Sales Tax on Shop[smith Orders

[dusty]

You may all receive this without me posting it here but just in case.

I deleted the link because it appeared as though it gave the world a path into my computer. Not good.

The link was to a message from Doug Reid alerting us to the fact that the "Sales Tax Bill" that is now in Congress will, if passed, attach a sales tax on everything that is purchased on-line. Orders placed before the bill is passed (like right now) will not be subject to that tax.

[beeg]

I assume that if after IF it's passed. That if ya call in the order from out of Ohio sate. There will still be no tax?

[frank81]

It likely will be passed.

I don't understand the amount of backlash and misinformation out there about this bill. The Amazons and Ebays of the world must have done an excellent job at starting a grass roots campaign. That or people are just that cheap and beliggerent. I for one would love for my county to get the sales tax they are already legally owed but can't collect. The park needs some work, sidewalks need built, and we could use another police officer.

[JPG]

Sorry go be so ignorant of 'details', but whose sales tax is to be collected? Existing sales taxes to states and locals or a new federal sales tax?

FWIW, my state income tax forms(personal and corporate) have a place to pay for purchases made out of state that did not collect KY sales tax.

So unless it is a 'new' tax, no impact will be felt here! Theoretically at least.

[heathicus]

It likely will be passed.

I don't understand the amount of backlash and misinformation out there about this bill. The Amazons and Ebays of the world must have done an excellent job at starting a grass roots campaign. That or people are just that cheap and beliggerent. I for one would love for my county to get the sales tax they are already legally owed but can't collect. The park needs some work, sidewalks need built, and we could use another police officer.

What kind of sales tax is your county legally owed but can't collect? If it's legally owed it, then it can collect it.

Sales tax has never been based on where the purchaser lives. Sales tax has always been based on the physical location of the seller. That has been upheld by the Supreme Court in the past.

If people from another state came to a locally owned small business in your town, should the sales tax collected go back to the other state because that's where the customer was from? What if that customer also lives where there are additional county, city, and locality sales taxes? Should your local small business collect those taxes and send them back to that customer's home county, city, and locality too? Even limited to just state taxes, imagine if they had to do that for every state. For every customer, they would have to find out what state they live in, keep track of what the sales tax rate is in that state, collect the appropriate tax, and then send payments to every state that has residents shop at their store. You've just added an enormous burden of red tape, paperwork, extra costs for someone or a service to manage it for you, etc. And you turn every business into a tax collector for every State in the Union. The Internet is no different than driving to another state. Local sales taxes should not be based on where the customer lives, but where the business is.

And this will not hurt the big corporations like Amazon and eBay. They have the resources to absorb the extra cost of tax collection. What it hurts is smaller businesses and startups. It hurts the local business trying to expand by adding internet sales. This hurts the teenager turning pens and selling them online to fund his college tuition. They may not be able to enter the online market because of the added expense and hassle. How many lawyers is it going to take for every small business wanting to sell goods online to make sure they are complying with every state's tax regulations? And again, if you're going to make online stores collect every customer's state taxes, why not the customer's home county and city taxes as well? Don't they need money too?

While this may "protect" places like Walmart (that already has a physical presence everywhere so already has to collect state taxes) from Amazon (who's "physical presence" is very limited in comparison), it also protects Amazon and Walmart from those small and micro businesses looking to expand online. This will hurt small businesses and the poor and middle class (who are facing a price increase in a rough economy) the most.

Instead of the states trying to use the Federal government to pry more money out of the hands of the people, they should be trying to reign in their own budgets.

[frank81]

Sorry go be so ignorant of 'details', but whose sales tax is to be collected? Existing sales taxes to states and locals or a new federal sales tax?

FWIW, my state income tax forms(personal and corporate) have a place to pay for purchases made out of state that did not collect KY sales tax.

So unless it is a 'new' tax, no impact will be felt here! Theoretically at least.

The sales tax will be remitted from the seller to the appropriate entity as if the transaction occured at the buyer's address.

The feds are absolutely not touching any money. They only have to be involved because it involves interstate commerce and there are no existing laws that allow a state to force a seller to collect and remit the tax if they are located in another state. They are taking the ambiguity away that has prevented collection.

When you buy stuff from ShopSmith, you'll pay KY sales tax and Shopsmith will send the money to KY.

Currently you would only owe sales tax if you lived in Ohio because there is no conflict in who/where the transaction took place, if both parties are in Ohio then they get the tax.

[heathicus]

Sorry go be so ignorant of 'details', but whose sales tax is to be collected? Existing sales taxes to states and locals or a new federal sales tax?

FWIW, my state income tax forms(personal and corporate) have a place to pay for purchases made out of state that did not collect KY sales tax.

So unless it is a 'new' tax, no impact will be felt here! Theoretically at least.

Most states have that question on their tax form. But few people report their purchases and turn in the sales tax. So this law is a way to force the business to collect the tax at the time of the transaction rather than asking their residents to voluntarily pony up some extra sales tax money.

[frank81]

What kind of sales tax is your county legally owed but can't collect? If it's legally owed it, then it can collect it.

Sales tax has never been based on where the purchaser lives. Sales tax has always been based on the physical location of the seller. That has been upheld by the Supreme Court in the past.

Sales tax has been based on where the transaction physically occurs, regardless of the seller's address. It's easier to administer based on the seller's address, and its normally small dollars so that's how its applied.

Right now its legally ambiguous where an internet sale phsyically occurs. Is it the seller's computer, the buyer's computer, or the server? If a state tried to collect from an out of state seller it would be stuck in the court system and not worth their time. The new law clarifies this.

And yes this tax has always been owed, for years they let it go but the dollars are big enough now to fix the system.

[dusty]

Please note that as of right now if you order something from Shopsmith you are not charged a sales tax. That became that way not all that long ago (two or three or four years ago).

If this bill passes, all online orders (and call-ins) are going to be subject to tax and as I understand it - Uncle Sam is not going to trust that you will divvy up your share of taxes when you file. Uncle Sam (and baby brother at the local level) is going to get his share from the seller. If the seller does not collect it from the buyer - oh well.

If everyone filed their taxes and reported their purchases (that are subject to federal, state and local tax) this bill would be unnecessary. Does everyone file their taxes as required - I don't think so. Does everyone declare their taxable purchases - I don't know.

If you bought from Shopsmith last year, did you report that you spent that money on taxable items. Don't answer that - it is rhetorical.

[JPG]

As Heath just said, more bureaucracy!

Seller has to report to 50 states plus all the locals!:mad:

I do hope Uncle Sam will act as a 'clearing house' and the states do the same for the locals.

And done in a simple efficient manner!!!!!:) How's that for an oxymoron?;)

Egad what amount of detailed data will need to be 'filed'!:( Who, address, amount, tax id ?

Sounds like a recipe to kill interstate commerce.

P.S. I just exercised my grey matter some more so please eliminate the who and tax id from the data filed. Still too much if locals are involved.

Whee!!!! A programmer's golden opportunity!