Tax Sales Legislation will Changes the E-Commerce forever.

26 replies
The Senate is planning to vote on a bill tomorrow (Monday) that would require every online sellers to collect sale for all states that they have customers in.

As an online seller, you will be responsible to collect and fill taxes for each state that you made a sale in.

The bill is more likely to pass: On the Amendment S.Amdt. 656 to S.Amdt. 578 to S.Con.Res. 8 (No short title on file) -- GovTrack.us

eBay is trying to fight this bill, and asking every online seller to take an action :

Internet Sales Tax | eBay Inc. Main Street

I am no longer an online seller, but I can see how can this bill effect online sellers. You will be responsible for collecting out of state taxes as multi million dollar corporation which is a lot of burden for an online sellers.

If your senate is voting Yes, send a petition, it is not yet too late to take an action.
#ecommerce #forever #legislation #sales #tax
  • Profile picture of the author Alex Blades
    I am not surprised, this sounds like something that will only benefit big retailers, by eliminating competition. Never mind the tax revenue it will generate, it will be spent the second the government gets their hands on it.

    It might be wise to set some money aside, so you can donate money to politicians and hire a lobbyist to propose legislation for you

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    • Profile picture of the author Enfusia
      This would massively effect WSO's and the forum as well.

      Broke people do stupid stuff and our Ahem.... Leaders? Are broke in many ways.

      Patrick
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  • Profile picture of the author Seemore25101
    I'm in Canada.. I hope this wouldn't affect me if I sell to the states. I know that my sales are all tax free when I sell to the states but I need charge Canadians tax for any province they live in. Not 100% true though, if I don't charge the tax, the consumer is responsible to pay the tax on everything they buy online come tax time... which most likely never happens.
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  • Profile picture of the author onegoodman
    This legislation will definitely benefit the big companies to get rid off the competition.
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  • Profile picture of the author Ryan David
    I have a hard time believing this could actually pass. Maybe pass the senate at this point, but I can't see how it would pass the house.

    It does exempt sellers under $1M, which is their way of buying just enough votes to make them seem sympathetic.
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    • Profile picture of the author onegoodman
      Originally Posted by Ryan David View Post

      I have a hard time believing this could actually pass. Maybe pass the senate at this point, but I can't see how it would pass the house.

      It does exempt sellers under $1M, which is their way of buying just enough votes to make them seem sympathetic.

      It seems like it is going to pass the senate.
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      • Profile picture of the author RKeele
        Will this affect affiliate marketer's in any way? I like being the middle man, and simply making a commission, when my traffic buys something. I assume this will only affect the company actually selling the product? I don't like it, in any case, but just curious.
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        • Profile picture of the author Green Moon
          Originally Posted by RKeele View Post

          Will this affect affiliate marketer's in any way? I like being the middle man, and simply making a commission, when my traffic buys something. I assume this will only affect the company actually selling the product? I don't like it, in any case, but just curious.
          Some sellers, like Amazon, have terminated affiliates in states like Illinois where state tax laws would require the seller to collect taxes based on the presence of affiliates in the state. A uniform national sales tax requirement would presumably make it possible for the sellers to now accept those affiliates again.
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    • Profile picture of the author J Bold
      Originally Posted by Ryan David View Post

      I have a hard time believing this could actually pass. Maybe pass the senate at this point, but I can't see how it would pass the house.

      It does exempt sellers under $1M, which is their way of buying just enough votes to make them seem sympathetic.

      That's an important point. That it exempts sellers under $1M.

      If that's true, I wouldn't think it's such a bad idea and would only effect 1% or less of the people here.
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      • Profile picture of the author Alex Blades
        A uniform national sales tax requirement would presumably make it possible for the sellers to now accept those affiliates again.
        A tax like this would kill many small businesses. As you know, many sellers on Amazon have to cut into their profits to be able to compete with the multi-billion dollar retailers. A seller on Amazon could easily make a 10% profit, while major retailers can make 47,100, even 300% profit off the same product. On top of that, sellers on Amazon have to pay affiliates 4-6%. Affiliate programs in those states were scrapped, because the sellers could not compete and pay affiliates at the same time.

        Here in Ohio we pay an 8% sales tax, so if you add $8 to every hundred dollars spent, you will end up with a crap load of abandoned carts.

        This can only benefit major retailers, who can can absorb the sales tax with it's buying power. Small businesses or individual sellers, cannot afford to lower prices anymore, to be able compete with billion dollar retailers. They also cannot afford to buy 100k or a million units to drive their cost down.

        They may say there is a million dollar exemption, but a million dollar in sales, does not mean a million dollars in profit. Businesses can do a million in sales and only bring in 100k or less.

        This legislation is aimed at sites like Amazon, where small businesses flourish. I would be interested to see who first came up with this piece of legislation, and see who were his/her campaign donors. A tax like this will do more damage than good, and put more money into the pockets of the big retailers.

        Legislators will use tax revenue as an excuse for a 17 trillion dollar debt that will never be paid off, and make a ton of more money for their campaign donors.

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        • Profile picture of the author serryjw
          Originally Posted by Alex Blades View Post

          A tax like this would kill many small businesses. As you know, many sellers on Amazon have to cut into their profits to be able to compete with the multi-billion dollar retailers. A seller on Amazon could easily make a 10% profit, while major retailers can make 47,100, even 300% profit off the same product. On top of that, sellers on Amazon have to pay affiliates 4-6%. Affiliate programs in those states were scrapped, because the sellers could not compete and pay affiliates at the same time.

          Here in Ohio we pay an 8% sales tax, so if you add $8 to every hundred dollars spent, you will end up with a crap load of abandoned carts.

          This can only benefit major retailers, who can can absorb the sales tax with it's buying power. Small businesses or individual sellers, cannot afford to lower prices anymore, to be able compete with billion dollar retailers. They also cannot afford to buy 100k or a million units to drive their cost down.

          They may say there is a million dollar exemption, but a million dollar in sales, does not mean a million dollars in profit. Businesses can do a million in sales and only bring in 100k or less.

          This legislation is aimed at sites like Amazon, where small businesses flourish. I would be interested to see who first came up with this piece of legislation, and see who were his/her campaign donors. A tax like this will do more damage than good, and put more money into the pockets of the big retailers.

          Legislators will use tax revenue as an excuse for a 17 trillion dollar debt that will never be paid off, and make a ton of more money for their campaign donors.

          WHY should there be a tax for us IF it is B2B? It's a business expense.
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      • Profile picture of the author serryjw
        Originally Posted by J Bold View Post

        That's an important point. That it exempts sellers under $1M.

        If that's true, I wouldn't think it's such a bad idea and would only effect 1% or less of the people here.
        $1M per what? Is that the TOTAL you sell through PayPal or per customer or per transaction?
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        • Profile picture of the author onegoodman
          Originally Posted by serryjw View Post

          $1M per what? Is that the TOTAL you sell through PayPal or per customer or per transaction?

          $1M Total in sales out of your state.

          This bill is currently sponsored by the Big Corps: Wal-Mart, Best Buy, Macys, claiming that it is unfair for them to be forced to collect sale taxes while small business owner doesn't ( They find that people would rather by from the online seller to avoid sale taxes and this is harming their business.
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          • Profile picture of the author Alex Blades
            Originally Posted by onegoodman View Post

            $1M Total in sales out of your state.

            This bill is currently sponsored by the Big Corps: Wal-Mart, Best Buy, Macys, claiming that it is unfair for them to be forced to collect sale taxes while small business owner doesn't ( They find that people would rather by from the online seller to avoid sale taxes and this is harming their business.

            Just as I suspected, big retailers with tremendous buying power. 1 million units vs only 6 left in stock...

            God forbid these big retailers have to cut into their 100-300% markups to compete with the mom and pop stores

            Walmart 2012 profits, $15.7 billion, $35.5 billion outside the U.S Boo freakin hoo

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            • Profile picture of the author onegoodman
              Originally Posted by Alex Blades View Post

              Just as I suspected, big retailers with tremendous buying power. 1 million units vs only 6 left in stock...

              God forbid these big retailers have to cut into their 100-300% markups to compete with the mom and pop stores

              Walmart 2012 profits, $15.7 billion, $35.5 billion outside the U.S Boo freakin hoo
              For these companies no much money is ever enough .

              Wal-Mart has participated successfully in barring the manufacturing industry in USA and moving uncountable number of jobs over to China over the past few decades. Now they trying to go the extra mile .
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      • Profile picture of the author Ryan David
        Originally Posted by J Bold View Post

        That's an important point. That it exempts sellers under $1M.

        If that's true, I wouldn't think it's such a bad idea and would only effect 1% or less of the people here.
        I wouldn't be ok with the bill just because of this fact. This is the way Washington sets a trap. If they put the $1M number on that business, that number is NEVER going up and more and more people will walk right into it (see AMT).

        You never want to give the gov't a new revenue source because it will only get bigger. If you're lucky enough to have a toll-way in your state, you can see why it's a bad idea.
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  • Profile picture of the author Tim_Carter
    We have to collect GST in Canada for Canadian customers, but not Provincial sales tax (outside our own province). That sounds like a nightmare.

    Won't affect Canadian sellers.
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    • Profile picture of the author Alex Blades
      Originally Posted by Tim_Carter View Post

      We have to collect GST in Canada for Canadian customers, but not Provincial sales tax (outside our own province). That sounds like a nightmare.

      Won't affect Canadian sellers.
      In the meantime our politicians spend their time scratching their asses, wondering why American jobs go over seas, to damn stupid to realize that their greedy paws are what's doing it. Our founding fathers would turn over in their graves if they knew how these greasy ass politicians are fleecing America.
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  • Profile picture of the author Tsnyder
    It depends on what you're selling.

    In every state I'm aware of there is no sales tax on educational material.
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    • Profile picture of the author kindsvater
      Originally Posted by Tsnyder View Post

      In every state I'm aware of there is no sales tax on educational material.
      If you're trying to imply you can call your products "educational" and avoid paying a tax you are incorrect.

      An educational organization, like a nonprofit selling items to its members may have an exemption.

      .
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  • Profile picture of the author JohnMcCabe
    Even if it passes the Senate, it still has to pass the House and get signed. Which I doubt will happen.

    I think it's pure politics. Those who vote in favor get to claim that they're trying to keep raise revenue and cut the deficit. Those who vote against get to claim they're fighting for the little guy.
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    • Profile picture of the author Ryan David
      Originally Posted by JohnMcCabe View Post

      Even if it passes the Senate, it still has to pass the House and get signed. Which I doubt will happen.

      I think it's pure politics. Those who vote in favor get to claim that they're trying to keep raise revenue and cut the deficit. Those who vote against get to claim they're fighting for the little guy.
      I agree that it won't pass the House Now that this is public, there is no way that any self-respecting member of the GOP would vote for this.

      I don't know if I'd say it's pure politics though. Amazon & Walmart would love for a bill like this to pass. Amazon already has a "Marketplace" for merchants and Walmart has a very limited one (that will probably be built out soon). They want small merchants to be selling through THEM.

      Illinois called it the "Mainstreet Fairness Act" and framed it as a way to help local businesses. They tried to imply that the online business would pay the tax and not the person making the purchase, although I would assume most people could figure that out (hopefully).
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      • Profile picture of the author JohnMcCabe
        Originally Posted by Ryan David View Post

        Illinois called it the "Mainstreet Fairness Act" and framed it as a way to help local businesses. They tried to imply that the online business would pay the tax and not the person making the purchase, although I would assume most people could figure that out (hopefully).
        You may be assuming too much.

        How many people rejoice every year over the "tax refund" the "government gives them"?

        Of course calling it a 'tax refund' instead of 'returning money we confiscated and used interest-free for a year' might have something to do with it... :p
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  • Profile picture of the author Alex Blades
    For these companies no much money is ever enough
    For these companies, money is GOD!!!


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    " I knew that if I failed, I wouldn't regret that.
    But I knew the one thing I might regret is not ever having tried. "

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  • Profile picture of the author Rbtmarshall
    this kind of nexus tax across all states in online sales has always been inevitable.
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    • Profile picture of the author Ryan David
      Well one thing that isn't brought up often when this is discussed is that while consumers have to save on TAXES when they purchase online, they also incur SHIPPING charges that are probably more. Sure, they might not actually pay the charge (as it appears on the invoice), but they are "paying" for shipping.

      Realistically, an internet tax won't save a mom/pop. To compete, they need to be on the internet regardless.
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