Internet Sales Tax

[Chasper]

Visiting a state for the purpose of selling merchandise which is delivered at the point of sale, has been long established as pseudo nexus, i.e., sales tax must be collected and remitted.

This is different from internet sales...your point of sale is in that state and if they collect sales taxes from local sellers sales at those shows it is fair that they collect them from your sales also.

With Internet sales the point of sale is in your home state. Sellers in the other states delivering to your state don't have to collect tax on their sales to residents of your state so the current system is fair.

What we are talking about is making me responsible for collecting taxes in the state of Hawaii, 5000 or so miles away and where I've never been in my life. I think Hawaii should find a better way to make their citizens obey their tax laws.

The point was that we established a presence in 14 states by virtue of attending an art fair in those states. Because of this presence we are already required to remit sales tax on all sales to these state, including internet sales, and our sales are nowhere near $1,000,000. It is a inconvenience to comply, but it is the law and we do comply.

Much of what has been said about remitting sales tax to all states is exaggerated. I know, we already remit in 14 states. There are several options for software systems that automate the process. I sell one of them.

 

[Smitty37]

I would expect more creativity from you, Smitty!!

COLLECT the tax for Hawaii!! Over a year or so, that might amount to $20-$50!!!!

THEN, schedule a trip TO Hawaii. Make sure to list the PURPOSE of your trip to deliver the money you owe them!!

Now, your $5000 trip should be TAX DEDUCTIBLE business expense!! You save at least a grand in income tax!!

Ed, that sounds very tempting.....

 

[Russianwolf]

Currently, there are something like over 9,600 separate tax reporting locations (state, local, city etc) that the tax software would have to accommodate and keep current on. That means filing reports to 40 states involving these (and writing checks as it applies) every month - whether you had a sale in those states or not. I expect that this number will also grow as time goes on.

The legislation as proposed actually solves this by saying to participate, the state must establish a single sales/use tax department. local and city taxes would not apply.

So if all states go in, there would be a maximum of 50 checks to write if your business was selling to all 50 states.

And if your states decides not to opt in, then the current rules apply.

 

[Smitty37]

Visiting a state for the purpose of selling merchandise which is delivered at the point of sale, has been long established as pseudo nexus, i.e., sales tax must be collected and remitted.

This is different from internet sales...your point of sale is in that state and if they collect sales taxes from local sellers sales at those shows it is fair that they collect them from your sales also.

With Internet sales the point of sale is in your home state. Sellers in the other states delivering to your state don't have to collect tax on their sales to residents of your state so the current system is fair.

What we are talking about is making me responsible for collecting taxes in the state of Hawaii, 5000 or so miles away and where I've never been in my life. I think Hawaii should find a better way to make their citizens obey their tax laws.

The point was that we established a presence in 14 states by virtue of attending an art fair in those states. Because of this presence we are already required to remit sales tax on all sales to these state, including internet sales, and our sales are nowhere near $1,000,000. It is a inconvenience to comply, but it is the law and we do comply.

Much of what has been said about remitting sales tax to all states is exaggerated. I know, we already remit in 14 states. There are several options for software systems that automate the process. I sell one of them.

No doubt to cover your costs of collecting sales tax for 14 states:biggrin:

My point is that I have no business presence in the state where you live - your state provides me with no services so why should I be asked to collect tax that you owe to your state if you purchase something from me, and without compensation for doing it at that..

 

[sbell111]

I decided when I started my business that the state would get tax on every sale. Just as if I set up shop downtown and sold things out of a store front.

I put the pricing on my website with the little click button and when they pressed it it was added to their cart at a reduced price and tax was added to get it back up to the advertised price. $106 click button = $100 in cart price + $6 tax.

Never had a complaint.

State got their 6% and I slept fine at night.

State pays for the roadwork, police, water supply, etc. It isn't free. I do my part.

If you sell something to me, you won't be required to collect WV sales tax. You will be required to collect Tennessee sales tax. Then you'll complete paperwork related to that tax and send it and a check to the Great State of Tennessee. Then you'll do the same for every other state that you sell to.

 

[sbell111]

The pain in the rear is the states have different rules for when and how to pay your taxes. I'm on the border of NC and SC. In SC I have to pay my taxes by the 20th of the following month while NC requires a sales and use tax that is submitted once a quarter. It's hard enough to track who I pay, how much, and when for just the 2 states. Plus having to maintain our business registration and tax numbers for both states.

And we have to file a $0 return even if we don't sell anything or else we get a nasty note from the state.

It should also be noted that sales tax isn't even the same within a single state. Are we supposed to know that the sales tax in one county is 0.25% higher than other places in the state?

Edited to mention that this issue is reflected in the bill, as someone smartly pointed out.

 

[sbell111]

Just amazing how they can legislate, completely ignoring the "unintended consequences"!!

Sadly, it seems that these are actually the intended consequences. The are trying to 'balance the playing field', in other words, make it harder for online retailers. That's what it would do, all right.

 

[sbell111]

I would expect more creativity from you, Smitty!!

COLLECT the tax for Hawaii!! Over a year or so, that might amount to $20-$50!!!!

THEN, schedule a trip TO Hawaii. Make sure to list the PURPOSE of your trip to deliver the money you owe them!!

Now, your $5000 trip should be TAX DEDUCTIBLE business expense!! You save at least a grand in income tax!!

You can probably deduct that stamp that you used to get the taxes to South Carolina and New Jersey, also.

 

[Chasper]

Visiting a state for the purpose of selling merchandise which is delivered at the point of sale, has been long established as pseudo nexus, i.e., sales tax must be collected and remitted.

This is different from internet sales...your point of sale is in that state and if they collect sales taxes from local sellers sales at those shows it is fair that they collect them from your sales also.

With Internet sales the point of sale is in your home state. Sellers in the other states delivering to your state don't have to collect tax on their sales to residents of your state so the current system is fair.

What we are talking about is making me responsible for collecting taxes in the state of Hawaii, 5000 or so miles away and where I've never been in my life. I think Hawaii should find a better way to make their citizens obey their tax laws.

The point was that we established a presence in 14 states by virtue of attending an art fair in those states. Because of this presence we are already required to remit sales tax on all sales to these state, including internet sales, and our sales are nowhere near $1,000,000. It is a inconvenience to comply, but it is the law and we do comply.

Much of what has been said about remitting sales tax to all states is exaggerated. I know, we already remit in 14 states. There are several options for software systems that automate the process. I sell one of them.

No doubt to cover your costs of collecting sales tax for 14 states:biggrin:

My point is that I have no business presence in the state where you live - your state provides me with no services so why should I be asked to collect tax that you owe to your state if you purchase something from me, and without compensation for doing it at that..

Your logic is almost exactly the same as that of the Supreme Court in the 1967 Bellas Hess case
National Bellas Hess v. Illinois - Wikipedia, the free encyclopedia The ruling was reaffirmed by Quill vs North Dakota in the early 1990s. Since then there have been numerous attempts by states to circumvent the ruling. States passed laws defining nexus as using state roads to deliver packages, using phone lines within a state to place orders, and a long list of other unsuccessful efforts. A tax auditor from Tennessee once showed up at the door of the company I worked for in Missouri, he announced that he was there to audit our catalog sales and use tax collection in his state. That was an interesting standoff.

Courts interpret laws, they do not make laws (lets not start an argument over that). Congress is free to cancel old laws and make new ones. The basis for the ruling goes back to the Interstate Commerce Act of 1887. It can be changed.

BTW, if you take that trip to Hawaii, don't take along any pen kits to deliver to anyone, don't even talk to a customer who might be influenced to buy kits from you in the future. That would establish a presence and you would have to start collecting use tax in the state.

 

[sbell111]

Visiting a state for the purpose of selling merchandise which is delivered at the point of sale, has been long established as pseudo nexus, i.e., sales tax must be collected and remitted.

This is different from internet sales...your point of sale is in that state and if they collect sales taxes from local sellers sales at those shows it is fair that they collect them from your sales also.

With Internet sales the point of sale is in your home state. Sellers in the other states delivering to your state don't have to collect tax on their sales to residents of your state so the current system is fair.

What we are talking about is making me responsible for collecting taxes in the state of Hawaii, 5000 or so miles away and where I've never been in my life. I think Hawaii should find a better way to make their citizens obey their tax laws.

The point was that we established a presence in 14 states by virtue of attending an art fair in those states. Because of this presence we are already required to remit sales tax on all sales to these state, including internet sales, and our sales are nowhere near $1,000,000. It is a inconvenience to comply, but it is the law and we do comply.

Much of what has been said about remitting sales tax to all states is exaggerated. I know, we already remit in 14 states. There are several options for software systems that automate the process. I sell one of them.

I'm not sure if your logic is valid.

Let's imagine for a moment that I own a chain of brick and morter stores and sell online. Most of my stores are in Tennessee, but I also have one in Kentucky. Since I have that store in Kentucky, I collect sales tax for online sales to Kentucky.

My Kentucky store is underperforming, so I close it. Now I have no physical locations in Kentucky. Therefore, I no longer collect sales tax for online sales to Kentucky.

Similarly, you would only have a physical presence in other states while you are attending art fairs in that state. The mere fact that you previously attended an art fair in a state doesn't mean that you will do a future one and certainly doesn't mean that you have a current physical presence in that state.

 

[sbell111]

So imagine that you are an online retailer with total sales of 750k. You are not affected by this law. However, you have a very strong 4th quarter next year which pushes your total sales to $1,000,000.01. Does that mean that you have to go back and pay the sales tax for everyone that you sold to all year long?

 

[ed4copies]

So imagine that you are an online retailer with total sales of 750k. You are not affected by this law. However, you have a very strong 4th quarter next year which pushes your total sales to $1,000,000.01. Does that mean that you have to go back and pay the sales tax for everyone that you sold to all year long?

As I read the proposed law, no. But the following year you will be expected to pay.

 

[Chasper]

I'm not sure if your logic is valid.

Let's imagine for a moment that I own a chain of brick and morter stores and sell online. Most of my stores are in Tennessee, but I also have one in Kentucky. Since I have that store in Kentucky, I collect sales tax for online sales to Kentucky.

My Kentucky store is underperforming, so I close it. Now I have no physical locations in Kentucky. Therefore, I no longer collect sales tax for online sales to Kentucky.

Similarly, you would only have a physical presence in other states while you are attending art fairs in that state. The mere fact that you previously attended an art fair in a state doesn't mean that you will do a future one and certainly doesn't mean that you have a current physical presence in that state.

It is not my logic, it is the way state enforcement works.

If you closed the KY store you could de-register with the state and stop collecting.

It may not seem fair that one visit to a state for a few days to conduct business is the same as a year round presence, but exactly that has been well established in the courts. You can be required to register and you remain registered until you deregister. While you are registered you can be fined for not filing the required sales/use tax reporting forms, even if you have no sales during a reporting period. DAMHIK

 

[Smitty37]

Currently, there are something like over 9,600 separate tax reporting locations (state, local, city etc) that the tax software would have to accommodate and keep current on. That means filing reports to 40 states involving these (and writing checks as it applies) every month - whether you had a sale in those states or not. I expect that this number will also grow as time goes on.

The legislation as proposed actually solves this by saying to participate, the state must establish a single sales/use tax department. local and city taxes would not apply.

So if all states go in, there would be a maximum of 50 checks to write if your business was selling to all 50 states.

And if your states decides not to opt in, then the current rules apply.

You're right but I think only partly - I read that as saying only one authority can audit you and you only have to file with one authority in each state....however I didn't see anything in the bill that prohibits the states from requiring you to report sales taxes collected for the other jurisdictions. i.e. you only have to file to NY State for taxes collected for NY City but nothing prevents NY State from requiring you to report how much you collected for the city....and perhaps the counties. The states need that information to properly distribute the money collected from their residents. Admittedly all states do not allow local sales taxes so for them there would be only the state to worry about.

 

[sbell111]

I'm not sure if your logic is valid.

Let's imagine for a moment that I own a chain of brick and morter stores and sell online. Most of my stores are in Tennessee, but I also have one in Kentucky. Since I have that store in Kentucky, I collect sales tax for online sales to Kentucky.

My Kentucky store is underperforming, so I close it. Now I have no physical locations in Kentucky. Therefore, I no longer collect sales tax for online sales to Kentucky.

Similarly, you would only have a physical presence in other states while you are attending art fairs in that state. The mere fact that you previously attended an art fair in a state doesn't mean that you will do a future one and certainly doesn't mean that you have a current physical presence in that state.

It is not my logic, it is the way state enforcement works.

If you closed the KY store you could de-register with the state and stop collecting.

It may not seem fair that one visit to a state for a few days to conduct business is the same as a year round presence, but exactly that has been well established in the courts. You can be required to register and you remain registered until you deregister. While you are registered you can be fined for not filing the required sales/use tax reporting forms, even if you have no sales during a reporting period. DAMHIK

In that case, I would 'deregister' (is that really a thing???) after my show in that state is over.

 

[Chasper]

In that case, I would 'deregister' (is that really a thing???) after my show in that state is over.

Dream on. You can expect it take a year or so for the the de-registration to be processed and approved. There is one state where we are required to file the tax forms monthly, we only do shows there twice a year. If we fail to file a monthly report we receive a penalty (aka FINE).

 

[sbell111]

I'll take your word for it. Still, if I don't have a physical presence in a state, I'm not collecting online tax there. It doesn't matter if I once did a show there. I have yet to be called on it.

 

[Haynie]

Those who favor this (as near as I can tell that would only be politicians wanting to get more of your money) are trying to sell it as a way to help "level the playing field" for small box stores but I have not been able to figure out how they will benefit at all - it isn't going to increase traffic to them a bit. Small box stores are not losing business to the internet - many of them already have internet sales themselves or sell products not condusive to internet sales.

I sell boat parts At least until my inventory runs out. New OEM parts. Several people have come in looked at the part. Got the price and right in front of me checked the price on the net. Several said, "will you charge me sales tax?" I have said yes. So they left to order it off the net. Many will openly challenge my prices based on giant outlet prices. I cannot compete with the giant outlets. They are able to give lower prices AND no sales tax. At least this bill will make them charge sales tax.

So, yes Smitty I have lost business to internet sales because, when the prices match, the sales tax charged has driven and does drive customers to the net.

I HAVE to charge sales tax. I understand when I HAVE to pay sales tax. I understand that one of my jobs is dependent on taxes that are collected.

 

[Smitty37]

So imagine that you are an online retailer with total sales of 750k. You are not affected by this law. However, you have a very strong 4th quarter next year which pushes your total sales to $1,000,000.01. Does that mean that you have to go back and pay the sales tax for everyone that you sold to all year long?

As I read the proposed law, no. But the following year you will be expected to pay.

That would be even if your sales drop below $1,000,000. Not only that I think that after you collected them once, you would be harrassed by 45 states even if you never reached $1,000,000 in sales again. For instance, I go over a million this year but didn't expect to - I didn't collect sales tax. Next year because I went over a million this year and I have to pay quarterly, I have to start collecting taxes --- at the end of the year I don't go over a million....if I stop collecting taxes, you can bet your last dollar that come about April of the following year because I paid the tax the previous year, I am going to begin to get "listen criminal" letters from 45 unhappy state sales tax collection departments that didn't get their check.

And I am going to have to respond to all of them, and they will want "Proof" that I don't have enough sales to be required to collect for them. If I don't I will find 45 states auditing me to prove I don't owe them taxes collected from their residents.

At least some states also require businesses to maintain their sales tax collections in a separate account from your personal and business accounts so the state's money does not get co mingled with yours - and heaven help you if the auditor shows up and you don't have enough money in that account to pay the state what you were supposed to have collected. You can go to jail for that. I did not see anything in the bill to change that either.

Like I've been saying it will be a nightmare.

 

[sbell111]

It seems that the fact that they charge shipping pretty much makes up for the 'no sales tax' thing.

 

[sbell111]

So imagine that you are an online retailer with total sales of 750k. You are not affected by this law. However, you have a very strong 4th quarter next year which pushes your total sales to $1,000,000.01. Does that mean that you have to go back and pay the sales tax for everyone that you sold to all year long?

As I read the proposed law, no. But the following year you will be expected to pay.

That would be even if your sales drop below $1,000,000. Not only that I think that after you collected them once, you would be harrassed by 45 states even if you never reached $1,000,000 in sales again. For instance, I go over a million this year but didn't expect to - I didn't collect sales tax. Next year because I went over a million this year and I have to pay quarterly, I have to start collecting taxes --- at the end of the year I don't go over a million....if I stop collecting taxes, you can bet your last dollar that come about April of the following year because I paid the tax the previous year, I am going to begin to get "listen criminal" letters from 45 unhappy state sales tax collection departments that didn't get their check.

And I am going to have to respond to all of them, and they will want "Proof" that I don't have enough sales to be required to collect for them. If I don't I will find 45 states auditing me to prove I don't owe them taxes collected from their residents.

At least some states also require businesses to maintain their sales tax collections in a separate account from your personal and business accounts so the state's money does not get co mingled with yours - and heaven help you if the auditor shows up and you don't have enough money in that account to pay the state what you were supposed to have collected. You can go to jail for that. I did not see anything in the bill to change that either.

Like I've been saying it will be a nightmare.

There are very few issues that you and I completely agree on. This is one of them. Of course, that very fact means that the bill will be passed. :biggrin:

 

[Smitty37]

Those who favor this (as near as I can tell that would only be politicians wanting to get more of your money) are trying to sell it as a way to help "level the playing field" for small box stores but I have not been able to figure out how they will benefit at all - it isn't going to increase traffic to them a bit. Small box stores are not losing business to the internet - many of them already have internet sales themselves or sell products not condusive to internet sales.

I sell boat parts At least until my inventory runs out. New OEM parts. Several people have come in looked at the part. Got the price and right in front of me checked the price on the net. Several said, "will you charge me sales tax?" I have said yes. So they left to order it off the net. Many will openly challenge my prices based on giant outlet prices. I cannot compete with the giant outlets. They are able to give lower prices AND no sales tax. At least this bill will make them charge sales tax.

So, yes Smitty I have lost business to internet sales because, when the prices match, the sales tax charged has driven and does drive customers to the net.

I HAVE to charge sales tax. I understand when I HAVE to pay sales tax. I understand that one of my jobs is dependent on taxes that are collected.

On the otherhand my wife worked at a boat dealership who made 75% of their sales of "boating related" items such as life jackets, etc. through their internet sales department.

We have a little boutique here that can stay in business and be available to local folks only because of their internet business. The owner told me she makes only about 30% of her gross sales to locals.

I buy a lot on the net personally, yet I live in one of the states that does not have a sales tax so I'm not going there to avoid paying sales tax.

Most of the sales I make (and they are all internet sales) the cost of shipping exceeds what you would pay in local sales tax if you bought from me rather than a box store in your state unless it is a fairly large order or your state sales tax is very low.

I've found that unless it is free shipping I can usually get it for less locally even though I don't pay sales tax in either case. Are you losing customers to 'no sales tax' or free shipping?

 

[PaulDoug]

For those that think this will only impact business over 1M. Who are their customers? You think those business are just going to eat the increase coat?

 

[Smitty37]

I think there will be a big rush of people here applying for sales tax exemptions for buying items to be used in production of items for resale. It this passes next year we'll be telling everybody to start a business to get their kits tax free.

 

[PR_Princess]

The legislation as proposed actually solves this by saying to participate, the state must establish a single sales/use tax department. local and city taxes would not apply.

From the way I understand it Mike (again I could be wrong here...this is not exactly lite reading!), one of the ways (but not the only) a state can participate in this bill is by being a member of SSUTA (Streamlined Sales and Use Tax Agreement).


You can read the current SSUTA agreement here -

http://www.streamlinedsalestax.org/uploads/downloads/Archive/SSUTA/SSUTA%20As%20Amended%205-24-12.pdf

FAQ from the SSUTA site -

Streamlined sales tax



And yes! If you run a pen selling business, and want to have your on line purchases sales tax exempt due to resale, you can do that! But you will have to fill this out this (proposed) form, in advance, and file it with every on line seller to might like to buy from.

http://www.streamlinedsalestax.org/uploads/downloads/Forms/F0003 Exemption Certificate_5_10_11.pdf

 

[Smitty37]

The legislation as proposed actually solves this by saying to participate, the state must establish a single sales/use tax department. local and city taxes would not apply.

From the way I understand it Mike (again I could be wrong here...this is not exactly lite reading!), one of the ways (but not the only) a state can participate in this bill is by being a member of SSUTA (Streamlined Sales and Use Tax Agreement).


You can read the current SSUTA agreement here -

http://www.streamlinedsalestax.org/uploads/downloads/Archive/SSUTA/SSUTA%20As%20Amended%205-24-12.pdf

FAQ from the SSUTA site -

Streamlined sales tax



And yes! If you run a pen selling business, and want to have your on line purchases sales tax exempt due to resale, you can do that! But you will have to fill this out this (proposed) form, in advance, and file it with every on line seller to might like to buy from.

http://www.streamlinedsalestax.org/uploads/downloads/Forms/F0003 Exemption Certificate_5_10_11.pdf

But at least they would only have to file the exemption once for each seller...not with every purchase.


I think the "level playing field" is a hoax. First, many of the small local stores have internet sales themselves and second, 500 large businesses account for the lions share of the internet sales of taxable items. This agreement is clearly designed by states to allow them to force retailers who receive no services from them to collect taxes for them.

Another interesting point is that the agreement does not allow individual sellers who think they are treated wrong by a state to use the States belonging to that organization as a cause of action.

 

[Smitty37]

I decided when I started my business that the state would get tax on every sale. Just as if I set up shop downtown and sold things out of a store front.

I put the pricing on my website with the little click button and when they pressed it it was added to their cart at a reduced price and tax was added to get it back up to the advertised price. $106 click button = $100 in cart price + $6 tax.

Never had a complaint.

State got their 6% and I slept fine at night.

State pays for the roadwork, police, water supply, etc. It isn't free. I do my part.

I've done some driving around WV and you're getting cheated:biggrin::biggrin::biggrin:

 

[Smitty37]

Visiting a state for the purpose of selling merchandise which is delivered at the point of sale, has been long established as pseudo nexus, i.e., sales tax must be collected and remitted.

This is different from internet sales...your point of sale is in that state and if they collect sales taxes from local sellers sales at those shows it is fair that they collect them from your sales also.

With Internet sales the point of sale is in your home state. Sellers in the other states delivering to your state don't have to collect tax on their sales to residents of your state so the current system is fair.

What we are talking about is making me responsible for collecting taxes in the state of Hawaii, 5000 or so miles away and where I've never been in my life. I think Hawaii should find a better way to make their citizens obey their tax laws.

The point was that we established a presence in 14 states by virtue of attending an art fair in those states. Because of this presence we are already required to remit sales tax on all sales to these state, including internet sales, and our sales are nowhere near $1,000,000. It is a inconvenience to comply, but it is the law and we do comply.

Much of what has been said about remitting sales tax to all states is exaggerated. I know, we already remit in 14 states. There are several options for software systems that automate the process. I sell one of them.

I would think that a psuedo nexus would apply only while you were actually in the state. I'm surprised that going to the State 1 day and making 1 sale could obligate you to collect tax on internet sales.

 

[Smitty37]

I decided when I started my business that the state would get tax on every sale. Just as if I set up shop downtown and sold things out of a store front.

I put the pricing on my website with the little click button and when they pressed it it was added to their cart at a reduced price and tax was added to get it back up to the advertised price. $106 click button = $100 in cart price + $6 tax.

Never had a complaint.

State got their 6% and I slept fine at night.

State pays for the roadwork, police, water supply, etc. It isn't free. I do my part.

Couldn't charging your state sales tax to out of state buyers on the internet under existing law be unlawful itself?

I'm confident there is no such law. The bill being proposed gives power to the states to collect taxes from out of state. There currently is no federal law on state sales taxes. And No state would make a law saying they wouldn't collect sales tax on online sales if they collect them from brick and mortar.

I doubt it would be illegal under the current system. What state is going to object to getting more tax than they are due? But under the new law (assuming $1,000,000 in sales), you'd have to report tax to each state where you had a sale. So your 6% option won't work for the new law.

My only problem with the new law, is that down the road, the $1,000,000 will probably change to $100,000, then $10,000 until there is no limit. Then it affects all of us. Both buyer, and seller.

I think there is regarding internet sales.

 

[alphageek]

I would think that a psuedo nexus would apply only while you were actually in the state. I'm surprised that going to the State 1 day and making 1 sale could obligate you to collect tax on internet sales.

Well..
A) I hope he makes more than one sale in a show. And
B) I haven't left my state for shows, but most the shows require you to prove you are set-up witha state tax id. So the obligation to collect is a prerequisite to the show.

 

[BSea]

I decided when I started my business that the state would get tax on every sale. Just as if I set up shop downtown and sold things out of a store front.

I put the pricing on my website with the little click button and when they pressed it it was added to their cart at a reduced price and tax was added to get it back up to the advertised price. $106 click button = $100 in cart price + $6 tax.

Never had a complaint.

State got their 6% and I slept fine at night.

State pays for the roadwork, police, water supply, etc. It isn't free. I do my part.

I've done some driving around WV and you're getting cheated:biggrin::biggrin::biggrin:

:rotfl::rotfl: Ok, That's a good one to end the day on.

 

[Smitty37]

I would think that a psuedo nexus would apply only while you were actually in the state. I'm surprised that going to the State 1 day and making 1 sale could obligate you to collect tax on internet sales.

Well..
A) I hope he makes more than one sale in a show. And
B) I haven't left my state for shows, but most the shows require you to prove you are set-up witha state tax id. So the obligation to collect is a prerequisite to the show.

I don't disagree with that Dean. My surprise is that he says that obligates him to collect the sales tax on internet sales after the show....and how about the next year when he doesn't go to a show in that state - must he still collect the tax?

 

[Smitty37]

I find it interesting that the proposed bill is being offered to "level the playing field" for small box stores in sales tax states yet in another thread I started the sense I get is that not paying sales tax isn't the reason most people have for buying on line.

I suspected as much because I live in a no tax state, I live 1 mile from a super WalMart where my wife does most of her grocery shopping we also have two or three plazas with local shops and a small "downtown" area with small shops and I still do a lot of buying on line because I stll need a lot of things I would have to drive a long way to get. A 35 mile round trip (if I went to the next bigger city with more stores) still costs me about $7.00 in fuel alone. To go to where I could buy pen supplies would cost me a 128 mile round trip or about $22.00 or so in fuel. Shipping averages to about $7.00 or thereabout so I shop on line and don't have to spend an hour driving.

The short is that the real driving force behind the bill is getting more money -- not leveling the playing field -- that's the smoke being used to hide the truth.

 

[ed4copies]

The motivation for this bill is simple!! THE STATES WANT THE MONEY!!

In 2012, the US Dept of Commerce estimates total internet sales at $225.5 Billion.
EVEN IF 30% of that is large sales that will require the seller to remit sales tax (cars, boats, other 'registered' items), that still leaves over 150 Billion that is "sales tax free"!

That means $7.5 billion in REVENUE (at an average 5% sales tax rate). Which is about $21 per person in the USA. Multiply that by your population--for say, Illinois (now deep in debt). (12,800,000)

This results in over $280 million per year, growing at a 15% annual growth rate. AND the impact on the consumer is negligible, if we accept the $21 per person!!

ALL governments need money.
WE are their only source (people, usually residents)

A "hidden" tax increase gets less public rage than an increase in taxes you are "billed for" and, therefore, SEE!

And, they can always make the argument that you can AVOID this tax by simply SAVING more and SPENDING less. Which, if everyone complies, will further destroy the economy, make more people unemployed and increase the amount needed by government to support the unemployed.

It is really, very simple math.

 

[ed4copies]

Actually, taking the average spending per person on the internet and multiplying Illinois population by the "per capita" spending, then applying the real 6.25% sales tax of Illinois, you will derive a number slightly OVER half a BILLION dollars for 2012. Growing at 15% per year.

Of course this bill shifts all the costs of collection to the private sector, so this revenue is pure "gravy".

 

[Smitty37]

The motivation for this bill is simple!! THE STATES WANT THE MONEY!!

In 2012, the US Dept of Commerce estimates total internet sales at $225.5 Billion.
EVEN IF 30% of that is large sales that will require the seller to remit sales tax (cars, boats, other 'registered' items), that still leaves over 150 Billion that is "sales tax free"!

That means $7.5 billion in REVENUE (at an average 5% sales tax rate). Which is about $21 per person in the USA. Multiply that by your population--for say, Illinois (now deep in debt). (12,800,000)

This results in over $280 million per year, growing at a 15% annual growth rate. AND the impact on the consumer is negligible, if we accept the $21 per person!!

ALL governments need money.
WE are their only source (people, usually residents)

A "hidden" tax increase gets less public rage than an increase in taxes you are "billed for" and, therefore, SEE!

And, they can always make the argument that you can AVOID this tax by simply SAVING more and SPENDING less. Which, if everyone complies, will further destroy the economy, make more people unemployed and increase the amount needed by government to support the unemployed.

It is really, very simple math.

Ed, the numbers are a little muddied on this but estimates I've read seem to be saying that the top 500 retailers account for 93% of the states "lost" revenue and this study
http://www.netchoice.org/wp-content/uploads/eisenach-litan-e-commerce-taxes.pdf

indicates that the most commonly referred to study might overstate the uncollected revenue by as much as 100%. The above study estimates that the lost revenue is not more than .6% of the states total revenue and only about 2.5% of their sales tax revenue.

The above means to me that if the states go after those top 500 companies (some of whom are voluntarily collecting sales tax on most of their sales 1.e. Amazon) all of which will likely have income far more than 100 million they could get the money they're after without harassing millions of small businesses like you and I.

I am not upset that they want the tax - in fact I am far more favorable toward sales (consumption) taxes than I am income taxes - but it is the buyer who owes the state that tax not the seller so why should we have to be their tax collectors. The states impose the tax on their citizens let them collect it from them.

 

[ed4copies]

C'mon Smitty!!!

You ain't no kid!!!!

The government long ago realized that private businesses were able to collect taxes MUCH MORE CHEAPLY than government.

This is WHY we have withholding!!!

How many times have you heard "I got a TAX REFUND" in a very joyous exclamation?

Sure, we withheld (at government's mandate) SEVERAL THOUSAND DOLLARS of your PAY!!!! Now, when you get back a couple hundred, you are ELATED!!

Think of the difference if we did NOT withhold, and you got the BILL for several thousand dollars!! We live up to our income (spend every penny we get)---now the government is attempting to "get blood from the proverbial turnip"!!

Maybe you worked for a major company for too long. For our small company (copiers), I have given hundreds of thousands of "other people's money" to the government over the years.

Government has not yet said, "THANK YOU" for helping them out.
I suspect I will not live long enough.

 

[Russianwolf]

I'd add that sales tax is a tax to the purchaser, not the business. That's why its added to the bill instead of simple a tax on the sales of the business. AND why C3 non-profits and some others are exempt from paying it.

They already have you acting as the collector.

In effect the states are saying "If you have your businesses collect our use taxes, we'll have ours collect yours".

They are trying to collect what they know is due them in the simplest way they can. Since there are fewer businesses than consumers.....easier to get the business to comply than the consumers. Herding the fewest number of rats.

 

[Smitty37]

C'mon Smitty!!!

You ain't no kid!!!!

The government long ago realized that private businesses were able to collect taxes MUCH MORE CHEAPLY than government.

This is WHY we have withholding!!!

How many times have you heard "I got a TAX REFUND" in a very joyous exclamation?

Sure, we withheld (at government's mandate) SEVERAL THOUSAND DOLLARS of your PAY!!!! Now, when you get back a couple hundred, you are ELATED!!

Think of the difference if we did NOT withhold, and you got the BILL for several thousand dollars!! We live up to our income (spend every penny we get)---now the government is attempting to "get blood from the proverbial turnip"!!

Maybe you worked for a major company for too long. For our small company (copiers), I have given hundreds of thousands of "other people's money" to the government over the years.

Government has not yet said, "THANK YOU" for helping them out.
I suspect I will not live long enough.

Ed - here is another point....given the total of all state tax collections from all sources 280 million spread across 45 states can be lost as a "rounding error".

I suspect the percentage of 'uncollected tax' internet spending is actually far lower than the 70% you assume. Remember internet sellers must already collect the tax for any state in which they have a nexes. and I believe that 70 plus per cent of internet sales are from 'brick and morter" companies that also have internet sales. For instance Dell Computers collects sales tax from almost every state...Amazon is currently up to 38 states, WalMart, Staples, Radio Shack, Apple Computers, and on and on already collect taxes from almost all of the states on their internet sales and they cover a lot of internet sales.

My estimate would be more in the range of half what your estimate for their increased revenues even given that the average sales tax rate is higher than the 5% you used (I think it's about 7% or so). The amount would be lost in the grass of the tolerance of their estimates.



i

 

[Russianwolf]

If I recall Amazon recently lost their fight on this.... maybe why they are supporting the measure now. THEY want a "level playing field". and THEY have the money to lobby for this whereas small businesses don't.