Sales Tax on Shop[smith Orders

[frank81]

All in all a bureaucratic nightmare that will raise the cost of states

I still disagree with everyone's assertion that this is a huge administration cost.

Everything you mentioned is already done in every state for brick and mortar sales. Here is Missouri's for illustration: http://dor.mo.gov/pdf/localsales.pdf

You see its simply a table with a few columns. That's all any of this is. You stick that in a database, bounce the address on the sale against the table, that's your tax rate. My adress is in city limits, so I pay 4.225% state plus 3.833% city. If I moved a half mile south I would only pay 4.225% state plus 1.833% county.

As far as providing one place to remit the tax in a state, most states were already doing that. My sales tax goes to Jeff City, then they mail a check back to the city and county for their cuts each month. It would be a huge waste of funds if anywhere is running a redundant sales tax division in every city and county government.

I would argue if any states were not already doing those three bullet points, they would be operating terribly inefficient already. Getting in line with this law would be zero cost for most states, and reduce costs for those that need to change.

[reible]

It seems to me that if you want to cheat the sales tax you might want to get that order in for a powerpro now. I got mine at a Lowes and paid my state taxes and I do add out of state purchases to my IL income taxes so it makes no difference to me....

The problem with sales taxes and shopsmith use to be that they charged me Cook Co./Chicago rates and I would have to call and have them fix it or just live with it on smaller items. Defeated the convenience of online ordering.

Our sales tax rate where I live is 6.75%. Or in powerpro dollars (2000*.0675) is $135.

For me I see little change except the money will come out of my pocket sooner rather then coming due at tax time....


Ed

[davebodner]

I assume Frank81 knows what he's talking about concerning the bureaucratic burden on companies and states.

The change that's finally allowing this bill to pass is Amazon's new support. Previously, they objected to paying sales taxes, just like any mail order outfit. But now they're trying to implement same-day delivery. No longer will they be able to serve all of California from a humongous warehouse in Nevada. Now they'll have to have a "substantial presence" in California, as well, forcing them to pay California sales tax, anyway. So, they dropped their objection.

I'm for it. Government (mostly by accident) has granted an advantage to mail order outfits versus brick-and-mortar stores. I'm glad they're leveling the playing field.

[Ed in Tampa]

Right now the sales tax issue is being discussed in Florida. As the law stands now in Florida if a company is located in Florida they must collect sales tax on all that they sale as guided by existing tax law.

Since we do not have a State income tax most people do not report purchases made in other states that did not collect sales tax.

The discussion now is whether this is unfair to local businesses that must collect sales tax thus charging a higher price to the consumer. The difficulty is enforcement and making businesses in other states track their sales, collect the proper tax, send the proper tax to proper state. All of that amounts to a huge book keeping nightmare and added cost.

Add to the mix the fact that many counties and cities in Florida have an additional sales tax that changes almost yearly and I'm sure other states have the same problem.

Just reading the tax laws for each state, each county and city would require each company to hire a person as full time tax person. An expense many businesses could not endure.

[heathicus]

How about we "level the playing field" (I personally hate that phrase) by removing the taxes on brick and mortar stores?

Another problem with this bill is that now, if you sell online, you become subject to being audited by every state that collects sales tax. If you have a business in Arizona selling widgets online, you can be audited by the state of New York. Every state tax collection agency now has audit power over every business doing business online.

And while this may not be a "new" tax but merely a Federal enforcing of existing State tax laws, the impact of these taxes have not yet been felt. And since sale taxes are regressive by nature, it's the middle class and poor that will feel it most and have their purchasing power reduced.

[heathicus]

The discussion now is whether this is unfair to local businesses that must collect sales tax thus charging a higher price to the consumer.

I say we make it "fair" by dropping or lowering the sales taxes that local businesses have to collect rather than increasing the taxes that online businesses have to collect.

[dusty]

How about we "level the playing field" (I personally hate that phrase) by removing the taxes on brick and mortar stores?

Another problem with this bill is that now, if you sell online, you become subject to being audited by every state that collects sales tax. If you have a business in Arizona selling widgets online, you can be audited by the state of New York. Every state tax collection agency now has audit power over every business doing business online.

And while this may not be a "new" tax but merely a Federal enforcing of existing State tax laws, the impact of these taxes have not yet been felt. And since sale taxes are regressive by nature, it's the middle class and poor that will feel it most and have their purchasing power reduced.

I guess I might be wrong but I don't believe that anyone that has anything to do with drafting and implementing this tax lax (or change to existing tax law) is really interested in "being fair".

I also do not believe anyone in Congress really cares about the middle class and the poor. There is a lot of rhetoric about that but most of the action is contrary.

Sorry if I sound bitter but I exist along with the extended family (7 households) that are all trying to make ends meet in the middle class. I know what is real and what is rhetoric.

I'll bet that Doug had no ideal how much mud his post would create. He was just trying to give us all some advanced warning.

[forrestb]

Well, the MO tax tables are 23 pages long with many live here, pay this; live there, pay that.

The bill requires that each state provide SOFTWARE, not a table, for businesses and for each state. I have developed software before - not of this complexity - and it ain't cheap.

I wonder how many internet-only sellers are going to move their servers/headquarters or whatever qualifies to, say, Canada? Workers could live in the states and telecommute to Canada, eh?

Forrest

[BuckeyeDennis]

I'm not going to enter into the debate on an appropriate level of taxation. We need some amount of government services, and those require some amount of taxes. Just how much, I will leave to those with more interest in politics than I. But I must believe we can all agree that taxes should be collected in the most efficient manner possible ... that means minimal bureacracy, paperwork, and any other sources of non-value-added expense.

But the democratic political process tends to produce the exact opposite result. From a politician's perspective, a "good" tax is one that is almost too small to be noticed, offends no special-interest groups, and ideally, obscures exactly which party to the transaction is really taking the hit. These unfortunate, but real, political pressures inevitably result in a great number of small taxes, which of course drives up the cost of compliance.

BTW, are any of you familiar with the decomposition of the word "politics"? It is derived from the combination of two root words: POLY, meaning "many", and TICKS, meaning blood-sucking parasites!

But enough of the baloney. It dawned on me that cash is never used in Internet transactions, to my knowledge. Which means that Internet transactions are all funded through a mere handful of large financial-services companies such as PayPal, Visa, MasterCard, et. al. Presumably, they know the address of both the merchant and the customer. So why not let these guys earn their fees by adding a bit more value .. the collection and distribution of applicable taxes. Should be child's play for them, and a way to become even more indispensable.

[skou]

Quoted from Dennis, above. "BTW, are any of you familiar with the decomposition of the word "politics"? It is derived from the combination of two root words: POLY, meaning "many", and TICKS, meaning blood-sucking parasites!"

On a few political groups I hang out at, I'm prone to asking this question, which I wish I could ask to my late uncle, Jake Flake.

How do you tell when a politician is lying?

If no one gets this, I'll post the answer later.

steve