Online Sales Tax - More talk from DC

by MilesT
12 replies
So it seems the online tax question is being asked more and more in DC. This article speaks to it briefly, but I've seen others and I feel its inevitable.

How will this affect us and how much more complicated will it be to do business online?

I doubt buying will slow, but I think it will keep out some of the less serious marketers, and it will certainly increase our accounting bill each year.
#online #sales #talk #tax
  • Profile picture of the author Steve Faber
    It is a very large potential revenue stream, government revenues are down, and they are being lobbied constantly by off line business to collect tax from online business n the name of fairness. Anytime government thinks they have a new gravy train, they are all over themselves trying to find a way to turn on the spigot.
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    • Profile picture of the author mrbawb
      Here in California they're considering a "nebulous sales tax".

      Taxing the internet.

      This type of 'coersed confiscation' (as I like to call it) is already creating challenges for affiliates in New York where said tax is already a reality.

      Some companies with affiliate programs have tossed out anyone who lives in New York.

      I had a challenge being accepted by a company who didn't want to accept me because they were under the impression I was in a state with a nebulous sales tax.

      I think it was because my hosting company had servers in that state and that's what they saw.

      I made a phone call to the affiliate manager and once I confirmed I lived on California he added me to the program.
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  • Profile picture of the author JustKev11
    We need to fight these Internet sales taxes at our own state level and at the federal level.
    Call, write and email your governor, and senators and congressmen.
    The facts are that these internet taxes will destroy tens of thousands of small businesses and give our corrupt politicians more money to piss away and spend on themselves, their cronies, the lobbiests, unions, wall street, etc.
    People are mad as hell as exemplified by the Tea Party movement.
    It's time to take a stand and FIGHT....
    this is your livelihood that these corrupt scumbags are attempting to steal from you.
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    • Profile picture of the author tpw
      Originally Posted by JustKev11 View Post

      We need to fight these Internet sales taxes at our own state level and at the federal level.
      Call, write and email your governor, and senators and congressmen.
      The facts are that these internet taxes will destroy tens of thousands of small businesses and give our corrupt politicians more money to piss away and spend on themselves, their cronies, the lobbiests, unions, wall street, etc.
      People are mad as hell as exemplified by the Tea Party movement.
      It's time to take a stand and FIGHT....
      this is your livelihood that these corrupt scumbags are attempting to steal from you.

      I consider this a waste of my time. The powers that be will look at you as unpatriotic, unwilling to pay your fair share, and thus ignore your concerns. And at the end of the day, all the letter writing in the world will be as useful as a gnat on an elephants' butt.
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      • Profile picture of the author bgmacaw
        Originally Posted by tpw View Post

        And at the end of the day, all the letter writing in the world will be as useful as a gnat on an elephants' butt.
        While letter writing doesn't work quite as well for the 'big issues' it can work quite well for smaller issues. I've been doing a steady letter writing campaign on the behalf of veterans and returning service members since 2003 which has gotten some positive results, not as much as I'd like in some cases but results.

        As for the tax issue, politicians will soon figure out that raising taxes during a recession is the wrong thing to do since it stifles economic growth and especially employment. The next election in a few weeks and probably those in 2012 as well will be won and lost on employment numbers.
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      • Profile picture of the author Black Hat Cat
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        Originally Posted by tpw View Post

        I consider this a waste of my time. The powers that be will look at you as unpatriotic, unwilling to pay your fair share, and thus ignore your concerns. And at the end of the day, all the letter writing in the world will be as useful as a gnat on an elephants' butt.
        You haven't really been paying much attention lately, have you?
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  • Profile picture of the author InitialEffort
    This was a huge consideration for me.

    1. Set up your business in Nevada or another state without a state income tax. Take advantage legal ways to avoid taxes.

    2. If there is a blanket federal internet tax, it's fair for everyone living in every state and there shouldn't be this mass banning of affiliates due to nexus issues.

    3. IMO pick a state that is the least likely to have an internet sales tax, if it is passed from state to state. I live in MN, and last year MN was very close to getting a law passed.
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  • Profile picture of the author snapcontent
    My suspicion is that they will implement a sales tax via coercing the payment processors, like paypal. That would probably be the easiest thing for them to do, technically. As the other guy said, it will kill a bunch of small businesses. Land of opportunity, or what?
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  • Profile picture of the author jacktackett
    The only legit way for states to be able to force businesses to collect tax if the US government to pass a law allowing it. The Supreme Court struck down their attempts many years ago in relation to mail order. Some states try to circumvent the law by claiming affiliates and indepentant sales reps constitute a nexus and try to force them to collect. The result?

    in NC and other states that have tried this the companies have simply kicked the folks out of the affiliate program. So not only does the state not get the big company to collect tax, but any income tax and economic benifit from the affiliate goes down the drain. Everybody loses - what a shame.

    However, in NC they did pass a download sales tax - so if you do business in NC and sell to a NC resident you need to collect sales tax. You can see this at click bank now - they will add the sales tax to your purchase.

    Here's the biggest impact that will come from this legislation - sales taxes in most states are applied on a county by county basis, and even on a city by city basis. In NC there are 100 different tax rates (though most have the same rate) AND several cities have different tax rates. PLUS taxes are different on different items. So its a paperwork nightmare - you have to determine which tax rate to apply on a purchase.

    When this passes it will just add to our accounting procedures.

    But I suspect long before Congress passes a law allowing states to collect sales tax from out of state companies - we'll be dealing with that freaking 1099 law long before then. THATs the law we should be calling/writing/VOTING on today!

    I'll pass along my soap box to whoever needs it next....

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    • Profile picture of the author Dan C. Rinnert
      Originally Posted by jacktackett View Post

      Here's the biggest impact that will come from this legislation - sales taxes in most states are applied on a county by county basis, and even on a city by city basis. In NC there are 100 different tax rates (though most have the same rate) AND several cities have different tax rates. PLUS taxes are different on different items. So its a paperwork nightmare - you have to determine which tax rate to apply on a purchase.
      Yeah. That's the government's idea of a "streamlined" sales tax system. In Ohio, we have 88 counties, so that's 88 sales tax rates plus some areas have city and other sales taxes, so there are perhaps around 100 different tax rates here too.

      My idea of "streamlined" would be one sales tax rate per state or just a flat rate national sales tax. Trying to (eventually) calculate dozens upon dozens of sales tax rates for 50 different states is going to be a royal pain.

      But I suspect long before Congress passes a law allowing states to collect sales tax from out of state companies - we'll be dealing with that freaking 1099 law long before then. THATs the law we should be calling/writing/VOTING on today!
      That too. Hopefully a lot of those bums will get thrown out of office in November. And hopefully the new ones will follow-through and reverse some of this nonsense instead of letting it slide.
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      • Profile picture of the author spearce000
        Originally Posted by Dan C. Rinnert View Post

        Yeah. That's the government's idea of a "streamlined" sales tax system.
        Just wait until you get VAT
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  • Profile picture of the author Caleb Spilchen
    I was told by Canada Revenue Agency... That if I was making money, over a certain amount, my business would be required to have a tax ID. If so, I would have to charge tax to all customers, and not those from my local area.

    Another reason why I've decided to be self-employed instead of incorporated for now... I don't ever want to charge tax.. It's sad enough that I pay almost double the tax on things that I used to only pay one tax on.

    Caleb
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