|Yet another attempt at internet tax|
They just keep trying.
And they will continue, particularly in these trying times. Attempted to do this (or similar) back in the BBS days before the Internet got going!
They are talking about a tax for having half-million threshold of revenue and up. That's not exactly what an average online business makes I think especially these days.
Still I would be against it because it's on revenue not actual net income. Because taxing someone while disregarding total expenses creates artificial debt and many other problems.
|Still I would be against it because it's on revenue not actual net income. Because taxing someone while disregarding total expenses creates artificial debt and many other problems. |
All sales taxes are on revenue. Plus, it's paid by the consumer, not businesses.
That aside, an internet sales tax is inevitable and this really shouldn't be that difficult of an issue. However, now is obviously not the time to implement any new taxation- give it at least a year or two.
With that being said, the current bill appears to have holes. First the $500,000 cap for small businesses is too high. It makes it too hard for 'medium sized' (although I don't think most would consider a retailer with $1mil revenues anything but small) businesses to compete with small businesses who don't have to charge sales tax as well as it keeps it difficult to compete with large businesses with their inherent advantages of being big.
Second, if this requires businesses to report and file sales tax with 47 states this will be an absolute administrative nightmare that would be completely unfeasible for any company without a dedicated accounting staff.
|All sales taxes are on revenue. Plus, it's paid by the consumer, not businesses. |
So? You mean it makes no difference because it's the consumer who pays the extra tax not the business (who perhaps purchases services or products from another business thus becoming a consumer who pays the tax after all). In the end everyone pays it one way or another.
Either they don't know what's going on right now or they do it on purpose. The methodology followed matches the current economic climate and it's basically alchemy. You borrow from the future to pay the past, print more paper to cook the numbers and use an endless bureaucracy to cover them up. If they wanted to boost the market they would had relaxed or pretty much eliminate the sales tax long time ago.
I only care about two things... Making it a national standard, and making it simple. Other than that, I really don't care. But I do not want to see people penalized because their state does it one way, and some other state does it another way. Until they can figure out a way to do it all the same, it shouldn't happen at all. How can they possibly expect businesses to be OK with a system that could potentially punish people for simply living where they live. Obviously customers will favor sites selling from the states that have the best tax deal.
But it's kind of weird that Amazon is all over it.
|Second, if this requires businesses to report and file sales tax with 47 states this will be an absolute administrative nightmare that would be completely unfeasible for any company without a dedicated accounting staff. |
And to make matters worse, some states have multiple tax rates depending on the county/parish. Pennsylvania has two rates, and I believe Florida has almost as many rates as there are counties, according to one of my customers. If it is to be implemented, it does need to be a flat tax to be practical for the retailer, though any other way would probably lower the unemployment rate among accountants ;)
you're underestimating Florida's complexity. :-)
the state has a rate, and every county has a surtax rate. the surtax rates are set by the county, and they change often.
new surtaz by county sheets are published every now and then, once or twice a year. here's the latest one:
not all sales are subject to the discretionary surtax. here's the chart to determine which cases apply:
then we have other rules, surtaxes, deductions and more for certain categories of goods - like vending machines, hotels, fuel distributors and on and on.
point is, nobody complies, it's too complicated.
first, it's county based. zip codes and phone numbers aren't. so everything an online merchant collects today, isn't always enough information to determine the delivery county, which is what the tax rate is based on.
second point being, nobody tries to comply, it isn't possible.
i just overpay. i collect the base 6% sales tax, then remit the max rate of the highest county.
most people just use the surtax of their own address.
remember what a spanking machine is... childhood memories... every time i fill out the form, i want to grab our politicians and line them up to go thru a spanking machine made up of every accountant, website operator, and store owner in the state.
compliance is not possible, everyone knows it, and nothing changes. such is govt.
Same deal in CA... Dozens of tax "districts". When it started I thought... Surely I will pay the sales tax based on MY district, right? Oh, of course not... That would make sense. Instead, it's based on the buyer's tax rate. I'm like... Uh, yeah... I'm not doing that. I live in one of the highest, but I just do them all at my rate. Funny thing is... Most of the urban areas are the highest rates and those areas probably hold the majority of businesses. So if they did it that way, they'd probably make more money and also decrease the admin work by a factor of ten. Even the state tax people I've talked to hate it and think it's ridiculous. They also have a ridiculous rule that anything over a lousy $200 a year in sales tax and you have to do quarterly, which is a giant pain. So one would have to ask... Who ARE the geniuses that come up with this stuff? Politicians must live in a complete vacuum from reality.