E-commerce Sites to Collect Sales Taxes Nationwide 584
aengblom writes "An agreement between 38 states and some of the nation's largest retailers is bringing taxes to the net, The Washington Post reports. In return for collecting taxes for all U.S. sales, the retailers would not be held liable for taxes they 'failed' to collect previously. Best quote: 'If we disclose who these companies are, it's like putting a target on their back.' The Post reports that Wal-Mart, Marshall Fields, Target, Toys R Us and Mervyn's have all 'independently' announced plans to collect taxes nation-wide." Internetnews.com has a story about the taxes and an article claiming it won't hurt online sales.
IMHO (Score:5, Insightful)
Re:IMHO (Score:5, Insightful)
*I* for one, would NEVER goto walmart.com when I could drive the two minutes to go there.
I also refuse to buy anything computer related from retailers (aside from display models that have been marked down to like $30 from 100 at Best Buy).
I would MUCH prefer to shop BB online just so I don't have to demand that another little rat doesn't bother me while I am in the store.
Re:IMHO (Score:2)
But there is a huge industry online for consumer goods. A lot of people are just getting into the notion of purchasing more stuff online than not. Most people still prefer to go to the store right now, but the trend had been swinging. But this will difinitively kill that big time.
Re:IMHO (Score:2)
Re:IMHO (Score:5, Insightful)
Re:IMHO (Score:5, Informative)
Just taking your photos to the local Walmart isn't an option since there's no ubiquitous read/writeable removable data storage format other than useless floppy disks.
Re:IMHO (Score:4, Funny)
Pot, meet kettle.
Re:IMHO (Score:3, Informative)
You mean Wal*Merde , don't you? The lines are too long, the help is surly[1], other shoppers are clueless and the pricing isn't all that competitive when you look at the quality of some of the crap on their shelves.
[1]From being forced to work unpaid overtime [organicconsumers.org].
Re:IMHO (Score:2)
Target? (Score:5, Insightful)
Wait...why would I shop ONLINE for something that's down the street again?
Oh, right, no sales tax.
No diff anymore.
Bye bye website.
Re:Target? (Score:4, Informative)
I once had a nice book shipped to my mom as a gift. I was surprised that Wal-Mart.com carried it, and more surprised that their price was well below the other online retailers for that book.
It arrived damaged, and my mom tried to return it to the local Wal-Mart, but they did not carry that book at the store. But Wal-Mart.com did a good job handling the return.
In any case, here in California, we already pay sales tax when we order from most online vendors, because they have a business presence in California. Now the rest of you get to join in the fun.
I've been shopping (Score:2)
My online purchases have tapered off as shipping costs have grown to include the 'undefined' handling as well. As for shipping, I can do it at the post office for just as cheap and have it insured against damages at the same time.
P.S. WalMart in next to SATAN, just to the left of Disney in the Underworld Academy graduation photo.
Oh, right, no sales tax.... (Score:2)
What amazes me is how often I'll see people club each other to get some bulky cheap thing on eBay, which common sense states the shipping cost should be the limiting factor on. e.g.
$2.00 for Coffee mug + $5.00 shipping.
(hint: always figure postage into your final bid amount, if it's a rare Webvan mug for a combined total $7.00, and you'd happily pay $10.00 go for it.)
I frequent many of my LxS (x = bike, computer, etc.) because of their advantage of Buy-it-Now-and-Have-it-Now technology and I-Can-Take-it-Back-For-Exchange-or-Refund technology, which, as opportunity cost, beat whatever discount I'd get from Pay-Now-Get-it-Later-and-Get-Screwed-on-Returns technology.
What about gas? (Score:2)
No difference in Michigan (Score:5, Insightful)
Besides, why should Target care if you buy from them online or down the street as long as you buy from them? All they need to worry about is you going to "just-like-target-but-no-tax.com".
It will hurt (Score:3, Insightful)
Only reason anyone buys stuff online is because it is marked down enough to cover shipping...shipping+tax means its more or as expensive as retail stores, so there is no reason to buy there...
This seems like a really bad time for this with the economy in the crapper...
Re:It will hurt (Score:4, Interesting)
Not true - I shop online for selection, convenience, and easy price comparison. Not to say that it won't hurt the online retailers from a price competitiveness standpoint, but this decision certainly doesn't mean "the end of online retailing."
Re:It will hurt (Score:2)
I don't shop online but do all of the above for price comparison. Then I call the brick and mortar (if they don't have online inventory indicators) and drive there. It is the best of both worlds. Speed and convenience of the internet, don't have to wait for shipping and have it now of the brick and mortar store. Adding sales tax only makes it better for me to go to the store.
As an aside, most of my online purchases are PC parts. CompUSA has a decent selection but don't specialize, and the local shops are extremely expensive. This will only hurt online retailers.
Re:It will hurt (Score:2, Insightful)
So what if it hurts online sales. I don't think it will, that much. If anything, it'll help local sales more than it hurts the online retailers.
Agreed, but.... (Score:2)
That said, if they think it won't hurt at all, they're insane, I agree. Who hasn't made sure a vendor for something online wasn't in their home state? I live in CA, and it's hard shopping for computer equipment, but given our 8.25% sales tax, is frequently worth it.
Also, doesn't it seem as if all the companies they mentioned are "clicks and mortar" stores? Since these companies have physical locations everywhere, won't this just about kill their online sites?
Not a new internet tax (Score:5, Insightful)
Re:It will hurt (Score:3, Insightful)
Sure the local independent could order them, but it's still cheaper to buy certain books (O'Reilly) online. Nevermind that Amazon can get a book to me in two days whereas the indie book store might take two weeks.
E-commerce won't die till mail-order dies. Mail order isn't going to die till everyone with a hobby has a local store carrying exactly what they want. I doubt there'll be a high quality kite shop w/in an hour of where I live anytime soon.
Re:It will hurt (Score:3, Insightful)
There are a whole lot of people living in basically the same situation, and we aren't going to give up our online shopping any time soon. We are the online customers of stores like Target and Best Buy, and that's why they can say that online shopping isn't going to be hurt.
It may be no problem for you to drop by WalMart and pick up what you want, but for me it's an All Day Outing which can only be attempted on Sunday, since that's the only day my wife and I both have off.
Sigh... (Score:3, Informative)
It wouldn't annoy me if I felt that these additional taxes, and tax rises noticably made quality of life better - but stuff like our health service and public transport continue to degrade into chaos and disorganisation.
Slightly OT I know, but I felt like ranting about taxes.
Re:Sigh... (Score:2)
We already have. Everything you buy online in the UK has sales tax (VAT) on it.
graspee
Re:Sigh... (Score:5, Informative)
What are you on about? In the UK everyone gets evenly charged 17.5% VAT instead of local state tax. It's not like you get a tax break if you order from a company in Sussex and live in Hampshire!
The whole thing is that you can avoid sales tax in the US if you order from another state. It's basically tax evasion (I believe you are supposed to pay it at some point but nobody does). This is really closing a loophole, annoying as it is.
Re:Sigh... (Score:4, Informative)
The tax you are probably supposed to be paying if you purchase from out of state is not generally called a sales tax, and you don't owe it to the other state, but rather a Use tax, which you typically owe to your state of residence.
See, California can't tax the vendor in Nevada for selling you something by mail, because the vendor is not in their jurisdiction (CA and NV chosen at random, and maybe not even correctly). But the Nevada vendor doesn't pay the tax to Nevada, because they book the sale as occuring outside the state, and the Constitution prevents states from taxing interstate commerce. So, California (probably ... most states have these laws) expects you, the California resident, to voluntarily cough up the lost sales tax revenue as a Use Tax on purchases that haven't been taxed by either California or another jurisdiction (state, in this case), except when California wouldn't charge sales tax on the item anyway. Some states go so far as to include a Use Tax schedule in their yearly state income tax returns. Unsurprisingly, since these purchases can't be tracked by the states (the vendor is outside the jurisdiction, and hasn't done anything to break the law of that jurisdiction), states have a pretty tough time enforcing their Use Tax laws. But that doesn't mean you aren't supposed to pay :-)
Not a lawyer, yada yada yada, but I have played on in a court room :-)
VAT? Hello? 17.5%? (Score:2)
It's barely conceivable that you're talking about importing goods into the UK, in which case you don't get charged tax by the seller (although that's nothing to do with the UK). However, you do get charged import duties by customs and excise (or a postal service on their behalf, in which case you get hit with an extra charge for the priviledge) on any single item over £18 GBP in value.
That's one reason why places like cd-wow.com are so great; they post each DVD or CD singly, with the value clearly displayed, so it all just slides through. But order something over £18 in value and you will likely get import duties levied on it (but even with that, and even being posted from Hong Kong, it's still cheaper than buying from inside the UK!)
It had to happen sooner or later (Score:2)
Fair Enough (Score:5, Interesting)
Last I checked, the UPS guy was driving on the road that local taxes paid for...
But the book store isn't taxed (Score:3, Informative)
The myth of no taxation on mail-order is only around because most states never bothered to procescute people that skipped out on $12 worth of sales tax per year. Michigan for one has started to look into enforcing the law in hopes that they can scare most of the dodgers into paying up (at least partially).
Re:Fair Enough (Score:4, Interesting)
But then again sales taxes are not legitimate, it's double taxation. You are taxed for earning and you are taxed for spending and you are taxed for saving (unless you put it in your mattress, but sooner or later the IRS is going to wonder and you'll be audited anyway). You are constantly being punished for being a productive member of society. If you decide not to be a productive member of society then the income of those that are productive is redistributed to you, therefore you are rewarded.
Yes we need a tax but don't double tax. Make it an income tax or a sales tax but not both.
That started to get a bit off topic, but by paying sales tax for goods and services out of your state you are being taxed for services you do not use. If I buy something at my local target I am driving on the roads, burning fuel and participating in commerce within my own state. That (although arguably) takes resources that the state collects taxes on.
If I buy something out of state, that business does pay taxes on their income in their state so the "cost of commerce" is covered. The truck that picks the packages up and brings them to UPS facility paid taxes to be licensed so that is covered. If it is a ground shipment, most states have regulations taxing the trucks that go through them in the form of licensing or fuel costs (or both) so that is covered as well. I didn't make my money in that state so they are not entitled to my income (that of course leaving out the argument that govt is entitled to any of your money or we would be arguing our own state's taxation again). And the truck that brings it to my door is licensed in my state and the income they earn for bringing that package to me is taxed so my state is already getting their share. Seems to me that any additional taxation is unfounded, not to mention that I have NO say in the state's gov't that I bought the package from so me paying them any kind of tax (directly, as apposed to indirectly like the portion of my money that is income tax for the store) is taxation without representation which is unconstitutional. Isn't that what was behind the revolutionary war (among other things - not I don't need a history lesson), just on a MUCH smaller level?
Abolishing the income tax on ALL levels and going to a national sales tax would of course solve these issues (but create others), then the feds can ration out money to the states based on their population. And when everyone is paying 50% sales tax they will get a better idea how badly goverment is bloated and maybe change their voting habbits...
Re:Fair Enough (Score:4, Interesting)
If a business has a "locus" in a state (basically a substantial business presence), then they are obligated to collect sales taxes in that state.
So your traditional brick and mortar company charges tax wherever they have a store or an office. Mail-order companies meet the same test. Here's a couple of examples.
I live in Massachusetts. When I buy goods from Amazon, I am not charged sales taxes, because Amazon has no direct business presence in my state. However, if I lived in Washington (the state they're headquartered in), or one of the states where they had a warehouse, I would have to pay sales tax on my order.
Related to that, Apple has 2 (soon to be 3) stores here in Massachusetts. So if I buy from Apple.com online, I pay sales tax. However, I had to pay sales tax even before they opened the brick-and-mortar stores here, because Apple has had a sales office in the Boston area for well over 20 years.
What some of these companies were doing to try and get around the tax laws was create "separate companies" that were supposedly independent subsidiaries of the parent company and therefore didn't share all the locii with the brick-and-mortar stores. Ergo, no sales tax was being charged. That was a tax dodge, plain and simple, and in many cases (like Barnes & Noble) it's already been nuked by the courts.
Now theoretically, in states with sales taxes you're supposed to declare your purchases from out-of-state, and pay "use taxes" equivalent to the amount of sales tax you avoided. But in the real world that doesn't happen, except at some of the businesses who can't legally afford to screw the taxman. Individuals never pay it, needless to say - perhaps that just might help explain why so many malls and stores exist just over the New Hampshire state line (NH has no sales tax).
Basically, "Internet sales taxes" are a crock - but the same rules that apply to traditional mail order should apply to Internet-based sales.
Legislative stupidity (Score:5, Interesting)
I was wondering how long it would be from the time Bush took office (and left the Clinton/Gore approach of "fund the Internet to build it up, but keep it hands off as much as possible") to the time big companies (brick-and-mortar types) started getting their way legally.
Re:Legislative stupidity (Score:2)
So I can just buy from a Canadian e-retailer. Or a Mexican.
I hadn't even thought about that. But I know when Canadians buy from the US they pay some rediculous ass ramming tax. We often get requests to label our software delivery as "demo". This way the value of the item is $1 and they pay little or no tarrif (or duty - I forget which is which).
I wonder if we pay the same ass ramming tax on items comming into the US? Does it make a difference which country it comes from?
Re:Legislative stupidity (Score:5, Informative)
It's called 'duty'. Its meant to discourage the very mentality posed by the parent poster; namely that shopping outside of your economy is bad for your economy.
The US likely has import duties as well, but you would have to check with your customs agency in order to confirm whether duty applies to the specific products you are interested in importing.
Re:Legislative stupidity (Score:5, Insightful)
Good grief. I know people here love to blame Bush and Republicans for all the evils in the world, but at least try to make some amount of sense when you do. This is an agreement between retailers and *states*, neither the federal government nor Bush has anything to do with it. (And I'm relieved to know Clinton kept his hands off the Internet, otherwise we might have gotten bad laws like the CDA, DMCA, and crypto restrictions. Oh wait.)
Re:Legislative stupidity (Score:3, Informative)
Re:Legislative stupidity (Score:3, Insightful)
Bush is not under fire for just cutting taxes, he's being criticized for who the majority of the cuts are benefiting. Many say the upper class and middle class investors get the large bulk of the savings.
Other complaints include the inappropriate timing of the cuts and whether those cuts can be afforded right now.
Officials: Government close to hitting debt ceiling [cnn.com]
Let the children pay [cnn.com]
Re:Legislative stupidity (Score:4, Insightful)
So maybe the states could try *gasp* making cuts in their spending?! My God! Maybe even eliminate some of the less useful government programs, such as the ones created just to insure a certain block of voters goes for a particular party every few years? Imagine that!
Some already have been (Score:5, Interesting)
It's just a leveling of the playing field. At some point I expect mandatory for all businesses, including those without a physical presence, which could be difficult for the Mom & Pop, HOWEVER(!) that doesn't prevent some sharpie from starting up a business to track it for them, if you get my drift.
Re:Some already have been (Score:2)
Re:Some already have been (Score:2)
A lot of folks have been cheating on this one (physical presence). For example, Borders claims (or at least used to) that borders.com is a totally separate, independent company with a physical presence only in a couple of small states, even though every Borders store is full of promotions for borders.com.
More About Convenience for Me (Score:3, Interesting)
Not a good move at this time (Score:2)
Now they want to tax Internet sales. Hmmm.
I understand local jurisdictions are under a lot of pressure, what with states and counties running huge deficits and wondering how they will pay for local police and fire departments and social services. But this just seems like a bad move to make at a time like this. With the Internet's sales rising nearly exponentially each year, it would make sense to keep shopping tax-free and hope that Internet spending can help to prop up the economy.
Still, federal proposals to cut taxes sure won't help states and municipalities deal with their budget deficits. Still seems wrong-headed to me, though.
Re:Not a good move at this time (Score:3, Flamebait)
No, they don't. If tax breaks were about stimulating the economy, they would be directed at the low end of the income distribution--people likely to spend the extra money.
Instead, the administration gives huge tax breaks to the wealthy and introduces new sales taxes that hurt spending but make some special interests happy.
Internet's sales rising nearly exponentially each year
Of course, Internet sales are rising "exponentially"--your bank account with 0.5% interest also is "rising exponentially". Most things that grow grow exponentially, some just do it faster than others.
Re:Not a good move at this time (Score:3, Informative)
The previous tax cut, and the currently proposed tax cut, are both sweeping cuts that benefit ALL classes of income-earners.
As it stands now, the wealthiest 50% of the population bears 96% of the tax burden so it's natural that an across-the-board tax cut would free more dollars up for the top 50% than the bottom 50% in absolute terms( by a ratio of roughly 24:1 ), but the amounts retained on a percentage basis are actually higher for the lower 50% than the upper 50%. Your troll is ridiculous and unfounded.
Here are the numbers to back up my claims:
http://www.irs.ustreas.gov/pub/irs-soi/00in01rt
( Excel file, although it opens fine in OpenOffice )
Re:Not a good move at this time (Score:3, Informative)
The upper 10% of the income bracket pays 50% of all income taxes (same source). Maybe those who actually pay taxes might appreciate it.
Re:Not a good move at this time (Score:4, Interesting)
As opposed to "rich" taxpayers who will put it under their mattresses?
Instead, the administration gives huge tax breaks to the wealthy
The income tax reductions actually make the system more progressive. The evil rich will get a larger reduction in absolute dollars only because they pay so much more in the first place. But you knew that.
and introduces new sales taxes
This is an agreement made with state governments. The Bush administration has nothing to do with it. But you probably knew that too.
Re:Not a good move at this time (Score:3, Interesting)
Now they want to tax Internet sales.
No, they don't - this is a deal with the States (maybe you've heard of them) which the liberal critics of Bush seem to forget.
hmmm (Score:3, Interesting)
"No really officer, All ten million orders last year went to the same address in Oregon"
No motivation (Score:3, Funny)
Re:No motivation (Score:2)
So if you want to get those hard-to-find books, you'll *continue* to get them from amazon, right? What's the problem?
Re:No motivation (Score:3, Interesting)
The agreement should only affect stores with a physical presence in your state. Amazon.com, being little more than a set of warehouses, shouldn't have to collect sales tax unless one of their warehouses is in your state. This agreement doesn't affect them because in the case of having a warehouse in your state, they would've always been collecting sales tax.
What? (Score:2, Insightful)
And they want to start taxing online purchases NOW?
What the hell business school did these idiots go to?
It's only another reason *not* to buy online, notice it's the big brick and motor guys that are all for the taxes.. If people don't buy stuff from the small company online, guess where their probably going to get it from....
That would be three confirmed companies... (Score:5, Informative)
Also, Target Corp and Toys R Us are working together with Amazon.com for online sales, so really it's only two groups - Target-ToysRUs-Amazon and Wal-Mart.
I welcome sales tax for these merchants as it will probably encourage shopping in the local economy, which is better for small business and lesser municipalities (though perhaps bad for my home city, since Target Corp is based here).
38 states is not all of them (Score:2)
States' Rights -- why? (Score:2)
Amazon.com (Score:2, Interesting)
Huh? (Score:3, Insightful)
It seems to me that the Internet is being used by brick-and-mortar merchants as a smokescreen to push an agenda they have been trying to push for decades.
As for "not hurting", what are these people thinking? Not having to pay sales tax just barely makes up for the shipping costs and extra hassles of on-line ordering. If I can't even save the sales tax anymore, then I might as well go to my local electronics store. Which is, of course, why state law makers have been lobbied so hard to push this through.
"Smokescreen"? What are you on? (Score:3, Interesting)
If merchants like Wal-Mart haven't been charging sales tax on online orders (I don't know, I haven't ordered anything online from them), they've clearly been violating the law to do so. State laws almost uniformly say that if the company has nexus (a physical presence, like an office, store or distribution center), it's responsible for charging you sales tax.
On the other hand, you are responsible, in most states, for paying "use tax" (basically a different name for sales tax) on items you buy from out-of-state retailers who did not charge you any sales tax. Betcha didn't know that one. This agreement essentially fixes the problem that almost no one pays that tax, and it catches companies who had been trying to skirt the nexus rules.
Re:Huh? (Score:3, Interesting)
From the article, what has changed is several large retailers, with physical presence in nearly all states, who were previously charging sales tax in none of them, or only in a small handful where their on-line division had a physical presence, will now charge you sales tax.
The article specifically names Walmart, with stores in all 50 states, as having walmart.com registered in only 9 states. No longer will they be able to charge sales tax in only those few states where the on-line division has a presence, because they stores at in every state.
Of course, you'll still only pay tax if they have a physical store or presence in your state and you live in one of the 45 states with sales tax. At least for now. But the states also want to change that and force all US merchants to collect sales tax, regardless of wether they have a physical presence in the destination state.
Shopping online should cost more (Score:2)
Frankly, I think this is a good idea.
It will absolutely hurt online sales (Score:3, Insightful)
Am I the only one who looks for online sites that will not charge tax to buy from? Somehow that seems doubtful. The reasons for buying online were (1) Not having to set foot in a store or shopping mall and (2) No tax offset the cost of shipping. Much as I hate malls I'm not at all sure it's worth ordering online when I have to pay the 8%+ (welcome to California) additional to the state. Dammit.
I'm glad I'm in New Hampshire... (Score:2)
I'm glad I'm not in New Hampshire... (Score:2)
Please Someone Explain to me... (Score:2)
Now, B&M stores with an online presence aside, wouldn't charging me sales tax on my order from Amazon (or Buy.com or etc.) in effect be taxing interstate commerce?
Re:Please Someone Explain to me... (Score:2)
Re:Please Someone Explain to me... (Score:2)
commerce to me, which Constitution explicitly
says is in the purview of the Feds...
To say it won't hurt is a blanket statement. (Score:3, Insightful)
For places like Wal-Mart, Target, and Toys 'r Us, it will probably hurt online commerce because people will just go to the local store. But the store is still getting their money, so they aren't actually hurt. For places that aren't so physically pervasive, such as purveyors of computer components, online sales won't be hurt if they eventually have to collect taxes. If I'm looking to buy an Athlon XP2000+ and I check the local shop and find it to be, say $200 plus 7% tax for a retail box and find it on pricewatch [pricewatch.com] for $115 plus tax and shipping, I'll certainly buy it from the online shop, after checking out their credibility on the BBB [bbb.org] of course.
Use the phone. (Score:5, Interesting)
So now just look up what you want online, and call their 800 number to order instead of using the Web.
I suppose they'll plug that too though...
Sigh.
Garg
Hmm .. stupid (Score:5, Interesting)
So Sites like Walmart, Toys R Us, and my own Black & Decker have to pay taxes; Where sites like Crazy Aaron's Thinking Putty or Old Glory Games - do not.
That being said:
If I *DRIVE* to virginia (or deleware etc) and buy a car
If I order something over the phone, I don't have to pay tax in some states. Same if I order a magazine.
While internet stores are no replacement for a good Brick and Morter store
I went to FIVE hobby shops local to me that carry minatures
Now, I tried to buy them in a REAL store first
Granted - I was looking for some rather specalty items, but when a store CARRIES said items
All my real stores failed me
Internet shopping is only good if you know exactly what you want - its very hard to browse for something on the net
Three days later, product in hand
I guess my point is, Internet stores generally do business across state lines. [hence no income tax
Trying to regulate income tax for a NON store fronted web-store is stupid. If they had a local store, most folks prefer to go to them first. The E-Commerce-replaces-real-stores that everyone was afraid of in retail sales
Which state gets the money? (Score:3, Interesting)
Re:Which state gets the money? (Score:3, Informative)
Online sites shouldn't be exempt (Score:3, Insightful)
If a rational system for determining which sales tax applies can be put into place, there is no reason that online sites should be exempt.
BTW, I agree that the moritorium was justified - I just don't think you can reasonably expect it to last forever.
Their first step (Score:2)
I'm concerned that the big boys are going to work it out for themselves, and the little online shops (several of whom I develop websites for) will get screwed by having to pay for 'tax tables' or 'approved software' that will run us out of business.
Since the states will be getting sales taxes now, will they be willing to refund the taxes that UPS and FedEx pay (profit, gas, employee taxes, etc.)?
Economics (Score:2)
Among other things, Web stores are open 24 hours a day and they have things in stock that you can't get at your local store.
Web stores operate out of warehouse space, which is far cheaper than retail space, especially if you live in a city. The employees don't have to deal with the public, so their time is spent more effectively.
Retail stores have many downsides. They have to deal with remainders (items that don't sell) more often, and have to choose carefully the tradeoff among items to stock. Most can't operate 24/7. The employees can be a real problem: if one person doesn't show up for work, long lines can develop at retail counters.
Shipping is expensive, but it's the only downside to web stores. They have many other economic advantages on their side, so they can continue to be a bit cheaper, and often more convenient. I buy things from Amazon that I could get from my local Borders, but that bookstore is a good 20 minutes away. Total round trip is 40 minutes. I'd buy it from Amazon even if it were a bit more expensive. Add the fact that it's generally cheaper, even with Amazon's economic model hiding the shipping cost in the price, and it's no contest: I spend far more at Amazon than retail bookstores.
Other stores offer things I can't get locally without much travel, from cake decorating supplies to obscure DVDs to Ebay's miscellania, and I live in a major metropolitan area.
Does it suck that I'm now paying 5% more for my stuff than I used to? Sure. Will it cut into some sales? A bit. But I doubt it's the Imminent Death of the Web.
Flat Tax (Score:2)
This is stupid. (Score:2)
Dumbass state govt's (Score:2)
Ok, there's this other solution that doesn't involve taking more money away from middle class people. IT'S CALLED CUTTING SPENDING!!
I live in Washington. We've been having extreme budget troubles for the past 2 years, as well as a poor economy (we've been harder hit by the recession)
During the late 90's, our state had a HUGE surplus. Gigantic, billions of dollars. You'd assume that the state would save it up for lean times, right? No, of course not! Government spending doesn't work like that! No, they spent it on worthless programs. The money was gone amazingly fast. Now, due to their short sightedness, I have to give them more money.
Re:Dumbass state govt's (Score:3, Insightful)
There was never a surplus in the 90's. It was a "projected" surplus based on "estimates" from the Congressional Budget Orifice, of the "approximate" "future growth" of income taxes derived from dot-commers realizing "capital gains" on selling ther stock options.
Hello!? That surplus never materialized because the market crashed and nobody ended up making all the bazillions of dollars in income tax on the profits. So many people had overvalued stock that there were no more idiots left to buy it. Then, BOOM, it hit and here we are..
See, we as individuals can't pull this neat trick whenever our budgets get tight (and believe me, they're tight).. The gov't can either simply print more money, which will have an effect on inflation a couple of years down the line (but that's okay, blame it on whoever is in office when the inflation hits), or two, just take more of ours! GEE! I wish I could just walk up to some random stranger on the street and take money out of his wallet!
No society has ever taxed itself into prosperity. Taxes will not stimulate the economy. Taxes will not put food in anyones' mouth (except maybe the bureaucrats who run the whole dog and pony show). Taxing the internet will not increase sales.
HOWEVER, there is a legitimate issue of tax avoidance that should be addressed. This issue was never addressed in the mail-order days because mail-order sales never amounted to a significant portion of all sales. However, in the era of the Internet (which is now over), it was much easier for people to go online and buy stuff tax-free, especially big ticket items like computers that would generate $70+ in revenue for the states and localities. Making it so easy to avoid sales tax quickly started drying up state coffers. This wasn't a problem because the loss in sales tax revenue was more than made up for by the increases in income tax revenue that was the result of ultra-low unemployment and the higher wages that went along with it. Now that the income tax stream is pretty much gone, and states are instead paying out "welfare" type benefits, we have a cash flow problem.
What we have been seeing thus far is rising sales tax rates everywhere to account for tax-free sales that go on over the internet. Shifting the sales tax burden to fewer and fewer shoppers is dangerous business because it is essentially narrowing the tax base. Continuing the trend will eventually lead to the expiration of brick-and-mortar retail alltogether. We've seen this phenomenon in real-estate for decades. One school district decides it wants more money, so it raises tax rates until people start leaving. However, they can't reduce their budget, so they have to raise taxes more to offset those who leave. This cycle continues until you have New Paltz, NY, where the tax rates on my parents' $130k home are almost $10k per year, and Pottstown, PA where I was going to buy my new home until I found out that the tax on the meager $120k "estate" was over $5k per year. The same could happen in retail if there is always a tax-free solution - or as long as States refuse to cut spending.
Of course, what are the chances that any government will ever reduce spending? If they try to cut spending, some crybaby group will whine that they're going to "starve the poor".. if they try to increase spending, some other crybaby group will whine that they're going to "tax the middle class"...
I guess that's the problem, too many crybaby groups..
So what? (Score:2)
The tax they 'failed to collect'. (Score:3)
That's assuming that there's any rationality to sales tax.
My father had a home business for awhile. It failed--most small businesses do. During the time he operated, he made not one sale within our state. It happens, when you're making so few sales that you don't even actually have to file income tax.
The state of Ohio now claims he owes them something along the lines of $20,000 in sales tax.
But they don't phrase it as 'we think you made enough sales that you now owe us in taxes, which we estimate to be $20,000', no. They say 'you owe us $20k, pay up'.
And there's not a damn thing you can do about it.
For a large retailer? This could be a *significant* fear. Assessmants for hundreds of thousands--hell, even millions--in taxes that you didn't collect. Or... changing your policies to start collecting them ASAP.
How many of you could really say you'd choose the nameless, faceless consumers over your own business?
Not all e-commerce hurt (Score:3, Insightful)
The aspects of on-line sales that will be hurt are those that probably never needed to be on-line in the first place. For example, I saw an ad for mail-order firewood a few days ago...what the hell are they thinking?!?
It's never been tax free in California, anyway (Score:3, Interesting)
Anything you buy from out of state is supposed to be declared and you pay a Use Tax equal to the Sales Tax you would have paid if you bought it locally.
Other states probably have similar provisions.
Still cheaper (Score:3, Informative)
A couple of examples: DVDs are typically between 8 and 10 UKP from the supplier I use (based in the Channel Islands, which is tax-free BUT because the discs all cost under 18 UKP, they're exempt from having UK duty and VAT loaded onto them when they arrive at Customs). Shop prices are 20 UKP for the same DVDs, although if you're lucky you can find a 2-for-1 offer, which only goes to show what a rip-off the headline price is. Big online suppliers of PC components are so much cheaper than PC World stores, it's not even funny.
This article is misunderstood! (Score:5, Informative)
"For example, Wal-Mart has 1,500 stores scattered across all 50 states, but WalMart.com, a separate subsidiary, has a physical presence in only nine states."
WalMart.com's presence in nine states requires them to collect taxes for those nine states. However, this deal would require them to collect in all fifty, since the
A store like mWave.com (a personal favorite), whose only presence is in California, would still be treated the same way they've always been: Purchases from outside California are tax-exempt, just like they would be from a mail-order catalog.
I imagine Dell will be affected by this. They charge no sales tax for orders from "Dell Home", but "Dell Business" charges tax to everyone. It's likely that, if they buy in to this deal, Dell Home will charge tax to everyone.
The short of it is, though, Don't Panic! If you're shopping for bargains online, you'll still find them.
New Hampshire? Delaware? (Score:3, Informative)
So does this mean that the only time I won't be paying tax on my online purchases will be when I'm shopping at stores in my home state? This strikes me as at least a little bit absurd. If I mail order something from a company in a state that charges sales tak I don't have to pay it; why should this be any different?
Re:New Hampshire? Delaware? (Score:3, Interesting)
Technically Correct, Will Be Constitutionally Fla (Score:4, Interesting)
Wal-mart and Target have operations in all states. Ergo, they already collect sales taxes for that appropriate state and it's no big deal to include online and telephone sales, which they should have been doing anyway.
Ever notice on television advertisements for "The Osmonds Greatest Hits", you'll see the disclaimer that "residents of New York add sales tax". That's because the company pushing and fufilling the order has offices in New York. They're required to collect taxes for orders going to destinations within the state of NY. So, there's nothing terribly earth shattering about what these companies are doing nor the agreement that has been reached. I argue that Target/Wal-mart are trying to keep their respective tits out of the wringer because they haven't been collecting taxes for online/telephone sales.
In fact, I argue that this is the first step in stricter enforcement of sales tax laws directed at large corporations.
HOWEVER, you'll note that this is a voluntary program. The states can not force the guy at FixYourOwnPrinter.com to collect sales taxes for parts sold to anyone in any state other than his own. It is unconstitutional.
While this voluntary program is technically correct, I think it may be the first step at a wider attempt at regulating interstate commerce. Which of course, the states can not do per the Constitution.
Look for this one argued in the US Supreme Court soon.
Let's Go All the Way With This (Score:3, Informative)
One scheme that was proposed several years ago (but died in committee) combined a sales tax of 20% and an annual refund of 20% of whatever the government declared was poverty level income. Every head of household would receive the same dollar amount refund, adjusted for dependents. All income tax, including corporate tax, would be abolished. People with more money would pay more tax because they spend more money. For poor people, who spend all or nearly all their income, the refund would amount to ALL the sales tax they paid, because the refund would be set at 20% of a poverty income. For wealthier people the refund would amount to only a fraction of the tax they paid.
This would accomplish the same thing as a continuously graduated income tax rate, but without the 4000 pages of IRS rules and 105,000 IRS employees we now use to collect the same amount of money. The vast army of accountants, clerks, lawyers and consultants whose careers are dedicated to paying and avoiding taxes would have to find something productive to do with their lives.
To manipulate a sales-tax-only system, Congress would have just 2 numbers to work with: the percentage rate and the refund ammount, and any changes they made would be completely out in the open. No corporate taxes would be built into the cost of everything we buy. No custom-designed loopholes would be created to pay back campaign contributions. People would pay tax according to how rich they are and how much stuff they consume, the opportunities for cheating would be far fewer than now, and everybody who would know exactly how much tax they were paying.
If we did switch to an all-sales-tax system it would be essential to enforce it on all sales, which means it would have to be collected on e-commerce. So on that basis, I think instituting the practice and getting people used to it could be a good step.
Glad Oregon is so close. (Score:3, Interesting)
It's not like they have a way to tell what I bought here and what I bought there. Sure they could have a check point at the border but they don't, and until they do, shop in Oregon I will. I do shop here as well but going to Portland for the weekend is fun and I find myself doing a lot of shopping whenever I'm there. Next month I'm going to be in Ashland, OR for two weeks and will most likely do some shopping on the way home. Sales tax doesn't seem like much but 8% adds up rather quickly.
Come on, people! (Score:5, Insightful)
This is nothing new. It's not a new tax, and it is not any less legitimate than the sales tax you pay when you go to a brick & mortar establishment. (The legitimacy of that sales tax is debatable.)
If anything, this agreement helps consumers in that we no longer have to track our out-of-state purchases in order to pay Use Tax on those items. You do pay Use Tax on those items, right? If you don't, you're breaking the law if your state has a Sales Tax.
As for curbing sales, this move will only curb online sales for sites that are already not competitive. Them's the breaks in a free market.
Re:Taxation (Score:2)
Re:Live Free or Die (Score:2)
Re:Live Free or Die (Score:3, Interesting)
The men that started this country did so for many reasons, but one was the heavy burden of taxation and levies imposed by the king. Unfortunately, we are carrying a heavier burden today than back then, yet there is no second revolution. Yet.
Re:WTF (Score:3, Informative)
Companies that have regular Brick & Morter store locations in a state, are required by FEDERAL TRADE LAWS to charge income tax for any online sales made to said state.
[Trust me, I spent months reviewing this with our legal department before setting up our online store.]
This keeps folks from just doing all their sales 'ONLINE' by putting a kiosk in their store or whatever, and avoiding the taxes. Cheap, but if folks hadn't been doing it - no one would have had to make the law up.
What they are doing, is saying that 'We know you didn't collect taxes, However, if you promise that you will in the future (even in the states you DON'T have Brick & Morter in) we will overlook your entheusaum.
Basicaly its a call to amnesty to get leverage to PUSH for taxation on the web.
Not illegal (Score:3, Insightful)
Any e-store that sells to a state where they have a physical retail presence, is already require to charge sales tax.
Less scroupulous (and smaller) stores were installing 'ordering kiosks' that contacted their 'web server' and took an order over the 'internet' regardless of the fact that you were standing in their store - so they wouldn't have to charge you sales-tax.
Hence, why the original law came about.
Re:not to mention but its illegal (Score:3, Informative)
They're absolution from "failure to collect prior taxes" is to give them amnesty for not collecting tax on sales that they SHOULD have collected in the past (i.e. when they first went online and for some reason didn't collect it)..
There is still nothing allowing them to collect sales tax on interstate sales to states in which they have no physical presence...
Re:Sales tax charges in the US (Score:3, Insightful)
I, for one, am glad that sales taxes are totted up separately, because if they get too big, people will complain, and government will be forced to limit its leeching.