Posted on 09/24/2007 9:57:56 AM PDT by Graybeard58
Meeting last week in Wyandotte County, officials from 22 states had hoped to move closer to their goal of collecting sales tax on all Internet purchases nationwide.
At the end of the two-day meeting, they left empty-handed.
Right now, many Internet vendors collect sales tax voluntarily at the urging of some states, but not all do. The patchwork of sales tax laws currently presents a burden on interstate commerce that courts have ruled unconstitutional.
To solve the problem, several states — including Kansas — have joined the “Streamlined Sales Tax Project.” The member states are working to simplify sales tax laws to make Internet taxes easier to collect.
However, several large states are reluctant to join the sales tax project because they feel changing their laws would be a burden on their businesses and cause some local jurisdictions to lose revenue.
Here’s why:
The project’s rules require all delivered merchandise to be taxed according to where it is delivered, not where the store is located.
Kansas changed its sales tax law in 2003 to comply, resulting in complaints by small businesses that it created an expensive burden on them to calculate the amount of sales tax on each delivery sale.
The same concern has prevented other states, including Missouri, from joining the effort.
Ohio, Texas and many other large states still use a store’s location to determine the sales tax on delivered goods. Switching to a delivery rate, they contended, would hurt localities with businesses that do a lot of deliveries.
Without more states aboard, supporters say it will be difficult if not impossible to persuade Congress to allow all 50 states to collect taxes from Internet sales.
A compromise, supported by Texas and Ohio, was hammered out this summer and would allow a state to keep its current system of taxing delivered items based on a store’s location.
But it drew strong opposition at last week’s meeting from business groups that presented their own proposal.
The business plan would have continued the delivery rate rule with some modification, but allowed states to allocate those dollars to local governments any way they chose. It was approved on a 15-5 vote.
Ohio Rep. Bob Gibbs, who backed the compromise plan, noted that all 5 “no” votes came from states negatively affected by the current rule — Ohio, Utah, Washington, Tennessee and Michigan.
Gibbs said the county he represents would lose 50 percent of its local sales tax base if Ohio changed its law.
“That’s a nonstarter in our legislature,” Ohio state Sen. Ron Amstutz told the governing board. “You’ve left us between a rock and a hard place.”
Missouri Sen. Joan Bray of St. Louis said it would be difficult for Missouri to join the project under either plan.
Missouri revenue officials say it would be difficult to develop a system that computes sales tax for every address in the state.
About 7,500 governmental units in the U.S. have the ability to levy a sales tax; 2,400 of them are in Missouri. Kansas has between 700 and 800 local sales tax units.
Supporters of the national tax collection effort hope the current impasse is temporary and will try again in December during a meeting in Dallas.
“These are not easy issues,” said Joan Wagnon, Kansas secretary of revenue and newly elected president of the project’s governing board.
Little line? I got a whole page, which I promptly tossed.
A real world example: A couple of years ago, I bought a factory-refurbihed iBook. It was available from the Apple store online, and also from a small reseller online. But because Apple has stores in Georgia,they were required to charge sales tax. The other company wasn't.
So I saved a hundred bucks. And a thousand-dollar sale, instead of going to a retailer who pays taxes and creates jobs in my community, went to a company that does the same in California.
It's not a simple question of paying taxes or not. It's a question of a current tax system that discriminates against brick-and-mortar small businesses, which are still a major driving force in the economy, even if the dot-coms get all the hype.
That's absurd. Local governments collect tax on nearly all sales across a store counter. and those are still the vast majority of all retail sales. Every major supermarket chain has systems that can track the whole patchwork of sales taxes for all of the stores it runs. K-mart, Sears, Walmart, Blockbuster, Starbucks don't seem to have a lot of difficulty collecting sales tax and making sure it's handed over to the right officials.
It might be difficult, impossible, or not worth the effortto try to track virtual sales, like downloaded software or music (or, of course, porn), but for any physical gods, you've got both a delivery address and almost always a credit card billing address. Pick one and assess the tax there. Set up a geographic database of sales tax rates by address -- I'd be surprised if one didn't already exist.
I deal on E-Bay all the time, but-I only pay with money orders. Probably still traceable, but they’d really have to work for it.
They ship, right? And I don't think it would be at all difficult to trace the address where the money order was issued. PayPal might be a little more difficult.
Most pay Pay sellers are gonne be too much hassle to try to collect. But why should an eBay seller not collect the same sales tax that a local pawn shop selling the same used goods would?
As you know, one of my income streams is internet sales of books, music & movies. The minute they make me responsible for collecting sales taxes is the minute I find another way to make some extra income.
Luckily, our state governments are too stupid to actually put two and two together...for now, anyway. *SHRUG*
Just how broke are we, as a country, that we need even MORE money bilked out of businesses and consumers? Not very. We have PLENTY of tax dollars to waste each year on really, really stupid things. I’m not giving them a dime more.
A quick look through this website will clear things up for anyone as to how much of our money is flushed down a rat hole each and every day:
http://www.cagw.org/site/PageServer?pagename=homePage
or herd cats
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