States Push Internet Taxes While North Carolina Looks to Repeal [E-Taxes Are Evil.]

...Meanwhile, Alabama legislators are considering a bill (HB 365) that would force out-of-state retailers to notify consumers of their obligation to pay taxes on their purchases. The legislation is under consideration despite the fact that a federal District Court in Colorado halted implementation of a strikingly similar law, noting it clearly violates the Commerce Clause and U.S. Supreme Court precedent by significantly burdening out-of-state retailers.

Yet, while others are introducing bills to tax Internet sales, North Carolina – one of the first states to pass an Internet tax – is seriously considering two measures (HB 867 and SB 715) that would repeal the law. North Carolina has witnessed first hand the negative repercussions of the Internet tax. Since its enactment, the law has failed to collect any additional revenue for the state or level the playing field with in-state businesses, instead simply costing North Carolina advertisers their jobs.

small correction to article; It’s not an “internet tax” bill, it’s a “collection” bill.

The tax is the sales tax, and it is due whether Amazon collects it or not. Trying to find tricky ways to get Amazon to collect the sales tax is a futile effort on a state basis — it would take a national law to do it so that Amazon can’t simply pull the plug on states who try.

but people in North Carolina have to realise that they owe sales tax on their internet purchases now, and will still owe them after the “internet sales tax collection” bill is repealed. Their obligation under the law to pay sales tax is not changing.

It's a "use tax", identical to the "sales tax", and it is paid, LIKE the sales tax, by the residents of the state who bought items, from any state, for use in North Carolina.

If the vendor doesn't collect the tax, for whatever reason, the resident of the state is required to file and pay the tax directly.

It is simply more convenient when the vender/merchant collects the tax, so you don't have to do extra paperwork and track your sales purchases.

The courts have ruled that a "use tax" identical to the "sales tax" is not a tax on imports, and is constitutional.

North Carolina Use Tax:

North Carolina use tax is due by individuals and businesses on purchases, leases, and rentals of tangible personal property and certain digital property purchased, leased or rented inside or outside this State for storage, use, or consumption in North Carolina. Use tax is due on taxable services sourced to North Carolina. Individuals and businesses must pay use tax when retailers do not collect tax on taxable transactions.
Out-of-state retailers that are not “engaged in business” in this State cannot be required to collect North Carolina's tax. However, some out-of-state retailers voluntarily collect North Carolina tax as a convenience to their customers. Out-of-state retailers include mail-order companies, television shopping networks, firms selling over the internet, and other retailers.

Virtually every state which has a sales tax has a corresponding "use tax" for any items where sales tax is not collected.

If you live in a sales tax state, and you order anything to use in your state, and the vendor doesn't collect the sales tax for you, you are required by law to pay the tax directly.

In North Carolina, if you pay income tax, you report your use tax on the income tax form.

Interesting Tidbit: North Carolina includes in it's use tax the sales tax equivalent for movies and other items you rent online or purchase online, even if they are delivered electronically:

Digital music delivered or accessed electronically,
Magazines and newspapers including those delivered or accessed electronically,
Ringtones,
Movies delivered or accessed electronically,

An Internet tax will KILL small e businesses. Most of the businesses online are not Wal-Mart but a person selling a widget in his house.

New York has city and county sales taxes along with the state, Florida has a county sales tax, so Joe small business would need a CPA to found out what he needs to charge. I don't need to charge tax if I do NOT get anything from a state (Except for tax bills!!)

LIBS will kill E-business

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