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The Almighty Buck

Congress Reconsiders Internet Sales Tax 200

FatHogByTheAss writes "The ability of local governments to collect sales and use taxes from Internet transactions was argued strenuously during a lengthy Senate hearing Wednesday, as time runs out on the existing federal moratorium on Internet taxation."
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Congress Reconsiders Internet Sales Tax

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  • Could they get around this by taking orders through an 800#? Put items in a shopping cart, then dial a toll free number, enter your account number, punch in your credit card number, and approve the purchase.

    It'd be an extra step, but it'd get you out of the headache of figuring out and keep up with taxes for each state and county.
  • by bmongar ( 230600 ) on Wednesday March 14, 2001 @11:21AM (#363430)

    I'm not a constitutional lawer or anything, but I think that means that Missouri can't say we shall tax everything from New York x% because we don't like them. And that the federal government can't impose a fee for transporting items between state lines. But any state still has the rights to tax purchaces, property, or use within it's bounds

  • It's like your neighbor complaining to the government you have a cow and he doesn't so they come in and shoot your cow rather than give your neighbor one as well

    I like the analogy, except that it seems to imply that the government should give your neighbor a cow. In fact, the correct response from the government should be, "Yeah, he sure does have a cow. If you'd like one too, perhaps you should consider buying one."

  • The reason that the catalog retailers didn't charge sales tax is because it would be a nightmare to have tax permits in all states, know all the rates and so on.

    That's not the whole story. The truth is that the use tax is a slippery way around the interstate commerce clause that is of dubious legality. It's never been really challenged in court, and many don't believe it would hold up. The closest thing (at least that I know of) to an applicable court ruling was a case where the Supreme Court ruled that nexus- the term used for a what makes a business subject to a government's tax jurisdiction- is "a permanent physical presence" until Congress says otherwise. The courts later ruled that having a website on an isp's server in a state, for example, is not a permanent physical presence. Typically it requires something like property ownership to form nexus.

    Many states (not all, I believe) decided that the only way around their legal problem was to directly charge the resident the tax after the transaction. The use tax can hardly be considered part of the transaction. Generally it is an entry on your annual tax forms. The states are aware of how questionable the practice is, so it is never really enforced.

    Businesses (say, involved in B2B transactions on the net) pay anyway to avoid even the slightest appearance of illegality. Fortunately for the states right now (although it hurts their arguments for an internet sales tax), businesses made up about 80% of Internet sales in the last major accounting study.

  • So, how do you determine where the buyer or seller are?

    The selling company could be incorporated in the USA, but the web site taking the order could run in Europe.

    The buyer could dial in to an ISP in China, live in Russia, and have the goods delivered in Finland

    This is a global economy, the world is your home town... Governments will have to come up with global rules on this, and a way to globally enforce this. Until then, internet taxes are impossible to enforce.

  • Purchasing things over the internet is no different than buying something mail order. All one would have to do is just call up the place you want to order from and place an order and still skip out on the sales tax.

    To the non-business consumer, E-Business is really only fancy mail order.
  • its actually 8% since 2001 started. fyi. it still sucks.

    Lord Arathres

  • Don't they see, state residents HATE sales tax. McCain got it right people are trying to "escape" sales tax because they view it as a great annoyance. I personally don't see how sales tax can even be legal, it seems to me that they get to tax the same money twice (ie in PA they get 6% of a 100 purchase from me, plus they get to tax the retailer for the income). I am hoping the internet manages to completely wreck the current sales tax system, after all several states get along quite well without it. Delaware's economy is doing great, much better than neighboring PA. And even though DE income taxes are higher, when you add up income, property and sales taxes, DE is still cheaper than PA, NJ and MD to live in.
  • No. It refers to states creating excize taxes on goods and services from other states. At the time the US was more of a federation of *independent* states, rather than the collection of provinces it has, often in unconstitutional ways, become.

    Unfortunately many (most?) judges no longer adhere to the constitution as the highest law in the land, substituting such phrases as "compelling public interest" to justify unconstitutional, but (in their minds) desirable, behavior or legislation. It would not surprise me in the least to see the same thing happen here, where such laws are passed, and permitted, in direct conflict with the constitution, the given a stamp of judicial approval after the fact out of expediency for the moment.

    Historical examples of this include, but are not limted to, various definitions of obscenity, child pornography, threats against the president's life, and so on. Speach which is, strictly speaking, protected by the constitution but has nevertheless been abridged, with judicial approval, for reasons of expediency.
  • It must differ from state to state, because Mass definitely considers delivery point of sale.

    To even complicate matters, when my parents bought their car in Mass. and picked it up in Mass. they did not have to pay any tax. According to the Sales Manager, the State of Mass. goes by where you register your vehicle as the determing factor.

    Just more proof that tax laws are complex.
  • The amount of taxes you pay in a lifetime is spent by the government in under a second.

    How's that for feel-good politics?

  • Section 9, clause 5 of the US constitution: "No Tax or Duty shall be laid on Articles exported from any State."

    This says the state which you're exporting it from can't collect a tax on it, but the state you're importing it to still can. Say you go to NH and buy a car. 0% sales tax. But you live in MA, right across the border. Before you can register it, you have to pay MA a tax because you're importing it to use it. Technically, you're required to report and pay tax on everything you import into your state that you didn't purchase there, but for individual citizens, such amounts tend to be trivial enough to the government that they aren't pursued.

    Now, what this constitutional clause does say is that if Missouri wanted to require everyone in every other state to send them their tax money when they shipped an item to a Missouri citizen, they couldn't enforce it, because: a) they don't have jurisdiction there, and b) they can't force a company which doesn't have a point of presence in their state to abide by their laws regarding import duties. That can only be the responsibility of the importer, not the exporter.

  • I wonder if McCain has any numbers to back up his statement that people go into a brick-and-mortar store, look around, then go home and order it.

    The only stuff I have bought online are airline tickets, my new PC, and stuff you can't find at the mall. If I order something online:

    • I have to pay shipping
    • I have to hope that someone puts the right thing in the box
    • I have to hope that it doesn't get damaged in transport
    • I have to wait at a couple days to have it (unless I pay extra for overnight)
    • It's a major hassle to return it if it's the wrong thing, or broken
    • I'm still supposed to pay Virginia state sales tax on it (technically)

    If I buy something at a store, I pay my sales tax, put it in the car, and drive home.

    Maybe I'm just not e-nough. :)

  • The big issue is just in jurisdication of the tax. Do I pay Massachusettes sales tax when I live in Los Angeles and the merchant is in Boston? Or do I pay California sales tax? And, if it's California, does that mean that the merchant has to keep seperate books for all 50 states?

    I believe the law is clear: you pay taxes based on where you live. Retailers have offered to provide free software to map zip codes to tax rates and so forth, so the "red tape" argument doesn't hold much water, either.


    Ok. Small online businesses currenlty don't need to lay out any significant infrasturcture to sell stuff. Just because something is free doesn't mean it doesn't take effort to establish. Requiring that sort of thing, that "red tape", will cut out a large portion of (admittedly crappy) smalltime entrepreneurs.

    -Andrew
  • I believe there are database packages (I've worked w/one in Oracle) that have the sales tax for every zipcode in the country. They update it every month or so.

    There are a number of companies that sell this information in comma delimited record format. I remember buying this information for a contract I did several years ago. Go to goggle.com and search for "zip codes". If I remember right it cost me $495.00

  • Either that, or I lack the self-reflection needed to hit the Preview button :-/
  • 3 - Force the customer to pay taxes to the state they reside in for out-of-state purchases.

    Actually, I'm pretty sure you're supposed to do this already. Its just that nobody does, and I've never heard of it being enforced.

  • There are zip codes that include both a town and the surrounding country -- and the town has it's own sales taxes. (Warrenton, VA is, or used to be, one example.) Also, in some jurisdictions the sales tax varies depending on the type of product, and each state (and maybe some cities) classifies the products differently, so it is going to be damned difficult to program all the combinations in and get it right.

    Sales tax depending on the location of the seller would be a whole lot simpler to administer -- but that's not the way the laws have been written.
  • The big issue is just in jurisdication of the tax. Do I pay Massachusettes sales tax when I live in Los Angeles and the merchant is in Boston? Or do I pay California sales tax? And, if it's California, does that mean that the merchant has to keep seperate books for all 50 states?

    It's worse than that. Remember, different areas have different sales taxes. LA County has a higher sales tax than Ventura County. I seem to recall that there are somewhere in the vicinity of 10,000 different sales tax authorities in the US.
  • It really looks like hypocricy[1], when one day people lament any "special" internet-this and internet-that laws like the DMCA, CIPA, buisiness method patents etc. as unconstitutionally, illogical or down right stupid, and the next day a discussion about taxation of internet trade will spawn a whole lot of special-case advocates.

    That aside, goverments who are basing a large part of their income on a sales tax need to be able to tax the internet trade. Otherwise they will simply need to find another place to get their income. One option is to raise the non-internet sales tax in order to maintain revenues, but that will quickly break down to the point where only the poorest and the dyslexic are paying taxes, which isn't exactly the biggest revenue source. Not to mention the inherent imbalance in burdens.

    Another way for sales tax-dependant governments is to begin taxation on income. And trust me, you do NOT!>/B> wan't to go that way, if at all possible. I live in a country with a tax system that basically works this way: Confiscate all income, and pay out welfare to all. A significant fraction of my income is taxed at 68 percent. In addition to that comes a 25 percent sales tax and various scams as 350 percent tax on cars, but that's beside the point. The main issue is that given the choice between sales tax on internet trade and income tax, I'd happily accept the first. At least that is proportionate to my consumption, not to my income.

    Any way, the bottom line is that the government money has to come from somewhere and if sales tax is the answer, I don't see why internet trade has to be treated special.

    [1] English is NOT my native language.

  • If you complain that sales tax is wrong on internet transactions, then it should be equally wrong on brick-and-mortar transactions.

    I completely agree; sales tax is wrong on brick-and-mortar transactions, as well.

    Anytime you tax something, you discourage it. Perhaps only a little, but you do, if for no other reason than the fact that person's $100 won't buy $100 worth of merchandise, but only $94 or so, which means he's only contributed $94 back into the economy, not $100.

    Since the purpose of taxes is to pay for government programs, let the government charge for the use of it's services, and stop tying that to other things to disguise it.

    Let me keep 100% of my money, spend it as I like, and then tell me how much I have to spend if I want government services. I'll pick the ones I want, and pay for them.

    I'll donate some of the remaining money to charity, to help those who are less fortunate than myself pull themselves up by their own bootstraps.

    -
  • almost no taxes are constitutional, think this is would be great time for americans to stand up for their fucking rights and get some other taxes repealed if this goes well. For example income tax doesn't go towards anything useful, it's just extra money for the government to waste on expanding there alraedy grossly over extended powers of state. Do we need more taxes ? no we need less takes.. check out the link in my sig it does a much better job of explaining
  • Is it just me, or does this seem like a moot point now that people are realizing something important: Almost nobody orders anything online. All the online stores are going under. Etoys went, Amazon is almost out of money (Again.), CDNOW is getting there again, etc.

    I mean, really, other than airline tickets, what do people buy online anymore?

    What they really need to tax is ebay sales! Tax every last cent for people selling off yard-sale leftovers!
  • Not really. What would happen, for instance, if I bought an item from a website outside of Canada is this: to send the item to me the company I bought it from has to declare the value of the item on the package, then customs sticks on an envelope with a bill for the appropriate amount of provincial and federal sales tax before sending the item on to me. Of course, where things get hairy is when people buy things that aren't physically delivered, like a paid software download. But potentially that's not insoluble. There could be a tax treaty between Canada and the US under which each country deducts the other's sales taxes at source on purchases, avoiding this problem.
  • IMLO, I really think this is something they should leave alone. With laws in place already stating how state to state taxation is handled, for phone transactions and such, why make it different for the internet? Is this just one way of trying to take a few more dollars and cents away from us? I don't agree too much with the statement about people are coming into local shops, finding what they want, and buying them off the internet to escape taxes. They are more than likely buying off the internet because they can find it a HELL of a lot cheaper! So I say just leave it be, why change the horse midstream? I don't think this would do much other than put a little more money into gov't, which do we think we really need to do that anyway??
  • Not that I thorougly enjoy paying the GST, but that's not really accurate. GST revenue in 1999-2000 was $22.8 billion (from the annual report, Ministry of Finance - http://www.fin.gc.ca/toce/2000/afr00_e.html). The total budget of the Canada Customs and Revenue Agency is $2.8 billion (2000-2001 Main Estimates, Treasury Board Secretariat - http://www.tbs-sct.gc.ca/tb/estimate/20002001/E_me 00.pdf)and that's for everything; customs, income tax, corporate tax and the GST. I've no idea just how much of that they spend on collecting the GST - the figures aren't broken down that way - but there's no way they spend more to collect the tax than they bring in.
  • I'm in favor of lessened taxation, but I'm also sane. That sanity makes me realize something: If I had three choices, and I had to rank them in terms of desirability, it would be like this:
    1. Best: no taxing any type of sale.
    2. Not so good: taxing all sales the same.
    3. Worst: lopsided taxation that taxes one type of sale while another type is not taxed. In the world of competition, this means that the taxed type of sale will lose popularity EVEN IF it is actually superiour. I don't want to see internet sales beat bricks-and-mortar sales based on absolutely no real-world merits whatsoever.

    And realisticly, removing all sales taxes simply WONT happen, so the compramise of EQUAL taxation is the next best compramise. It's funny that you decry 'sin' taxes used for behavoral engineering without realizing that the current lopsided situation is just that. It's like owning a physical store is a sin.

  • First, this is just completely irrational. If it's a sports team, we expect the teams to compete based on what they bring to the table, following the same rules. As long as they do that, then we call it fair. However, we might say two teams are competing on a "level" playing field, even if one team is cheating or is favored by the referee (i.e., one is better than the other but _lack_ of fairness makes them competetive equals). Likewise, businesses are expected to compete based on what they bring to the table. That is fair. There is a difference between equal opportunity (e.g., "fair") and equal results (e.g., "level").

    Second, the poster is mostly incorrect if he thinks that retail stores have a huge natural advantage over all online stores. Retail stores with store fronts have all kinds of overhead (e.g., paying for an expensive storefront, maintaince, salesmen, other employees, inventory, plowing the parking lot, etc.) Many of the retail stores that are able to offer relatively low prices only are able to do so because they've developed an enormous amount of skill, expertise, and infrastructure to make it happen; they aren't just a bunch of teenage geeks throwing together from money being thrown at them.

    Third, why should E-commerce be some kind of moral imperative? If we're going to say E-commerce should be subsidized to make the competition "level", should we not also say that high end retail stores in, say, Manhattan should have negative taxes applied to their goods (or subsidies, or what have you)? No, because they also recieve an advantage for doing so. The customer decides if they'd rather pay 5 dollars more for a 15 dollar item for the covenience. The same should go for e-commerce.

    Fourth, besides merely being "unfair", it's economically damaging to the greater economy insofar as it promotes inefficiency. One of the most basic tenets of capitalism is that it creates efficiency and does so naturally. This unequal taxing is an INTENTIONAL effort to foil that. What you are effectively saying is that a business should be able to compete on the same footing as the other competitors, no matter how inefficient they are. In other words, you're promoting inefficiency.

    If E-commerce is valuable to the customer, then the customer should be willing to pay a premium for it. If the customer is driven by prices, then that decision should be driven by what each company can bring about, in terms of raw efficiency, without regard to the government meddling. Likewise, if the decision is more complex, if the decision is between two things that are not entirely equal, the customer can decide. e.g., If a company wants to use supermodels to sell toothpaste, the cost will be passed onto the customer. If a company wants to use any retail location, the cost will be passed onto the customer. If a company wants to use a fancy pants E-commerce method, the customer will pay (or refuse to pay) the cost differential.

  • I believe it is going to be calculated based upon the customer's location.

    This brings up several other questions, though. What if the customer's billing and shipping locations are different? Would the shipping address or billing address be the taxable location?

    How would the taxes collected be distributed to each locality. Would the taxes be payable to the federal government, who would in turn distribute monies to the appropriate localities, or would the web merchant be responsible for mailing out tax revenue to hundreds of different local governments?

    How would this system be integrated into existing e-commerce solutions? How much time and money would it cost to upgrade current order processing software to automatically charge and allocate local sales tax for each order?

    How would the government propose to enforce that sales tax is actually being collected and paid out? What measures are in place to ensure that vendors abide by these regulations?

    How would orders placed on international websites for delivery in the US be affected?

    The idea is feasible, but it seems like there are quite a few questions that need be answered prior to implementation.

  • I don't have a problem with paying sales tax on mail order any more than paying sales tax at my local book store.


    heh...you're obvously not from California. grrr 8.25%...
  • Ok so if no one (or no one significant) makes purchases online due to the tax differential, then WHY should it matter if taxes are applied? As long as ACTUAL TAXES and the ACTUAL RELATED COSTS are the exact same (or near to it) for both the e-commerce and storefront retailer, I don't see how ANYONE could have a reasonable objection.

    Now whether or not this can be done is another debate entirely, but let's be clear here, if taxes do not persuade the customer one way or the other (i.e., they are equal), it is FAIR; the otherway around is UNFAIR.

    That said, all these people that say that today's complex tax system is too complex and too large to handle cost effectively at scale is simply ignorant. There are services and computer programs that handle these things for you, they really are not that expensive, a lot of mail order-type businesses handle them. I happen to work for one, we pay the both the city and the state, and the costs are NEGLIGIBLE. The prices of these systems would also plummet and improve if all the E-commerce companies starting purchasing them. Anyways, it's not as if any taxing of the internet necessarily means there needs to be anything so complex. For example, there could be an overhaul of the sales tax system(s). Or there could also be a federal body that would facilate all the tax transactions.....

    In closing, you're kidding yourself if you think E-commerce is that big of a component of the NASDAQ, at least if you look at sales (as opposed to the relatively recent and absurd valuations on DotComs). Even if it were, if customers are merely shifting their purchases from DotComs to storefronts, then it's just that, a shift, not a net loss.
  • That's why your computer was made and invented here(Fairchild Semiconductor and TI invented the internet). I guess that was from our 'Ignorance'.
  • This brings up several other questions, though. What if the customer's billing and shipping locations are different? Would the shipping address or billing address be the taxable location?

    I was about to say that the obvious choice is the billing, but it isn't. In fact, the shipping very easily could be.


    Of course the shipping address would be used. Otherwise you'd get everyone and their brother setting up a bank account or credit card account in Timbuctoo so as not to pay any taxes on ANY purchase.

    (Of course I'm assuming there is no sales tax in Timbuctoo.)
  • The lack of a sales tax on Internet business may indeed give them an advantage over regular business.

    The solution is simple, and doesn't require any constitutional wrangling: END THE SALES TAX!!

  • The state can try to collect the tax from it's own residents. Michigan sure tries!
  • Both parties already pay taxes - that's not what this is about. The manufacturer pays taxes on the materials that are shipped and on the resources that they consume wherever they're located. Likewise, I pay property tax and income tax to cover that on my end. To say that the sale and subsequent shipment uses public resources any more than usual is ridiculous. Do I pay tax when I ship a birthday present to my dad? The government is already taxing us to death; to add a tax on a transaction that doesn't consume any additional resources is irresponsible.
  • Of course if you buy from Barnes and Noble.com should you pay tax or not? They might not be based in your state, but they probably have a retail presence in it.
  • IANAL but as I recall, USA mail order companies are only required to collect sales tax if they have a "significant presence" in the buyer's state. (What that means is open to legal interpetation (expensive!), but no presence obviously isn't "significant presence".)

    Thus, national chains like Sears had to collect the tax for your state, but if you ordered from Bob's Worms By Mail on the other side of the country, Bob didn't have to tax you.

    As far as I'm concerned, Internet sales should be treated just like any other mail order. Tax based on the buyer's destination and the seller's presence (if any) in that state. Obviously, international sales go through the usual Customs/import procedures with all the tariffs and what-not that entails.

    And, USA states can quit whining for more money. It's embarassing....
    --

  • Shipping is usually higher then the tax. Local ratailers can't keep their prices down because they waste a lot of money.
  • he price of a product should not be based on the cost to manufacture, but rather, should be based on what the market can bear.

    Of course in a perfect marketplace, the price that the market will bear tends to drop quickly to not much more than the price to make and deliver the product. You can only charge substantially more than cost if there aren't a bunch of competitors with essentially identical products who can undercut you. As a product becomes a commodity good instead of a unique one, price becomes the biggest single selling point and will tend to drop to a level that will only justify a small profit. If an online merchant can really cut their overhead cost to less than your local store, they should be able to undercut them and run them out of business unless the local store can offer enough value in the form of service to differentiate their product.

  • Now on-line retailers will have to find an accountants who know the local sales tax rates for every state, county and city in the US! Hooray!!

    I figure such an accountant should be able to charge.. oh, 50-70 thousand dollars per hour.

    -c

  • The *new economy* wasn't taxed, it was a great time, markets flurished, money was everywhere. Then the market died, napster went down, I get paid less, and _________________

    * I think "the internet was taxed" will fit here well.

    Sadly enough, I started this out as a joke, but it's true.
  • McCain: "The 'Main Street' retailers ... see customers come to the store to locate items ... only to leave and order the items over the Internet just to escape the sales tax."

    This is such crap. People don't pay shipping fees to avoid sales taxes, if they are doing anything *remotely* like what he's talking about, it's because they can pay shipping and *still* get it cheaper than retail. "Main Street" retailers are whining because they can't compete on *price*, not because taxes have any significant effect on competition.

    Me, I just bought a P3-933 from a retailer. Why? Because after paying for shipping, it would have cost me exactly the same online, and I would have had to wait 2 days for it to come, minimum.

    --Dave Rickey

  • But any state still has the rights to tax purchaces, property, or use within it's bounds

    Naturally. For example, if I'm in the same state as foo.com, and I buy stuff from foo.com, I expect to pay that state's sales taxes (a lot of sites do this already). But if I'm in a different state as foo.com, I'm fairly certain that constitutional clause prevents my state from charging tax on stuff bought from foo.com.

    In that case, calling it an "internet tax" seems inaccurate. It's more like a simple enforcement of existing taxation laws.

  • What government resources do internet merchants consume? Bricks-and-mortar merchants utilize an infrastructure that's built up by the government (roads, sewer, traffic lights, etc.) and thus should pay taxes. Internet merchants use no such infrastructure - so why tax them? If there is some value-added from the government, then it could be justified, but levying taxes on internet merchants - especially by local governments is particularly absurd. My government in Atlanta isn't providing any service for a merchant based in Seattle or California or wherever. Taxation "just because bricks-and-mortar merchants are taxed" makes no sense at all.
  • Ah, I buy all my computer equipment online. 90% of my books are online. DVD player and other electronics from online. My hobby kits are from online. (YOU try finding used laser parts in a mid-sized town.) I'll probably end up buying my next car online.

    Furniture that MATCHES. Online.

    Shopping for a Mutual Funds, Vacations, and a new TV will all be done online.

    Why WOULDN'T you shop online? It's easy to research and compare prices.

    Later,
    ErikZ
  • Actually, I couldnt disagree with you more about your main point (#1).

    In my liberty minded opinion, the best way to tax a population is not how we do now. Right now, we tax on many levels, income, payroll withoutholding, sales, use tax, property tax, etc etc.

    These taxes mostly are invasive - they require you to report this or that to the government. The best way to tax people, the way to ensure the most individual control or freedom would be a universal federal sales tax.

    With a sales tax, the individual controls exactly precisely how much the government can take from you. If you don't want to pay the government any money at all, don't buy anything to which the tax applies. Build things, be self-sufficent.

    Under our current system, the government dictates the exact amount of money that you must pay them. You have an income tax bill, a property tax bill.

    In a perfect system, all taxes would be use/sales based. The Federal Parks system would be run on the money collected from entrance fees - no more and no less. This way, an individual can choose directly to support or not support the Park system.

    Under our current system, the only way to dissuport the Park system is to lobby for legislation to reduce funding. This system is utterly corrupted. Pet projects get money tacked onto huge mega spending bills.

    Politicans fear a universal sales tax, with the elimination of income and payroll taxes. This frightens them because it excludes them from power. Under the current system, politicans have undue power to direct citizens to pay for special projects they may or may not support.

    This system is fairly similiar to the one in Canada, but I believe they still have all the other socialist taxes that afflict their commerce system.

    Note, that this type of tax reform cannot be gradual - it must be immediately and widely implemented to make sense. You can't ease into a Federal Sales Tax - you would have to immediately end the Income and payroll taxes.
  • For example, a traditional store Should maintain a showroom and have inventory in the showroom

    Good lord...I don't know how many times I've gone to Sears, Best Buy, CompUSA, Circuit City, etc... to buy something and find that they are out of stock on that item - perpetually.

    I bought my $1299 video camera from a small store in Ohio that I'll probably never see. Not because of sales tax, but because I could not find it at a local store, so I went and found the lowest price.

    I buy DVD's at Amazon because I can "buy" a DVD months in advance at a LOW price and get it at my house when it does come out. (And until they closed the distribution center across town, I usually got it the day it was released in the stores.) That and it is "in stock" whereas going to a local store is a nightmare - sure, they have 500 copies of Stuart Little, but the only copy of Vampire Hunter D (assuming they ordered one) is gone.
  • Web merchants are already struggling to keep pace with brick and mortar stores in the sense that all web orders must include shipping to the customers home. This additional burden places additional pressure on Internet retailers and forces them to cut margins even further to maintain competitive pricing with local shops.
    I agree. I have some innovative practices which the government and the industry should support.

    I build laptops out of ice using chainsaws. It costs a lot to buy the ice, and we have a lot of warranty problems. Furthermore, training the highly skilled artists is expensive.

    Rather than using conventional shipping companies, I deliver goods by flying monkeys. Training costs are high, but I think society will find the service valuable.

    Seriously, the whole point of a free market is to encourage people to do things efficiently. How does society benefit by subsidizing on-line transactions?

  • If this passes, the computer and internet industries will follow Nasdaq. I'm not a Republican, but keep government out of the Internet.

    You don't have to be a Republican to think that way -- you might be a Libertarian [lp.org].

  • LA county is 8.25% still. About 20 years ago, they voted a 0.25% local sales tax for transit purposes. You can see what good THAT's done!
  • So far yet to be resolved is the question where does an internet transaction occur? This is of issue to which state gets the sales tax, which states gambling laws apply, which states pr0n laws apply. So congress would have to establish where the transaction takes place to begin to tackle the other issues

  • It is unconstitutional.

    Firstly, it's not unconstitutional, since he's advocating this at a federal level.

    The 'it' I was referring to was not his proposal, but rather his depiction of what he thought would happen in the future without it (paying tax for both the seller's state AND the buyer's state.)

  • I agree.. The simple fact is that when I go to an online merchant. The gov't isn't providing me with anything at all. I pay with my equipment to order something online. That is then packaged and shipped by the UPS or FedEX or whoever who PAY taxes already to run on the roads they do. I pay for everything, the computer, the electrcity, the internals, the bandwidth.. All this is; is just another way for them to try and make easy money.

    I pay 8.25% - 8.50% sales tax in NY. It sucks.
  • by wiredog ( 43288 )
    English is NOT my native language

    Nor is html,apparently.

  • Well, I got two contradictory replies to the post, and so I decided to go look it up anyway: You lose.

    Relevant Findlaw Article [findlaw.com]

    As far as section 10, referenced above and most directly relevant, is concerned, imports and exports only apply to goods imported from or exported to foreign countires. Section 9, the other section in question, deals only with restricting Congress from imposing taxes on goods exported from the states (this was a sore point at the time because of England's prohibitive taxes on colonial imports and exports), not with states laying taxes on goods between themselves. Which, technically, these aren't anyway, because they're not being taxed exclusively on the basis of being either an import or an export, but simply the the fact of sale.
  • It is unconstitutional.

    Firstly, it's not unconstitutional, since he's advocating this at a federal level. The constitution requires that states cannot impose tarrifs upon one another (as you mentioned), but certainly doesn't say anything about the Federal government not being allowed to charge a sales tax. (at least, I can't remember any such language off the top of my head).

    Only the selling location can have sales tax applied.

    How I wish this were the case. If so, then I'd just have to pay whatever taxes are appropriate for wherever the seller is, and they'd all move to Delaware (no sales tax). But, how do you define where the seller is? Their corporate headquarters? Their servers? Their shipping point? Tough to decide there. The general rule of thumb has been that you pay sales tax only when you're located within a state in which the seller has a physical presence.

    Unfortunately, this has not always been the case, and the Supreme Court, if I recall correctly, has actually allowed states to charge a "Use Tax" on items bought outside the state. Many states do this (I know for a fact that Maryland and Viriginia both do, though it's kind of hidden away). [I just did some searches at findlaw.com, looking for "interstate tax" and "interstate sales tax" and similar search terms on US Supreme Court decisions. Some interesting reading, but not anything that I can understand well enough to cite here. Check it out.....]

    It is illegal for states to apply taxes to items brought in from other states, because that's a tarrif

    (see previous remark). I agree with you wholeheartedly, but I know that at least some level of use tax has been approved. I'd like to figure out exactly what it was that the court said was okay, because I'd like to know how they countered the tarrif argument. I have a similar view on "commuter taxes" (taxing people who live outside a city but work within it), but I don't think there've been any rulings on that one.

    Bottom line: It certainly seems like you shouldn't have to pay taxes to your local state, if you bought something out of state (either by phone, web, or even in person on a trip), but such taxes are a regular, and apparently legal, practice. A standard federal sales tax like this would go a long way to clearing up a lot of those ambiguities, and would actually generate more income, even for states with Use Taxes on the books, since reporting for Use Tax is generally voluntary.

  • And I vote for a constitutional amendment.

    The current sales tax should really be called a "usage tax", because you're taxed based on the state in which you use the item, not the state from which you buy it. If I live in New York and mail-order an item from Vermont, the vendor won't charge me Vermont sales tax. Yet, I'm supposed to figure out how much New York sales tax I would pay, and then send a check to the state government. Of course, no one does that.

    It would make a whole lot more sense if companies charged sales tax from the state the items were sold. It shouldn't matter where the items are being used. If we implement this system, then this whole "internet sales tax" problem will just go away.
    --

  • There are these things coming out soon.. called computers..

    I *think* the high end ones can handles looking up and calculating sales tax.

    mmm... sarcasm. ;)
  • That is exactly what they are talking about. How to enforce existing laws or even make enforcing them feasable.

  • Local & State governments practically have no other source of income.

    Property taxes are "practically no income" for states and localities? Um, right.

  • this does imply that an ammendment is needed. if no state can charge a tax for goods that are shipped out of its borders, and the feds can't charge a tax for interstate trading, then who's going to collect the tax? the state of the recipiant? this is the current law, but the recipiant's state does not have import control to tax each item that's brought in it's borders. something like this would cost too much to control. should the citizens are to be honest on their tax forms to declare items bought outside the border? what a joke. is the gov't honest with the citizens when it proclaims "no new taxes"? NOPE!

    I think this just goes to show just how foolish these taxes are getting (and yet how greedy the gov't is when they see another opportunity to sweeten their pockets!)

    I would much rather favor a U.S. usage tax on all goods purchased that would REPLACE the current income tax. Face it, it's not to pretty to notice once a year on the w-2's exactly how much those bastards rape each and everyone's checkbook!

  • Given my VERY small understanding of how/why things are taxed, it seems we have things that are heavily taxed to compensate for things that are lightly taxed. If we were to create a creative and effective internet tax system that was small enough to not wreak havoc on the Internet economy we could use that revenue to lighten the burden on the heavily taxed items, therefore creating a lighter, more evenly balanced tax burden on everything. Oh well, at least it made sense in my head...
  • by mlong ( 160620 )
    In South Carolina, if you buy over the Internet and are not charged tax in the retailer's state, then you have to pay a use tax in SC.

    See: SC Press Release [sctax.org]

  • by Kamelion ( 12129 ) on Wednesday March 14, 2001 @11:59AM (#363538)
    Yeah. Minnesota is the same way. By law you are required at tax time to pay sales tax on all items you have purchased through out the year over the internet and through the mail.

    I have yet to see how they expect to enforce this tax law. I have seen some internet companies charge sales tax though. Some "well behaved" companies may already be keeping track of tax laws in states and sending in the state sales tax on your behalf (example: Loki Games, Va Linux Systems).

    The one thing that irritates me about the above article is these legislators don't seem to understand what taxes are for. Taxes are to raise revenue for a government entity. To say that you want to create a new tax to be fair is an abuse of the very purpose of taxes. If you don't need the money, what's the point of even talking about new taxes.

    It's like your neighbor complaining to the government you have a cow and he doesn't so they come in and shoot your cow rather than give your neighbor one as well.

    Just fed up with legistors.
  • Hmm, maybe CTV's numbers are a little biased... thanks for the info.
  • No matter how you cut it people are going to find ways around it. If I'm real desperate to "stick it to da man" I'll have it shipped to a friend's in the next state over and go visist. Of course this doesn't work if you live in the middle of Texas. :)

  • And every e-tailer relocates to SD, NH or some other 0% sales tax state.

    Not that this is necessarily good or bad, just a prediction.

    --
  • Far easier than that. We have a sales tax program running on AS/400 that will determine tax rate for any address on the planet; City, county, state/province, country. Only cost us five figures, and another low four to integrate it into the billing system.
  • The only real problem with that is for people like me who live 6 miles away from BFE and don't own cars to get to the closest brick-and-mortar store. For me, even if the internet purchases were teaxed, I'd still be saving close to 30% over what i would have to pay if I were to go to one of the small businesses located in my town. THanks to the Internet, I get less of the "College town gouging" that is very apparent when I go home and look at how cheap many things are compared to the prices I pay for the things I need immediately and can really only get from one of the businesses here.
    On Another note, I'm wondering if things like E-bay would become subject to taxes if the moratorium on internet taxes gets lifted. Any body have any clues?
  • Taxation is the governments way of invoking compulsory financial support to fund the development and maintenance of societal infrastructure, i.e. roads, schools, hospitals etc. that are required to support the physical presence of brick and mortar merchants, employers, employees and customers.

    Taxing online or virtual merchants would be unfair and unethical because these merchants place no such (or at best insignificant) demands upon the infrastructure.

    Where is the justification for these taxes?


    "A microprocessor... is a terrible thing to waste." --

  • You are arguing the wrong issue. This is about making the SAME rules apply to business regardless of how they take the order (phone vs internet). If you want to argue against ALL sales taxes, that's fine, but that's another argument entirely, one that should be applied to ALL transactions the same, not with a special dispensation to just internet sales.
  • So... lets see how they could do this:

    1 - Force us to pay tax in the state we buy things.

    For example, If I, living in New York, buy something in Massachusetts, I would pay 5% MA sales tax on my internet purchases. I think they could get away with this constitutionally. They could equivicate this as me driving to MA and buying something there. However, this would cause a lot of internet businesses moving to states with out sales taxes, like New Hampshire or Oregon.

    2 - Force to company to collect sales taxes from the state which the customer is from.

    Using the example from above, I would have to pay 7% NY sales tax on my internet purchases in MA. I don't think this one would be constitutional. Plus imagine the nightmare for the companies keeping track of all the different taxes!

    3 - Force the customer to pay taxes to the state they reside in for out-of-state purchases.

    What could the federal government do here? I guess they could force companies to report all purchases made to each state. Just like employers do with W-2 forms. The each customer would have to pay sales taxes each year, probably right on their state income tax forms. I can only image this being another bureaucratic nightmare.

    None of these things seem to favorable, or easily inforcable. What the about big mail order houses? aren't they raising a fuss about this as well?
  • http://www.argusleader.com/editorial/Wednesdayfeat ure.shtml

    That paper there, the Argus Leader, is the largest paper in South Dakota, and among the largest in the upper great plains. They've been gung ho about an internet sales tax for quite sometime, and it appears to be havin an effect.

    For a dose of how middle america sees these .coms, check it out, and while your at it, use the link "send a letter to the editor." Maybe some informed opinion, versus the "OhMyGod those .coms are killing Ma and Pa in de store dere."

    Here's the argument:

    "Those lost revenues put added burden on bricks-and-mortar businesses when catalog and cyber-retailers aren't paying a fair share. And with that 5 percent or more discount, some price-conscious buyers are abandoning local businesses."

    By the way, nobody mentioned catalog retailers....just e-commerce.
  • There was an article in the NYTimes on March 8 which suggests that the better solution is to eliminate Sales Tax altogether.

    Article at the times. [nytimes.com]

    The main points are:

    • It is only applied on 40% consumables creating an economic distortion.
    • That it is a "double" tax, since most sales tax is paid by businesses and they pass that extra cost onto consumers through higher prices.
    • The remote/local problem is bad for states. (Amazon has a huge warehouse in Nevada just over the CA border because they don't want a presence in CA.)
    It is also a "hidden" tax, which lawmakers like. If you were presented with a bill on April 15 for all the sales tax you paid through the year, you'd see how insidious it is.

    The article is interesting, but I don't think congress will give it a second thought.

  • No taxation without representation.

    And if this set of government is a representation then perhaps we should rescind the Declaration of Independence and rejoin the British Commonwealth. I understand Australia may be giving up their seat at that.
  • The fact that some transactions are taxable and others based on the method of order transmission is a farce. Hopefully Congress and the states correct this.

    I mean, did the telephone industry need a moritorium on taxes for orders placed by phone when it started? Of course not...
  • I dont know the appropriate rate. That will have be worked out. But this type of tax system is actually very fair.

    Exepmting basic necessities, i mean actual necessities like bread, milk, etc etc is a good idea. A baseline number of essentials should be tax-free for everyone.

    Towns should not by and large charge sales tax. I dont think I proposed that.

    About your point about penalizing the people for contribiting to the economy, this isn't true. Right now, working and earning wages, which *literally* drives the economy, is penalized. The more you take, the more they take. You have no control over how much money the government takes from you.

    But the details are not important to my point. YOu disagree with this tax because of the details, not on its merits. Taxes to me are not a detail-issue. They are a moral issue. The government should not force you to pay any taxes at all. The decision to fund or not fund the government should be made by every citizen, every time they choose whether or not to purchase something. It forces governments to be responsive, and to adhere to democratic priniciples every single day.
  • >P.S. I place this idea under the GPL. Take it,
    >use it, extend it, print it out and use it for
    >toilet paper. Hopefully this way, no one will
    >patent it as a "business process. :-)

    Too late. Former Prime Minister Brian Mulroney beat you to it in Canada a decade ago with the wildly unpopular national "Goods and Services Tax", a national 7% sales tax. Within a few years, his Conservative Party (which he no longer led) went from being a majority government to being two members out of more than 300 in Parliament.

    The GST has resulted in more red tape than ever imagined. It costs more to collect the tax than it brings in as revenue, and we only have to deal with 10 provinces and 3 territories. Trying to set up the beaurocracy to collect it from 50 states and then to distribute it fairly is insane.
  • The future looks good. That accountant will quickly come in a patented software package that will allow 5 simultaneous connections with the upgrade license. Available on NT.
  • by tuffy ( 10202 ) on Wednesday March 14, 2001 @11:12AM (#363575) Homepage Journal
    Section 9, clause 5 of the US constitution: "No Tax or Duty shall be laid on Articles exported from any State."

    So, unless the internet tax is going to be a federal tax, the states cannot collect money from stuff imported from other states without amending the constitution. At least, that's how it appears to me.

  • I'm sick of online rules being different than physical rules

    So am I. Mail order catalogues don't have any sales tax, so why treat the internet differently?

  • If you recall (which you probably don't, since this started much before any of us were really around to remember), this was a fear that was had by normal old mail-order houses. One of the big ones was Eastbay who had that shoe catalog (and quite possibly still does), and local merchants would complain that people would come into their stores, try on the shoes and then state to the salesman's face that they were now going to go buy that from Eastbay because it was cheaper there.

    The only difference here, as far as I can see, is the whole "instantaneous gratification" factor. Now you can just do all of this faster than you used to be able to. What I actually see happening, and what I think makes the most sense is to apply a taxation system that works like the mail order catalogs of days past. Which, if I recall, basically amounts to you paying taxes if the company is located in the same state as the purcahser, but I can't remember for sure.

  • by DunbarTheInept ( 764 ) on Wednesday March 14, 2001 @11:51AM (#363585) Homepage
    ...states cannot collect money from stuff imported from other states...

    Yes, but that's not what they are talking about. They are talking about the state in which the seller is located having a sales tax, not the state in which the buyer is located. The idea is this: Let's say you live near a state boundry, and you nip across state lines and buy something in the neighboring state, then drive back home with it. If it is a brick-and-mortar business then you end up paying sales taxes for the neighboring state in which you bought it. If you do the exact same thing on-line and have them deliver it to you, then you don't. This is just an attempt to make the online businesses and the physical businesses live by the same rules. I don't see anything wrong with that. If you complain that sales tax is wrong on internet transactions, then it should be equally wrong on brick-and-mortar transactions.

    I'm sick of online rules being different than physical rules. If we want to argue that the CDA is unfair because it puts internet speech under more restrictions than traditional speech, then we have to, in all fairness, accept that the sales tax should be the same for both physical and internet sales.

  • If we should tax internet (catalog and phone orders too) and how we should tax the internet are two distinct questions.

    Ignoring if, why are so many people arguing that the HOW of it is impossible. We shouldn't have to worry about the 7000 different tax jurisdictions; collect sales tax according to the retailers jurisdiction.

    ie I'm in CA I buy RAM from a company in NJ. I pay NJ's x% sales tax and the great state of NJ gets its revenue.

    'Main St.' companies are happy - online retailers don't have an unfair tax advantage.
    States and local municipalities are happy - they get money
    I don't really care, I'd get taxed if I bought it localy

    Why would it need to get more complicated than that?

  • Well I can tell you people will drive an hour to save 5% sales tax. If you want too see this in action come visit Nashua NH. Land of no sales tax and big malls.

  • by AaronW ( 33736 ) on Wednesday March 14, 2001 @11:54AM (#363591) Homepage
    I would beg to differ with you on on-line vs traditional retail. There are many expenses for traditional retail that just don't apply to online sales. For example, a traditional store must maintain a showroom and have inventory in the showroom. An Internet Retailer (IR) does not need this and can thus reduce the real-estate, utilities, and manpower required for this.

    Also, a brick-and-mortar store needs to hire cashiers to be able to handle peak demand. An IR can get by with fewer cashiers since most of the work is automated and the transactions don't necessarily need to be processed in real-time.

    A traditional store needs to hire employees to maintain the showroom and to keep track of inventory, check for shoplifting, install survalence cameras, etc. A IR doesn't need to worry about shoplifting, and the displays don't need to be maintained (take a photograph and you're done).

    Now, there's some additional cost for on-line, such as hiring a web designer and for web hosting (which is cheap these days), but compared to the traditional store the cost is far less.

    If you're counting catalog companies as traditional, they have the expense of publishing their catalogs, printing them, and mailing them. A IR doesn't have this expense, only the publishing expense.
  • by DunbarTheInept ( 764 ) on Wednesday March 14, 2001 @12:05PM (#363595) Homepage
    This won't happen. It is unconstitutional. Only the selling location can have sales tax applied. This issue has already been dealt with once with ordering things over the phone. It is illegal for states to apply taxes to items brought in from other states, because that's a tarrif, and the Constitution forbids inter-state tarrifs.
  • by Anonymous Coward
    It isn't individual consumers buying off the internet to avoid sales tax that congress or "the government" are worrying about. It's wholesalers.

    A local company in town started buying stuff off of the internet in bulk, paying less in shipping than they would in taxes, then sells the products to outlet stores at a little less than cost. They make a decent profit for doing almost nothing (making $0.25 per shirt once is a quarter, for a bulk of 10,000 shirts, it's $2500).

    This middleman company started a year ago, employs about 5 people, and is making a killing. It hurts government funds by evading sales tax, and IS going to catch on.

    I'm not a Republican, but I love the roads, clean water and safety that my government provides.
  • Taxing the internet from state to state is one thing, but what's going to happen when you buy things out of country? Are we going to be paying tarriffs online, or will it be considered duty free (like on airplanes and in some airports)? Also, does anybody know whether or not they're going to try and tax auctions/auction sites? Because I can't see a legitimate claim for taxing purchases but not auctions, and I can't see a way for enforcing auctions . . . eBay anyone?

    Time flows like a river. Here's a stick, don't drown.
  • Sales tax on internet transactions would just drive up the cost of doing buisness on the web and create a new industry for accountants to track all the individual principalities sales tax and provide that information as a service (I'm sure the VCs are getting out their checkbooks as we speak).

    I also agree that sales tax in the meat world doesn't work either. Every state and pissant county can make up a reason to charge a sales tax and if you are a buisness in that area tough luck if the guy down the street can charge less because of it.

    Sales tax has also become a political tool for those that would like to have a say in what you can and cannot do. A higher sales tax on cigarettes for example. We need to take a stand on our personal liberties if nothing else.

    If sales on the internet are subject to the local whims then I can see special taxes popping up in those communities that want to discourage "those people" from living here. This is an extreme example, but IMHO a valid one.

  • All constitutional issues aside, A sales tax imposed upon internet purchases would be unfair to web merchants.

    Web merchants are already struggling to keep pace with brick and mortar stores in the sense that all web orders must include shipping to the customers home. This additional burden places additional pressure on Internet retailers and forces them to cut margins even further to maintain competitive pricing with local shops.

    The presence of a state sales tax, in most states, serves to help even the playing field, and equalize pricing betweeen on-line, and in-store merchants. Adding sales tax to internet purchases would place an undue strain on web retailers, most of whom are already struggling to stay afloat. With the recent downslide of the stock market, and the lack of venture capital funding, many on-line companies are already struggling with an unacceptable burn rate, and would surely go bankrupt if this proposed sales tax legislation were to pass.

  • What??? noooo. They have to manufacture whatever it is they are buying. Materials have to be shipped and then whatever you are buying has to be shipped to you. I agree that the way they are trying to tax people is stupid but to say that e-merchants don't use infrastructure is absurd

    "One World, one Web, one Program" - Microsoft promotional ad

  • I'm too busy/lazy to go out and look this up right now, but aren't you guys really talking about imports/exports to and from the United States? My recollection isn't perfect, but I think the intent of those clauses was to keep any individual state from imposing its own separate taxes on goods sent or received from foreign countries, not from between one another.
  • by Ian Wolf ( 171633 ) on Wednesday March 14, 2001 @12:18PM (#363621) Homepage
    I believe it is going to be calculated based upon the customer's location.
    That's fine with me, I live in New Hampshire, where we _currently_ don't have a sales tax.
    This brings up several other questions, though. What if the customer's billing and shipping locations are different? Would the shipping address or billing address be the taxable location?
    I was about to say that the obvious choice is the billing, but it isn't. In fact, the shipping very easily could be.
    A couple of years ago, a friend of mine who lived in Andover, MA needed some furniture. We went to a couple of places in NH and he found a living room set. When he asked about delivery, they told him if the furniture was delivered to him, then he would have to pay Mass sales tax. However, if he picked it up, he wouldn't have to pay any. Apparently, the way the law works in regards to taxes (at least AFAIK) the transaction's location is determined by where the goods are received.
    How would the taxes collected be distributed to each locality. Would the taxes be payable to the federal government, who would in turn distribute monies to the appropriate localities, or would the web merchant be responsible for mailing out tax revenue to hundreds of different local governments?
    Well, I don't see how the first option could ever work, call me skeptical, but I don't think the states will be crazy about this one. On the other hand, if I recall correctly, businesses are under no obligation to pay taxes to governments they do not have a presence in. In fact, I think I remember seeing the arguement made that online businesses should be treated the same as mail order businesses the last time this debate came around. This is why you'll often see that box on the bottom of mail order forms that say something like "CA Residents Only add xx.x%".
    How would this system be integrated into existing e-commerce solutions? How much time and money would it cost to upgrade current order processing software to automatically charge and allocate local sales tax for each order?
    Well, I suppose it depends on the e-com solution in place. For the ones that were well thought out, it might actually be a breeze. I would think companies who already do some form of their business in the retail or catalog space this will be an easy thing to do. The online only "e-tailers" may have rough seas ahead. Of course, all this would depend greatly on how this tax plan is put in place.
    How would the government propose to enforce that sales tax is actually being collected and paid out? What measures are in place to ensure that vendors abide by these regulations?
    I'm not sure about this one, but we could probably see a greater emergence of eCom in "tax havens" (using the term very loosely). Depending on the implementation of this tax, some of these businesses could move into more "tax-friendly" states or even countries. As for enforcement, the big guys in the ecom world would probably be watched pretty closely, while the smaller vendors could/would slip through the cracks, at least for a little while.
    How would orders placed on international websites for delivery in the US be affected?
    I'm pretty confident that this base will be covered to some extent. It'll be hard to enforce, damn near impossible, on the consumer level, but business would probably be hit with use taxes or some other kind of delivery clause. Something like I mentioned above.
    The idea is feasible, but it seems like there are quite a few questions that need be answered prior to implementation.
    Definitely!
  • Just to answer the responses that different rules apply whether exporting or importing goods from other states. Just look at Section 10.

    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 control of the Congress.

    So if a state wants to tax another state's imports and actually receive the proceeds (rather than it being funneled into the treasury), an amendment will still be required. Whether this is desirable or not is another argument. But as it stands, any true "internet tax" over cross-state goods doesn't appear to be lawful.

  • And now we know how Bush will be financing the millionaire's tax cut. Thank you for playing.

  • by bmongar ( 230600 ) on Wednesday March 14, 2001 @11:17AM (#363624)

    In most states you are suposed to be a responsible citizen and go to the department of revenue or whatever and pay the use tax on interstate purchaces. So you were suposed to pay sales tax

    The reason that the catalog retailers didn't charge sales tax is because it would be a nightmare to have tax permits in all states, know all the rates and so on. But with the increase in mail order volume brought on by the internet states are getting itchy for that money.

    I don't have a problem with paying sales tax on mail order any more than paying sales tax at my local book store. I do however beleive that there shouldn't be any different rules for the internet vs a regular catalog.

  • So you buy a case of your favorite BBQ sauce from Wyoming to be delivered to your home in Massachusetts. Your Wyoming webtailer charges you Wyoming sales tax and Massachusetts sales tax. Cheaper to go the Safeway, isn't it?

    That's going to happen unless you deal with the fundamental issues at the bottom of this:

    1. Local & State governments practically have no other source of income.

    2. The Internet blows away jurisdictional elements and creates the equivalent of a tarrif between states (illegal under the U.S. Constitution)

    OK, so how can you get local & state governments their income without having a jurisdictional nightmare?

    A Universal sales tax. Everything ordered out of state is exempt from local & state taxes, but must pay a Federal sales tax. This includes mail order, telephone ordering, Internet, etc.

    How to you distribute it? By population to all 50 states. The Universal sales tax will be aportioned to the states depending on their populations. It is then the responsibility of the state government to distribute it to their local governments.

    I'm sure this will be a touch controversial, but it's sure as heck better than dealing with 7000 taxing jurisdictions.

    P.S. I place this idea under the GPL. Take it, use it, extend it, print it out and use it for toilet paper. Hopefully this way, no one will patent it as a "business process. :-)

  • by Hellasboy ( 120979 ) on Wednesday March 14, 2001 @11:19AM (#363628)
    >>"The 'Main Street' retailers have a legitimate fairness argument when they see customers come to the store to locate items they want to purchase, only to leave and order the items over the Internet just to escape the sales tax," C'mon, who buys stuff off the internet to avoid paying sales tax? go to pricewatch and you'll see incredible ram prices but with 13$ shipping charges. I've shipped ram before, and i know that it doesn't take 13$ to ship. But, even with that high shipping, it's still cheaper then stuff they sell at Best Buy. I buy stuff over the internet because I don't feel like paying the high mark-up that local stores add. The best prices that i've seen come from small businesses. This isn't about people escaping sales taxes, it's about the 'Main Street' retailers not being able to maintain their profit margins on items. If this passes, the computer and internet industries will follow Nasdaq. I'm not a Republican, but keep government out of the Internet.

It seems that more and more mathematicians are using a new, high level language named "research student".

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