Americans Online Seen Paying States Seeking $23 Billion

[Purveyor]

Kelly Blair, a banker from the Baltimore suburbs, spends hundreds of dollars online every year buying gifts and household supplies like pet food and shampoo. She doesn’t check to see whether she owes sales tax -- though her home state of Maryland says that she should.

“I had no idea,” said Blair, 30.

U.S. states forgo as much as $23 billion a year in sales tax as consumers like Blair spend money online at businesses far across state lines. That’s because officials rely on consumers to pay it. Millions of consumers technically are violating their states’ tax laws, and the states have chosen not to pursue them one by one through audits.

That situation may change: A measure that Majority Leader Harry Reid, a Nevada Democrat, said will pass the U.S. Senate this week would let states require companies such as Amazon.com Inc. (AMZN) and dealers in EBay Inc. (EBAY) online auctions to collect sales taxes. That may lead to a boon for state governments only now emerging from the fiscal blows of the recession.

“It’s rare to have an opportunity to collect tax revenue that’s already owed,” said Donald Boyd, executive director of the State Budget Crisis Task Force, a private group that issued reports on state fiscal matters. “From a state perspective, it’s a very good thing. There is a hole in tax bases that is only going to grow otherwise. It’s significant revenue over the long term.”

more...

http://www.bloomberg.com/news/2013-04-25/americans-online-seen-paying-states-seeking-23-billion.html

[graham4anything]

1. This ONLY affects people bringing in more than ONE MILLION DOLLARS. Not a baker in Baltimore.

I hope it passes.

besides, the poorest don't shop online anyhow. So this only affects the rich and upper middle class who can easily afford it and should stop robbing the rest of America by their getting a freebe.

[loyalsister]

3. It should help local businesses

When there is less of an advantage to ordering online, maybe people will buy more at local mom and pop stores.

[Baitball Blogger]

39. Because of the mailing costs, people don't buy online for the convenience. They do it because of the

variety.

[loyalsister]

43. This "people" does

for convenience and it is often less expensive because there's no sales tax.

[Baitball Blogger]

44. Have you seen what mailing costs are today?

Nothing to sneeze at.

[loyalsister]

45. Yes...

But if you would have to take a taxi to the store and back, postage is negligible. For people who can't or don't drive and have little access to public transit it is a matter of convenience.

[Heddi]

29. Oh baloney. Plenty of "poor" people shop online

My mom uses Amazon to order tons of things online because she gets free shipping through Prime. Costs $79 a year and she gets streaming videos that seh can watch instead of paying for cable. And she's poor. Dirt poor. Income last year was around $8,000. She has no retirement, is fully disabled but not approved for SS Disability yet. SHe lives off the charity of others and food banks and food stamps. But for things like cat food, it's cheaper for her (living in the middle of bum fuck) to buy it on Amazon. She doesn't pay shipping, she doesn't spend the $$ on gas driving 45 minutes each way to the closest grocery store.

I don't think you know as much about the "poor" as you'd like people to think you do.

[Travis_0004]

31. The exemption is for bussiness selling less than 1 million, not people earning less

So amazon would tax everybody, but a small business would not tax anybody out of state.

[haikugal]

2. Yet most of the Bush tax cuts

for the rich were kept...

[truebrit71]

4. Thank you!! They cannot pass a single increase on the rich or the corporations...

...but they NEVER miss a chance to soak the poor and the middle class....

[graham4anything]

5. This does NOT affect the poor/middle class. It only affects those making more ONE MILLION.

This does NOT affect the poor.

[truebrit71]

6. Um, yes it DOES...

If amazon.com starts collecting tax, it will collect it from EVERYONE...

[graham4anything]

7. Amazon is now doing this without the law. Because they are opening retail in all states

but the poor do not shop on line. It takes a quick computer and a credit card and the poor don't have that access at this time.

Now, if everyone would be given smart phone or a high speed computer laptop that would be different.

But it is quite an unfair advantage online against the mom and pop store owners who are driven out of biz.

Amazon is nothing more than walmart anyhow.

[haikugal]

9. Excuse me...

I'm poor by an standard and I use the web to do some of my shopping. If you don't have a car to drive around paying shipping and having the post office deliver to your door is a valid alternative.

This will hit me and the others like me. It will also hit the middle class. I don't know what your talking about it not hitting anyone but millionaires...really.

It doesn't go without notice that there is no problem increasing taxes on the 99% while the 1% gets to keep most of their privilege...and money.

[graham4anything]

10. The people who pay it will be the sellers who have 1 million in sales

And, as you are saving money going to the mall, and gas or bus/subway where you would pay tax, why should online be free?

Besides, Amazon is almost always free shipping (and sellers of course charge shipping but its in the price, not as shipping so it is quite an unfair advantage for a regular store outside of the net.

And again, Amazon is going to do this as they are opening retail/pick up so if one has a physical presence in a state, they are required to charge sales tax.
(same as any seller is required to pay income tax on every single penny made).

When one wonders why states have no money, this is a big reason. Why sales tax wasn't charged from day one, who knows.

Sales tax will be whatever it is in each state.

but only sellers/dealers making 1 million or more will be required to file them for online sales.

[haikugal]

12. You make a lot of assumptions....

that aren't true Graham...

The costs will be passed along...and I pay shipping as often as not. Amazon doesn't get the majority of my business and the 1% still evades their fair share.

I don't mind paying taxes but I want a voice in how the money is spent. I don't feel like I have that voice. I also think the 1% should be paying their fair share. Period.

[graham4anything]

14. Everyone would be equal buying, and the large sellers will now be required to pay it.

So in essence, this effects the mega dealers and mega buyers more.

One would think if a megamillionaire sits at home and his family shops online and spends a million a year,what was tax free will now be taxed.

[haikugal]

18. I don't know...

but you seem to have an idea that only the 'privileged' shop online...so not true.

AND the rich still get their tax write-offs and privilege.

[graham4anything]

19. Again, its the small mom and pop retail stores that bear the brunt of no sales

so the poorer small business retail outlets are getting hit hardest since online started.

You are not looking at it from their point of view
They have to charge tax, and 100% of the people who come in their stores pay taxes.

And they have to send in 100% no matter what state the person entering the store comes from

[haikugal]

21. I'd look to Walmart for that hit to Mom and Pop stores....

Amazon does damage in a similar way..

Tax everyone above the poverty level...put the tax rate back up to 50% for those with the greatest income. Enforce the tax laws and follow up on the evaders...trace that money being hidden off shore....then spend it on the people and make this a great country again.

[Heddi]

30. Exactly. That poster has no clue

My mom lives far below the poverty level. She's waiting on her SS Disability to come through and until then, she lives off food stamps, charity, and food banks. She lives in the country and the closest grocery store is 45 minutes each way.

So once a year she buys (or I buy for her) an Amazon Prime account. She gets free shipping on Prime items and she gets streaming videos so she doesn't have to pay for cable. She uses prime to buy stuf like cat litter and cat food and who knows what else, but it's great for her because she's spending less than she would at the middle-of-nowwhere "mom and pop" store that charges $1.50 for a can of Friskies AND she's not driving for an hour and half AND she's not spending $$ on gas.

She has a pre-paid debit card that she uses for $$. No high falootin credit card for her.

There are plenty of poor people, especially rural poor, who shop on the internet. And they have computers. And they have debit cards. And they're poor.

[graham4anything]

36. And they don't make a million, therefore this tax is irrelevant.It is for sellers who make million.

This is not taxing the buyer. Only the seller. And Amazon is going to do this, regardless whether this law passes or not. Because they are making physical stores or drop stores in all 50 states, therefore, by law, if you have a physical location, you have to send in sales tax as a retailer.
It does not affect the buyer at all.

again, Amazon is going to do this in 2014, regardless of this bill.
So Amazon is not part of the conversation.

And the only ones who are attempting to stop this bill are the big corporations because they are the only ones affected.

[haikugal]

37. Well said Heddi...

you've described me right there. I hope your Mom gets her SSI soon...I lost a toe waiting but once I jumped all the hurdles it saved my life. Good luck to you both.

[TheMightyFavog]

11. And you don't exactly need a brand new computer and a high speed cable modem to shop.

One can just as easily order stuff from Amazon with a ten year old computer running XP on a DSL or even a dialup connection. (yes, those still exist. Particularly out in rural areas.)

[haikugal]

13. Thank You...

[juajen]

28. Almost everybody has a debit card. Used as easily as a credit card. NT

[brentspeak]

32. "the poor do not shop on line"

Dumb Post of the Night

[geek tragedy]

8. They're sales taxes, not purchase taxes. Isn't the tax an obligation on the seller, not the buyer?

Am I wrong?

[graham4anything]

15. Yes.

Why do you think the CEO of ebay don't like this? Because it only affects the big dealers and they don't want to do this.

Donahue don't GAS about the smaller sellers and ebay hasn't since Meg took over.

[Fumesucker]

16. Are the prices the buyers pay going to rise to cover the sales tax?

If so then it's the buyers who pay those taxes, not the seller.

[graham4anything]

20. What about the mom and pop retail outlets that haven't been able to fairly compete?

it's the internet that has caused 99.9% of all retail mom and pops to close, that were not closed by the box stores.

Online=Amazon


Had there been tax on the net from the beginning, perhaps 50% of the mom and pops would still be in biz.

Unemployment is a direct line because of both Amazon and Online sales.

[Fumesucker]

25. There's lots of mom and pop enterprises on the internet

A lot of the stuff I buy online you simply cannot get at all locally and never could, I buy things from very small suppliers of esoteric items on a regular basis.

It's much easier to set up a small retail business online than it is to do so in the brick and mortar world, indeed I've sold a fair bit of stuff myself over the years, everything from tanning beds to car and motorcycle parts to cameras, lenses and accessories.

There's at least one DUer who supports himself by buying junk or wrecked cars and parting them out on Ebay.

Even on Amazon I've bought from individuals or small businesses quite a few times, Amazon allows individuals to sell just like Ebay and Etsy.

[graham4anything]

26. NONE of mom & Pops online who make under a million are affected

so again, its not an issue.

Amazon is already going to tax, regardless of this bill, because they are opening a physical store in all 50 states to have next day (or even same day) shipping.

No regular dealer on ebay/amazon makes a million a year and I doubt there are any at all on etsy or ebid

And of course, no US outlet collect VAT tax and no customer pays vat for any foreign company

[Fumesucker]

27. I bet you dollars to cheerios that the little guys will be paying sales taxes within five years

I know you're a huge fan of sales taxes but could just once the politicians tax those who can actually afford to pay rather than the poor schmuck who's struggling to keep his head above water?

Of course they can't, because those who would have no problem financially paying extra taxes already own the politicians.

[graham4anything]

35. You do understand, brick/mortar small guys are ALREADY paying sales tax forever.

And they pay rent, water, electricity, and drive to and from their store, they pay insurance,
they pay for any help, etc.
They have to buy supplies for their stores. They have to eat lunch outside which add expenses.

Why should someone working on the internet get a freebee?

BTW-I thought we want MORE spending. Spending only comes from taxes.
Every state is penalized by this.

rememeber-taxes are a good thing to our party.

Where in the world do people think working on the internet gives one a pass from responsiblity?
Whether small or large, not paying ones share is cheating.

[Fumesucker]

38. Umm.. I grew up in a small family business and had one myself for much of my working life

All of my customers when I had my own business were small business themselves, I mean really small usually one person.

Why don't we just pass a 90% income tax on anyone making less than $100K/yr? You'd be good with increased taxes for my Republican state to spend on stamping out abortion, shoveling profit to corporations and harassing anyone not a right wing white male, yes?

[graham4anything]

40. Taxes already exist. ANd I am not a fan of ron or rand paul and their hate tax stuff

If one, as someone used as example, has to travel 45 minutes each way, that is 90 miles
that is at least 3 gallons of gas if not 4 or 5 (depending on vehicle) and wear and tear on a car.

At around $4bucks a gallon, that is between 12 and 20 dollars in gas

the example above was for about $10 in groceries.
Sales tax depending on state in, is less than 80cents.
Meaning, sitting at home on the net saves a person the gas and wear & tear and mileage and oil changes.

So paying a little sales tax still saves a fortune, but it might save a job.

And in small biz- NO ONE makes a million dollars. The tax above is for ONE MILLION DOLLARS.
And if they do and are cheating the government, I have zero sympathy for tax cheaters.

That only makes everyone else pay more
(Same with health care and everything else).

It's a win-win-win for all involved.

[Fumesucker]

41. I don't own a car, in fact I use an electric bicycle for grocery shopping.

1685 mpge to be exact, I calculated it recently.

Here's my two posts about what I've been doing.

http://www.democraticunderground.com/11282403

http://www.democraticunderground.com/11282343

[CBGLuthier]

17. In Most States you are correct. in mine, Oklahoma, it is called a Use Tax

Not a sales tax and they require you to report it. They can kiss my ass of course. It was the only box on the efile that you had to put a zero in to make it move forward.

If they really want to come after me for the 50 bucks or so worth of online purchases I have made let them.

[brentspeak]

33. About most things, yes, you are

Seller passes the sales tax onto the buyer, who must pay the sales tax in order to make purchase.

[Marrah_G]

22. Actually I don't have a problem with paying the sales tax

State taxes go to keeping my state running smoothly.

HOWEVER, I am annoyed that THESE are the taxes they are going after when none of these assholes in DC have the balls to stand up to the corporation blatantly dodging ALL their taxes.

[kevinbgoode1]

23. I don't mind paying sales taxes either. . .however

in my state, the "Use" Tax was created not just to get online sales revenue, but sales taxes they claim you owe when you purchase anything out-of-state. While part of this was aimed at people crossing state borders to purchase cigarettes much cheaper, the state ALSO thinks we "owe" the state sales tax if we go on vacation, for example, across the country and pay LESS sales tax (or none) for a souvenir which we bring back home. I find that latter regulation appalling.

Their reasoning is that we are depriving the businesses of the state of customers if we go on vacation elsewhere and purchase, for example, a rain jacket. Even though we pay the state we purchased the product in sales tax on the item (or, I suppose, in the few states with no tax, we pay nothing), my state says we "owe" the DIFFERENCE. However, there is an exception - if I purchase a product on vacation in Seattle (or Boston, or SF, or someplace with HIGHER sales tax), then my state doesn't care - we don't need to report it.

So I have some objections to the USE tax. Most online retailers I've ever used already assess sales tax, and when I checked this year while doing taxes, the same places assessed a rate equal or slightly over the rate in my state. So those were apparently paid and I was fine. There were two online sales that didn't charge me sales tax, and I reported and paid my home state. But I do think it is going a bit far to expect someone traveling, for example, to keep track of receipts for any purchase made in another location which MAY have charged less sales tax (or none) than my home state - under the guise that I am somehow depriving businesses in my home state of customers. And where is the exemption for items which a business in my home state may not advertise or SELL and you have to purchase it out of state? An example - I went to a university in another state for grad school and wanted this large yard flag in school insignia outlined in led lights - clearly a specialty item. I live in a small city of 20,000 several states away. How would I be depriving my state or those businesses of a customer or taxes? And why should I pay a Use Tax on the item just because I live here?

[Marrah_G]

24. Wow that is fucked up

Going to check on my state to see if they have something like that.

[Skip Intro]

34. I feel so sorry for the states. They should take more from us.

This is a good idea, as I'm sure any struggling American will agree.

[Fumesucker]

42. Especially the Republican ones

They need more money to gerrymander districts, launch lawsuits against Obama, restrict abortion and of course funnel to their bidness buddies.