New Jersey Wants To Collect Internet Sales Taxes

NBC10 ^ | Tuesday, July 4, 2006 | AP

[MinorityRepublican]

TRENTON, N.J. -- The budget dispute that closed New Jersey's government and threatens to shutter Atlantic City casinos centers on the governor's plan to increase the state sales tax. He says a 1-cent increase will earn New Jersey $1.1 billion.

Lawmakers, fearing a voter backlash, either don't want to raise taxes, or want to use some of the revenue for other spending.

But more than half of the money Gov. Jon S. Corzine wants to raise by increasing the tax is already owed to the state.

And no one is collecting it.

State estimates show New Jersey loses about $600 million per year in sales taxes from sales over the Internet.

"That is a significant amount of money," Assembly Budget Chairman Lou Greenwald said recently as he backed New Jersey's effort to try to collect more sales taxes from Internet commerce, which have proven a great untapped, difficult-to-reach revenue source for state lawmakers.

States have struggled for years to collect sales taxes from not only online, but also from catalog purchases. Buyers are supposed to pay sales taxes in the state in which they live on items purchased through Web sites and catalogs, but states lack a national system to track sales and have different sales tax laws.

Thus New Jersey, as it fights about sales tax revenues, is missing out on potential revenue.

"We're still working on that," said Sen. Shirley Turner, D-Mercer. "It's just difficult to accomplish. It would be ideal for us in terms of getting additional revenue."

About six years ago, several states formed a joint effort to create identical, simple regulations for sales taxes. New Jersey is among the 44 states, along with the District of Columbia, that joined the effort.

Businesses voluntarily join the system and declare their intent to charge and pay taxes, enticed by the uniform tax definitions that make it easier for them to avoid audit problems.

The system is voluntary because the U.S. Supreme Court has ruled tax collections are prohibited unless the business being taxed has a presence in the state trying to collect the tax. Federal legislation can permit such taxation, but Congress hasn't acted on several proposed bills.

[MikefromOhio]

Ohio has supposedly been trying to do this for at least 4 years....

[stephenjohnbanker]

New Jersey can go pound sand.

[MinorityRepublican]

Ohio has supposedly been trying to do this for at least 4 years....

Haven't been passed in Ohio yet?

[austinaero]

New Jersey, me-thinks they middle name is "tax increase"...

[MNJohnnie]

In which case everyone running an Internet business will simply set up in a tax free Red state. If the big Government Democrat Socialists don't wise up soon. Blue State America is going to turn into Africa. They will be nothing but a parasite living off of the largess of Red State America

[mware]

well the dems control the legislative, executive and to be quite frank about it the judicial branch of the government in NJ.

It is going to be a long 4 years.

[Extremely Extreme Extremist]

Boy these Dim fools just do not get it. They're like wild hyenas fighting over a carcass.

[oceanview]

there is nothing they can do, absent a new law from Congress, allowing it.

[MikefromOhio]

No I think it passed 4 years ago...

I can't remember clearly, but it was at least 4 years ago (I was on midshift at the time, everything is a blur)....

[MikefromOhio]

a long 4 years?

If they keep going like this, the Dems won't be controlling anything after November.

[oceanview]

the federal proposals, would mean each company would have to collect and remit the sales tax in the state in which the purchase was made. it doesn't matter where the seller is located.

[MinorityRepublican]

Boy these Dim fools just do not get it. They're like wild hyenas fighting over a carcass.

AKA New Jersey Democrats.

[Brilliant]

NJ taxes everything. I guess this is no surprise.

[zarf]

I hope the voters of New Jersey get their asses taxed as well. They deserve all the tax misery they get. Enjoy!

[tflabo]

Tax and spend NJ liberals are addicted to raising new taxes like an out of control drunken gambler rolling the dice to financial ruin up the road in Atlantic City.

[mware]

a long 4 years?

If they keep going like this, the Dems won't be controlling anything after November.

From your mouth to God's ear.

[Truth-The Anti Spin]

You do realize that blue states pay more into the federal till than they get out, and red states receive more than they put in?

[JohnD9207]

Wow...Dumacrats wanting to raise taxes. Now thats a original idea. Well you voted em in so live with it. Next they are gonna approve a user fee (tax) on public lands and projects. How does TEXAS do it without a state income tax and a budget surplus?

[MAexile]

I know that MA and RI have tried for years to do something like this. There is a line on the tax form for you add the sales tax you would have paid if you bought the item in a state that has no sales tax. Yeah right.

Patently unconstitutional if you ask me.

[MikefromOhio]

I hope the voters of New Jersey get their asses taxed as well. They deserve all the tax misery they get. Enjoy!

Ummmmmm Right.....

[MikefromOhio]

I certainly hope so :)

[seasoned traditionalist]

How is this any different than from what us tobacco users have been subjected to when we were basically shut off from being able to purchase our products on line and thereby avoiding state taxes?

Not to worry all, when "SPRITZER" (who was the driving force behind intimidating major credit card companies from authorizing purchases from mostly Native-owned outlets)gets elected Guvenoor of New York, he will not doubt make this one of his top priorities.

Demo Rats, always looking for a way to stick their hands in our back pockets.

[mware]

Well you voted em in so live with it.

Well actually no I didn't vote for them.

I am an endangered species here in NJ, a conservative Republican.

[MikefromOhio]

The easy answer is it's not.

[Extremely Extreme Extremist]

You do realize that you're about to become ozone, right?

[TheLion]

They are probably losing more taxes from illegal aliens working off the books.

[JohnD9207]

No offense, I felt the same way when I lived in Michigan. One resume and a u-haul later I found a place where my vote counted.

[mware]

LOL, kind of new in here to spout that line. Shall we call forth the kitties???

[austinaero]

Is this their "New Direction for America?"

Just wondering.

[MikefromOhio]

I'm claiming that ZOT!

:)

[Lancey Howard]

You do realize that blue states pay more into the federal till than they get out, and red states receive more than they put in?

Yeah sure - - been hearing that lame spin for years. Also, "the cities pay out more than they get back". Same thing. I suppose that's why all the parasites are concentrated in the Democrat parasite nests (cities).

[austinaero]

And,,our property taxes aren't so bad either,,,,at least in the area I live in.

[mware]

None taken my FRiend. It was south jersey that handed the keys to the bank to the democrates. We got a lot of work to do, but the Dems have been doing a lot of it for us in the last 3 days.

[Doogle]

We're still working on that," said Sen. Shirley Turner, D-Mercer. "It's just difficult to accomplish. It would be ideal for us in terms of getting additional revenue."

like most things, dummies always have difficulties accomplishing anything. This is one of NJ's shooting stars, and just another reason I'll be leaving this state soon

Doogle

[oceanview]

the use tax is constitutional - its a states rights issue.

what state X cannot do now, is compel a company in state Y to collect and remit the tax to them when someone from their state buys an item. but they can compel the use tax, if they catch you.

[socialismisinsidious]

"That is a significant amount of money," Assembly Budget Chairman Lou Greenwald said recently..."

I can picture him...drool dripping, hands rubbing together, eyes rolling, laughing maniacally....all they see is dollar signs.

This kind of crap is out of control all over the country. Do these power hungry bureaucrappers ever think to be fiscally responsible, reign in spending and to stop vote buying with the Peoples' money? (OK I know I'm just talking crazy now) The answer: no.

[Doogle]

[oceanview]

it depends on the city. NYC for example, is a huge tax engine for both new york state, and it terms of federal taxes.

[mware]

LOL.

[dead]

[JohnD9207]

And,,our property taxes aren't so bad either,,,,at least in the area I live in.

_______________________________

So there is room for growth huh? I don't trust anyone who claims that more taxes are the answer. Kinda like more Crack is the answer for the Crackhead.

[MNJohnnie]

Yes and it is a huge drain on Federal Incomes as well. Check the recent hysteria from New York Politicians when a piddly $40 million was shaved off what they felt they were entitled too. According to the New York pols not getting that $40 million was going to be the end of the world for New York. I suggest we trade New York and New England to Canada for Alberta and Manitoba. Fiscally, we would be far better off.

[A CA Guy]

Jersey has real trouble. Their politicians want to sue everything including your every other breath I hear.

[JohnD9207]

You do realize that blue states pay more into the federal till than they get out, and red states receive more than they put in?

______________________________________________

GREAT!!!!!

[austinaero]

Plenty of room, and plenty of growth, I have to say. North of Austin,,,nice country. Nice people. Casual. Bring your flip-flops (and I'm not talking John Kerry!)

[mware]

Wait to the folks in NJ look at the budget Daddy Warbucks is trying to get passed.

He wants to put a tax on the number of beds a hospital has.

I kid you not.

[Mannaggia l'America]

I know that MA and RI have tried for years to do something like this. There is a line on the tax form for you add the sales tax you would have paid if you bought the item in a state that has no sales tax. Yeah right. Patently unconstitutional if you ask me.

Most states do this - because they don't really have a "Sales Tax", they have a "Sales & Use Tax".

Sales Tax is what you pay when you buy a taxable item within the state.

Use Tax is what you pay when you buy an item for use within the state, but the seller does not collect sales tax for your state.

In general, sales tax is only collected by companies that have a "nexus" (presence) in a state.

For example, I have a business in PA and do online sales, and I only collect sales tax for sales I make to other PA residents. If I sell to an NJ resident, I don't charge them PA sales tax because they are not in PA and I am not in NJ. And I cannot collect NJ sales tax because I do not have a presence in NJ. However, the buyer does technically owe NJ "use tax" on what they bought from me. But it's up to them to pay it.

PA has been cracking down on this for businesses recently. I just got threatened with an audit over use taxes. Since I have a PA Sales Tax license, I had to go back through all my business purchases for the past 3 years and determine whether not I made any out of state purchases where the seller did not collect PA sales tax. I did find a few things, like some computers that I bought.

But what NJ wants to do is basically force mail order and web companies to collect their "use" tax for them.

[MNJohnnie]

The system is voluntary because the U.S. Supreme Court has ruled tax collections are prohibited unless the business being taxed has a presence in the state trying to collect the tax. Federal legislation can permit such taxation, but Congress hasn't acted on several proposed bills There is no such thing is a "Use tax". What part of "has ruled tax collections are prohibited" do you fail to understand? That is not open to interpretation by the states. As usual OV, you are font of disinformation.

[Swanks]

Legislators thinking anything they can think of tax is "theirs". Here's why there is a stand off in the 1st place at Trenton (Hint: It's not about some members fending off tax hikes - it's some members p.o.'d against this threat and abuse by all powerful unions):

"Public employee unions wasted no time reacting to the proposal by three Democratic state legislators to cut state employee salaries and benefits by 15 percent as an alternative to raising the state sales tax from 6 percent to 7 percent.

One of the unions, Local 195 of the IFPTE, faxed "Pink slip notices" to legislators yesterday. "Be advised that you are officially being put on notice that it we lose our jobs and/or benefits, we will do everything possible to see that you lose yours. Be assured that there are more than enough voting members of various public sector unions to enforce this pink slip. It's Your Choice!"

The "solution" is coming in a few days will be as clear as day: Go back to non-Gov't employees, whack them $2.B more tax this year, and give it over to NJEA and the other Unions. Just like every year.

The legislature knows who their masters are.