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29 States to vote on taxing online sales next month!

Link to article in Denver Post today

10:53 pm on Oct 28, 2002 (gmt 0)

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5:38 pm on Oct 29, 2002 (gmt 0)

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The Canadian banks are predicting the our dollar will rise to between 68 and 70 cents within the next year. Our economy is growing at 3.5% (we never did slip into negetive growth even after 9/11) and that will have more to do with the Canadian dollar than your elections.
Trust me.. the currency traders do not flock to the lowly Canadian dollar for security.

11:45 pm on Oct 29, 2002 (gmt 0)

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I think I am going to get hammered for this one, but here goes.

I really don't think this involves encouraging foreign trading, big brother or anything remotely close to that.

There are certain facets of our (USA) society that are still public (Tax run). I don't disagree with that either.

These state agencies that traditionally enjoyed much of the sales tax (pre-ecommerce) do serve a purpose. They employ people, they teach our children, they build our roads, etc..

While a portion of these taxes are apropriated discriminately (lining the pockets of undeserving people), the sales tax as a whole does serve a purpose.

If you say that this is big brother clamping down on us, I would argue the contrary... that this is allowing the states to still exercise some amount of independence while not depending on our federal government.

While I don't want to pay any more money than I already am, I don't think that the 5-7% sales tax will deter anyone from purchasing online. I know most people don't even flinch when selecting the $12.00 shipping option.

...will continue this later....


12:12 am on Oct 30, 2002 (gmt 0)

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States don't have the Constitutional authority to regulate or tax interstate transactions. This authority resides solely with the Congress. If legislation of this sort is passed by states, it will surely be overturned by the Supreme Court.

Of course, the states do have the right to levy sales taxes on intrastate transactions. I'm in Nevada. If I sell online to somebody else in Nevada, and the product is taxable, I as a merchant have to pay sales tax. Whether I collect the tax is my business. My company "eats" sales taxes at this point because so few of our sales are subject to it.

6:47 am on Oct 30, 2002 (gmt 0)

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Here's a question...If the US begins taxing e-commerce how long will it take for a banana republic or Caribbean island to step in and create in Internet friendly zone?


1:10 pm on Oct 30, 2002 (gmt 0)

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If the states do succeed in charging out of state commerce (I still feel this is highly unlikely), they will most likely charge the sales tax on goods entering the country as well.

When we in Canada order from the states, Canadian Customs collects the Federal Goods and Services tax (GST) and the provincial tax (PST), or the combined blended tax (HST) depending on what province you live in.

If the US didn't charge out of country commerce, I would see a large number of mail order operations shift north of the border.

4:33 pm on Nov 1, 2002 (gmt 0)

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"I just have a strong bias against having our own business having to compete unfairly with somebody who can send the same product in here from out of state," Heath said.

I'm hard pressed to come up with examples that support this. Especially once you factor in shipping.

The shipping cost is analogus to what it would cost to go to a store and purchase/transport the item yourself. Depending on how you travel (car, bus, train) that cost can be a dollar or two, or more. Most consumers overlook this. But in fact, the shipping cost is what you will pay to avoid having to go to the store yourself. The cost of shipping is not a tax.

The merchant complaining about unfair competition is making the point that out-of-State catalog and website merchants do not have to charge sales tax, while "brick and mortar" shops do.

It seems strange to me, that if I go to the store and buy a few CDs and books I will pay a few dollars in sales tax to the State and maybe the local government.

But if I buy the same things via a website, I pay no tax. This situation forces the various merchants to compete on an uneven playing field. In effect, it is actually a subsidy for interent e-commerce.

What's so special about selling thing via a website that entitles e-commerce merchants to a special tax exemption?

People rail against "a tax on the internet" -- but the example I have given is not an "internet tax"; rather it is a sales tax which would be identical to what all other merchants pay.

Also, consider that people most likely to have computers at home and work are middle-class, upper-middle class, and rich -- and the people least likely to have access to computers are the working poor. Does it seem right that middle-class (and above) people have an opportunity to avoid sales taxes while poor people do not?

The guy sitting in an office earning the big bucks can use his computer to buy any- and everything on line (clothes, furniture, books, CDs, maybe even groceries) . . .

. . . while the guy that emptying the trash and cleaning the carpets, earning a lot less, has to go to the local stores and pay tax on his purchases.

In my opinion, that stinks! My ideal is that everyone should be treated equally and that means pay tax at the same rate regardless of method of purchase.

Of course, if you're the guy earning more and not paying taxes on all your purchases, it's easy to ignore this.

8:10 pm on Nov 3, 2002 (gmt 0)

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hahaa.. like I always say.. as you go into business..everyone has their hands in your pockets.. first the web hosting company.. such as yahoo takes a cut if your a a yahoo store..then visa/mc.. blah blah blah want a percent.. affiliate links want a cut.. so while you do all the slaving away and setting everything up everyone says ill take my share thank you... so we make them rich as we become more successful.. I dont really like that as I put in 15 hour days to scrap by.. someone who does nothing makes the bucks..

like it is said in the article.. we dont use their highways.. dont need their cops, ambulances, what have you.. never enter their state.. so this is pure greed again! If their brick and mortar stores are losing profits.. tell them to lower their prices! Duh! I sell products everyone uses and if you go to the local shop.. you will find it for a slightly higher price then i charge...not drastic since my items are small ticket items.. point is.. greed! If your losing money..drop your prices jer*s.. OR LEARN HOW TO MARKET!

11:06 pm on Nov 4, 2002 (gmt 0)

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In New Jersey Sales Taxes are charged on any sale where the buyer is within the states jurisdiction. This is true of retail sales, mail order sales, telemarketing sales and Internet sales.

Now to aid collection, a company that is within New Jersey must collect the sales tax and pass the monies on to the state.

Any buyer that buys from an out of state company must self-report the sale and pay the tax. So a law already exists covering Internet sales. The law is all but unenforcable.

The proposal is to make out of state companies collect the sales tax for every state in the union. That would raise the paperwork burden to 50 times what it is now.

In New Jersey I must pay the taxes collected and file a form monthly if I've collected over a certain amount otherwise I file and pay quarterly. That's 12 forms for me and 12 checks. Our sales tax rate is uniform throughout the state. Things are fairly simple.

In nearby New York, the tax rate is not uniform by state. It differs from county to county. So sales taxes are collected by the state and an addon is collected for some counties. New York State is 6% but New York City is 8.25% I don't know how things are in the other states.

I know that zip codes don't follow the taxing authorities. Isn't it Junction City that is in 3 different States? When we ship something we would need to know how to identify the proper taxing authority from the address. Is it the buyer address or the shipping address that would be used. If it were the shipping address what happens with multiple shipping points? If it is the buying address, couldn't someone just set up a buying address in a non-sales tax state? Someone has suggested that there are 7500 separate taxing auuthrities. This new law, I hope addresses some of these problems.

However, there are some legal problems too. Our constitution gives the US government not the states the right to regulate interstate commerce. So chances are this law will be unconstitutional.

Next is there also a legal principal that you may not make a law in an area you can't enforce. So New Jersey can not make a law about things in New Mexico, because they have no power to enforce a law in New Mexico. If this is true how could NJ require a company in NM collect and report sales taxes on sales from NJ.

If we really needed a national sales tax system, should the federal government be the one to impose it?

4:35 am on Nov 5, 2002 (gmt 0)

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I strongly disagree with those that think online commerce has an inherent advantage.

Bricks&mortar customers....
get to see and touch their merchandise.
get their items immediately.
returns are quicker (cheaper and easier too)
trust guarantees more.(store can't claim it was damaged in shipping)
get to try out the item in-store (in many cases)
can get 1 on 1 input from clerk.

any online business of any size will have employees, with their inherent cost.
needs to store their inventory too (rent), or uses drop-ship, cutting profit

If the tax system,state and federal, could ever become
standardized --lol, maybe taxation would'nt be so bad..

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