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Thread: If the Senate has their way anything you purchase online will soon charge Sales Tax

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    If the Senate has their way anything you purchase online will soon charge Sales Tax

    Well it was good while it lasted but it's about to come to an end buying stuff on Amazon and other online stores where you don't have to pay taxes. Currently if a store doesn't have a physical location or registered business name they in a state they don't have to charge sales tax. This means several online retailers only add tax in for buyers in their own state since they don't have a location elsewhere. The big box retailers like Best Buy, Walmart, Target,etc. have always charged but soon everyone will be paying.

    People are supposed to report on their taxes every year if they buy out of state stuff online but very few do that obviously so the government is pushing to fix that.

    http://www.cbsnews.com/8301-205_162-...ess-in-senate/

    Sounds like this bill is as good as passed.

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    Bronze Beebs9Dizzle's Avatar
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    I'm assuming this only applies to purchasing in a state that does have sales tax?

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    Quote Originally Posted by Beebs9Dizzle View Post
    I'm assuming this only applies to purchasing in a state that does have sales tax?
    A business wouldn't have to charge someone in a state that don't have sales tax (Alaska, Delaware, Montana, New Hampshire, and Oregon) BUT lets say you run a business in one of those states with no sales tax now you have to collect for the 45 states that do charge if selling to someone from one of them.

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    Quote Originally Posted by BeerAndPoker View Post
    Quote Originally Posted by Beebs9Dizzle View Post
    I'm assuming this only applies to purchasing in a state that does have sales tax?
    A business wouldn't have to charge someone in a state that don't have sales tax (Alaska, Delaware, Montana, New Hampshire, and Oregon) BUT lets say you run a business in one of those states with no sales tax now you have to collect for the 45 states that do charge if selling to someone from one of them.
    This is very much akin to Walmart moving into small towns and killing all the small businesses.

    The large online retailers know this will crush the small guys.

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    Quote Originally Posted by abrown83 View Post
    Quote Originally Posted by BeerAndPoker View Post

    A business wouldn't have to charge someone in a state that don't have sales tax (Alaska, Delaware, Montana, New Hampshire, and Oregon) BUT lets say you run a business in one of those states with no sales tax now you have to collect for the 45 states that do charge if selling to someone from one of them.
    This is very much akin to Walmart moving into small towns and killing all the small businesses.

    The large online retailers know this will crush the small guys.
    That is a huge reason they are doing it. Their are lots of people who have connections to purchase goods at wholesale prices and they have low to no overhead so they can charge less then a retailer like Walmart who probably gets the best prices possible due to the volume they purchase.

    If a smaller retailer can charge 10-25% (or more) less on a lot of items and then not charge sales tax then many people are going to buy from them if they are wanting to save money and willing to wait a few days to get the item.

    Big Box retailers have been pushing for this for years. This will also cause a whole lot more work for the smaller guys to collect and document all the sales tax they bring in and then distribute it accordingly.

    I'm not sure but I can just assume they will have to send in the tax collected "x" amount of times each year to every state that charges sales tax which the whole process for a small business that could be ran by a single individual will take up so much of their time.

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    Quote Originally Posted by BeerAndPoker View Post
    Quote Originally Posted by abrown83 View Post

    This is very much akin to Walmart moving into small towns and killing all the small businesses.

    The large online retailers know this will crush the small guys.
    That is a huge reason they are doing it. Their are lots of people who have connections to purchase goods at wholesale prices and they have low to no overhead so they can charge less then a retailer like Walmart who probably gets the best prices possible due to the volume they purchase.

    If a smaller retailer can charge 10-25% (or more) less on a lot of items and then not charge sales tax then many people are going to buy from them if they are wanting to save money and willing to wait a few days to get the item.

    Big Box retailers have been pushing for this for years. This will also cause a whole lot more work for the smaller guys to collect and document all the sales tax they bring in and then distribute it accordingly.

    I'm not sure but I can just assume they will have to send in the tax collected "x" amount of times each year to every state that charges sales tax which the whole process for a small business that could be ran by a single individual will take up so much of their time.
    Most states require quarterly remittance of sales tax.

    Also, how do they handle states that have local and county option sales taxes?

    Also, can someone clarify how the state government of California is going to enforce that a business in Texas collects and remits Sales Tax to them? I am not even sure how that is going to be possible at this point.

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    Quote Originally Posted by abrown83 View Post
    Also, how do they handle states that have local and county option sales taxes?

    Also, can someone clarify how the state government of California is going to enforce that a business in Texas collects and remits Sales Tax to them? I am not even sure how that is going to be possible at this point.
    This presents a whole lot of issues on accuracy but at this point they are so greedy if they received sales tax on 50% of the purchases it's more then the 0.0005% that report it now.

    Your placing a lot of trust into small businesses who many just don't have the man power to handle it. I can see audits being done at an all time high over the first few years after this goes into effect.

    GG small businesses.

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    Quote Originally Posted by BeerAndPoker View Post
    Quote Originally Posted by abrown83 View Post

    This is very much akin to Walmart moving into small towns and killing all the small businesses.

    The large online retailers know this will crush the small guys.
    That is a huge reason they are doing it. Their are lots of people who have connections to purchase goods at wholesale prices and they have low to no overhead so they can charge less then a retailer like Walmart who probably gets the best prices possible due to the volume they purchase.

    If a smaller retailer can charge 10-25% (or more) less on a lot of items and then not charge sales tax then many people are going to buy from them if they are wanting to save money and willing to wait a few days to get the item.

    Big Box retailers have been pushing for this for years. This will also cause a whole lot more work for the smaller guys to collect and document all the sales tax they bring in and then distribute it accordingly.

    I'm not sure but I can just assume they will have to send in the tax collected "x" amount of times each year to every state that charges sales tax which the whole process for a small business that could be ran by a single individual will take up so much of their time.

    Frankly I think they should make an exemption for smaller businesses at say a certain line of revenue - if you make below it, then you don't have to worry about the tax. They already make other exemptions for businesses in other areas based on its size, why the hell wouldn't they do it here? They are even exemptions with Obamacare...

    As far as the extra work, i would imagine an applicable computer program would take care of alot of sorting as to what goes where - you are already entering your billing info anyway everytime you make an online purchase, but yeah, it still would be more work.

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    Gold abrown83's Avatar
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    Quote Originally Posted by Gordman View Post
    Quote Originally Posted by BeerAndPoker View Post

    That is a huge reason they are doing it. Their are lots of people who have connections to purchase goods at wholesale prices and they have low to no overhead so they can charge less then a retailer like Walmart who probably gets the best prices possible due to the volume they purchase.

    If a smaller retailer can charge 10-25% (or more) less on a lot of items and then not charge sales tax then many people are going to buy from them if they are wanting to save money and willing to wait a few days to get the item.

    Big Box retailers have been pushing for this for years. This will also cause a whole lot more work for the smaller guys to collect and document all the sales tax they bring in and then distribute it accordingly.

    I'm not sure but I can just assume they will have to send in the tax collected "x" amount of times each year to every state that charges sales tax which the whole process for a small business that could be ran by a single individual will take up so much of their time.

    Frankly I think they should make an exemption for smaller businesses at say a certain line of revenue - if you make below it, then you don't have to worry about the tax. They already make other exemptions for businesses in other areas based on its size, why the hell wouldn't they do it here? They are even exemptions with Obamacare...

    As far as the extra work, i would imagine an applicable computer program would take care of alot of sorting as to what goes where - you are already entering your billing info anyway everytime you make an online purchase, but yeah, it still would be more work.
    The platforms are light years ahead on this. Magento for example already is very robust in this manner (mostly do to not wanting to alienate EU users VAT charges).

    The bigger problem is calculating what is owed and remitting it all.

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    Gold abrown83's Avatar
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    Quote Originally Posted by BeerAndPoker View Post
    Quote Originally Posted by abrown83 View Post
    Also, how do they handle states that have local and county option sales taxes?

    Also, can someone clarify how the state government of California is going to enforce that a business in Texas collects and remits Sales Tax to them? I am not even sure how that is going to be possible at this point.
    This presents a whole lot of issues on accuracy but at this point they are so greedy if they received sales tax on 50% of the purchases it's more then the 0.0005% that report it now.

    Your placing a lot of trust into small businesses who many just don't have the man power to handle it. I can see audits being done at an all time high over the first few years after this goes into effect.

    GG small businesses.
    It still doesn't get to the crux of how California laws can apply to a company in Texas. How can they legally enforce this, if I don't want to remit Sales Tax to them? Are they going to sue my business in California? That's great, not going to ever do business there anyways. Businesses are state entities not Federal. If they are proposing shifting that model it has about a million other ramifications.

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    Serial Blogger BeerAndPoker's Avatar
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    Quote Originally Posted by abrown83 View Post
    Quote Originally Posted by Gordman View Post


    Frankly I think they should make an exemption for smaller businesses at say a certain line of revenue - if you make below it, then you don't have to worry about the tax. They already make other exemptions for businesses in other areas based on its size, why the hell wouldn't they do it here? They are even exemptions with Obamacare...

    As far as the extra work, i would imagine an applicable computer program would take care of alot of sorting as to what goes where - you are already entering your billing info anyway everytime you make an online purchase, but yeah, it still would be more work.
    The platforms are light years ahead on this. Magento for example already is very robust in this manner (mostly do to not wanting to alienate EU users VAT charges).

    The bigger problem is calculating what is owed and remitting it all.
    That's what I'm saying the whole process of getting it remitted is work and taking faith into a small business owner to not forget to collect it.

    As for what your saying about California laws applying to a business in Texas this is one of many obstacles that could shelf this bill for a while. Businesses are state entities and who knows what other loops people would have to go through. It's not like Walmart whose got locations everywhere so they not only are prepared for this but have been doing it forever.

    Gordman - The thing about an exemption is anyone can say they didn't sell the allowed exception of dollars and probably get away with it or say they WAY oversell because their business grew faster then they thought. A lot of people just don't take accurate records.

    Even though this bill sounds likely to pass even if it did tomorrow in order to put it into effect we are talking about a lot more issues to deal with and educating people is a huge process in itself.

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    Bronze smithbk's Avatar
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    Quote Originally Posted by BeerAndPoker View Post
    People are supposed to report on their taxes every year if they buy out of state stuff online but very few do that obviously so the government is pushing to fix that.
    Virginia has always been aggressive in this area. (They actually tracked down people buying and shipping in furniture from North Carolina.) I'm a life nit, so I try to report my Amazon and Ebay purchases.


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    Owner Dan Druff's Avatar
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    There will be an exemption for all businesses making sales of less than $1 million per year.

    Amazon has already been pressured into always charging sales tax on items shipped to certain states, including California.

    This bill is one of the rare ones that crosses party lines, and has people on both sides of the aisle on the pro and con side.

    It is expected to pass.

    Strangely enough, Amazon is FOR this bill. I believe it's because they are already being forced to charges sales tax to 1/3 of the US population, and other smaller companies are getting away with not doing so, so Amazon is losing sales because of that.

    eBay is leading the charge against it, presumably because some of their "power sellers" will be affected by it. The typical eBay sellers will not be.

    I am against this bill. I think it's bad for consumers, and is in fact a tax increase likely to affect the middle class the most.

    The justification is that it will save local brick-and-mortar businesses from being crushed by online merchants, but in reality it's actually introducing a tariff to domestic online sales. While it's true that online merchants have much lower overhead, they also have to deal with shipping costs (expensive for many bulky items), return shipping costs, and a much higher rate of fraud. The online shopping model is the future, and this new tax plan is seeking to thwart that future by placing sales tax where it previously did not belong.

    I also don't understand how small online merchants are supposed to calculate the local sales tax, which can vary from the base state rate. For example, parts of southern California have a 10% sales tax, while other parts have a 7.5% tax rate, and most are in between. How is a merchant in Iowa going to know what to charge? (Amazon knows because it's huge and has every piece of data in its system, but this can't be expected of small businesses.)

    I think this should be considered a violation of states' rights, since sales tax is a state issue, not a national one. I don't understand how the federal government can make a law requiring one state's businesses to collect sales tax for a completely different state, but it seems that there is less and less concern for states' rights these days, which is a shame.

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    Online sales tax bill may be dead on arrival in House


    The online sales tax bill will face an uphill battle in the Republican-dominated House of Representatives, despite broad bipartisan support in the Senate.

    The Marketplace Fairness Act, which will allow states the authority to collect sales taxes from online retailers outside of their state, is scheduled for a vote in the Senate in early May and is expected to pass. The fast tracking that it experienced in the Senate, however, is unlikely to be replicated in the House.

    So far, Republican leadership has shown little interest in championing the issue of online sales taxation.

    “A Boehner spokesman deferred to House Judiciary Chairman Bob Goodlatte (R-Va.), whose panel has jurisdiction over the online sales tax bill, and a spokesman for Cantor, Doug Heye, said only: ‘We’ll review what the Senate sends over,’” The Hill reported.

    The issue has split Republicans, who typically stand firm in their resolution against tax increases. While the conservative Heritage Foundation and anti-tax-hike Americans for Tax Reform (ATR) have held firm in their opposition against what they call a tax increase, other Republicans argue it is an issue of states’ rights and tax fairness.

    “The legislation… is about letting states set their own tax policy without asking Washington’s permission. That’s the spirit of the 10th Amendment to the U.S. Constitution, and the spirit of this country,” Tennessee Sens. Lamar Alexander and Bob Corker argued in an recent op-ed.

    The National Governors Association (NGA) has also come out saying that this legislation does not violate the ATR pledge to not raise taxes.

    “Marketplace Fairness… is not a new tax or a tax increase,” the NGA said in its statement. “It clearly does not violate the pledge. In fact, the American for Tax Reform themselves admitted to leadership of the National Governors Association that this was not a violation. To say anything else is disingenuous.”

    “This is a last ditch effort to undermine legislation that upholds the principles of federalism and levels the playing field between Main Street and e-street,” the association added.

    Rather that circumventing the traditional committee process as it did in the Senate, the bill will likely go through the House Judiciary Committee under the control of Rep. Bob Goodlatte of Virginia, who has expressed concern over the nature of the bill as it is written.

    “I do not believe legislation like the Marketplace Equity Act is sufficiently simplified yet. While it attempts to make tax collection simpler, it still has a long way to go,” Goodlatte said in an earlier statement to The Daily Caller News Foundation.

    “There is also concern that despite disclaimers, the bill could open the door for states to tax or even regulate beyond their borders,” he added. “I am open to considering legislation concerning this topic but these issues, along with others, would certainly have to be addressed.”

    “We do have a ways to go,” Democratic Rep. Peter Welch of Vermont, a sponsor of the bill, told The Hill. “But we’re also much further along than we were a couple of years ago, or even a couple of months ago.”

    The splitting in Republican ranks, though, is a sign of optimism for proponents of the bill. Currently, the bill has 24 co-sponsors in the House.

    “Suggestions that the House Republicans are united in opposition to this are wishful thinking on the part of our opponents,” Jason Brewer, the Retail Industry Leaders Association vice president for communications and advocacy, told The Hill.


    http://dailycaller.com/2013/04/29/on...ival-in-house/

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    Platinum GrenadaRoger's Avatar
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    Quote Originally Posted by Dan Druff View Post
    There will be an exemption for all businesses making sales of less than $1 million per year.

    Amazon has already been pressured into always charging sales tax on items shipped to certain states, including California.

    This bill is one of the rare ones that crosses party lines, and has people on both sides of the aisle on the pro and con side.

    It is expected to pass.

    Strangely enough, Amazon is FOR this bill. I believe it's because they are already being forced to charges sales tax to 1/3 of the US population, and other smaller companies are getting away with not doing so, so Amazon is losing sales because of that.

    eBay is leading the charge against it, presumably because some of their "power sellers" will be affected by it. The typical eBay sellers will not be.

    I am against this bill. I think it's bad for consumers, and is in fact a tax increase likely to affect the middle class the most.

    The justification is that it will save local brick-and-mortar businesses from being crushed by online merchants, but in reality it's actually introducing a tariff to domestic online sales. While it's true that online merchants have much lower overhead, they also have to deal with shipping costs (expensive for many bulky items), return shipping costs, and a much higher rate of fraud. The online shopping model is the future, and this new tax plan is seeking to thwart that future by placing sales tax where it previously did not belong.

    I also don't understand how small online merchants are supposed to calculate the local sales tax, which can vary from the base state rate. For example, parts of southern California have a 10% sales tax, while other parts have a 7.5% tax rate, and most are in between. How is a merchant in Iowa going to know what to charge? (Amazon knows because it's huge and has every piece of data in its system, but this can't be expected of small businesses.)

    I think this should be considered a violation of states' rights, since sales tax is a state issue, not a national one. I don't understand how the federal government can make a law requiring one state's businesses to collect sales tax for a completely different state, but it seems that there is less and less concern for states' rights these days, which is a shame.
    Druff, come on, that's a feeble excuse, and I know you can come up with a better objection.

    In an era of GPS, mapquest and aps galore, it won't be difficult to identify the tax rate that applies based on shiip to address collected by the seller--a simple tabling operation will do that...for example, the California Board of Equalization publishes a sales tax rate guide by location currently....Currently sales tax software used by a tax preparer costs only a couple hundred a year right now--small business can afford that

    Why i don't like this law is because its just another way of fucking the average Joe--he gets screwed already because his wages are reported to the IRS and money taken by the government from his pay before he get his check. Its easy collections/pickings for the government as the taxman knows pretty much how much tax he should owe.

    Meanwhile Mr SmallBusinessMan who Druff is sympathetic to is the one doing most of the cheating/underreporting...indeed, according to IRS studies of the tax gap, about 1/6the of proper amount of tax goes unreported/collected due to cheating, with most of the cheating done by small businesses, and in particular real estate and construction industries as the most likely offenders--but its too politically unpopular/technically difficult for the government to after that non-compliance--so they tolerate the cheating and put the extra burden on the working man.

    This sales tax law is just another way the government wants easy money from the taxpayer...
    (long before there was a PFA i had my Grenade & Crossbones avatar at DD)

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    Just bought something for like 20 bucks on Amazon today and saw for the first time they added sales tax for some odd reason. Never happened before.

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    Bronze smithbk's Avatar
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    Quote Originally Posted by Gordman View Post
    Online sales tax bill may be dead on arrival in House
    “The legislation… is about letting states set their own tax policy without asking Washington’s permission. That’s the spirit of the 10th Amendment to the U.S. Constitution, and the spirit of this country,” Tennessee Sens. Lamar Alexander and Bob Corker argued in an recent op-ed.
    Lie, lie, lie. The states have already set their own tax policy. They just can't seem to coerce other states' citizens to collect taxes for them. A state has every right to coerce its own citizens to self-report. It just isn't worth the PR hit and the actual capital required to enforce. And these are Republicans thinking this way about the Constitution! Spirit of the country my....


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    Owner Dan Druff's Avatar
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    Quote Originally Posted by smithbk View Post
    Quote Originally Posted by Gordman View Post
    Online sales tax bill may be dead on arrival in House
    “The legislation… is about letting states set their own tax policy without asking Washington’s permission. That’s the spirit of the 10th Amendment to the U.S. Constitution, and the spirit of this country,” Tennessee Sens. Lamar Alexander and Bob Corker argued in an recent op-ed.
    Lie, lie, lie. The states have already set their own tax policy. They just can't seem to coerce other states' citizens to collect taxes for them. A state has every right to coerce its own citizens to self-report. It just isn't worth the PR hit and the actual capital required to enforce. And these are Republicans thinking this way about the Constitution! Spirit of the country my....



    I thought the exact same thing when I read that ridiculous quote.

    They are framing this as a Constitution-friendly bill, when it's actually the opposite.

    The bill is attempting to force businesses to become tax collectors for states where they have no presence, which is pretty much the opposite of what the Constitution tried to accomplish regarding states' rights.

    When you have no physical presence in a state, you should never be required to collect taxes for them.

    This bill isn't even being pitched in a way that people are being asked to pay taxes they rightfully owe. It's pitched as a handicap for online businesses, with the scare tactics that brick-and-mortar businesses will go under without it.

    It's pretty much a local tariff, which does nothing to help the American economy and only exists to punish e-businesses.

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    Quote Originally Posted by Dan Druff View Post
    Quote Originally Posted by smithbk View Post

    Lie, lie, lie. The states have already set their own tax policy. They just can't seem to coerce other states' citizens to collect taxes for them. A state has every right to coerce its own citizens to self-report. It just isn't worth the PR hit and the actual capital required to enforce. And these are Republicans thinking this way about the Constitution! Spirit of the country my....



    I thought the exact same thing when I read that ridiculous quote.

    They are framing this as a Constitution-friendly bill, when it's actually the opposite.

    The bill is attempting to force businesses to become tax collectors for states where they have no presence, which is pretty much the opposite of what the Constitution tried to accomplish regarding states' rights.

    When you have no physical presence in a state, you should never be required to collect taxes for them.

    This bill isn't even being pitched in a way that people are being asked to pay taxes they rightfully owe. It's pitched as a handicap for online businesses, with the scare tactics that brick-and-mortar businesses will go under without it.

    It's pretty much a local tariff, which does nothing to help the American economy and only exists to punish e-businesses.

    Surprised nobody brought up the issue of this bill being yet another shot across the bow to continue to abuse and pervert the single most perverted small section of the US Constitution known all to well as the Interstate Commerce Clause. After all when the SCOTUS decided the government could force commerce upon individuals why not extend that power to force taxes added onto said commerce across state lines. (This proposed law Im surprised isnt being attacked by many of those fly by night advertisers who mass market in the "As seen on TV/Not available in any store" since it would likely mean no more of the Residents of XY and Z states must include sales tax and lead to said marketers having to remit taxes to all states)

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