Washington State Encourages Internet Sales Tax

prostoalex writes "Washington state Governor signed a tax bill encouraging out of state businesses to collect sales taxes on purchases made by Washington state residents. It should be noted, though, that Washington state does not collect personal income tax, and hence relies on state sales tax for 53.1% of its revenues." As the article notes, "People who purchase items from out-of-state Internet or catalog companies are currently supposed to pay the sales tax, but rarely do." Looks like Washington-staters won't be able to fib on their tax returns about internet purchases, starting in 2008.

Not that it matters but ...

[slughead]

I don't think this is legal under the constitution. The sales are made outside WA and therefore cannot be taxed by the WA government. A lot of governors have tried this crap, I don't think any have succeeded though.

It's stupid anyway. Sales taxes in Seattle are up to 9.1% which is pretty damn ridiculous. If I were living in WA and this went through, I'd move. Internet purchases help make WA living more affordable.

Re:

[karnal]

But the state doesn't have personal tax. So if you actually lived in the state of Washington it would be a good deal. This was even noted in the /. summary: It should be noted, though, that Washington state does not collect personal income tax, and hence relies on state sales tax for 53.1% of its revenues."

Tip: Don't buy anything in Washington if you don't live there :)

Non residents arn't taxed (as much)

[Kaenneth]

When I was working retail, all a customer had to do was show an out-of-state ID, and their purchase would be sales tax exempt.

I would assume this wouldn't apply to the newer Hotel/Rental car taxes tho.

Re:

[gEvil (beta)]

If the company doesn't exist in your state, why should you have to pay tax on purchases from them?

Actually, in most places you are technically supposed to pay taxes on them (called 'use taxes'). However, it's not up to the seller to collect them--you're supposed to report it yourself on your state/local tax forms as 'purchases made out of state or jurisdiction'. The thing is that hardly anyone ever reports/pays them and the states don't bother going after them for it.

Re:

[miskatonic alumnus]

I started paying my use taxes a few years ago. On my state income tax form there was a check box for those who didn't keep good records of their out-of-state purchases. I'd Check it, add some miniscule percent of my income for use tax (about $20) and breathe a sigh of relief knowing that I could survive an audit. Pretty cheap protection money.

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[dgatwood]

I fail to see how the government can legally charge a use tax. The legal reason for a sales tax is to pay for services provided to the businesses that charge it---fire and police protection, etc. A purchase made out of the state does not create those costs for the state, and therefore does not deserve to be taxed with what is nothing more than a fancy name for a sales tax.

Further, if the state is claiming some cost incurred by "use", then they should be required to charge it evenly for all products, not

Re:Not that it matters but ...

[Nullav]

And further, why are people so god damn willing to give up their money to the fucking government?!

You're right. Let's just leave mass transit, maintaining the roads, and law enforcement up to large corporations. Then we wouldn't have to pay taxes to the government.
Of course, then those corporations would need a steady flow of income to make up for how much they're spending on these services. I got it! They could collect fees from people using the roadways at certain points, charge a percentage for all goods sold on their land, and charge everyone in the area based on how much they make each year.

Then we wouldn't have to pay those stupid taxes.

Re:

[jerkface.us]

But undocumented immigrants, who don't usually pay income taxes, still have to pay sales taxes.

Re:

[I'm Don Giovanni]

"But undocumented immigrants, who don't usually pay income taxes, still have to pay sales taxes."

Yep.
Same thing for criminals (e.g. drug dealers). Sales taxes are a way to get tax revenue from those that wouldn't report any personal income.

Re:

[Blakey Rat]

A) That's just trading one tax for another. If the tax rate is "too low" (and I don't think it is, considering how much the Washington State government throws away in the form of Sound Transit among other things), then it should be raised.

B) Adding a state income tax would:
1) Increase the amount of paperwork everyone in the state has to do-- that sucks
2) Not lower any associated local taxes. Sure, the optimist would say "well since we have a income tax now, the sales tax will lower to 4%." It won't. We'll j

Re:Not that it matters but ...

[dreamchaser]

I'm not sure I disagree with you, but to play devil's advocate for a moment one *could* say the sale *does* take place in WA. The buyer makes a purchase from his or her home or workplace which is in the State of WA. The *physical* aspect of making a purchase (in this case clicking 'submit order' or whatever) is taking place in that state.

Governments do have to collect taxes. I actually prefer a sales or VAT tax over any income tax at all.

Again, not saying that I think they should necessarily get away with doing this. I *do* think that the entire tax system and code(s) needs a complete overhaul, not just in light of new technology such as the Internet, but also in light of how convoluted and cumbersome it is overall. Of course the politicos on both sides of the isle mostly like complicated tax codes. Makes it easier for them to bury loopholes for their masters...I mean campaign contributors.

Re:Not that it matters but ...

[Dun Malg]

I'm not sure I disagree with you, but to play devil's advocate for a moment one *could* say the sale *does* take place in WA.

No, you actually can't say that. The law is very clear on this, and predates the internet, having been settled long ago on the issue of mail-order. The sale happens where the money changes hands in exchange for the goods. That location is the business office where they process the credit card transaction, deposit the check, or receive the cash. It doesn't matter if your ass is in a chair on the beach in waikiki or in a barcolounger in cleveland, if you're buying from a guy in Texas, the sale is in Texas.

Re:

[quizzicus]

So if the sale takes place in the state where the business is located, where does the consumer's state get the authority to tax it?

Re:

[American Infidel]

States get the authority to tax interstate purchases from the same place that software companies get the authority to impose EULAs: from the magic of flat-out lying.

Re:

[The Warlock]

Florida got around this little obstacle by taxing "use" instead of "sale", where the "use" tax was waived if you paid a sales tax. The end result, of course, was that out-of-state purchases were taxed as much as in-state purchases. A clever bit of legal work, I must say.

Re:

[Jeff DeMaagd]

I think that's disconnected. The problem is that the sale still crosses state lines, and if the product and store is not physically in WA (has to be shipped in), then interstate commerce code applies, not the state's, because the *physical* act of making the rest of the transaction takes place mostly outside WA. While the buyer is in WA, the seller is somewhere else. In not having a physical presence in WA, I, as a seller, am not under WA's jurisdiction. Just because I happen to serve a few bits to the

Re:

[Fuzzie Viking]

I agree with most of what you say. Governments absolutely need legitimate sources of income. However, the devils advocate part falls apart when looked at closely. A person is no more "doing business in the home" with an internet purchase than they are using a phone call/mail order catalog. Are you saying because their voice says "yes I'll buy it" or their hand puts a stamp on the envelope that these businesses should also pay taxes? I would have to disagree with that. The transaction takes place remotely,

Regressive taxation

[pjt33]

I actually prefer a sales or VAT tax over any income tax at all.

Do you, perchance, have a high income? In a situation where VAT is the only tax, the poor spend a greater proportion of their income on tax than the rich, because they spend all their income.

The Constitution is black and white on this

[Beryllium Sphere(tm)]

Article I, Section 9:
"No tax or duty shall be laid on articles exported from any state."

Re:

[Teresita]

It's stupid anyway. Sales taxes in Seattle are up to 9.1% which is pretty damn ridiculous. If I were living in WA and this went through, I'd move. Internet purchases help make WA living more affordable.

Right. Let's save money. Let's move from a beautiful green ecotopia and hot job market (Boeing, Amazon, Starbucks, Paccar, Microsoft, and Dept. of Defense) with rising house prices, to Detroit, where houses go for $30,000 and people make SUVs that don't sell because everyone wants a Prius.

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[canuck57]

It's stupid anyway. Sales taxes in Seattle are up to 9.1% which is pretty damn ridiculous. If I were living in WA and this went through, I'd move. Internet purchases help make WA living more affordable.

You should not complain so much, Washington state does not have personal income tax do they? 9% in that case would be a small amount to pay.

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[Dun Malg]

I don't think this is legal under the constitution. The sales are made outside WA and therefore cannot be taxed by the WA government. A lot of governors have tried this crap, I don't think any have succeeded though.

Hence the wording of the law, which "encourages" rather than "mandates" out of state retailers to collect the tax. Yeah, I agree, it's pretty stupid.

Re:

[HermMunster]

The state makes up the remaining amount of the roughly 46.8% on other forms of taxes such as extremely high property tax. There are constant levies, constant increases in other forms of tax as well, but the property tax is what is supposed to make up for the difference. Then there is a problem where WA state seems to think that everyone should be an employee of the state. The state provides nearly no benefits to those below poverty and puts nearly no money into the coffers of the school system instead the

Re:

[DurendalMac]

You're telling me it's stupid. I'm happy as hell that I'm getting out of this idiotic state soon. They like to keep raising the minimum wage to be the highest. Now, you could say that's good for some, but in the long run, that kind of periodic raising will make companies look elsewhere. It's going to slow the growth of business in the state. Then there was the online gambling ban, which is utterly fucking STUPID. The state legislature is majorly fucked up. Why do people keep voting these boobs into office?

Re:Not that it matters but ...

[harlows_monkeys]

I don't think this is legal under the constitution. The sales are made outside WA and therefore cannot be taxed by the WA government. A lot of governors have tried this crap, I don't think any have succeeded though

It is legal, according to the Supreme Court. The main case in this area is Complete Auto Transit vs. Brady.

The state is not taxing the out-of-state sales. Rather, it is imposing an excise tax on possession or use of the items by residents of the state (this kind of tax is usually called a "use tax", and I'll call it that in the rest of this comment). A common example of this kind of thing is taxes on luxury items such as boats. If a state has such a tax, you generally will have to pay it when you register the boat, even if you bought the boat out of state. The same power that allows the state to tax that boat that you are using in-state regardless of where you bought it is what allows them to tax, say, your mail-order books or computers or viagra.

The main limits on this, due to the interstate commerce clause in the Constitution, are that they cannot force merchants in another state to collect the tax for them (but see below), and the tax cannot unduly burden out-of-state purchases. The Court has decided that this means that the total tax on an out-of-state purchase (sales taxes in the state of sale plus the use tax in the buyer's state) cannot exceed what the tax would have been had the item been purchased in-state.

As far as collection goes, a state does not have the power, in general, to tell a merchant in another state to collect this use tax for the state. What I mean by "in general" is that an arbitrary merchant, in another state, that does not have some connection with the buyer's state other than selling items to them, could not be forced to collect for the state. However, if that merchant has some relationship with the state that does give the state power over it (such as it having offices or stores in the buyer's state), then they state may have power over it. This is why major national merchants collect taxes on mail-order purchases, even if their mail-order operation is out of the purchaser's state--they have retail stores in the purchaser's state, and so the state can tell them to collect the tax.

For items where the merchant does not have to, and does not voluntarily decide to, collect the use tax, the state has generally only actually collected on items like cars and boats, that have a registration requirement. But most states do have a (widely ignored and in most cases largely unknown) requirement that you pay your use tax.

Oh, one more thing. I don't remember what case it was in, but I believe the Court has also decided that Congress does have the power to require merchants to collect use taxes when they sell mail-order, even if they do not have a sufficient present in the buyer's state to give that state authority to compel such collection.

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[denebian devil]

Or move to Philadelphia, where there's a 7% sales tax (1% higher than for the rest of the state), a 3.07% state income tax, and a 4.26% city wage tax. Sounds so much better than a flat 9% on all sales.

Re:

[denebian devil]

I could have said "1% higher than the rest of the state except for Allegheny County" but then I wouldn't have left you with the opportunity to nitpick.

City tax rate is the problem

[topham]

The fact you have individual City tax rates is the biggest problem.

While the current situation in Canada is similar to the U.S., out of province purchase isn't subject to sales tax unless the company has a local presence, or you live in Quebec. (They are always the exception).

Implementing tax collection based on destination in Canada is simple, a table containing the province, tax rate, expiry date, and gl code are probably sufficient.

In the U.S. you would need a complete database of Zipcodes, and, or addresses to resolve the tax rate. Ugh! Now you have to maintain that, and that is probably on a monthly basis, not even yearly.

Re:

[DogDude]

In the U.S. you would need a complete database of Zipcodes, and, or addresses to resolve the tax rate. Ugh! Now you have to maintain that, and that is probably on a monthly basis, not even yearly.

It's not a big deal. That's a cost of doing business. Besides, if this happens, it'll be built into all of the major shopping cart software inside of a week.

Re:

[thewils]

it'll be built into all of the major shopping cart software inside of a week

Already is, there's a thriving industry in the US providing sales/use taxes by City, County and State because they change so frequently making it impossible to keep up on your own. Here's a quick google of same [google.ca]

The fun starts when you get ZipCodes that span City, County or State boundaries...and also when you start having to apply taxes historically because of crediting returns, etc.

Re:

[Jeff DeMaagd]

It's not the programming that's the problem. For one, it's a constitutional problem which has not been dealt with. According to the US Supreme Court, the burden is on the states to harmonize what is taxed and what is not before they have any right to do this. So far, the states have not complied with the SCOTUS ruling, so trying to hassle businesses about it is jumping the gun.

Another, it's an added burden for small businesses if they have to deal with the cost of transactions to every pissant jurisdicti

Re:

[rainman_bc]

out of province purchase isn't subject to sales tax unless the company has a local presence, or you live in Quebec.

Wrong! You pulled a fact out of your anus. In fact if you're a business and you buy goods out of province you have to self-assess the provincial sales tax and pay it to your government. Furthermore, if you buy a big ticket item like say, a car from Alberta, try insuring it in your province. You'll have to pony up the PST. Furthermore if you buy goods in the US and bring them across the border you also have to pay PST.

Only consumers don't pay PST when buying stuff from other provinces, mostly becaus

Re:

[topham]

Perhaps I should have clarified, I was not talking about Businesses purchasing products or services.
I'm Canadian, lived in greater vancouver and currently live in Winnipeg manitoba. I can assure you that there are a lot of people that are fulling willing to drive to Alberta (from Winnipeg) just to save on sales tax.
But, we were not talking about people physically shopping, but rather over the internet.

When importing items into Canada you do not pay PST on the items at customs, with SOME exceptions. Vehicles

Re:

[Blakey Rat]

Yeah, but look at the alternative. If we had one tax level, that would mean that when Washington State government decides they want a stadium and that it should be tax-funded (and yes, they do this!), people who live in Spokane would have to pay for a stadium built in Seattle if there was only one state tax rate. Does that seriously sound fair to you? How often is someone who lives in Spokane going to drive to Seattle for a football game?

I'm totally against people paying for services they didn't want and ca

Re:

[antifoidulus]

That isn't what the poster is talking about. The poster is talking about the fact that in the US, even within a state different areas can add their own sales taxes on top of the state mandated one. For example in PA the tax rate in Allegheny county(which Pittsburgh is in) was 1% more than the state sales tax. I lived on the edge of Allegheny and Butler counties, and a lot of people who lived on the other side came over to make major purchases(thus saving the 1% tax)

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[ichigo 2.0]

Ah, apologies to the OP then. In my haste I misunderstood his post entirely.

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[Detritus]

Any correspondence between political boundaries and ZIP code boundaries is purely coincidental. I used to have an address that would trigger lots of bugs in computer software. I lived near a state boundary. My residence was in state A, but my post office was in state B. My ZIP code was associated with the location of the post office, not the location of my residence. ZIP codes were designed for routing mail, not assessing taxes.

Where's the value?

[way2trivial]

what exactly, did the state of the purchaser do, or provide to deserve 'their share'
seriously.. I pay property taxes to my community, which benefit my community..
if I don't like them, I can move- and pay taxes (or not) elsewhere...

I can see a state requiring businesses to pay sales tax based on their location- you sell from delaware, you have no other locations, you charge no taxes..
benefit to deleware? lotsa companys move to delaware for real.. and increase the states revenue in other ways (new UPS center, new fedex center, new airports, new train hubs)

you sell fron NYC, you pay NYC taxes, all the way down to the city level......

but, if I sell from delaware, and sell to WA, how is the states infrastructure involved that they deserve anything?
if I am a bad merchant, which states attorney general/BBB is going to be contacted?
(hint, the seller's state)

it should be evolutionary taxation, 50 little economic centers- stodgy states can charge the high/heavy taxes and just have funds from heavy handedness and spend it on tax collection/enforcement, enlightened states can charge no sales tax, and enjoy increased revenues from having more citizens, employed in more jobs....

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[scheme]

what exactly, did the state of the purchaser do, or provide to deserve 'their share' seriously.. I pay property taxes to my community, which benefit my community.. if I don't like them, I can move- and pay taxes (or not) elsewhere...

Aside from providing services like roads, state police, labor and environmental protection to the purchaser, courts, etc. the state didn't do much to deserve the sales tax.

right.. and those services

[way2trivial]

should be funded by the means necassary to get the package to the door (i.e. the commerce that occurs in the state)

UPS (who delievers in the state) pays what should keep up the roads required to deliver through state fuel taxes.

the purchaser (recipient) pays property taxes and income taxes for the state services (police, courts)

if the state is unable to make their economic model work- it needs to evolve... but it should be a self-contained financial entity..

Now.. if a state decides to charge a higher gas

Re:

[Nigel_Powers]

Right...but besides providing services like roads, state police, labor and environmental protection to the purchaser, courts, etc., what have the Romans ever done for us?

Oops, I mean the state... :)

Re:

[Phroggy]

Don't forget public education.

Let me know how that works out for ya...

[pla]

"Washington state Governor signed a tax bill encouraging out of state businesses to collect sales taxes
...
Looks like Washington-staters won't be able to fib on their tax returns about internet purchases, starting in 2008.

Why? Washington state has NO power to do anything more than "encourage" out-of-state companies to comply. Not only can't they practically enforce this, trying to do so would violate Article I, Section 8, Clause 3 [wikipedia.org] of the US constitution.



States can pass all the stupid laws they want regarding what you have to pay for "use" tax and the like. But at the end of the day (at least, at the end of April 15th), cash still lets you make untraceable (and untaxable after-the-fact) purchases.

I will really never understand why we accept "death and taxes" as somehow magically inevitable. The governments of the world have demonstrated themselves completely incapable of responsibly allocating the resources of the citizenry for the common good. Why do we still let them?

We should view tax evasion as one of the most noble of "crimes", depriving aggressive social parasites of their sole form of food.

Re:

[zippthorne]

The only way to truly free yourself from taxes involves significant risk of death. And even then you don't free everybody from taxes. Most people simply decide the benefits of not being a revolutionary outweigh the cost of not being in charge.

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[mr_matticus]

Why let them? Because there's no better solution that isn't vaporware. It's like saying, "why should you be limited by Windows, OS X, or Linux? I believe in ShinyHappyOS. Sure, we only have six developers, and they can't even agree on what SHOS should do and not do, but these other people have it all wrong!

Tax evasion isn't a noble crime. It's a crime of greed on the part of the person doing the evading. They want to keep more of their money. It's not as if they take that money and contribute it to c

No State Income Tax in Washington

[Rudolfo]

Looks like Washington-staters won't be able to fib on their tax returns about internet purchases, starting in 2008

Well, that's not really an issue since there's no state income tax in Washington state.

(Although having residents like Bill Gates and Paul Allen is a good reason to consider it.)

Re:

[Pakaran2]

Actually, both of them likely have capital gains that far, far outpace income. And as such probably pay a much lower effective tax rate than (e.g.) a surgeon does, or even a member of the middle class.

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[Blackknight]

You'd see MS moving out of state REAL quick if that happened. I wish Michigan had as much sense as Washington and Oregeon, instead we have a dumbass governor that wants to RAISE taxes, on an already crippled economy. They're also talking about raising the gas tax, which might not be a bad thing if they actually use it to fix the damn roads.

There's a good reason

[DogDude]

The thing is, that you can look at this issue like it's money-grubbing on the part of the politicians, which I'm sure is part of the story. Another important thing to realize is that some kind of national sales tax collection law thing is necessary to protect brick and mortar stores. There's no possible way that a brick and mortar store can compete with an online store if price is all people care about (and apparently, from the number of Slashdotters who say that they buy a lot online, price *is* the only

Even when price is not an issue

[symbolset]

The advantage goes to the virtual store. Physical stores have a host of problems that cost a great deal of money that online stores simply do not have. The biggest one that I can think of is:

They close.

Karma of local purchases

[symbolset]

Is the man who sweeps the warehouse in the MidWest not my Brother also? Is the UPS driver not my neighbor? Is there a way I can choose products where I know all the people involved got a living wage, and not break the benefit of the commerce by making it impossible for me to afford? Does the clerk at your local store make more than the ones at mine? Mine are poor. Do your neigbors not invest their retirement funds in large companies that make these transactions? Is it not a benefit to encourage businesses to compete in the field of supply chain efficiency?

My understanding of hard drives far exceeds the level of maintenance a reasonable person would consider worthwhile. If you require guidance in this area, I can appreciate your willingness to pay a premium for it.

And this "hard drive" you speak of... is it not made in Asia by robots and packaged by enslaved children? When you're done with it, will you ship this toxic component to your local landfill or will you "recycle" it by having it shipped back to asia, where it will be dismantled and strewn across farmers fields for the lead to leach into the groundwater?

I don't see the karma here.

Out of state biz are under no obligation to report

[postbigbang]

The government of Washington State can do whatever encouragement it wants. Without a physical presence in the state, businesses are under no obligation to do squat in terms of reporting to Washington State government what's been sold into Washington State.

There are a number of theories of laws to support *not* sending the information, even if encouraged to do so. Imagine the litigation pain in the butt for private citizens accused of importing goods from say, Nevada, for a measily $100 in plausible return.

I

Re:Out of state biz are under no obligation to rep

[DogDude]

It used to be fun to live in Washington State, having no income tax, while shopping totally in Oregon, which had no state sales tax. My friends that lived in Vancouver Washington were overjoyed at their 20% higher net-of-taxes income possibilities.

You're saying that it's "fun" to deliberately game the system to avoid paying taxes? So what? That doesn't make it right morally, ethically, or legally. That's certainly not something that I would brag about. Did your friends ever think beyond their own wal

Re:

[postbigbang]

Washington State's brick-and-mortar businesses ought to ask the Washington State legislature to get real, and consider the fact that the time is past to use sales tax as a 50% contributor to the budget. Sales are too mercurial to do this.

In terms of morality, there is no questions that governments need to be financed. But it's fascist to think that we're under an obligation to conserve our income. Much work needs to be done to harmonize tax infrastructure. More work needs to be done to prohibit governments

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[postbigbang]

You believe they cannot change this inequitable system, and are therefore doomed. If you also believe in democracy, this might not be so. Ever heard of Chambers of Commerce? Small Business Associations? Testifying in legislative sessions?

Things like the Walmart wave came, and any number of small businesses had to either adapt or perish. Does Walmart have an unfair advantage? Perhaps, perhaps they're like Dell and found a suitable business model that's very difficult to battle-- and certianly not impossible.

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[postbigbang]

The Big Boxers have their place.

In my 'hood' there are a lot of little computer stores. I can buy on eBay or at a hundred sites in a heartbeat and beat the hell out of their prices. But the little guys have an advantage: convenience. I drive over, pickup my bizarre cable, maybe a drive, some other tech junque, and leave.

I hit the big box places and cherry pick their loss leaders. Once in a very rare while, I might make a purchase there of a major item, but only after extensive homework--> and only becaus

Re:

[Mad-Bassist]

Did your friends ever think beyond their own wallet, as to the damage that they were doing to Washington's brick and mortar businesses? Did your friends ever consider if Washington would be such a great state to live in if most of the brick and mortar stores said "Fuck it. We can't compete with these people who just want to avoid paying taxes. We're closing up shop"? There is a flipside to that too: some of us Portlanders will cross the river to buy cars because the auto dealers like to say "Cars sell for

Washington State residents don't file returns

[symbolset]

Looks like Washington-staters won't be able to fib on their tax returns about internet purchases, starting in 2008.

The state has no income tax so for the most part state residents don't file returns. There is a form [wa.gov](PDF) people fill out if they bought things online or out of state but if you were going to lie on that form you wouldn't fill it out at all. Far fewer than 1% of Washington residents fill out this form.

Back when car tabs on a big RV cost more than $5,000/yr it was quite common to go to a neighboring state to buy the thing, which cost the state a great deal of money in lost sales tax. To recover this lost tax an enforcement program was begun, and several people were prosecuted and fined up to the full value of the vehicle. This raised public awareness of the tax to the point where a series of initiatives was passed to make the registration tabs on all vehicles a flat $30. A series of (IIRC) three initiatives was required because each initiative that was overwhelmingly passed was immediately opposed by the government, the courts, and the attorney general's office. It was turning into a parody of democratic principles. They even did a hatchet job on reputation of the citizen who started and pushed the $30 car tab movement, Tim Eyman. Eventually though they got the idea that the people weren't going to tolerate this tax any more and even though the AG had the initiatives that passed declared unconstitutional the legislature reduced the tax to $30 anyway.

Immediately after this Seattle and some other jurisdictions passed new add-on taxes for vehicles but called them by a new name. At present the taxes on vehicle registrations are still much more reasonable even in the worst case. The struggle on this issue in Washington continues and likely will not end.

There is currently a movement to install a personal income tax in Washington in the name of fairness. It is likely to get a lot of press, but no traction. The only way this would get popular support was if it was promised to lower other taxes also and the people of Washington know that would be a flat lie. Besides, several of the wealthiest business people in the world live in Washington and they can afford to have a state income tax quietly killed.

FTA:

The main sticking point revolved around a change the law makes on where sales tax goes when it is collected. Under current law, the jurisdiction where a product originates receives the sales tax. That doesn't help the state, if the product originates with an out-of-state Internet company.

Under the measure, the jurisdiction where the product is delivered would get the tax.

The change benefits some cities and towns, but hurts others. To solve this problem, the measure calls for mitigation, in which jurisdictions that lose money would receive payments from the state.

This "mitigation" sounds like a way for some bureaucrat to increase the "fairness" to his friends and family. That's going to end well.

Re:

[Blakey Rat]

It's kind of funny that we have Eyman on one side and the state government on the other. I think Eyman's a total blowhard, and his $30 license tabs went way too far... but on the other hand, if it wasn't for someone like him prodding the government into action, we'd still have ridiculous license tabs. And frankly, I'd prefer taxes that are too low compared to taxes that are too high.

Of course, one of the reasons that the license tabs were so high in the first place is that roughly 2/3rds of the population (

Re:

[Beryllium Sphere(tm)]

>They even did a hatchet job on reputation of the citizen who started and pushed the $30 car tab movement, Tim Eyman.

When "they" found out that Eyman pocketed fifty thousand of contributions, should "they" have refrained from asking him about it? When he denied it, should "they" have taken his word for it? When it was proven, should "they" have carefully covered it up?

How on earth is telling people where their money is going a "hatchet job"?

Re:

[Blakey Rat]

Sadly, I think Seattle is probably right next to San Francisco when it comes to political alignment. Imagine how much better Washington would be if everyone who lived in Seattle had to go live on the east side of the mountains for awhile. They might see that, hey, this state has tons of independent, strong people making a great living without needing all the crap Seattle thinks the government should provide. (Because, let's admit it, the entire state government is based around Seattle... everywhere else in

Re:

[Aexia]

Sorry, but when tax revenues by and large get exported from Seattle to the rest of the state, you're hardly getting "ignored"; You're getting subsidized at Seattle's expense.

Re:

[ameoba]

...you mean "Seattle metropolitan area", right? Seattle-proper is only about 1/8 of the population of the metro area (which is something like 80% of the state population).

Re:

[Beryllium Sphere(tm)]

"This area has an abundance of wealth solely based on the lack of government regulation in the software and computer industry. The wealth however is often transfered back to the state to fund needless and sometimes competing programs (Monorail/Light Rail) and there is a huge amount of waste. Those who think they are "entitled" will eventually ruin this state and destroy its fortune.

It's kinda ironic to think that "more government" is the answer to the common ills of prosperity that was caused by something t

As you can see from the parent...

[symbolset]

The limitless resources of the State were used to vilify Mr. Eyman, with the tacit participation of Seattle's notoriously liberal media. It was only when the legislature was faced with the prospect of growing "boot the rascals out" campaign that they reversed course on this tax and escaped being evicted from the statehouse by the narrowest margin ever.

It was too late to rescue what was widely held and by the government admitted to be one of the most regressive taxes in the country. It was not too late to

A note for non-Washington /.ers

[symbolset]

In Washington State the sale of packaged liquor is a state monopoly, with certain rare exceptions. All profits on these sales go directly to the state. For the most part, the liquor stores sell liquor only (and state-run lottery products) and so a mixed drink requires multiple stores to assemble. In almost all cases the selection available is not as broad as you would find in any other state, and pricing is high. Liquor stores are closed on Sunday, and operating hours on days they are open are not what

I don't see how they can do this...

[thewils]

(FYI I am Canadian)

Firstly, the Supreme Court decision mentioned (RTFA) states that businesses don't have to collect taxes for a state unless they have a presence (nexus) in that state. Secondly, what state is going to start collecting taxes and remitting them to another state - they have no obligation to do this (due to the same 1992 SC ruling I believe) - it would only work with a reciprocal agreement (hence the consortium of 21 states I guess).

But, it only takes a few 'rogue' states to spoil it. If you

There are only three things that should matter

[hey!]

about taxation in an ideal world. Whether you buy from a local vendor or from an internet vendor isn't one of them.

They are:

(1) How much you are taxed
(2) How fairly you are taxed
(3) How complex it is to comply with the tax.

How much you are taxed, on average, depends on how much your elected officials spend. Taxing Internet sales doesn't raise your taxation levels on average.

Clearly, not taxing Internet sales is simpler than taxing them for everyone.

The real question is fairness.

So what are they going to do about Portland?

[bennomatic]

So what are they going to do about people who live in the southernmost portions of Washington, and who hop across a bridge to Oregon cities like Portland, where there's no sales tax? Are they going to put a toll on the bridges that only applies to Washingtonians who may have spent money in Stumptown?

Re:

[chill]

For a while there they were trying to do just that, with a couple of roadblocks on I-90 east of Spokane trying to catch people who made big, tax free purchases in Montana. This was 3 or 4 years ago, and they were only stopping people with Washington license plates. It didn't last long.

And with both Oregon and Montana not having sales tax, and Kellogg, Idaho having one of the largest Dodge/Jeep dealers in North America -- they are VERY touchy about registering a car in Washington that you brought in from o

Internet Sales tax = B.S.

[Orange Crush]

For a physical sale in Washington state, sales tax makes sense--visitors and tourists use the roads, infrastructure and government services too. Sales tax for Internet purchases outside of Washington state does not make sense. Should the volume of online sales increase to the point that sales tax revenues start plummeting rapidly I'm pretty sure this would be offset by increases in property and business-related taxes when UPS, FedEx, etc. start putting in processing facilities like mad to handle the massi

prostoalex is wrong w.r.t. Washington's revenue

[stomv]

According to prostoalex, "Washington state ... relies on state sales tax for 53.1% of its revenues."

That's incorrect, off by half. State taxes provide $33b of the state's $63b budget -- 52.3%. But sales tax makes up 53.1% of the state's portion of the revenue, not 53.1% of the revenue. In fact, it makes up .531*.523 == 27.7% of the revenue for the state. You'll note also that the state's revenue stream for licenses and fees (another word for tax) is $10b that isn't included in that $33b mentioned earlie

Warning Washington: I dont by from CA cuz of this.

[Jackie_Chan_Fan]

I dont buy from CA online anymore because of their tax. It would be a shame for Washington to make the same mistake. All it will do is drive buisness out of the state.

United States Constitution trumps Washington State

[LorenzoV]

United States Constitution trumps Washington State law.
http://www.usconstitution.net/const.html [usconstitution.net]

Section 9.
"No Tax or Duty shall be laid on Articles exported from any State."

There is court precedence to back it up, too.
http://tinyurl.com/2pyvoh [tinyurl.com]

Re:

[mr_matticus]

Any state may establish duties on wine, but that does not harm anyone in California. The taxes and duties are charged to the consumers, not the the suppliers, and if they are charged categorically, then it does not change the relative cost of California wines over any others. The distinction may be drawn between imported and domestic wines because one involves international agreements, which further may be controlled by federal requirements. That is not equivalent to making a distinction between Oregon a

Which is it already?

[shaitand]

From the summary:

'Washington state does not collect personal income tax'

or also from the summary:

'Looks like Washington-staters won't be able to fib on their tax returns about internet purchases, starting in 2008.'

Re:

[faedle]

Legally, residents of WA are supposed to file a tax return that is a sum of all their purchases made outside the state. For example, Vancouver WA is right across the state line from Oregon, which has no state sales tax, and many who live in what we (Portlanders) refer to as the "Leper Colony" make many major purchases in Oregon as a consequence. In fact, there is an entire shopping center (Jantzen Beach Mall) which exists right on the other side of the Interstate Bridge.. and on a typical Saturday the par

Too complex

[Kakurenbo Shogun]

Utah, which had joined the so-called "Streamlined Sales Tax Project" (ha!), was going to start collecting sales tax based on where an item was delivered even in-state rather than where it was sent from, but first repeatedly delayed and later scuttled plans to do so, along with, I believe, some other aspects of the Project. Even for in-state purchases, the complexity of tracking the rates for and reporting sales to so many jurisdictions was too great a burden on businesses.

The only way I can imagine someth

WTF?

[Blakey Rat]

Looks like Washington-staters won't be able to fib on their tax returns about internet purchases, starting in 2008.

We don't have to file (state) tax. It says so in the article quoted about 2 sentences above this moronic comment: Washington State has no income tax.

So now editors don't even read the blurbs. Or did they before?

Okay, give me a vote

[Migraineman]

I'll be happy to pay your "out-of-state sales tax" if you'll provide me with the ability to vote in your elections. [Palpatine] Awlll of them. [/Palpatine]

I expect representation for the taxation. [wikipedia.org]

Hey politicians!

[operagost]

Want to increase sales tax revenue, and total revenue? Abolish your income tax. Then exclude food and clothing from sales tax and raise it a few percent.

"Problem" solved.

Maybe Amazon should move to Oregon?

[walterbyrd]

Oregon has no sales tax, and it's -what?- about 90 miles away?

Imagine if Amazon threatened to move, and take all those jobs with them. I'll bet a lot of people in WA wouldn't be too happy.

Re:

[MrShaggy]

Sure, avoid the 6$ on the hundred, however its going to cost ya 30$ to ship it. Plus tax.

Re:

[pla]

Sure, avoid the 6$ on the hundred, however its going to cost ya 30$ to ship it. Plus tax.

1) "Plus tax?" I think you probably didn't mean to tack that on there, in-context.

2) If I pay FedEx $30 to ship something, the money goes to people employed in getting my goods to me, providing me with a service. If I pay $6 to the government, it goes to enforcing the WO(s)D, to killing Iraqis, to free healthcare for 5th-gen welfare mommies and illegal immigrants. I'll choose to pay the $30 every time, given tha

Re:

[MrShaggy]

I agree, I live near Toronto, we have a 6% federal goods and service, and a 7% provincial tax.

But being the kind of guy I am, I'd rather buy locally if I can. Its hard to look at something on the internet and say 'this box will work exactly that way' when I get it. Besides, if there is a problem its way faster for me to go back to the store, and deal with it there.

Itunes is great, groceries not so.

Re:

[linguizic]

I've got a friend who lived under Soviet rule for most of his life, he also lived in Canada for a while and he swears up and down that when you add up all the taxes you pay at every level, the USA has the highest taxes AND that USians don't get as much for their tax dollars as they do in Canada.

Re:

[rayvd]

Anti-capitalist, anti-US post based on 'hearsay' by a 'friend'! Mod parent up!!

Re:

[omeomi]

Tired of paying idiotically high taxes which support the bread and circuses that keep the mindless proles from thinking too hard about how much this sucks? Try electing somebody other than far-left Democrats for a change!

Yeah, because those Republicans are doing such a good job at keeping taxes down. I mean, my Federal income tax has been plummeting over the past 6 years of Republican rule. Oh, wait, no they haven't...they've gone up...and they've been spending way more than they bring in, which means t

Both parties fail on tax policy!

[kad77]

Neither US political party has much to brag about on tax an spend issues. They both are quite greedy.

Take a look at the CATO Institutes 2006 report card on state governors:
http://www.cato.org/pubs/pas/pa581/reportcard_tabl e.html [cato.org]

In case you are too blinded by ideology to even look, I'll post the scores of the governors above and below Washington :

Bob Riley (R) -- Alabama, 47, F
Christine Gregoire (D) -- Washington, 47, F
Mike Huckabee (R) -- Arkansas, 46, F

The full report, with analysis and discussion:
http:// [cato.org]

Re:

[omeomi]

In case you are too blinded by ideology to even look

Of course, because anybody who doesn't agree with the idiot-neocon ideology must be blinded by left-wing ideology. That both political parties are pretty messed up is no secret, but my point is that adding more Republicans to the mix certainly isn't going to improve matters.

Try and get some facts

[mybecq]

I mean, my Federal income tax has been plummeting over the past 6 years of Republican rule.

I'll see your sarcasm, and raise you some facts [moneychimp.com]:

1992 1993 2001 2002 2003-2006
    -2000
                10.0% 10%
15% 15.0% 15.0% 15.0% 15%
28% 28.0% 27.5% 27.0% 25%
31% 31.0% 30.5% 30.0% 28%
    36.0% 35.5% 35.0% 33%
    39.6% 39.1% 38.6% 35%


I don't know where you got your mathematics degree from, but for me:

2000 -> 2006
15% -> 10%
28% -> 25%
31% -> 28%
36% -> 33%
39.6% -> 35%

Looks like

they've gone up

doesn't quite fit the numbers.

(Yes, the tax brackets get wider, but they do that every year.)

Re:

[ameoba]

Maybe he got his mathematics degree 4 years ago? Going from poor student to working professional has been known to significantly increase one's tax burden.

Re:Avoid the tax

[AuMatar]

Reread your economics book. No good has intrinsic value. A good is only valuable if someone else desires it, and only to the degree they desire it. Gold has no special magical property that gives it an intrinsic value.

Re:

[Gnight]

No good has intrinsic value.

What about, say, food (in general)? Is food not intrinsically valuable to humans? Whether or not you desire to eat, you must eat to continue living. Therefore food does have intrinsic value to all humans wishing to continue living.

Re:

[loganrapp]

If humans no longer wished to live, the food would have no value. Meaning - humans desire food because it's required for their survival. If they suddenly stopped caring about life, they would not desire food and food would be worthless.

Re:

[AuMatar]

No, you misunderstand value. The value of something is a function of the perceiver's marginal utility. Value exists only as an expression of scarcity and demand.

Re:

[AuMatar]

The fact that it has a use does not mean it has value. You need to reread your economics textbook too.

Re:

[HermMunster]

As far as I can recall the federal government regulates this and has shot it down repeatedly. It will be challenged and shot down again. There's no sales tax for interstate purchases for a reason. This is a usurpation of those reasons.

There's little they can do to enforce it as purchases from out of state are not trackable. Also it puts a burden on businesses with licenses to set up with every possible company they do business with in line to verify their business license.

It will also turn many companie

Re:

[Planesdragon]

Avoid the tax by buying with gold. It's exempt from tax due to the fact that it's a good with intrinsic value.

Uhm, what?

Care to quote me the law that says that? Far as I know, the IRS et al treat any transaction as a "cash" transaction, and exempt or apply those taxes based on the good being sold or the purchaser, not the method of payment.

Re:

[mr_matticus]

Why would Boeing get a tax bill? They already collect taxes on their products from all customers.