Internet taxes again

TomerN

11 years ago

Bitcoin is the solution to all of you problems!

That was a joke, but I think you are absolutely correct.

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TravisO

11 years ago

It's still also hard to trace people for their taxes online. It's private. Maybe for those big companies who sells a product can experience this kind of thing because they were known to the authorities.

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asiriusthoth

11 years ago

This doesn't make sense to me, can you elaborate? I know quite a few people who own Nevada corporations who have no problem selling services/products to people in California.

I was forbidden to collect sales tax in CA. And they TOLD me I thus couldn't sell ANY taxable products there. I had to push for MONTHS to find out why! So WHY was I forbidden? I was registered as a nevada corporation(AKA foreign corporation), and thus couldn't sell unless registered as a corporation in CA, which means MORE expenses, reporting, and problems.

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ronrule

11 years ago

I was just interviewed by NBC News's Consumer Advocate Herb Weisbaum about this a couple hours ago.

It's interesting how the largest supporters of the bill - Walmart, Target, and Best Buy - are the ones who will be completely UNAFFECTED by it. They're already paying sales tax in every state because they have a presence there. This is nothing but an attempt by them to increase the costs of their smaller competitors, and nothing but an attempt at government to once again stick it to the little guy in favor of their political contributors.

Let's hope it fails.

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Janice Sperry

11 years ago

Amazon is supporting the new bill and eBay is opposing it.

Why Amazon Supports An Online Sales-Tax Bill : Planet Money : NPR

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ronrule 11 years ago

Originally Posted by Janice Sperry

Amazon is supporting the new bill and eBay is opposing it.

Why Amazon Supports An Online Sales-Tax Bill : Planet Money : NPR

Amazon aims to have a physical presence in every state - they're already in several. Thus they fit into the Walmart/Best Buy category and would be taxed anyway.

They want to force "price equality" to smaller retailers. They call it a "level playing field" ... The problem is taxation is a horrible way of doing it, because in the end, everyone loses.

If I spend $10,000 per year online, buying the same stuff will cost at least $10,700 if this passes. If I have to pony up an extra $700, then that's $700 less I have to spend elsewhere. Or, if I don't HAVE the extra $700, I would less than $10K.

Either way, retailers - both online and local - will lose. Taxation takes money out of the economy.
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Blase 11 years ago

We are 16.5 trillion dollars in debt.

The government elite are looking for all
the ways they can to get your money.

BTW... did you know they are also looking at your retirement
funds and Obama care lets them take money from your 401k's and IRAs.

You also pay taxes to use the Internet now, it's on your phone
bill if you use DSL or your cable. Your taxes on your phone
bill went up a number of years ago because of the Internet.
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- iSixty 11 years ago
  
  And when you die
  They'll tax the penny on your eye
  The Taxman (Beatles)
  
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lecards

11 years ago

I was reading this and Felt this time they might have a shot at passing the bill. Lets hope they dont.

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Shane12

11 years ago

The brick and mortar companies support this because they think it will make them more competitive. I've got bad news for them. Even with sales tax, they still can't compete on price, convenience, or selection.

In the case of Amazon, I'd like to be able to give some of the tax to Washington state. If my home state wants more tax revenue, they should learn lessons from states that facilitate the creation of companies like that, as opposed to scaring them away with bad policies.

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ronrule

11 years ago

Looks like it passed in the Senate - 69 to 27. What the heck is wrong with these idiots?

Now it's up to the House of Representatives to stop it in its tracks.

Senate passes bill paving way for states to collect tax on online sales | Fox News

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kencalhn

11 years ago

This stupid online tax will have a "chilling effect" on all online purchases and turn people off to buying things online. Whether or not you're impacted directly w/the 1M threshold, main thing is it will reduce consumer spending online. Which affects all of us.

Just what we need in these economic times...not. I will resist the tempatation to talk politics, but it's all obvious. Or as the teens would say, "Really?". In the middle of the worst economic collapse in several generations, ooh let's raise taxes, say the dumba$$ politicians. What a surprise.

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ronrule

11 years ago

The effects of this will cascade. You have businesses that are 100% internet-based out there that will either lose customers if they pass along the sales tax or absorb it. They're going to have to spend money hiring accountants and lawyers in different states to figure out the differences in the tax codes.

Less money in the economy with more of it going to government. This is a government money grab, plain and simple, and I can tell you right now I'll move some of my online operations overseas if it passes the house.

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Kay King 11 years ago

We are 16.5 trillion dollars in debt.

Actually,, it's 16.8 trillion now - and will be 17 trillion soon. Add to that the trillions we're committed to for health care - and a possible 6+ trillion estimated cost of immigration reform.

I don't think this will sail through the House - but we'll see.

How long before someone tries to add an extra federal tax for internet sales only - on top of state sales taxes? If this goes through, that is coming soon.
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AdamYoungpeter

11 years ago

Say hello to your greatest and best friend - big brother.

He will love you and take care of you and make sure you never are in harm. Millions of people will continue to support the power and money grab of this government because they get their free programs and free stuff. The productive ones like us will suffer and continue to lose our freedoms and money.

This bill is just a grab for control and regulation of the internet. Slowly, baby step by baby step, they will encroach every area of your life until freedom is gone. People will ask how it happened and those who have been following and speaking out about what this government is doing to our freedom will shake their heads at them.

Amazon, Walmart, and Bestbuy know what they are doing. They will be able to kill smaller businesses and grab more consumer dollars than ever before because they already pay taxes on their online sales. This doesn't hurt them at all. It will hurt or kill the small guy.

Every person that runs their own personal business online should be hoping that this bill fails in the House and hopefully never returns.

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Darrell Hagan

11 years ago

Originally Posted by AdamYoungpeter

Say hello to your greatest and best friend - big brother.

He will love you and take care of you and make sure you never are in harm. Millions of people will continue to support the power and money grab of this government because they get their free programs and free stuff. The productive ones like us will suffer and continue to lose our freedoms and money.

This bill is just a grab for control and regulation of the internet. Slowly, baby step by baby step, they will encroach every area of your life until freedom is gone. People will ask how it happened and those who have been following and speaking out about what this government is doing to our freedom will shake their heads at them.

Amazon, Walmart, and Bestbuy know what they are doing. They will be able to kill smaller businesses and grab more consumer dollars than ever before because they already pay taxes on their online sales. This doesn't hurt them at all. It will hurt or kill the small guy.

Every person that runs their own personal business online should be hoping that this bill fails in the House and hopefully never returns.

Exactly. Couldn't have said it better.....and I did sign & send the eBay against it letter.

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ronrule

11 years ago

If you factor in individual state debts as well, its over $140 trillion.

Entitlement and military spending account for 80% of the federal budget (with entitlements being the largest share). That means EVERYTHING ELSE we expect from government, even for all of its inefficiencies, is getting done on a mere 20% of the budget. We dont have a revenue problem in government, we have a spending problem.

If you dont know how to manage your personal finances and run up a bunch of debt, you dont get to walk into your boss's office and appoint yourself a raise... you have to figure out where to cut back and do it. The government needs to be forced to follow a similar set of rules.

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yakim1

11 years ago

I belive and pray that the Republican majority house will just see this as a tax hike and vote this new attempt to collect more taxes down since it has already passed the Senate.

What a nightmare to think about if this does become law!

Best regards,
Steve Yakim

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ronrule

11 years ago

First the tax. Then the exemptions of what can and can't be taxed. Then the variable rates based on product type. Its all an effort for more control. Just watch, next someone will propose that "green energy" products should be tax exempt. Or cars that get over 40 mpg. Or some other damn thing that a well-funded corporate lobbyist masquerading as an environmentalist or "for the people" will use to win their exemption.

I can tell you this much... if they apply it to digital goods, it would be really easy to set up an overseas company without even having to switch to an overseas web host. Not only will it circumvent the sales tax, it will also solve the already ridiculously high corporate tax issue too. The more they take, the more businesses move off shore. And if you're an internet business, its really freakin easy to do. They picked the wrong group to tax.

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GarrieWilson

11 years ago

I would have no problem collecting sales tax on every sale I made IF it was paid to MY state.

I would consider coming to my site the same as to my store front - if I had one.

-g

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yakim1

11 years ago

Maybe someone can clear something up for me. This is a National bill and not a state bill. If it passes this should be a federal sales tax. I don't see how the Federal Government can force each state to charge a tax.

So is this a Federal sales tax or a state sales tax?

If this is a Federal sales tax it would be the first sales tax by the government and I don't believe it will pass the house.

I wouldn't mind a Federal Sales Tax if they got rid of the IRS. But that would take to much power away from the polititions.

I just don't want this to be the beginning of a VAT (Value Added Tax) tax like they have in Europe, which would the next logical step.

Plus if this passes, I will have to make a major change to my payment processing script to collect a sales tax. As I don't want everything to go through my shopping cart.

Best regards,
Steve Yakim

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ronrule

11 years ago

Originally Posted by yakim1

Maybe someone can clear something up for me. This is a National bill and not a state bill. If it passes this should be a federal sales tax. I don't see how the Federal Government can force each state to charge a tax.

So is this a Federal sales tax or a state sales tax?

If this is a Federal sales tax it would be the first sales tax by the government and I don't believe it will pass the house.

I wouldn't mind a Federal Sales Tax if they got rid of the IRS. But that would take to much power away from the polititions.

I just don't want this to be the beginning of a VAT (Value Added Tax) tax like they have in Europe, which would the next logical step.

Best regards,
Steve Yakim

It's a Federal bill that allows the states to cross over their jurisdiction and require companies who have no agreements with them to collect sales tax on their behalf.

I say if a state wants to charge sales tax for out of state transactions, that's between them and the resident of their state - a business owner who isn't incorporated in their state, and has no contract or agreement with their state, should not be obligated under federal law to collect sales tax on a state's behalf and comply with their tax code.

How the Internet Tax Bill Will Affect You

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yakim1

11 years ago

Originally Posted by ronrule

It's a Federal bill that allows the states to cross over their jurisdiction and require companies who have no agreements with them to collect sales tax on their behalf.

I say if a state wants to charge sales tax for out of state transactions, that's between them and the resident of their state - a business owner who isn't incorporated in their state, and has no contract or agreement with their state, should not be obligated under federal law to collect sales tax on a state's behalf and comply with their tax code.

How the Internet Tax Bill Will Affect You

So, since my LLC is in Nevada, and they don't collect sales tax on Internet sales I don't collect sales tax now. But if this law passes I have to register with every state that wants to collect this sales tax. This is a nightmare for payment process developers, because I don't see how we can tell where a purchase is coming from without asking what state they live in so the proper tax percentage can be to the sale and then processed.

Then what do you charge people who do not live in the USA?

Best regards,
Steve Yakim

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ronrule

11 years ago

Originally Posted by yakim1

So, since my LLC is in Nevada, and they don't collect sales tax on Internet sales I don't collect sales tax now. But if this law passes I have to register with every state that wants to collect this sales tax. This is a nightmare for payment process developers, because I don't see how we can tell where a purchase is coming from without asking what state they live in so the proper tax percentage can be to the sale and then processed.

Then what do you charge people who do not live in the USA?

Best regards,
Steve Yakim

Hopefully the House will kill it before we have to worry about it, but a 69 to 27 vote in the Senate is pretty strong. This is a real threat.

If it passes, all of the major payment gateways (including PayPal) will likely eliminate all payment options that don't require an address. Gateways like PayPal will give you an option to let them auto-calculate the tax if you don't pass over a separate tax field. And all of the people who use those Gateways will have to update their software that talks to them.

Yet another reason I always encourage people to use a hosted shopping cart instead of a script... updates like this are someone else's problem if you do. If you installed a local script, that's on you to update - and hope that if your provider DOES update their cart, that your customizations will still work when you install their tax updates.

But yeah, it's pretty much going to be a greater technical challenge than Y2K.

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rondo 11 years ago

Originally Posted by yakim1

I just don't want this to be the beginning of a VAT (Value Added Tax) tax like they have in Europe, which would the next logical step.

Why not? Wouldn't a single nationwide VAT/GST make more sense than dozens of different state taxes?

Andrew
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darrylhudson

11 years ago

Here's the response I receive from my senator when I wrote them a letter about this subject.

Dear Mr. Hudson:

Thank you for your recent correspondence regarding federal tax policy. Your taking the time to contact me is appreciated.

Over 20 years have passed since the Supreme Court found (Quill v. North Dakota) that current state and local sales tax rules were too complicated to require retailers to collect sales taxes unless they had a physical presence in the state of the consumer. This decision resulted in legislative responses at both the state and Federal level.

States responded by adopting, the "Streamlined Sales and Use Tax Agreement," a comprehensive interstate system to streamline and harmonize their tax rules and administrative requirements. This agreement was approved by 34 states and the District of Columbia, and became effective in 2005. Georgia became a full member state in 2012.

Congress' attempted responses to the Supreme Court's decision have been varied. While some proposals have been drafted to simply sanction the Streamlined Sales and Use Tax Agreement, other proposals have attempted to create new "internet sales taxes," a course of action that I do not support.

Earlier this year, S. 336, the Marketplace Fairness Act, was introduced and referred to the Senate Committee on Finance. S. 336 was not passed out of committee for consideration by the full Senate, though identical legislation, S. 743, was recently considered by the full Senate.

On May 6, I, along with 68 of my colleagues voted on S. 743, the new Marketplace Fairness bill, which would sanction the Streamlined Sales and Use Tax Agreement that the State of Georgia has already adopted. S. 743 ultimately passed the Senate with a 69-27 vote margin. I believe Congress should enable brick-and-mortar retailers to operate on the same playing field as e-commerce retailers. This bill ensures that local businesses are not placed at an unfair disadvantage compared to their online competitors.

Whenever legislation regarding internet taxation or the collection and remittance of local sales taxes is considered by the full Senate, I will certainly keep your views in mind.

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jan roos 11 years ago

The gov is running a deficit of over a trillion dollars. Do you think they will pass on an opportunity to get more tax money from the citizens or say stop the wars and the millitary machine?
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- Tom B Banned 11 years ago
  
  You already have states going after the big guys for taxes simply because they have affiliates in state. The states will continue that ride so this new law will make things easier in the long run. It is inevitable.
  
  You can always move your company overseas.
  
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Farish

11 years ago

Some misinformation about this bill and what some of you are saying in general.

First, you need to have over a million dollars in sales.

Any of you complaining about this, have over a million dollars in sales?

If you don't, then this bill does not effect you.

If you have over a million dollar in sales, I wish I had your problem.

Second this does not create a federal sales tax for online goods. It does not go to the Federal coffers.

Third, the 1992 court ruling was about the commerce clause in the Constitution.
There is a good chance that this new bill will not pass that test.

It has already been stated by a couple law groups that if this bill passes completely that a constitutional challenge will be file holding up this bill for at least 2-3 years.

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ronrule

11 years ago

Originally Posted by Farish

Some misinformation about this bill and what some of you are saying in general.

First, you need to have over a million dollars in sales.

Any of you complaining about this, have over a million dollars in sales?

Yes

If you don't, then this bill does not effect you.

Yes it will. Even if YOU don't have over $1 million in sales, most of the places you buy things from do - and their products are about to get more expensive. When everything you buy online goes up by 7-9%, you'll feel it in your wallet. Make no mistake, it will affect you.

If you have over a million dollar in sales, I wish I had your problem.

That's not the point ... margin is. It's based on a gross calculation, not net. Plenty of companies make over $1 million in sales, that doesn't mean it's all profit.

Take the oil companies for example ... All of their billions of dollars in net earnings are the result of an 8% margin. Every $100 they make costs them $92 to make it. If you taxed their gross earnings at 8%, they would be BROKE. So yeah, 8% can be a big number, and have a huge impact.

Second this does not create a federal sales tax for online goods. It does not go to the Federal coffers.

I don't think anyone is saying that, it's pretty clear it's a permission slip for states to tax outside of their jurisdiction.

Third, the 1992 court ruling was about the commerce clause in the Constitution.
There is a good chance that this new bill will not pass that test.

It has already been stated by a couple law groups that if this bill passes completely that a constitutional challenge will be file holding up this bill for at least 2-3 years.

Hopefully that's the case (that it won't pass). I don't see how any state other than the one I'm doing business in should have the right to require me to collect sales tax on their behalf, and conform to their tax codes. If they want to charge sales tax on out of state purchases, that's between them and the residents of their state to figure out. I shouldn't be obligated to do their work for them, I have no contract with them, no agreement with them, no presence there, and didn't at any point agree to adhere to their tax code.

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Farish

11 years ago

Originally Posted by ronrule

Yes it will. Even if YOU don't have over $1 million in sales, most of the places you buy things from do - and their products are about to get more expensive. When everything you buy online goes up by 7-9%, you'll feel it in your wallet. Make no mistake, it will affect you.

Was talking about the seller side of things. When it comes to the consumer, it is another punishment on taxes in a weak economy.

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ronrule

11 years ago

Originally Posted by Farish

Was talking about the seller side of things. When it comes to the consumer, it is another punishment on taxes in a weak economy.

It still affects them - they have costs too. Even if they won't be responsible for paying the tax, the fact that it exists will affect them. Maybe through the products they buy for their business, or maybe just their day to day expenses and subscriptions.

How many people, on this very forum, have a site with a shopping cart? Guess what, that cart is going to have to be updated for compliance purposes. If this passes, the payment processors will be required to collect address info to run transactions through to ensure taxes are being collected, which means the shopping carts that communicate with them will need to be updated to ensure they're passing the correct information. You're likely to have some new costs coming your way to update your software, even if you earn't earning enough for it to affect you.

Or what if you're the guy who MAKES that software - you've got some work to do too to get a patch out, or you're going to have a lot of unhappy customers once your stuff stops working.

See, this is how things get to this point. When people say "It doesn't affect ME, I don't make enough so I don't care" you end up letting the government screw someone else due to your personal indifference. One way or another it will come back to bite you.

Everyone should look at legislation not as how they are currently affected, but put themselves in the position of the people who ARE going to be affected and think "What if I'm there one day". All of this "let's eat the rich" crap has gone too far, and all it's doing is pushing good companies overseas.

Tax increases never generate the calculated revenue, because they don't account for changes in human behavior. And when prices go up, human behavior changes. Just look at the Cigarette tax in Florida... they predicted it would bring a certain amount of revenue and enacted it, and what happened? The higher prices caused some people to quit. So they raised the tax, causing more people to quit. Then they raised it again and even more people quit. Now the programs that are funded by the cigarette tax - children's health care - are at the risk of being under-funded, so the state wants to create new taxes to pay for the monster they created. And the same exact thing will happen there, the higher the tax goes the more consumer behavior will change.

The money won't "find it's way to mainstreet" as the Senator says ... it will only find it's way to government, with less cash in the economy available to BOTH online and brick & mortar retailers.

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Farish

11 years ago

Originally Posted by ronrule

It still affects them - they have costs too. Even if they won't be responsible for paying the tax, the fact that it exists will affect them. Maybe through the products they buy for their business, or maybe just their day to day expenses and subscriptions.

How many people, on this very forum, have a site with a shopping cart? Guess what, that cart is going to have to be updated for compliance purposes. If this passes, the payment processors will be required to collect address info to run transactions through to ensure taxes are being collected, which means the shopping carts that communicate with them will need to be updated to ensure they're passing the correct information. You're likely to have some new costs coming your way to update your software, even if you earn't earning enough for it to affect you.

What payment processor doesn't ask for your address? Even with paypal, my address is part of the system. I don't type it in, but it shows up as part of the transaction. Visa, Mastercard, etc require address verification for online purchases already. I can not think of any shopping cart I have done in the last 10 years that didn't ask for my billing address. I sure hope they ask for this information for identity verification.

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GarrieWilson 11 years ago

Originally Posted by Farish

What payment processor doesn't ask for your address? Even with paypal, my address is part of the system.

I tell PayPal to not ask on digital products. Makes it so the buyer can't file a non-delivery complaint.

-g
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- ronrule 11 years ago
  
  Originally Posted by GarrieWilson
  
  I tell PayPal to not ask on digital products. Makes it so the buyer can't file a non-delivery complaint.
  
  -g
  
  Same here, I dont collect a physical address on digital products or subscriptions. If I am not mailing them something I dont need it.
  
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Internet taxes again

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