-and-mortar due to cost-cutting through automation and larger volumes of merchandise. In addition, while some people may find that their local shops are once again competitive for some of their in-stock items, Internet shops are able to offer a much wider variety of stock. Closing the loophole wouldn't, in and of itself, kill (or even seriously maim) e-commerce. Anybody who tells you so is just whining about the possibility of being required to actually be honest about their taxes.
The thing to worry about is the implementation. If the states can put together an implementation which can be relied on and trusted by all three sides (net shop, state gov't, consumer) and is practically faultproof, good for them. However, if they try to require a system and sysadmins can't trust it/have to make concessions to be able to run it, it makes buisnesses and consumers very nervous about privacy, or it has a noticeable incidence of error, that could kill e-commerce (and/or backfire on the states and result in an astronomical number of "under-the-table" purchases).
I dread this. (Score:4, Interesting)
Do you know how many people don't know how to figure out how to add 6.5% on an order? How many times a day I have to call confused grandmas because of short checks?!?
I'm getting aggravated already just thinking about this. This is going to be hell for us. It's no wonder there's a big jar of Advil available for everyone in the office.
Hmm, New Hampshire (Score:3, Interesting)
Time for Another Tea Party (Score:5, Interesting)
If you have a chance, contact your local and state representatives and let them know that this is the worst thing you've heard of. Otherwise, we'll all be screwed.
Re:We don't have to pay taxes (Score:3, Interesting)
sounds like fun (Score:5, Interesting)
So lets enumerate a typical pay check on a typical day...
Federal Income Tax (unconstitutional BTW)
Unemployment Tax
Soc Sec. tax
medicaid tax
State Income Tax (likewise)
Gas Tax
Cigarette Tax
Excise Taxes
Sales Taxes
Personal Property Tax
Prepared meals tax
highway tolls
FCC charges
The thing I find troubling, almost ironic with almost every tax, especially sales taxes, is that I'm paying these taxes with income that has already been taxed. WTF.
And what do I get for the 50% of my income that goes to the government??
I get to wait in a long line at the supermarket while DaSheeki sorts her grocieries in 3 separate piles... one for WIC, one for Food Stamps, and one for cigarettes (which she purchases with a $100 bill). What a pleasure that can be.
I get to have my annual IRS harassment.
I get to have my annual BMV harassment.
Can anybody name one thing besides internet (mail order) sales that IS NOT taxed? Bueller?
How many of you gainfully employed lemmings actually study your pay stub every time you get paid, and identify the amount of money the government stole from you that week?
What are you going to do about it?
Taxes, Taxes and more Taxes (Score:5, Interesting)
Re:The part that really sucks... (Score:3, Interesting)
It's unheard of to be _required_ by law to purchase some particular (extreemly expensive) software.
This is, unfortunatly, quite common. My parents own a small business (land surveying company). I worked there as a "kid" (around 12-24) and still do from time to time (they can not use the specialized software I wrote and I can draw topographical maps more accurate than they can and they paid for nearly all my school and still help me if I run short of funds - and I also help them when they do). Local law REQUIRES that they provide an autocad file (nearly 4000 dollars for the software, Acad and supprting software included). This cost is EXTREMELY costly for them (no free (as in beer) option, that has all the functions that are required, software for them (of course suggestions are always welcome
Buying from international sites? (Score:2, Interesting)
+5 Insightful? (Score:4, Interesting)
Damn but we do have some bitter 'merican slashdotters...
People gripe about taxes. But then they say, "Hell, could be worse, couldn't it? I mean, we could be livin in one o' them Yuro-peein countries and paying fifty percent in taxes. Hell, I don't know how they stand it."
And I always have the same response. "I don't care how much I pay, as long as it's spent efficiently." If the State takes 100% of my paycheck, then efficient spending provides that they are able to find a way to compensate me for 100% of the value I contribute to my company.
In the 'States we're definitely burning about 92 cents on the dollar, I agree. But most of the people clamoring for "reform" really want a system that is worse at stopping them from screwing people more than they are. Flat taxers are invariably rich. Rich people are almost invariably flat taxers. Rich people that aren't flat taxers have more heart than brains, and poor folk who are flat taxers just really don't know who to trust. Let's just say there are reasons they aren't rich.
I always thought Washington state was full of peacenik hippie freaks. Turns out it is, except they keep electing Democrats who keep out a state income tax (you read that right) in favor of a single-mother-crippling 9-percent sales tax.
Microsoft pays no federal income tax. Bill Gates pays no state income tax. Why do people vote for legislators that would rather have a dollar from a working mom than ten dollars from a billionaire? I can't say, but I intend to find out. I think it has something to do with how rare it would be finding Republicans campaigning on a state income-tax platform... Ah, another fine benefit of the two-party system.
Damn. Guess I'm one of them bitter 'mericans.
Bad idea (Score:2, Interesting)
But besides, that, why are businesses being forced to be tax collectors, and to do so without any compensation from the government? This is unfair to businesses and ends up costing business owners money, which then is passed on to the consumers.
For now, collecting tax on one state is already burdensome enough. If we're going to start forcing businesses to collect taxes for each individual state, this burden would become so overwhelming that it ends up restricting business and innovations altogether. By then only the big guys would be able to survive on this. The smaller businesses would be forced to shut down.
Re:This might be un-populare (Score:3, Interesting)
1) Fill out the online order form, print it, fax it. .
2) Fill out the online order form, print it, mail it.
3) Fill out the online order form, call the 800 number, quote the order reference number, provide payment and shipping details over the phone
Which begs the question: suppose I email an order? Is that close enough to "mail order" to escape the tax?
IANAL, but I'm sure a bunch of 'em will make $$ on answering the above question...
Ruins my idea (Score:2, Interesting)
Mail Order (Score:2, Interesting)
Re:sounds like fun (Score:3, Interesting)
You'll spend a while just to find out what some taxes are (like fuel and oil), and whether or not some charges you pay on things like utilities are indeed taxes. What you consider to be a tax is completely up to you. Some might consider the FCC line charge on a phone line to be a tax, but others may not.
Unfortunately, I have not spent the time to come up with a "streamlined" way of doing it. Making this a daily 10 minute task is probably the easiest. Keeping a spreadsheet (paper or electronic) with a column for each tax is appropriate - as you pay new taxes, you simply add new columns.
Pay careful attention to the method you use to be sure you don't count a tax twice, or not at all. Do not use your withholding to compute your income tax - use the actual figure from your tax return in the spring.
Ask the gas station attendant to break down how much of your fuel purchase went to various taxes. They are usually willing to help you out if they're not too busy.
On your utility bills, include any taxes, or charges levied by any government, whether federal or local. Those are taxes in my book.
When you pay tolls, always ask for a receipt. I use EZ-Pass so it's simple for me to keep track of them.
When you buy things online, be sure you notice whether or not you were charged sales or other taxes. If you buy something from abcxyz.com, and they have a business entity in your state, they are required to collect tax for that state.
I'm not going to publish my exact figures because god only knows what someone might be able to infer from that information. But, I urge you to try this yourself for just one month, and you'll be horrified at how much you actually pay in taxes. Just be judicious and pay attention and you won't miss any of them.
Here's an interesting mental exercise on income taxes:
All people involved are in the 28% tax bracket and are just regular schmucks like you and me
1) Person A pays waitress B $1.00 as a tip
2) Waitress B then pays Person C that $1.00 to wash her windows
3) Person C then pays Person D that same $1.00 to do something else
and so on and so forth until
25) person Y pays person Z to cut her toenails
26) person Z pays person A that $1.00 to jump in place for 4 minutes
26 transactions, all taxable - the IRS would collect $7.28 on that $1.00 that floated around if it felt it was worth the time...