|Senate Passes Internet Sales Tax Bill|
|The Senate sided with traditional retailers and financially strapped state and local governments Monday by passing a bill that would widely subject online shopping — for many a largely tax-free frontier — to state sales taxes. |
Businesses with less than $1 million in online sales would be exempt.
Looks like it won't impact really small retailers but the rest should start looking into carts that have adequate taxation capabilities real quick!
There was previous discussion on this topic here: [webmasterworld.com...]
Larger businesses won't really be effected either, since they were already charging regular taxes to begin with (if there was a distribution center in your state, you were likely already being taxed, at least, I know that's what Amazon and Best Buy had done in the past).
This is simply a tax on medium sized companies.
Amazon and Best Buy. along with Walmart, Target, Macy's, Sears, etc. had a presence in every state.
Amazon did because of all their Amazon Stores which hosted retailers around the country.
The difference is people NOT having a presence in other states will now be collecting and paying those taxes if they make more than $1M in sales. eBay is lobbying to raise that limit to $10M in sales.
Next thing you know the IRS will be trying to collect sales tax even on the value of free stuff given away on Craigslist because it does have value if it were actually sold therefore technically taxable.
Personally, I'd like to see them start taxing intangible goods in California because anything sold digitally like an MP3 or MP4 over the internet has no tax. Not surprisingly it's known as the iTunes or Apple tax, which could raise many millions for our troubled state and Apple threatened to move. Now that Congress has stepped up the game, Apple may not have such a threat left in it's quiver short of moving to a different country or just buy their own island.
This is one of those bills where the real threat is not the tax itself but the bureaucracy involved.
But consider yourself lucky, here in the European Union if you cross certain thresholds you have to collect the sales tax of the country of destination, too. Now imagine you had to file the VAT declarations in twenty different languages.
just because the senate passes a bill doesn't make it a done deal.
it also has to pass the house of representatives and there's no guarantee it will even make it out of the relevant committee (probably ways and means, in this case).
and if grover norquist, the most powerful lobbyist on k street for perhaps 20 years now, doesn't want it to happen (he doesn't) it probably won't go anywhere.
maybe next time.
phranque let's hope you're right
Phranque IS right - some sources are already saying the House Republicans think it's a tax hike and therefore won't vote for it. (It actually makes no difference to the amount of taxes that should be legally collected - it just shifts the burden from individuals who are supposed to report their unpaid sales tax with their income tax to companies who will collect it.)
Am I wrong, or does this mean Amazon.com will charge sales tax, but little resellers on there will not? So for anyone who actually DOES report sales tax with their income tax, it'll be even more confusing as some orders mix untaxed and taxed items?
|Next thing you know the IRS will be trying to collect sales tax even on the value of free stuff given away on Craigslist because it does have value if it were actually sold therefore technically taxable. |
IRS has nothing to do with sales tax. But technically, "bartering" already IS something you're supposed to report as income to be taxed. I.E., you give me your old dresser and I perform an oil change on your car - you're supposed to tack the cost of the oil change onto your income and I'm supposed to tack on the value of the dresser to mine. It's such hooey, I don't think anyone's ever reported it, LOL.
Certified Service Providers > FYI > Merchants need to know...
The SSTP is setting up a system by which Internet e-commerce companies can voluntarily pay state taxes to the states in which their customers reside. The incentive the SSTP is offering companies is rather than try to work out how much tax a company owes for each locality they can instead use a CSP (certified service providers). In addition, "the states that are in compliance with SSUTA (Member States) will offer advantages to those sellers who use a CSP. Six companies, SpeedTax, Avalara, Exactor, Taxware, AccurateTax, and Fed-Tax, have been designated Certified Service Providers for the SST project.
|just because the senate passes a bill doesn't make it a done deal. |
As it is now, it's just the one bill, right? I don't know exactly how it works, but you have to figure that more bills will be piggybacked if it's at the stage where that could still happen. I would definitely be impressed if this bill made it through by itself.
that's a good point.
the senate streamlined this to be a single bill of only 11 pages.
in the house it will get packaged together with a bunch of retch-inducing bills to make it poisonous.
lot's of tax raising and some health care stuff should do the work.
If it passes, it will affect most of my clients, who do more than a million in online sales per year, but only have physical presence in one state.
Well it's one thing to get something taxed related passed through a Democrat controlled Senate and a whole other thing to get it through a Republic congress.
Bringing another viewpoint on this... As an affiliate, I've been paralyzed by fear whenever I considered relocating to another state, due to aggressive affiliate nexus laws that are being pursued by most state governments. Long story short, state governments have been using the existence of affiliate relationships to prove nexus has been established. The end result is that my affiliate relationships are terminated and my income takes a dive.
This bill, if passed, will remove the threat of an affiliate nexus law destroying my business (or forcing me to move yet again).
Also, the Republican stance that this is a new tax is pretty silly. Everyone is supposed to pay their sales taxes via Use Tax. This is an enforcement law, not a new tax.
I agree that a flat, streamlined sales tax would be better, but you have to realize that "states rights" play such a big role in our government that getting a federal, streamlined tax initiative off the ground is next to impossible.
Lastly, on moral grounds, considering how hard state governments were hit by the great recession, you know we all really have a duty as business owners to collect and remit this tax. That's my opinion at least. Oh, and I'm not a Democrat.
"states rights" play such a big role in our government...
Is it OK to post NO COMMENT
|considering how hard state governments were hit by the great recession, you know we all really have a duty as business owners to collect and remit this tax |
I'm reminded of the quote, "Failure to plan ahead on YOUR [state governments] part does not create an emergency on MY part." I certainly feel no moral duty to act as tax collector for the states. Most of them were already spending their way into their current dire straits- the recession only sped up the process and made it more obvious for people to see.
incrediBILL, I don't disagree with you at all. I think it will be a slippery slope from here, but I don't think most customers will care much or even see a difference from this move. Thus, there won't be much of an outcry. It's all downhill from here.
|If it passes, it will affect most of my clients, who do more than a million in online sales per year, but only have physical presence in one state. |
Until other states pass laws saying your clients affiliates constitute a nexus elsewhere... states are making specious, damaging arguments / laws, that will take decades for courts to over turn. The MFA is those stores saying "make it simple for us, and we'll play". Point being, if the MFA doesn't pass, the idea that single state nexus will save them from many hassles, is a false premise. States will be coming after them with other nexus arguments - the MFA gets rid of those arguments and hassles, it makes nexus moot, and provides an easy to administer solution for your clients. States pay for the CSPs who provide the technology, and consumers pay the sales taxes they're supposed to be paying now. Without it, the merchants are the focus of many nexus efforts, by many states.
jskrewson@ "Also, the Republican stance that this is a new tax is pretty silly. Everyone is supposed to pay their sales taxes via Use Tax. This is an enforcement law, not a new tax."
Wonder if the folks in the following states that have NO TAX would agree with your "moral grounds" hypothesis!
@Herb, residents of those states won't have to pay sales taxes. Remember, it is the purchaser's state of residence that determines the tax.
Merchants in states with no sales tax will have to collect for out of state purchases though.