Sales Tax (US)

[rcjordan]

I hate to do it --open a thread on sales tax, that is-- because most webmasters do not believe what they might actually be getting into with product sales online.

At any rate, go out and get 06/29/00 copy of the Wall Street Journal. Heads up!

[edit obsolete ubb code]

[edited by: rcjordan at 11:40 am (utc) on Aug. 20, 2003]

[rcjordan]

Sam provides a good summary of the Streamlined Sales Tax Project:
States move toward 'Net taxes [geek.com] -Geeks.com article

[rcjordan]

creeping closer [zdnet.com]

[Xoc]

The most interesting part of that was this:

Currently, states are due sales tax from most online purchases. But because of two U.S. Supreme Court decisions, the states cannot compel out-of-state merchants to collect taxes for them during remote sales. The court ruled that while the states are owed the taxes, the tangle of tax regimes made the task of determining how much tax to charge too burdensome for merchants.

I always assumed that Congress would be passing a new tax. But it's not. It's figuring out how to make the existing taxes be simplified to pass Supreme Court scrutiny.

[David]

I think it is going to be a while before they can get this done. The obvious problem of calculating the tax for every state (this can be done with a program). But then they would have to ask all small business to fill out tax forms and cut checks (monthly or quarterly) for up to 52 states. I just don't think Bush is going to allow that kind of burden to be placed on business at this time.

>> The article talks about states working together.

I had a recent conversation with my state tax board and they are working on it big time. One of the big things I got from the conversation was that individual states could start an audit process of business in their states. Since business to business is a major part of the commerence it is a big piece of the tax. The seller is not required to collect the tax but the purchaser is required to pay it. So each business is required to pay the tax on all supplies,equipment,software,advertising art work, ect.

One way or another I guess they will find a way to get the $$$.

[NFFC]

Warning!
Do not read the following if you are of a nervous disposition:

"The European Union is close to agreeing upon a tax on digital sales made over the Internet outside the EC to EU citizens....In other words, e-tailers in the US will have to charge and collect VAT on music and software downloads purchased by EU citizens on behalf of the European Union."

The Register [theregister.co.uk]

[Gary_Snyder]

"Any order that is placed with CCNow carries no U.S. sales tax because our company is located in Delaware. CCNow acts as a retail reseller of our clients' products. As our client, you sell your products to CCNow and we re-sell those products to customers.

In the U.S. it is the responsibility of the retail merchant, not the drop-shipper or supplier, to collect any sales tax that is due. This is true even if you are shipping products to a customer in your own state, because the customer is buying the products from CCNow, not from you.

U.S. sales tax is only collected when the customer is located in the same state as the retail merchant. This means that any CCNow customer who is outside of Delaware will not owe sales tax. Any customer who happens to be located in Delaware would not owe sales tax either, because Delaware has no sales tax.

Please keep in mind that this applies only to customers who place their order with CCNow using a credit card. If a customer pays you directly by check or money order, and that customer lives in the same state as you or your business, then you must collect sales tax from that customer."

[rcjordan]

Yes, it is coming.

>there are literally 100s of thousands of us in their states who make a small but honest living using the web. Does anyone of them really want to destroy our livelihood and our economic contribution to their State, for the sake of a sales tax

The short answer is 'yes' -without sales tax, or revenue generation of some kind contributing (income tax) to the state coffers, you are a non-entitity to them... something that competes with their 'real' businesses that do generate sales tax, payroll taxes, income taxes, business property taxes.

>the CPA fees would eat up your profits because the payment part to the States requires human talent and work.

I'm involved in several businesses, one of them is wholesale/retail and has nexus in two states. Others are service businesses, with employees/payrolls. All of them have a huge burden of compliance that must be factored into the cost of doing business. Through them, I know what pain is. Then there's my web publishing business.... 100% virtual, no employees, no products -just me and the keyboard selling virtual real estate (ads in websites). Sometimes it's been very hard to stay virtual, but this thread reminds me once again of all the red tape I don't do.... I think I'll stay the way I am. Now if I could just figure out a way to legitimately get around the self-employment tax!