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The Almighty Buck

States To Try Taxation Of The Net Again 468

Posted by Hemos from the going dept.
kimbermatic writes "From the Denver Post comes this article that the states are ready to try and tax the internet sales once more. The poor economy is sending the 'hounds' sniffing for more money. An interesting, and alarming read if your interested in protecting online merchants from this taxation plan." 'though it's not really online sales that are the big ones people want -- it's catalog mail order sales, which are still much bigger then online sales.
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States To Try Taxation Of The Net Again More

States To Try Taxation Of The Net Again

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  • Collecting this tax will cost more than the tax can produce itself. They at least need to settle the New World Order and implement the 1 World Government under "W" first. After which implementing this will be much simpler...

    Remember, you are supposed to be paying state tax on all of your catalog orders anyway. So this will not be a new law, just a new enforcement technique...
    • First, everything on the net is computerized and leaves a digital trail. Much easier to trace than face-to-face transactions.

      Second, the choke point are the delvieray services. There only a few of them. They could be forced to collect the tax as postage. Much like the charges on your local phone bill for taxes added by any telco service you use.
    • While the jab at dubya is something of a troll (though you should read this [accessatlanta.com] and this [whitehouse.gov] before you dismiss the sentiment outright), the part about collecting the tax is fairly insightful. Exactly how do you set up a system for tracking this sort of thing? Or do they just plan to dump the burden on merchants everywhere, and sock it to them if they don't comply?

      The jurisdiction issues also make my head spin. I can't see any reason why, if I sell from California, Conneticut has any business regulating how I do business....
    • OK, you ARE supposed to be paying local state tax on all of your across the border orders. The new tax is however a tax on the RETAILER not the customer as most seem to be missing.

      The tax we are required to pay today that most ignore is based on customer location, this proposed tax is based on retailer location.

  • Wow, sucks to be an online merchant (Score:3, Insightful)

    by ShawnDoc ( 572959 ) on Monday October 28, 2002 @01:43PM (#4549438) Homepage
    Can you imagine having to try to figure out what sales tax to charge and who to forward the payment on to if local/state governments are allowed to tax online sales? Not only do you have to contend with different rates for different localities, but you have to mess with different exemptions and ways of classifying products for tax purposes. This will kill the small online merchants in a heartbeat.

    • Read the article... (Score:5, Informative)

      by unicorn ( 8060 ) on Monday October 28, 2002 @01:47PM (#4549482)
      I do so enjoy it, when people comment without reading the articles first.

      It QUTIE clearly says, that in order to get on board with this plan, states have to harmonize their sales tax regimes. So that the state, and local taxes are the same.
      • I do so enjoy it, when people comment without reading the articles first.
        But that's the slashdot way!
        It QUTIE clearly says, that in order to get on board with this plan, states have to harmonize their sales tax regimes. So that the state, and local taxes are the same.
        That's about as likely as slashdot readers reading the article. You're talking about something that comes between politicians and money. That's like coming between a momma bear and her cub only the bear doesn't pretend that you like what she does to you because its "for you're own good."
      • to get on board with this plan, states have to harmonize their sales tax regimes. So that the state, and local taxes are the same.

        Good as a concept, VERY difficult in pratice.

        Different states and localities tax different things and exempt others. Some places, food is not taxed. Some, clothing. Some places only certain types of food. Some places have no tax.

        Let us take a hypothetical:
        I live in State X that does not tax clothing. The etailer I wish to buy from is also located in that state. So now I have to pay not only shipping for the one piece (far more than the local store pays for bulk shipping), but additionally the country-wide Internet tax on that clothing. The balance has just moved from one side to the other. The local retailer I might visit to buy that same thing does not add on the tax. Or..it might even be the same company. Tax via the web, no tax in person.

        hmmmm....

    • No, you know what really sucks?? (Score:5, Insightful)

      by NineNine ( 235196 ) on Monday October 28, 2002 @01:49PM (#4549502)
      To be a REAL retailer with inventory, rent to pay, etc. and have to compete with 12 year olds with online stores that don't have to pay sales tax. Why, exactly shouldn't online retailers be taxed like everybody else?
      • Oh so you're only a REAL retailer if you have a brick and mortar set up? Bullshit. Online retailers are not like everyone else, otherwise they would be taxed the same. Your gripe appears to be that online retailers have it easier (and from context I assume you are in some way involved with a brick and mortar retail business). It's tough shit if your chosen business can't cut it as technology advances, but that's life, get used to it.

      • Re:No, you know what really sucks?? (Score:2, Insightful)

        by Anonymous Coward
        To be a REAL retailer with inventory, rent to pay, etc. and have to compete with 12 year olds with online stores that don't have to pay sales tax. Why, exactly shouldn't online retailers be taxed like everybody else?

        Well, there's a little thing called the US Constitution which specifically prohibits states taxing interstate commerce. The idea was to avoid having each state do exactly what the US as a whole does, i.e., use tarifs to implement protectionist policy. Now, I know the constitution is supposed to be a "living document" (bullshit IMHO) but there's really no way around that provision w/out changing the document.

        No preference shall be given by any regulation of commerce or revenue to the ports of one state over those of another: nor shall vessels bound to, or from, one state, be obliged to enter, clear or pay duties in another

      • Online retailers do pay taxes. They pay income taxes. That is not the issue here, however. The issue is whether you and I should pay sales and use tax on items that we purchase from an online retailer out of our own state.

        Currently the online retailer is not required to collect the tax since calculating the amount and paying to the various governments is too difficult. It is assumed that anybody purchasing an item online is paying the appropriate use tax for their state on their own.

        The states instead would like to simplify the taxation process so that they can rely on online retailers to withhold sales tax.
        • The states instead would like to simplify the taxation process so that they can rely on online retailers to withhold sales tax.

          That's certainly a nice way to put it. I prefer this way:

          The states instead would like to transfer the enormous costs of enforcing their use tax to online retailers, since the cost of accurately collecting use tax from individuals is typically higher than the revenue that is generated.
        • "Too difficult"? A simple piece of software would do it for them. I forked over a good chunk of change on a couple of accounting packages, with part of the purpose to track the sales tax that's due the gov't. It's just a cost of doing business. With online retailers already having tremendously reduced costs by virtue of their business model, I see no reason that they can't collect and pay state sales taxes like everybody else.
      • Online retailers *are* taxed like everyone else.

        If I walk into NineNine's porn store in (say) Kalamazoo, and ask you you to ship the dildo I'm purchasing to my girlfriend in Texas*, you do not have to charge me sales tax unless you have a business presence in Texas.

        * unless she's in Austin and already has 6, in which case that would be illegal
    • I'm in the midst of such a project for my employer. It's going to be nasty.

      Right now we just plan to charge sales tax on customers in jurisdictions where we have nexus. That means only a handful of states. Iteration 2 of the project is to do this for international transactions.

      Right now we're just a service provider,not a vendor of 'hard goods', so our only product class is subscriptions to our service, but it's still going to be a bitch because of all the shoehorning we have to do of the tax calculations into our software.

    • RTA (Score:2)

      by dnoyeb ( 547705 )
      The article clearly states that the tax is charged to the retailer based on his location. It says nothing of the customers location.
    • There are software tools already to figure out the sales tax by every zip code in the country, and which goverment level gets which slice. The zip code would be taken from the recipient's delivery address. Perhaps the post-office or UPS may be require to collect the actual tax.

    • Re:Wow, sucks to be an online merchant (Score:4, Informative)

      by gorillasoft ( 463718 ) on Monday October 28, 2002 @02:08PM (#4549674)
      Can you imagine having to try to figure out what sales tax to charge and who to forward the payment on to if local/state governments are allowed to tax online sales? Not only do you have to contend with different rates for different localities, but you have to mess with different exemptions and ways of classifying products for tax purposes. This will kill the small online merchants in a heartbeat.

      The Streamlined Sales Tax Project, currently underway with leaders from half of the states, would set a standard rate for all Internet sales of goods, with the possibility of a second rate for foods. This would eliminate the problem of differing rates based on localities, as the states would agree to accept the same rate.

      More information about the SSTP [ecommercetax.com] can be found here [ecommercetax.com].

  • C'mon (Score:4, Interesting)

    by jzs9783 ( 612647 ) on Monday October 28, 2002 @01:44PM (#4549439)
    What's next - taxing garage sales?

  • Great idea: Make things harder for online bidness (Score:5, Insightful)

    by Skyshadow ( 508 ) on Monday October 28, 2002 @01:44PM (#4549443) Homepage
    Personally, I shop where ever the price is lowest -- that includes taxes and shipping.

    This means the only time I buy at Fry's is when I either need it *fast* (which happens) or when it's so little it's not worth ordering (which also happens). I mean, the CA taxes on anything in the $50+ range makes it worthwhile to always buy online and pay shipping.

    This, on the other hand, could change all that, couldn't it? I think this will just drive more people away from online business, sink a sector of the economy and drive prices up for the consumer (which means they'll probably spend less, which is a Bad Thing, especially when you're in a recession).

    But hey -- if that happens, I'll start selling motherboards on the street in SF right next to the guy selling the fake Rolexes.

    • Since when is it the job of government to make certain sectors of the economy profitable? ok, since the early 20th century, propping up farmers and steel producers.

      But the end result of not allowing taxes of online commerce is that there will be government subsidies to states that have online businesses.

      That's ridiculous.

      drive prices up for the consumer

      Now, you're not even trying to see the state's side of this. They don't look at it as increasing prices, but rather, increasing tax revenue to increase services to the state's inhabitants.

      Can you really justify not giving the poor people of California, Massachusetts, and Virginia the food stamps and Section 8 housing checks they so richly deserve?

  • There is no reason... (Score:5, Insightful)

    by frank_adrian314159 ( 469671 ) on Monday October 28, 2002 @01:44PM (#4549444) Homepage
    ... for online (or catalog) merchants to be given special advantage over the brick and mortar kind. If you hate taxes, you can say that no business can be taxed, but as long as any are taxed, they should all be taxed equitably. If you like taxes, again, businesses should be taxed equitably. The people who quote Heinlein whenever the **AA come up should also gripe about the advantage given to companies - in this case, those who are given advantageous tax exclusions.

    In any case, I see taxes as one of the prices one pays for living in a civilized society, so I see no problem taxing online folk at an equitable level.

    • Actually, there's great reasons (Score:4, Insightful)

      by unicorn ( 8060 ) on Monday October 28, 2002 @01:50PM (#4549509)
      Remote merchants use FAR less resources than local ones. The SFPD rarely has to respond to problems at the Amazon offices in Seattle, etc. Any wear and tear to roads, etc caused by delivery trucks should be borne by the freight handlers, and passed onto the merchants that way. By and large, a remote vendor will use basically no local resources.
      • Let me add a little to that. Considering that online retailers are using next to nothing (I'd say nothing at all) as far as state or federal owned resources. A sales tax is essentially saying "You will pay us money for the privilege of selling stuff to people who live in our geographical area". Which by itself is ridiculous. Especially since the cost is passed onto the consumer, not the retailer.

        • Re:Actually, there's great reasons (Score:5, Insightful)

          by spinkham ( 56603 ) on Monday October 28, 2002 @02:18PM (#4549761)
          But we LOVE taxes. You pay taxes when you make money, when you spend money, when you don't spend money and your holdings increase in value, and when you die and haven't spent all your money yet.
          About the only thing you can do with money and not be taxed is to buy food or donate money to charity.
          Kinda explains why we're all fat and still have sleazy televangelists, eh? ;-)
    • Right now, things are especially lopsided - because some online retailers do charge sales tax, added on to your web-based purchases.

      (I often wonder if those extra "sales tax" charges are really getting turned in as sales tax, or if it's just a scheme to bump up their profit margins?)

      Anyway, I see your point that there's no logical reason to treat web commerce differently than catalog/mail order commerce. But I'd like to see no taxes on either. As someone already pointed out - the cost of enforcing this type of tax is too great. M

    • Re:There is no reason... (Score:5, Interesting)

      by Kintanon ( 65528 ) on Monday October 28, 2002 @01:57PM (#4549566) Homepage Journal
      Drat, I was going to just moderate in this thread, but this is too good for me to pass up.
      No one is stopping brick and mortar stores from selling online. Also, when online stores sell things to people who are within their own state they charge sales tax anyways. I think that this is fair and equitable. There is no reason why my state should be trying to tax a business that is located in california for selling something to me.
      Also, some states don't have sales tax, so they already have an "unfair" advantage over businesses based in places which do have sales tax.
      Of course, I'm fundamentally against "general" taxation and believe that our tax forms should include an itemized list that we can select to spend our portion of the tax we paid on. That way programs that were universally dislike would disappear quickly, programs that just a few people liked could be supported somewhat, but very popular programs would get even more money. I'm also against Social Security and Medicare. Mostly because I'll never collect SocSec, and even when my wife and I were both unemployed we didn't qualify for Medicare and as a consequence have large amounts of medical bills. So I'm paying all of this money out into services I will never see a return from, and a good 40% of my tax money gets taken to fund a military industrial complex that I don't support!

      Kintanon
      • if your state has a sales tax, and you buy from out of state and don't pay the sales tax to your state, you are commiting tax fraud.
        People who live in states with a sales tax are obligated to pay sales tax on out of state merchantes to there state franchise board.
    • This will certainly create a competitive relationship between states. Local communities are already being pimped by sports teams and corporations for tax breaks and new stadiums. This will create a competitive atmosphere where one state will undertax the next, and in the end, unless they all have similar tax levels, merchants will simple go to the location with the cheapest tax. Remember internet companies are easy to move.

    • Re:There is no reason... (Score:4, Informative)

      by ivan256 ( 17499 ) on Monday October 28, 2002 @02:17PM (#4549747)
      There is no reason... ...for online (or catalog) merchants to be given special advantage over the brick and mortar kind.

      There are lots of good reasons, both legal and practical.

      First of all, in state catalog and internet sales are already taxed, so let's just assume we're not talking about those for this conversation.

      Out of state catalogs and internet sites are involved in interstate commerce, which is explicitly the juristiction of the federal government. These sales are already taxed in almost every state as "Use Tax" instead of sales tax because of this limitation. "Use Tax" is hardly ever enforced for individuals because it costs more money to police it than the revenue increase would justify. This leads to the second point: It would be impracitcal to enforce interstate sales tax on catalog and online vendors. First the state would have no way to keep track of which vendors shipped goods into their state, or what was in the box. Secondly, the 50x increase in the number of forms the merchants would have to file would give them a disadvantage over traditional retail outlets. Lastly, the catalog vendors don't have an advantage of retail stores because there is nothing stopping traditional retailers from selling over the internet or mail-order along side of their regular business.

      you can say that no business can be taxed...
      .
      .
      .
      The people who quote Heinlein whenever the **AA come up should also gripe about the advantage given to companies - in this case, those who are given advantageous tax exclusions.

      Your argument here is flawed. It is the consumer that is being taxed, not the business. The advantage is given to you not the company you are purchasing from.

  • Perfect tax! (Score:4, Funny)

    by teamhasnoi ( 554944 ) <teamhasnoi@[ ]oo.com ['yah' in gap]> on Monday October 28, 2002 @01:44PM (#4549448) Journal
    Let's tax the millions that go into campaign contributions! That way we (the people) will finally get some value out of all those politicians!

    Remember this election - a vote for Republicans makes baby Jesus cry.

  • it's bad (Score:2, Insightful)

    by hypergreatthing ( 254983 )
    tax is bad. You put internet tax and internet order companies will suffer. Hell, people will start importing from canada if that happens, which just moves sales across some other borders.
    • I'm not sure how it works going from Canada to the US, but when I order stuff online I usually get nailed with border taxes, and crossing fees for anything over $20.

      Chances are the same applies both directions, you'
      re not going to save any money by importing cross-border unless the price difference is quite high.

  • Detrimental to e-tailors (Score:5, Interesting)

    by Amadaeus ( 526475 ) on Monday October 28, 2002 @01:45PM (#4549456) Homepage

    What politicians fail to understand is that the major draw to e-tailing is the lack of taxes. Sure, shopping online a huge convenience, but people today would still choose to drive to their local retailer and actually touch and try out a product before making a purchase, and forcing taxes on e-tailing would take away any incentive for consumers to use the services of the fledging new industry.

    With huge competition with prices and selection from traditional real-life retailiers such as Walmart and Best Buy, e-tailers are already having enough trouble trying to grow their new industry. Slapping taxes and removing incentives for consumers to use online services would only impair progress. We're already seeing the effects of fees on online services and its related decrease in usage (MSN, Yahoo, Hotmail), taxes would further the disincentive campaign that seems to be propagating through the online world.
    • e-tailor? Sounds like a robot sewing your clothes, or maybe those Personal Area Networks that have cat5 and DC power running between your jacket pockets.

      You could try the word "e-tailer", based on "retailer", but it's still a dumb pun.
    • THink about it. If all a e-tailer offers, is an online version of a retail store. Then he truly does have to worry about things like salestaxes making the "experience" the same as retail, and thus not worth doing.

      However, a smart businessman, will actually differentiate his store, be it online of offline, so that there's a compelling reason to shop with him.

      I'm not in favor of more taxes, certainly. But arguing this strictly on the basis of "it'll kill generic online storefronts" doesn't sell with me at all. The government should NEVER be in the business of favoring one segment over another. If the online merchants have a reason to exist they will. But an artificial government subsidy shouldn't be in place.
      • The government should NEVER be in the business of favoring one segment over another.

        Are you sure about this ? Don't you think it might make sense for government to offer subsidies to companies that face high development costs in industries the government thinks might be helpful to its citizens in the long run ? For instance, would you be opposed to government subsidies to support research into alternative energies ? Would you be opposed at government attempts to foster business projects in the inner cities ? What about government projects to encourage environmentally-friendly technology ?

        Wouldn't all these be examples of government being "in the business of favoring one segment over another" ? And would you really say these are all bad ideas ?
    • What politicians fail to understand is that the major draw to e-tailing is the lack of taxes. Sure, shopping online a huge convenience, but people today would still choose to drive to their local retailer and actually touch and try out a product before making a purchase, and forcing taxes on e-tailing would take away any incentive for consumers to use the services of the fledging new industry.

      So you're arguing that e-tailing should be tax-free (read: Subsidized) because it's a new industry? I've got news for you: There are dozens of 'new industries' out there today, and almost all of them pay State taxes.

      I'm not saying that there should be new taxes, and I understand that a large part of the anti-tax argument has to do with "taxation over state lines", but let me ask you this: Why should we give tax breaks to a 'fledgling new industry' and but not 'fledgling new retail store' on Main street?

      I don't care if it's a fledgling new industry. I don't care if a retail store has the "I can touch the merchandise" advantage over an internet store. The internet store doesn't have to pay the high rent on Main street, they can pay the cheaper rent of a warehouse on the edge of town, or in a poorer state. There are dozens of similar advantages and disadvantages in any industry.

      If the state taxes a retail business, but does not tax the similar internet business, then it means they are subsidizing one industry over another, which is unfair.

      The government should not favor one industry over the other by giving tax cuts to either industry.

    • Re:Detrimental to e-tailors (Score:4, Insightful)

      by tmark ( 230091 ) on Monday October 28, 2002 @02:23PM (#4549805)
      What politicians fail to understand is that the major draw to e-tailing is the lack of taxes.

      No, the major draw to e-tailing is the incredible reduction in price some companies (say Amazon) can offer by virtue of their huge centralized warehouses and vast economies of scale coupled with relatively low overhead and miniscule labour and other costs relative to sales.

      In Canada, where we still pay the same taxes at Amazon.ca as we would if we bought things at the local bookstore, Amazon.ca's prices are a good 30-40% LESS than they are at the bookstore and 30-40% less than the next biggest online bookseller. THAT'S why I buy my books at Amazon now, NOT because I'm saving tax (which I'm not).

  • You already should be paying these taxes (Score:5, Funny)

    by Waffle Iron ( 339739 ) on Monday October 28, 2002 @01:46PM (#4549460)
    In most states, the law says that if you order goods from out of state, then it is your responsibility to report and pay the "use tax". If you aren't doing that already, you're a common criminal.

    If you order a CD from Amazon and don't pay your use tax, you're cheating your state out of more money than the artist would lose if you downloaded the CD from Napster.

    Don't try to rationalize. You're all thieves. Bow your heads in shame.

    (I have to make myself stop here. It's just too fun to spew out righteous indignation.)

  • everything (Score:2, Insightful)

    by yoha ( 249396 )
    every other economic transaction is taxed. there is no logical explanation why these should be exempt.

  • My word... (Score:5, Interesting)

    by GMontag ( 42283 ) <gmontag@guymontagDEGAS.com minus painter> on Monday October 28, 2002 @01:47PM (#4549475) Homepage Journal
    My word, when will these overbearing government goofballs learn that having LOW taxes while surrounded by HIGH tax areas drives business AND revenues up for the low tax area?

    Also, don't think that if there is no visible sales tax that you are buying anything tax free. The politicians conveniently forget all of the inventory, property, business income and other tax streams that they are already getting BEFORE they jack up/create a sales tax.

    A perfect example of that was Washington, DC. They exempted "not for profit" organizations and had the highest sales tax in the area. This only resulted in the few businesses that were paying taxes to loose business to Maryland and Virginia.

    Tennessee is now on their way to driving every bit of retail business near it's borders into the surrounding States with their 9.5% (or is it 10%?) sales tax. That is on top of their invintory taxes, "licensing" taxes, etc.

    Solution? A small group of States make it inviting for internet business to locate their warehousing, data centers, etc. there and reap the benefits of elevated employment and higher volume of money due to a lower % of taxation.

    • Tennessee is now on their way to driving every bit of retail business near it's borders into the surrounding States with their 9.5% (or is it 10%?) sales tax. That is on top of their invintory taxes, "licensing" taxes, etc.

      Even with one of the highest sales taxes in the US, the average Tennessean still has one of the lowest total tax burdens in the country. We have no state income tax, relatively moderate property and license tax in most places and federal tax is, well, the same as everybody else in the country. I'll take the higher costs at the checkout counter for a lower overall tax bill any day. And enough Tennesseans agree with me to have stopped a state income tax every time one is proposed.

    • Re:My word... (Score:4, Informative)

      by dustman ( 34626 ) <dlearyNO@SPAMttlc.net> on Monday October 28, 2002 @04:36PM (#4551118)
      My word, when will these overbearing government goofballs learn that having LOW taxes while surrounded by HIGH tax areas drives business AND revenues up for the low tax area?

      Exactly. Here in New Hampshire, we have the highest alcohol purchase per capita of any of the states (and it's about twice as high as the next runner-up). This is because alcohol is really cheap here, and people drive over the border from the neighboring states to buy it.

      Actually, New Hampshire's "taxes" on alcohol are "very high" (NH in fact makes more money per bottle than other states), but hard licquor is a state-owned monopoly, so we're still cheaper than everyplace else.

      Also, NH has no sales tax, so we get lots of people driving in from that, too.

      NH is a great example, in my opinion, of two concepts: The lower taxes (eq prices) thing you mentioned which attracts out of state commerce, and the concept of "state monopoly on vice" being very profitable.

      I am not a smoker, and I am continually surprised at how expensive the habit is... I can only imagine how much the state would make if it controlled tobacco sales this way (especially, with tobacco being cheaper overall just like alcohol).

  • Read the Constitution (Score:5, Insightful)

    by User 956 ( 568564 ) on Monday October 28, 2002 @01:47PM (#4549477) Homepage
    From the article: Twenty-nine states will vote on a tax proposal next month that could be pivotal in their effort to tax all online sales.

    Section 8 of the Constitution: Section 8. The Congress shall have power to lay and collect taxes, duties, imposts and excises ... To regulate commerce with foreign nations, and among the several states

    But then, who cares about the constitution? Certainly not the United States [aclu.org].
    • Quoting from a source (I forget exactly):

      You can get around the Constitution if you place the word "Schmonstitution" right after it.

    • Read the Article (Score:2, Informative)

      by dughat ( 158489 )
      The article states:
      But the Supreme Court has ruled that states can't tax sales from electronic retailers that do not have a physical presence within their jurisdiction.

      The court decided the requirement would put an inappropriate burden on e-tailers, especially with some 7,500 sales tax jurisdictions in the country that each have different collections procedures.

      The Streamlined Sales Tax proposal, on which delegates from the 29 states will vote on Nov. 13 in Chicago, would simplify tax collection procedures. If passed, it would become effective after at least 10 states meet the provisions of the agreement, which include requiring states and its local jurisdictions to have the same tax rate. ...
      "The end game is to go to Congress and say 'We have now simplified this enough so that it's no longer an inappropriate burden on interstate commerce and we would like you to tell retailers that they have to collect sales tax for states who have joined the agreement,"' he said.

      In other words, if the states agree on this proposal, they will then go to Congress and ask that it become law, in line with the constitutional requirements. The state is not taxing the business across the states anyway, they are taxing you, a resident of their state. They're just making the business help.

  • i got an idea (Score:2, Interesting)

    by SquierStrat ( 42516 )
    I know this is a long shot, but instead of raising taxes, how about we cut wasteful spending such tattoo removal programs in san jose, and then lower taxes so people can spend more of the money they earned. And how about we legalize drugs and tax the hell out of them. And how about ditching the income and going to a sales tax on non-essential goods and services so that people can choose when they will and when they won't pay a tax.

    Man, in a perfect world...

  • Agreed, with Reservations (Score:4, Insightful)

    by waldoj ( 8229 ) <waldo&jaquith,org> on Monday October 28, 2002 @01:48PM (#4549487) Homepage Journal
    After years of disagreement, I no longer believe that Internet sales should be free of taxation as a class unto itself. I argued in the mid- to late-90s that the shipping cost was a barrier to the then dozen-or-so e-commerce sites, and we needed to not throw up more barriers to prevent the economic success of the Internet. The Internet has now had that development time, and I am no longer convinced that an exemption is necessary.

    My remaining concerns are not sufficient to convince me that Internet taxation should not occur, but they are significant. The biggest one is the logistical nightmare of paying sales taxes to 50 different states, should that be the nature of the changed laws. Though the software end of calculating the fees surely wouldn't be difficult, the average mom-and-pop .com (and there are lots of them) would likely find having to file in so many different manners at different deadlines on different paperwork to be a significant problem.

    JM2C.

    -Waldo Jaquith

  • No new laws should be needed (Score:5, Interesting)

    by ProfessorPuke ( 318074 ) on Monday October 28, 2002 @01:49PM (#4549494)
    The governments shouldn't need to create any new laws to tax internet sales, because they should already do so.

    Performing an age old activity like sending packages through the mail in exchange for money transmitted by credit card should be equally taxable regardless of whether the customer places her order via phone, email, paper mail, http, fax, or the trusty old carrier pigeon.

    We've seen it again and again- government regulators/lawmakers/busybodies get tricked into thinking that activities are somehow inherently different when computers and internet are involved. This gives us special laws to prohibit computer intrusion (we've had wire fraud statutes since 1910) and special patents for "carrying out traditional business XYZ, but over http".

    I can understand the argument that to support budding e-commerce, you want to give them a temporary reprieve from some normal costs of business. But the expiration of such grace periods shouldn't be newsworthy, it should just be expected.

    Its about time this happened.
    • Mail order houses don't pay sales tax either, typically. Unless they have a physical presence in your state.

      While this article is pitching the target as e-commerce. I'm positive that they will attempt to aim the taxes at catalog sales as well.

  • Enough (Score:5, Funny)

    by drhairston ( 611491 ) on Monday October 28, 2002 @01:49PM (#4549495) Homepage
    Can anyone put forward a well-reasoned argument why the Internet should be exempt to sales tax? Every other method of interaction in the world - from face-to-face transactions to mail order to telephone sales - is governed by state statues which tax that commerce. Is the Internet exempt simply because it is 'too cool' or 'over the head of stuffy old lawmakers'?

    Perhaps taxation laws are merely over the heads of overexcited teenagers.

    • Re:Enough (Score:4, Informative)

      by damiangerous ( 218679 ) <1ndt7174ekq80001@sneakemail.com> on Monday October 28, 2002 @02:05PM (#4549641)
      Can anyone put forward a well-reasoned argument why the Internet should be exempt to sales tax?

      Well, putting aside for the moment your painful sentence structure of "the Internet" paying taxes or being taxed, let's get to the root of what you mean. Sales tax on items purchased over the Internet are not exempt from sales tax. This is a myth. Look at your state income tax return and you are almost sure to see a line for "use tax." In this line you are instructed to enter the value of merchandise you own/were given/won/etc that you have not yet paid tax on. Now for the second part, why people believe purchases made over the internet are "tax exempt." When you make a purchase at a retail store, the merchant is required by law to withhold sales tax on your behalf and submit it to the local jurisdictions. There is only a single juridsdiction (or group of jurisdictions) that remains the same with every transaction. It would be burdensome to expect a mail order operation, doing business across the country, to be familiar with the hundreds, if not thousands, of local tax jurisdictions and which apply to any given transaction. There is also the small matter of other jurisdictions not having the authority (to require tax collection) over a business outside their jurisdiction. Therefore the individual taxpayer is responsible paying any taxes they incur on a purchase made through the mail.

      Is the Internet exempt simply because it is 'too cool' or 'over the head of stuffy old lawmakers'? Perhaps taxation laws are merely over the heads of overexcited teenagers.

      Or perhaps you're guilty of not understanding the issues? I certainly hope you impart better research skills to your students at CCBC. With your attitude towards "overexcited teenagers" I would doubt it though.

    • You have answered your own question. Purchases made in a state where the seller has no business presence are not taxed. Internet, mail order, walking into a department store and having them mail it out of state are all taxed the same.

      The internet is over the head of overexcited lawmakers, and they can't see that nothing has changed here. Never mind that B2C catalogue sales are 10 times the dollar value of all B2C ecommerce. The internet is new, and to be feared, and what they fear they either ban or tax.

    • Here's that well-reasoned argument... (Score:5, Insightful)

      by Spock the Baptist ( 455355 ) on Monday October 28, 2002 @03:05PM (#4550254) Journal
      "Can anyone put forward a well-reasoned argument why the Internet should be exempt to sales tax?"

      The complexity of current systems of sales tax in the US are so complex that only larger retailers would be able to justify the use of online sales. Smaller retailers would be forced out of the market. In the event of some sort of simplified "internet tax" system, there still is the problem of submitting the taxes to the various states, no small headache.

      Because, many of the most interesting, innovative, and creative products offered online are from small businesses, including mom & pop internet retailers, those products would disappear from the internet in the event of internet taxation of the sort mention in the original post.

      An example:
      I'm very into bass fishing. Fisherman often develop a preference for certain lures that have become their favorites. New lures are introduced to the market, and become the hot bait of that year, season, etc.. It's not uncommon that the new hot lure, or an old favorite will not be available from local tackle shops. Local tackle shops have limited space, indeed even the biggest names in the mail order fishing tackle such as Bass Pro Shops, and Cabela's don't have the space to carry ever model, of lure, in every size, and color. (1k of models, 10 different colors on average, and lets say 5 sizes on average yields 50,000 different lures, and this is a conservative estimate.) Thus, I have on many occasions ordered lures direct from small manufactures, though, I prefer to do business with local tackle shops. Often these manufactures are ran out of a garage, or the shed in the back 40. As such they are quite capable of selling online to anyone in the US give the current tax structure. However, if these small manufactures were to be subjected to the complexity of having to determine, charge, and submit sales taxes to umpteen different taxing authorities in 50 different states the paperwork would overwhelm them. Even under a simplified system they would still have to submit taxes to 50 different states. Thus, in either case they would then only be able to sell wholesale, and/or retail only within their local taxation district.

      Not being able to sell to the fisherman directly would deprive such companies of the ability to be profitable, and the consumer of a broader choice of merchandise.

      Ergo, the consumer is harmed, and both local economies, and the national economy is diminished.

      I would also point out that catalog sales have always been "tax free" as the purchaser was responsible for state, and local taxes. So this sort of tax "problem" has been around for quite a while. I've been ordering from Bass Pro Shops, Cabela's, L.L. Bean etc. since at least 1976. I clearly recall that in the early 80's there were calls for taxing catalog sales. Such calls occurred with a fair amount of frequency for 15 years, or more. With the advent of the internet such calls morphed from "tax catalog sales" to "tax internet sales." This whole thing is nothing new, not unlike the push to prevent music, and video coping. First it was cassette decks, then VCRs, and now it's mp3 etc.. Same song, somewhat different lyrics.

  • Businesses use the internet also (Score:5, Interesting)

    by twocents ( 310492 ) on Monday October 28, 2002 @01:50PM (#4549505)
    Democratic businessman Rollie Heath, Owens' challenger in November's gubernatorial election, is pushing for Colorado to join the tax project.

    He said that not taxing online sales puts local businesses at a competitive disadvantage.

    "I just have a strong bias against having our own business having to compete unfairly with somebody who can send the same product in here from out of state," Heath said.

    Sure, some businesses have suffered quite a loss due to the internet, but many businesses rely upon the internet to order items for themselves. Restaurants for wine, bike shops for parts, used book stores that buy, sell, and trade on the internet. All of these types of stores and shops would be hit by this tax as well as Joe consumer. And on top of this point, would this not increase the amount of items ordered directly from countries such as Canada and Mexico?
  • Notice that Montana has no 'millons of dollars' in that fun little map on the bottom of the article? They have no sales tax.

    Why not move your 'online store' to Montana? I'm sure some enterprising geek can setup an 'offshore' ISP for all those who don't want to deal with our money-grubbing, mismanaging Congresswores.

    I'm sure there is a hole in my plan, but I just like saying "Congresswhores".

  • "Most states are running budget deficits, and they're looking ever more aggressively for ways to stem the erosion of their tax bases."
    Like hell they are trying to stem the "Erosion" of their tax base, they're looking to create a new tax. Rather than just tighten up their states respective budget's, maybe spend less, the politician's natural instinct is to create or raise a new tax.
    Internet sales will be taxed, now that the politicians understand that the business cycle wasn't eliminated, and that the internet is not some magical money machine for the economy, not to be trifled with.
    I'm surprised it took this long, but then, these are politicians.

  • Catalogue and Internet Taxation (Score:5, Informative)

    by Parsa ( 525963 ) on Monday October 28, 2002 @01:55PM (#4549546) Homepage
    I was taxed by a company on eBay a couple of weeks ago and brought this subject up with a state investigator about these matters. Here's the rundown from what I understand.

    A company doesn't have to charge you sales tax if they are located out of state. They CAN if they have an agreement with the state you are in if it's different from the state the company. Even if that company doesn't have a branch or whatever in your state. If the company does NOT charge you tax it's YOUR responsibility to go the the local department of whatever and tell them that you bought whatever item at whatever cost from whatever company and you will then pay the tax.

    Obviously a lot of people do not follow this course. And most mail order companies don't charge tax because it's apparently a giant pain in the ass for them to keep track of it all. So they don't charge across the board.

    So it looks to me that they aren't trying to tax something that's not taxed. They're trying to collect what's suppose to be.

  • ...how do some states get away without it? I just came from Montana, which has no sales tax. Do they raise other taxes to compensate? If some states can not have a sales tax, why can't the internet also? Can it be looked upon as a virtual state?

    Besides, if internet sales were taxed, shouldn't it be by the feds? They're the ones who created the internet in the first place.

  • We are already required to do this!!! (Score:3, Informative)

    by opto ( 592314 ) on Monday October 28, 2002 @01:59PM (#4549588)
    Welcome to North Carolina, USA folks. There is a nice little worksheet on our state tax form to report online and mail order purchases and pay state sales tax on them. So if this is offloaded to the companies selling the products, the prices will just go up. Simple economics.
  • So I wonder who exactly has tax jurisdiction over a purchase made by an individual in one state from a company in another state. Certainly if I buy something from a company in my own state, then the sales tax is only collected once. (At least, in theory.) If I buy something from another state, then my state will insist that I pay it taxes on the money I spent, and the other state will insist that the company I'm buying from pay sales tax on the merchandise it sold.

    Since sales taxes are generally levied on the merchant (and the merchant passes that tax right on to the customer), it seems like the "logical" solution is that a company doing business in a state has to pay sales tax on every item it sells in that state, regardless of who it sells to or what state they're in. The person buying the item only pays sales tax insofar as they compensate the merchant for the sales tax that the merchant is legally required to pay.

    Someone else pointed out that the Constitution says that Congress has the power to levy taxes. However the Constitution does not say that the states cannot also have that power in some form. Can anyone shed some light on this?

  • Who loses? (Score:4, Insightful)

    by mcubed ( 556032 ) on Monday October 28, 2002 @02:08PM (#4549672) Homepage

    The report estimates that all 50 states could collectively lose more than $45 billion in Internet sales tax revenue in 2006.

    Hmm, states can lose money that they don't currently collect? Isn't this a bit like saying, "Microsoft could lose more than $10 billion in annual revenue in 2006 if the government switched to Linux"? [Note: No, not a gratuitous MS swipe - I don't think MS would be so obnoxious as to use this phrasing.]

    How about, "All 50 states stand to gain more than $45 billion in revenue by imposing a new tax they are not currently in a position to impose"? Seems like a more accurate rendering of the situation, although still somewhat hyperbolic since all 50 states are not considering this proposal. Some states don't have sales tax, period.

    Michael

  • IMO the only real advantage to buying online would be not paying tax. I can usually get the same items at a local store for the same price, and not pay shipping. Nothing beats that instant gratification.

  • Price of success... Taxes (Score:5, Interesting)

    by salesgeek ( 263995 ) on Monday October 28, 2002 @02:11PM (#4549700) Homepage
    It's great to see that the internet has succeeded to the point that government wants to tax it. What's too bad is that many ecommerce businesses see their only advantage to be price. And if 4.5-9% in sales tax will cut into your orders that much, you are already among the living dead. Those that live by price, die by price. You can't make money selling $.99 for $1.00. For that matter, it's damn hard to make profit selling $1.00 for $1.10.

    $G

  • Bad Economy = New taxes ? (Score:4, Insightful)

    by Anonymous Coward on Monday October 28, 2002 @02:12PM (#4549707)
    Am I alone in thinking the US economy is not so bad ? Yes companies are dropping like flies and people are losing their jobs. However I also see plenty of success within families and small companies. Looks to me like this unrealistic fantasy has burst for the large corps and their employees. We have simply come back to reality. The US is one of the most well to do countries, so I can hardly feel bad about the overall situation.
    I listen to same drivel about why the US economy is bad and wonder who's economy they are talking about ! It bears no resemblence to economics I studied during school.
    They neatly separate everything into consumers/spenders and sellers. If the consumers are not throwing down money on frivolous junk but rather save for more important things to improve their lives all of a sudden the economy is bad. Seems to me the economy they talk about is where the rich get richer and poor get poorer.
    This net taxation is just another money grab with a convenient excuse. Unjustified and unrepresented. Hell if it has anything to do with the economy hurting state governments. Rather more of a result of the mismanaged bureaucracy that they are. Throwing more money at mismangement never helps.

    Ahh Im done ranting..

  • Apple computer already doing this? (Score:3, Informative)

    by Arcturax ( 454188 ) on Monday October 28, 2002 @02:12PM (#4549715)
    I bought a new G4 a couple weeks ago from the online Apple store and they charged me tax anyway. Is it because they are shipping from California (probably some goofy CA law) or did they forward this on to my state?

    I don't know which but I do know that I did have to pay tax and wasn't too happy about it either.
    • You had to pay because Apple, most likely, has a business presence in your state. This may be a distribution facility or, more likely, an Apple store. With the presence of a retail outlet in your state, they are required by your state to collect local taxes on all sales within that state. It doesn't matter that you placed the order and had the product shipped from California. Many states have had this law in place for quite some time.
  • If local businesses are charged taxes and mail order businesses aren't, this is a non-level playing ground, which is in inefficiency in the system, which is bad for the consumer.

    Many people have mentioned that they bought over the internet because they didn't have to pay tax, but they otherwise would have purchased locally. Purchasing locally you get to visually inspect the merchandise, which is a benefit to you, but one that you are not willing to pay X% for.

    But somebody has to pay that tax anyways. Basically you all are saying, "let's take that tax out of the pockets of the technically incompetent instead." Why not just lobby for a special tax break for Slashdot readers and get it over with?

    Of course, you Slashdot people also like it because it's a special subsidy for web merchants. Of course, you're free to whine when your tax money is going to any other special interest business. How about a subsidy for Microsoft? It may well be the most successful racket anybody has going to transfer money from the rest of the world to the United States. Surely that's a worthy cause?

    The internet has been great for lowering prices: it reduces the cost of information. It'll continue to do so in the future even if a few borderline dot coms go under and a few more bricks and mortar shops do well. pricewatchSanFransisco.com may become more useful than pricewatch, but that's about it. The market for computer hardware is one of the most cutthroat around, and it'll stay that way.

    Bryan
  • Tax the UPS and Fedex trucks at the state line.
  • There's been a lot of comments on interstate internet purchases, and hwo the buyer has to pay their own state's "use tax", but what about buyers from other countries? I'm specifically wondering about Canada. Usually when I buy a DVD or CD it's just mailed through the postal service. Are tariffs built-in to the cost of shipping to another country?

    (Offtopic, but I'd just like to say that the Canada/US exchange rate royally sucks. After shipping and exchange, that nice ebay bargain you've just found usually doubles in price.)
  • Hey, I have a fabulous idea to solve the evils of internet business creating deficits and starving the children:

    Try balancing your budget!

    I mean, sheesh, really, how hard a concept is that? Now, before you charge for that reply button saying that it's impossible, I point out that I live in Alberta. We used to have a multibillion-$ deficit and no end in sight, but we voted in competent financial leadership, and turned it around. Now we routinely post a $1B surplus, have a $17B trust fund for "rainy days", and will have the entire deficit paid off in a few more years. Add to that our free health care, 0% (yes, ZERO) provincial tax, copius social programs (school, welfare, etc), and somehow i fail to feel sympathy for states running $600 billion dollar deficits every year. I wouldn't be asking what we could tax next, I'd be asking why these jackasses were still in office.

    And yes, to answer your next question, it was kinda hard... we lost or had cutbacks in alot of programs that we'd gotten used to having for free.. and it's still going on. But the money we save from interest payments on our debt means that we'll be able to reinvest in a few years. And with 1/10 of the entire country living here, yes, we have lost our fair share of business to internet commerce.

    Ok, /rant off, but still, sheesh, how can you people put up with that kind of fiscal management? We elected the right people, passed a non-revokable law that said "No budget deficits, ever, for any reason", and that was that. The question isn't why shouldn't you tax IC, but why do you have the need to?

    Also, if you bothered to RTFA, take the budget deficits for the state, and subtract the "claimed" losses from IC. Doesn't balance out to 0, eh?
  • Your/you're and then/than is not that difficult to master. It is pretty sad when both are the span of a few sentence submittal.
  • Because they don't use the states resources.

    A local shop or store uses the states resources. It relies on the state's police officers to ensure that it isn't vandalized, and to prosecute anyone who steals. It relies on state money which supports and repairs the streets which give access to that shop or store.

    Online businesses don't rely on state resources, or if so only very very rarely and in minor regard. Thus, they shouldn't be taxed.

    The other problem with online taxation is that its taxation without representation. If a company is based in NY, it is only represented (in terms of state law) in NY. But lets say that the servers for its products which it sells online are in California. Thus, the company would be taxed in California, without representation. The same thing occurs for us citizens.

    Those are some good reasons why online taxation shouldn't be allowed. Here's another one -- its called the will of the people.

    How many people can you find (anywhere) that want to be taxed online, so they have to pay online taxes in addition to shipping and handling? Has anyone asked the people about this, or even mentioned it in an election? No. My guess, 99.99% of the people in America don't want online taxation. So we shouldn't have it. Its called Democracy.

    "Most states are running budget deficits, and they're looking ever more aggressively for ways to stem the erosion of their tax bases."

    Here's a suggestion: fire some of those useless paper-pushers. Get rid of obsolete programs and organizations. Stop letting greedy fucking politicians vote to raise their pay every year. The states have a money problem -- that's their problem. They mismanaged the money we gave them with our taxes. Now they want to punish us by adding more taxes (this very cowardly way to do it, add new taxes, instead of raising existing ones). Probably upwards of 80% of the money you give the state in taxes is wasted anyways. Try cutting off some fat first.

    In any other facet of life, people are held financially responsible for their money-management. Where else in the US can you keep on fucking up with money and always get more precisely because you fucked up? Where else do you get to run enormous budget deficits without the plug being pulled on you?

    I get really sick and tired of hearing about how the states don't have enough money. Taxes are raised at a much faster rate than inflation devalues money, and they always need more money. Apparently, the government is like God. All-powerful, all-knowing, all-wise, but just can't handle money.

  • Oxymoronic (Score:3, Insightful)

    by lildogie ( 54998 ) on Monday October 28, 2002 @02:33PM (#4549899)
    "Projected Sales-Tax-Revenue Losses in 2006" heads the chart in the Denver Post article.

    A "Revenue Loss." What a crock.

  • Internet Retailers already pay taxes... (Score:3, Insightful)

    by silverhalide ( 584408 ) on Monday October 28, 2002 @02:46PM (#4550055)
    Two things about this bother me. First of all, these provisions are only addressing "Internet" stores. This leaves traditional phone-in mail order services exempt from sales tax (as they currently are as well). I'm seeing a huge loop-hole here. Place your order online, call a number, press a button to confirm your order, and all of a sudden it's not an internet sale anymore. Tax free!

    Second, this is simply unfair to mail order companies in general. Having worked for one the better part of my life, I see the costs that go into such a business. Not only does the warehouse pay all of its traditional taxes -- property, employee taxes, and whatever else you have, they have several high expenses on top of their costs. Since accepting cash is not practical, they pay an additional 3-4% of EVERY DOLLAR that passes to them in credit card fees. I'm not sure exactly how the credit card companies pay their taxes, but I'm certain they do. Also, you have shipping fees on top of all that, in two places -- receiving product and sending out product. These shipping companies are definitely taxed -- the gas they use in their trucks, the employees, their infrastructure, everything. So, point being, a mail order business of any kind, internet or not, is already paying 10-15% of its goods' value in various expenses that directly translate into a tax revenue at some point for governments.

    Adding yet another tax on these companies will certainly make them struggle, reduce sales, and greatly affect revenues collected from the other sources. And since online merchants margins are generally very low, we're talking less than 10% in some cases, this extra burden could very easy put a lot of them out of business. Now, we can't tax someone who's out of business, now can we?

    The government should be supporting commerce, not stifling it with extra taxes that really don't have any return value for the merchant. How is paying 5% to a box I ship to colorado from florida going to benefit me? It can't! At least local sales taxes have a direct, tangible effect on our daily lives, which makes them somewhat tolerable.

  • What!? Some people are not entirely miserable?! (Score:3, Interesting)

    by Fantastic Lad ( 198284 ) on Monday October 28, 2002 @02:55PM (#4550153)
    Well, who fell asleep at that switch! We should ship him/her to the South to be put down like the dogs they are! (And make up for all the lost 'misery revenue').

    Seriously. . . I've read today more childish arguments from people who are basically saying, "Well, if I have to pay tax, then so should everybody!" --Which stems in part from the barely legitimate fear of losing the precarious toe-hold on their own income through a Bricks & Mortar business, which won't happen unless they are nincompoops who don't know how to run a business in the first place, (Why not set up your own internet order department and get one of your clerks to manage it? DUH!), and from a rabid sense of unfairness which has precisely nothing to do with what is good for the nation and everything about, "MOMMM! BILLY GOT MORE ICE CREAM THAN ME!!!"

    As for more new & wonderful taxes. . .

    Bullshit. Greed and nothing else. For one thing, the economy is mostly a make-believe game [rense.com] anyway, and for another, if you want to live in the 'good little consumer' head-space and play the make-believe 3rd edition rules to the letter, well then if the government would just, say, tax Microsoft properly, punish corporate criminals, (like Bush), and stop plans to drop a billion dollars worth of bombs on Iraq every week, then MAYBE we could dispense with all this other nonsense.

    Internet Tax? Fuck off. When the net is taxed, it'll also be so tightly controled that a pipsqueek like me won't be able to speak his mind. And wouldn't that just make for a bad day?


    -Fantastic Lad


    P.S. Is it just me, or has Slashdot been particularly 'careful' these days to steer clear of political and social topics which actually 'matter'? I've asked it before and been modded to shit for it, but I'll keep on asking until my Karma is dead and gone. . . "Who is whispering into the ears of the Slashdot Editorial staff these days?" I notice the story about the story about implantable microchips [wired.com] broke several days ago and hasn't shown up here. . . Hmm.

  • Dont they ever learn this isnt how it works? (Score:3, Insightful)

    by nurb432 ( 527695 ) on Monday October 28, 2002 @03:01PM (#4550222) Homepage Journal
    Basic economics.. higher taxes = less money to spend, thus lower overall tax revenue..

    Here in my state they are pulling the stunt of raising sales tax an additional 1% because tax revenue is low. Just in time to ruin the shopping season. ( oh and after voting themselves a pay raise, and better insurance benefits.. but canceling all non-political state workers raises for the next 2 years because of the poor revenue )

    Will they ever realize that lower taxes is what stimulates the economy? Or do they just have to take it all and keep the populace down until the next, WAY overdue revolution happens when everyone has had enough.

  • The problem with net taxation... (Score:3, Interesting)

    by Traicovn ( 226034 ) on Monday October 28, 2002 @03:16PM (#4550347) Homepage
    *stands on soap box and prepares to shield himself from tomatoes*

    I think that taxation of goods on the net is a good thing. I think we need it. Now, let me explain why.
    If you buy a good or service on the net there is no tax (usually) that you are forced to pay. Yes, you do end up paying the equivalent of or possibly even more than the cost of tax in shipping.
    The biggest problem with taxing products on the internet is the number of tax zones that there are in the US. I forget the number, but it's not 50. It gets down to the county, and then to the city, and then finally down to the actual product sometimes (it is not uncommon for food, or prepared food, to have a different rate of income tax, or for their to be an extra penny tax on certain goods). The problem is with all of these tax zones and the diversity of locations where shoppers and businesses are located is that keeping track of this data tends to be a pain, plus it means that while one person from Maryland may have to pay 30.00 for a product plus 5% tax, the person buying it from Florida might have to pay 7%.
    Enter the net tax: What I WOULD be willing to support is a broad, internet-wide sales tax, say, all products bought on the internet have a set tax rate of 4% (or 6%) but something low. This would be divided in some way where each entity (city, county, state) from both the region where the buyer and the region where the seller are located.
    Here's WHY I would be willing to support a sales tax on tangebile goods bought on the internet. Think of where that money from sales tax goes. Yes, some of it does go into silly programs, and into the pockets of city and state officials, but most sales tax money is used for programs such as education, fire departments, and other local services that you may use on a daily basis and not even think of. In reality your local city government provides more services to you, and effects you more than the national government in most situations.

    I do however REFUSE to support any tax on things such as access, hosting, online payment systems, or other SERVICE related items on the internet. I am STRONGLY against any sort of 'internet access' tax.

    In closing, let me say that before you speak violently out against taxes, think about what it would be like without them. Think about how much money could be lost to your city and state if more and more people start purchasing things online, maybe even purchasing online and then being able to pick up at a local retailer. Yes, I hate paying taxes just as much as the next person, I'd like to be able to hold onto as much of my money as I can, but I also am able to see the money being used in the community around me. As long as I can still see that the money is being put to good use, I feel that I can support taxation. If placing a tax on goods purchased on the internet means that I can continue to see this money being used in the community around me and in education, then yes, I'll support it. But in closing, they have to make it easy, if the tax is not just a 'general' tax that you are required to pay (a nation-wide tax that is divided between the different state/local governments) then it will end up being even more of a pain in the neck.

  • But wait! (Score:3, Interesting)

    by PhxBlue ( 562201 ) on Monday October 28, 2002 @07:41PM (#4552431) Homepage Journal

    Let's throw forward another scenario:

    I'm a legal resident of Pinellas County, Florida. I live in Montgomery, Alabama, as a consequence of being stationed at Maxwell Air Force Base. So, can someone tell me why I should owe the state of Florida a use tax on a product that I order from, say, Maryland?

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