Internet sales tax embraced by no-tax Republicans

[Omaha Steve]

Source: AP-Excite

By STEPHEN OHLEMACHER

WASHINGTON (AP) - You don't see this very often: a majority of Senate Republicans voting to make people who buy stuff on the Internet pay state and local sales taxes.

Anti-tax guru Grover Norquist isn't happy about it, and the conservative Heritage Foundation is questioning the senators' conservative credentials. But the issue of taxing Internet sales is getting strong support from Republicans and Democrats alike.

The Senate could vote as early as Thursday on a bill to empower states to require online retailers to collect state and local sales taxes for purchases made over the Internet. Under the bill, the sales taxes would be sent to the states where a shopper lives.

On Wednesday, the bill passed a test vote in the Senate, 74 to 23, with 27 Republicans voting in favor. Senators were trying to work out agreements Thursday on potential amendments and the timing of a final vote.

FULL story at link.


Read more: http://apnews.excite.com/article/20130425/DA5SJG1G0.html

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In this Oct. 18, 2010 file photo, an Amazon.com package is prepared for shipment by a United Parcel Service (UPS) driver in Palo Alto, Calif. States could force Internet retailers to collect sales taxes under a bill that overwhelmingly passed a test vote in the Senate Monday, April 22, 2013. (AP Photo/Paul Sakuma, File)

[MikefromMass]

1. This would really hurt small businesses

We rely on expanding market reach and sales that only the Internet can bring effeciently, but to try to manage state by state sales tax reporting is a burden that would be almost impossible to do without great cost.

I support generating revenue and dislike the Grover group, but at the risk of sounding like Boehner, this plan would actually hurt small businesses big time.

[thesquanderer]

2. Not surprised that Republican senators like it

In most cases, it helps businesses in their states.

And honestly, I'm not sure it's a bad idea, even if the Republicans like it for the wrong reasons.

[Fearless]

3. Of course Republicans don't mind!

It's basically a poor tax. Who buys the most stuff off the internet? How many wealthy people use amazon.com or some similar site?

[DallasNE]

4. It's Not A Tax On The "Job Creators"

It's a tax on everybody else so of course Republicans love it.

[cstanleytech]

7. Maybe thats their view but mine is that it might help level the playing field

somewhat as right now companies like amazon can and do setup shop in states with low taxes in order to escape paying sales tax on items that a local bookstore for example in ohio might have to charge thus it does encourage people to shop online to avoid paying said taxes.
Besides sales tax is a poor way to tax the wealthy and always has been, a better way is to hit them on their income and assests and to do away with all of the loopholes they are exploiting to escape paying their fair share.

[harmonicon]

11. Oh, please, not this false dichotomy again.

Where is the person who wants to buy a book and thinks to themselves, "I could go to the local book shop, but that dollar extra I would have to pay is just too much, so I'll wait a week and get it shipped to me." It's more likely that the local book shop wouldn't actually have what someone wants to buy, and if they were together enough to order said book, it would take longer to get to the buyer. So, either 1. look for book in your own time online and wait for it to be shipped to your door, or 2. drive to book shop, realize they don't have book you want, hope to find a clerk who can order the book for you, have them order it, wait for it to get in, wait for a call that it's in, drive back to the bookshop and pick up book. Most people will pick option 1.

This bill is about hurting small business in service to large business and fucking the poor with more tax.

[cstanleytech]

12. If it was false then amazon wouldnt be crushing the mom and pop bookstores

but they are.
So right now there are two options, either do away with sales tax alltogether and watch varies governments put the squeeze on people via "fees" and or by cutting services or we level the playing field alltogether and start making companies like amazon pay the sales taxes that they have avoided paying by placing their warehouses in states with low to no sales tax.

[harmonicon]

13. Did you read my post?

Seriously do you have any evidence that lack of having to pay in-state sales tax is the reason that people choose to buy something like a book online over going to a local shop? I don't think so.

Do you know that sales tax isn't paid by the retailer, but the customer? Amazon can afford to implement all of the accounting BS associated with allocating sales tax to many different jurisdictions - they make enough money to do that. Small businesses don't. This will hurt small business and help Amazon, Walmart, etc.

[thesquanderer]

15. It's not a matter of saving a dollar on a book

It's a matter of saving 5, 6, 7, 8 percent on ALL your books. And CDs. And computer gear. And audio gear. And on everything else that Amazon and other online retailers sell. Basically, anything that doesn't spoil or isn't too heavy to ship cost effectively is being bought on the internet. This tax isn't aimed at the person who buys one book a year on the internet, it's aimed at the people who buy hundreds or even thousands of dollars worth of stuff a year over the internet.

[harmonicon]

16. Really? Do you honestly think that?

If so, can you give me the evidence - even circumstantial? Even if it is about that, do you not see that it helps big business and hurts small business? Can you at least admit that? How is my friend who runs a record store in Grand Rapids, Michigan supposed to compete with Amazon when he has to now account for every sales tax jurisdiction in the country? How does a small business do that?

Who has every honestly argued that sales tax is the reason people buy books online? I would always rather buy books from a local shop, but for the last 15 years, I cannot think of a time when that's been more practical, even if price were no object.

[thesquanderer]

18. more info here

re: "If so, can you give me the evidence - even circumstantial?"

I'm not sure exactly what you're asking for evidence of. That it's aimed at people who spend hundreds or thousands of dollars a year on internet purchases, rather than at people who buy one book a year? Does that really need evidence? Would anyone care if it was such a small scale? The problem is the big scale. As in this quote, which might qualify as circumstantial evidence...

Old-fashioned retailers are going bust, leaving towns marred by vast, empty storefronts. Those that remain complain of “showrooming,” when shoppers inspect their wares, then leave the store to buy the same products on the Internet, finding lower prices and avoiding sales taxes.

that's from http://www.nytimes.com/2013/04/23/technology/internet-sales-tax-gains-ground-in-senate.html

re: "do you not see that it helps big business and hurts small business? Can you at least admit that? How is my friend who runs a record store in Grand Rapids, Michigan supposed to compete with Amazon when he has to now account for every sales tax jurisdiction in the country? How does a small business do that? "

As the same article states, online retailers with out-of-state sales of less than $1 million a year would be exempt. So I doubt your friend would be affected. The idea is to help small local businesses better compete with large out-of-state businesses. And for the states to capture that lost tax revenue, of course.

re: "Who has every honestly argued that sales tax is the reason people buy books online? "

Again, you're back to books! Like I said, it's not about books, it's about virtually everything.

[cstanleytech]

19. Bingo.

@harmonicon
Look, I dont want to argue I am just expressing my opinion much like you are.
I believe (and its an opinion) that the no sales tax to out of state online businesses is atm hurting small businesses more than its helping as it means less revenue for the state where the item is being shipped to as well as fewer jobs.
You ask for evidence though? Well does personal experience count? I live in a small town and its one of the ones thats seen a slow but steady decline in the number of small businesses in a roughly 50 mile radius over the past 15 years but surely you arent saying walmart is all to blame or are you?

[okaawhatever]

23. I agree with you. Also, this only affects those who sell over one millon dollars online per year.

Most small business either aren't selling that volume online only or they have a few very high dollar transactions. The erosion of the tax base is much more harmful and failure to collect sales tax all these years has given large online retailers an unfair advantage over small business'. I'm all for it provided they keep the qualifying sales volume at a reasonable level, or create an easy one stop tax collection system. Too much misinformation on this subject.

[cstanleytech]

24. The issue thats going to be tough to combat though

in order to create a truly level playing field is the cushy tax free and or low tax deals companies like amazon have been granted by the varies cities and or states.
Making people pay sales tax for online purchases will help companies like amazon more atleast for the next few years since they can keep lower prices as they already are getting huge tax cuts that wont expire for awhile.

[okaawhatever]

21. This is not really more tax. This is a tax that went uncollected for many years. In my state tax is

9.25%. If you buy something over the internet you automatically get a 9.25 per cent discount. While shipping charges
exist, they are usually offset by the selling companies lack of retail costs. I'm quite certain a solution can be reached to allow internet retailers a one-stop tax collecting solution. Ebay already offers if i'm not mistaken. The lack of taxes collected on items purchased over the internet is much more damaging to the average American than paying sales tax on internet purchases. Yes, a solution will have to be reached to make it easy for small retailers to collect and distribute taxes, but to allow people to purchase goods over the internet and avoid paying taxes never benefitted the poor. WalMart didn't go out of business when online retailing became popular. I think you'll find more mom and pop's did.

[Sunlei]

5. Republicans are all for local and state taxes.Revenue politicans can squander on whatever they want.

[mountain grammy]

6. The Republicans only oppose taxing the rich.. this won't hurt them a bit.

What a bunch of crap.. call em out!

[They_Live]

8. I am still confused...

(on edit- I need to read before I reply)

Why would it be based on the tax rate of the destination? This tax should be on the Sale and based where the item is sent FROM (origin)?
What about states that have no sales tax? Also, tax rates within a state can vary from city to city.

Origin makes more sense to me. If I live in Texas, and I walk into a store in Mississippi and buy a Black Sabbath CD, I would pay the Mississippi sales tax, not the Texas sales tax.

Anyway I am opposed to this.

[BadgerKid]

9. I see a renewed wave of H1B requests

for programming the tax-tracking databases!

[GeoWilliam750]

10. Excellent

Whilst one would hope that there would be some exemption for businesses with internet revenue under say $50,000, this is necessary. The avoidance of state and local taxes by distant producers versus local businesses is gutting the tax revenues of state and local governments, and destroying so many local shops.

Also, sales between individuals should be exempted, as they are currently from sales tax.

[Sunlei]

14. The customers pay sales tax. Used junk is already exempt from sales tax.

Local businesses are dead because they can't compete with the mega stores. Even with sales tax stuff online is less expensive.

Plus many local communities forbid small businesses in the home. People can't even work from home. Against zoning and HOA. Rent for a brick store is very high, and inventory costs plenty.

If the Gov. (local and state) really wanted to help small business rise from the dead they would cancel all HOA forbiding business in the home. They would make small businesses sales tax free.

[Ash_F]

17. Republicans love taxing the little guy. /nt

[Alan M]

20. A win win for Republicans

I am a small Internet business person. I’ll tell you right off the bat this is a horrible law because I can’t comply with it. I can’t keep track of all 50 states and their tax regulations plus 1000s local taxing jurisdictions. For those of you that say mom and pops can’t compete with Amazon it will only make them stronger as most of their medium and small online competitors will disappear.

And of course Republicans are for it as it closes a loophole for the poor and middle class, and it gives them ammo to say they gave Obama more revenue so they need more cuts. It is a win win for them.

[okaawhatever]

22. The current exemption level is $1 million per year in online sales. that's not online and store sale

just online sales. If you sell 2 million in your store and .75 million online you're exempt. I believe if someone can manage that level of sales, they can manage the taxes. Now, i'm sure a company will develop software or visa/mastercard will begin to offer something with transactions to reduce that burden. I keep hearing chicken little like responses from online retailers (and i'm one) who aren't even affected. I'm much more concerned with my state making up all the lost revenue that has happened since the online sales boom.