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I'm more concerned by the frequency that these laws are being streamlined in. We have specific ways that these things are supposed to be decided on when it comes to making laws. Recently it sure seems like a lot of politicians are finding loop holes to get their special project laws through without following all the rules. Now I'm sure that's always been the case but what seems stranger is nobody's saying hold on, back up we need to go back over this. Some people may not have a problem with this particular law but what about when it happens with something you don't like or could be harmful to job growth or to your family or something worse. These procedures were designed to make sure that the laws we create are as fair and beneficial as possible and to eliminate dictators from seizing control. When we allow politicians to skip steps, even if we agree with them is when it becomes dangerous.

 Ratbarf wrote:
Well a law that is widely unenforcible is a bad idea because it breeds disrespect for the law and the Justice System as a whole.

This bill is designed to replace the Use Tax that already exists in many states because they aren't getting sales taxes. Use Tax is very rarely enforced on a personal level, but can (and is in my parents' case) be on a business level. You are actually breaking the law if you don't pay sales tax or use tax on something you buy.

My mom had to go through 3 years of online purchase receipts to figure out a back-payed Use Tax amount. This law makes it more painful for online vendors for selling, but makes it easier for all businesses for buying, and means personal users will be compliant instead of the >99% of personal returns that don't report any use tax.

Unlike annual income tax adjustments, sales tax (at least in Pennsylvania) is submitted by the retailer to the state on either a monthly or a quarterly basis, but exactly like income tax it requires reasonably extensive (digital) paperwork. Having to keep track of 45 different states' tax codes, the totals for sales made to effectively 46 different states (counting tax-free Alaska, Delaware, Montana, New Hampshire, and Oregon as a single combined state), and then having to fill out 45 monthly or quarterly forms would be an absolute business-killing nightmare for a lot of people.

Not to mention most states allow for local sales taxes that get added to the state tax in some areas. In Philadelphia, the city charges an extra 2%. The highest sales tax in the country at 11.725% is found in Arizona, where the state sales tax is only 6.6%. In fact, despite five states having no sales tax, only two (Delaware and New Hampshire) are completely sales-tax-free down to the local level, and even New Hampshire charges sales tax on prepared food, hotels, and a few other niche things. Assuming, this bill also requires remittance of sales tax to local governments, it will literally require a team of on-staff accountants to comply.

That said, I'm conflicted on the bill. I don't like the idea of regressive taxation in general, so I'm not happy to see its reach expand, but I also think the internet economy is doing a lot of harm to our culture at large and I'm happy to see it taken down a notch. My hesitation there is that this will only negatively impact the little internet guy, but maybe that's a step? I also hate that this will affect small manufacturers, but the smart small fries manufacturer that only sells on the internet will simply stop selling to consumers and focus more on wholesaling to stores, which I like. Anyway, like I said, I'm torn...

Man, talk about a cluster thuck.

So, the e-store would have to charge taxes based on where you're having the order shipped to/ordering from? How does that even make sense? That is like having a B&M store and having people show you their I.D. so you can charge them the appropriate tax for the state they live in.

OK, did a little research and this is what I found: Any online store that makes more than $1 million annually in online sales would have to send taxes back to the states where their goods are delivered, based on the rates required in those jurisdictions.

http://abcnews.go.com/Politics/called-internet-sales-tax-explained/story?id=19042757

 ProtoClone wrote:
Man, talk about a cluster thuck.

So, the e-store would have to charge taxes based on where you're having the order shipped to/ordering from? How does that even make sense? That is like having a B&M store and having people show you their I.D. so you can charge them the appropriate tax for the state they live in.

OK, did a little research and this is what I found: Any online store that makes more than $1 million annually in online sales would have to send taxes back to the states where their goods are delivered, based on the rates required in those jurisdictions.

http://abcnews.go.com/Politics/called-internet-sales-tax-explained/story?id=19042757

Since we have simple programs that we trust to navigate to our location, I am sure there are programs available that will be do that, with appropriate regular updates. I don't see the issue.

 Frazzled wrote:

 ProtoClone wrote:
Man, talk about a cluster thuck.

So, the e-store would have to charge taxes based on where you're having the order shipped to/ordering from? How does that even make sense? That is like having a B&M store and having people show you their I.D. so you can charge them the appropriate tax for the state they live in.

OK, did a little research and this is what I found: Any online store that makes more than $1 million annually in online sales would have to send taxes back to the states where their goods are delivered, based on the rates required in those jurisdictions.

http://abcnews.go.com/Politics/called-internet-sales-tax-explained/story?id=19042757

Since we have simple programs that we trust to navigate to our location, I am sure there are programs available that will be do that, with appropriate regular updates. I don't see the issue.

I was actually more pointing at how silly it was. B&M stores don't care where you are from, just pay their states sales tax when you buy their items. Why can't it be done like this, why not based on the location of the store, not the buyer?

But this doesn't seem to matter much now after reading that article...if I am right, a store would have to make $1million annually in online sales in order to have to send out the sales taxes to respective states at the end of the year? So estores don't have to worry about this as long as they make under $1 million in online sales annually?

I think this is a good idea and one that should be encouraged.
https://www.etsy.com/blog/news/2013/making-online-sales-tax-work-for-small-sellers/

The United States government is one of the most cripplingly inefficient institutions in the world....as soon as they have this extra income they will start to spend the new money on new programs, while simultaneously killing small Internet businesses.

This bill is a horrible idea. Anything that gives DC more money when they have already proven time and time again that they've no idea how to manage their finances is a bad idea.

They're like a child that you give an allowance to, they spend all the money and you, as a parent, respond by upping their allowance every singe time.

 ProtoClone wrote:
[I was actually more pointing at how silly it was. B&M stores don't care where you are from, just pay their states sales tax when you buy their items. Why can't it be done like this, why not based on the location of the store, not the buyer?

You know thats blindingly logical.

It's logical unless you're a sparsely populated state (hello Montana) that's more likely to have consumers than online retailers. Those states would put up a serious fuss about inequality, especially since the policy would run contradictory to all existing state tax laws.

Also, I'd be surprised if most small online retailers aren't doing a million dollars. I'm doing half that in a year with a brick & mortar game store that's only been open for four years, and it seems like the whole point of doing an internet business is that you have a wider customer base.

And finally, what are e-businesses who are on the cusp of doing a million dollars supposed to do? Collect sales tax just in case they hit a million? Beg all their customers to pay sales tax after the fact once they hit a million? How the hell do you enforce that sort of a cut-off point? At some point in every store's growth, they're not going to know whether or not they're doing a million dollars in a year until they do it. Do they only start charging sales tax once they've hit a million for the fiscal year? I would assume they'd owe retroactively.

 MeanGreenStompa wrote:

 whembly wrote:

Eh... is it a Federal Tax? If so... hell no.

If it's to allow the states to implement their tax... sure.

What's the difference, you still pay tax, why would the source of the tax be pertinent?

Rate would be different. What this potential law does is make every retailer selling over the net collect state taxes for each state. Rates vary by state. Assumedly a Federal Tax would be a single rate and would be applied on top of existing state rates. So, source is important.

I thought VAT was 20% at each level of manufacturer change? (Example: some one cuts a tree and sells it to a lumber yard (add VAT), then the lumberyard cuts it up and makes it into boards and sells it (add VAT), then company buys the boards and turns it into a table and sells it (add VAT)) Someone from England let me know if I'm wrong or right, please. Just going off what someone told me in a completely different setting.

I have always thought that some of GW's pricing was based on this (not that they charge it to US, but they have to pay it for their boxes, plastic, etc.). With a multiple-step product then the tax can increase a lot, and consumers never see it because it is all in the price and sent on to the government by the manufacturer. It still screws the consumer through the higher price, but they tend as a whole to not see it so they don't get as mad. US politicians drool over the possibility, but most who even mention it get blasted.

I sure do hope this legislation dies in the house, and still dies after the next election.

Someone mentioned that the government concentrates on the paperwork more than the money. That's true, because most of the governments function at this point is designed to build more government (and more government jobs). It basically takes care of itself and grows....much like a cancer.

If they try this as a federal law then it will quickly morph into a federal sales tax. This is bad because they'll use a small number to get it passed (say 5% (or even less)) and then raise it as soon as they can justify it. I mean, what % did VAT start at? (Curious I don't even know - the few times that they tried to seriously discuss it over here it was like 5% - and even once 1% just to get the door opened)

BrotherVord wrote:
The United States government is one of the most cripplingly inefficient institutions in the world....as soon as they have this extra income they will start to spend the new money on new programs, while simultaneously killing small Internet businesses.

This bill is a horrible idea. Anything that gives DC more money when they have already proven time and time again that they've no idea how to manage their finances is a bad idea.

They're like a child that you give an allowance to, they spend all the money and you, as a parent, respond by upping their allowance every singe time.

Reading up on the bill might help make an informed opinion of it. This is not a Federal tax, thus "DC" would get no money. It is applying a state tax that already exists on the business (sales tax) as opposed to the buyer (use tax) - thus being more enforceable. There are so many false statements about this bill in this thread it makes my head hurt.

http://en.wikipedia.org/wiki/Use_tax

A use tax in United States is complementary to sales tax which means, if you buy a Taxable product/services without paying any Sales tax to vendor, you owe use tax. You must self assess use tax and pay it directly to the state where the products were consumed or services were rendered.

Does it hurt internet retailers? Sure. Because it's taking away an advantage they had over B&M stores. Congress initially gave them the sales tax [u]exemption[u] in the first place (and extended it a few years ago, IIRC) because they wanted to help internet retailers grow. Guess what? Internet retailers grew, and are now big business. They still have other advantages over B&M stores, especially building costs (you need more space in a pricier area for B&M) and staffing costs. Or are you really arguing that no one should pay any sales tax, internet or B&M? In that case, lobby your state government instead. Or move to a state that already has no sales tax.

BrotherVord wrote:
The United States government is one of the most cripplingly inefficient institutions in the world....as soon as they have this extra income they will start to spend the new money on new programs, while simultaneously killing small Internet businesses.

This bill is a horrible idea. Anything that gives DC more money when they have already proven time and time again that they've no idea how to manage their finances is a bad idea.

They're like a child that you give an allowance to, they spend all the money and you, as a parent, respond by upping their allowance every singe time.

Sounds like you need to move to Somalia - no inept government there to complain about!

In the meantime you drive on public road, visit public libraries and parks, use the post office, use medical and medicaid, the military, NASA, and social security. Safe water to drink, and air to breathe, public police force and firefighters, and a safe working environment because of OSHA. As an added bonus you get a 40-hour work week, overtime at time and a half, and no children toiling away in factories because those evil unions fought for that right back in the day.

Sounds like a fair trade.

--Chris
www.chrisvalera.com

Coming back to this, the bill passed Senate.

http://www.theverge.com/2013/5/6/4304764/senate-passes-marketplace-fairness-act-online-sales-tax-bill

In order to allay these concerns, the bill's authors adopted the standards set by the Streamlined Sales and Use Tax Agreement (SSUTA), a federal program designed to simplify online or mail-order commerce tax collection. To start collecting online taxes through the bill, states will either need to either have SSUTA membership — at this moment, there are 22 full members and two associate members — or pass legislation that creates a central authority for tax collection, provides free tax software to online sellers, and limits the liability businesses would face if they make mistakes based on bad information from a software provider or state official.

So what if I start buying my stuff from Sweden?

Import tariffs. Boom.

Quark wrote:
Coming back to this, the bill passed Senate.

http://www.theverge.com/2013/5/6/4304764/senate-passes-marketplace-fairness-act-online-sales-tax-bill

In order to allay these concerns, the bill's authors adopted the standards set by the Streamlined Sales and Use Tax Agreement (SSUTA), a federal program designed to simplify online or mail-order commerce tax collection. To start collecting online taxes through the bill, states will either need to either have SSUTA membership — at this moment, there are 22 full members and two associate members — or pass legislation that creates a central authority for tax collection, provides free tax software to online sellers, and limits the liability businesses would face if they make mistakes based on bad information from a software provider or state official.

Reading about this, i'm slightly less apprehensive about this bill now. Jury is still out though.

 djones520 wrote:

Quark wrote:
Coming back to this, the bill passed Senate.

http://www.theverge.com/2013/5/6/4304764/senate-passes-marketplace-fairness-act-online-sales-tax-bill

In order to allay these concerns, the bill's authors adopted the standards set by the Streamlined Sales and Use Tax Agreement (SSUTA), a federal program designed to simplify online or mail-order commerce tax collection. To start collecting online taxes through the bill, states will either need to either have SSUTA membership — at this moment, there are 22 full members and two associate members — or pass legislation that creates a central authority for tax collection, provides free tax software to online sellers, and limits the liability businesses would face if they make mistakes based on bad information from a software provider or state official.

Reading about this, i'm slightly less apprehensive about this bill now. Jury is still out though.

The part I highlighted in orange is scary. If the congress critters are willing to pass this bill, why would they not follow up with that? Seems very possible you end up with a Federal agency now acting as the Uber Tax Collector. States could very well see this as a way to increase revenue and be willing to give Unca Sam his cut to collect for them.

I hope this dies in the House.

It's saying the States do that, not the Fed government.

As I understand it, this is a bill making it legal for the States to collect taxes from online. Which all in all should be good for the states, because I imagine they started losing a lot of sales tax revenue once online purchasing took off.

 Tethyr13 wrote:
I thought VAT was 20% at each level of manufacturer change? (Example: some one cuts a tree and sells it to a lumber yard (add VAT), then the lumberyard cuts it up and makes it into boards and sells it (add VAT), then company buys the boards and turns it into a table and sells it (add VAT)) Someone from England let me know if I'm wrong or right, please. Just going off what someone told me in a completely different setting.

Nope, VAT is charged on all VATable goods (Not all are VATable, like books and most food) sold to an end user. Basicly the end user pays VAT. It is a form of sales tax.

In theory companies should not pay VAT, but do charge it.

Someone may cut down a tree and sell it with VAT, but the lumber yard would then be able to deduct that from the VAT payment they make to the govenment, so "claim back the VAT". It is a complex system and most medium sized companys will have specialist VAT accountants to deal with it, but basicly a company will be paying for stuff with VAT on, and selling stuff with VAT, but they will only pay the govenment the balance of (VAT on stuff sold -VAT on stuff purchased).

Small companys (T/O< £50k I think) do not have to charge VAT but do pay VAT on everything. They cannot get stuff Vat free like larger companys, but with a T/O of less than £50k is tiny, and probably only 1, possibly 2, people.

This may not be 100% correct, but then I'm not a VAT accountant.

 CptJake wrote:

 djones520 wrote:

Quark wrote:
Coming back to this, the bill passed Senate.

http://www.theverge.com/2013/5/6/4304764/senate-passes-marketplace-fairness-act-online-sales-tax-bill

In order to allay these concerns, the bill's authors adopted the standards set by the Streamlined Sales and Use Tax Agreement (SSUTA), a federal program designed to simplify online or mail-order commerce tax collection. To start collecting online taxes through the bill, states will either need to either have SSUTA membership — at this moment, there are 22 full members and two associate members — or pass legislation that creates a central authority for tax collection, provides free tax software to online sellers, and limits the liability businesses would face if they make mistakes based on bad information from a software provider or state official.

Reading about this, i'm slightly less apprehensive about this bill now. Jury is still out though.

The part I highlighted in orange is scary. If the congress critters are willing to pass this bill, why would they not follow up with that? Seems very possible you end up with a Federal agency now acting as the Uber Tax Collector. States could very well see this as a way to increase revenue and be willing to give Unca Sam his cut to collect for them.

I hope this dies in the House.

No they need to pass it. Then inform the new uber tax director and the IRS Director that there's only enough money for one. Let them pick 50 office workers each, arm them with office supplies and put them into Thunderdome. The image of 50 guys and gals in ties and loafers doing battle with staplers Purell would be a mega pay per view hit.

TWO TAX ENTITIES ENTER. ONE TAX ENTITY LEAVES!

 Frazzled wrote:

No they need to pass it. Then inform the new uber tax director and the IRS Director that there's only enough money for one. Let them pick 50 office workers each, arm them with office supplies and put them into Thunderdome. The image of 50 guys and gals in ties and loafers doing battle with staplers Purell would be a mega pay per view hit.

TWO TAX ENTITIES ENTER. ONE TAX ENTITY LEAVES!

Dosn't the IRS have armed agents? Seems a little unfair to me.

The one thing that keeps getting glossed over on this subject, is that pretty much all of you are all guilty of tax evasion.

Currently the law is pretty much that if you buy something online, and live in a sales tax state, it is up to you as the consumer to report the purchase and pay the tax to your state.

Because it is so much of a pain and difficulty to go after 90% of the popular for a few dollars here and there, just go after the businesses.

If you all had been honest and paid your taxes, this would not happen. LOL.

Also, sales tax is the most expensive tax to collect.