Skip to comments.Durbin introduces online tax bill, has Amazon support
Posted on 07/30/2011 7:07:30 AM PDT by bobsunshine
Sen. Dick Durbin (D-Ill.) will introduce a bill on Friday to allow states to require online retailers to collect sales taxes.
The measure has the support of online giant Amazon.
Sens. Tim Johnson (D-S.D.) and Jack Reed (D- R.I.) will co-sponsor the bill, titled the Main Street Fairness Act. Reps. John Conyers (D-Mich.) and Peter Welch (D-Vt.) will introduce a companion bill in the House.
Supporters of the bill argue it will close a loophole that allows online purchases to go untaxed, giving an advantage to online retailers over traditional, brick-and-mortar stores.
Our bill levels the playing field to give Main Street businesses a fighting chance, Welch said. When a consumer can walk into a store, try out a product and then go home and buy it online without paying sales tax, Main Street businesses and downtowns lose."
The retail trade groups National Retail Federation, International Council of Shopping Centers and Retail Industry Leaders Association support the measure.
The lawmakers argue the bill will allow state and local governments to collect more taxes and close budget shortfalls.
Between 2009 and 2012, states across the country, including Illinois, are expected to lose as much as $37 billion in uncollected state and local taxes on internet and catalogue sales, Durbin said in a statement. The Main Street Fairness Act doesnt ask anyone to pay a single penny more in taxes. Instead, it would help governors and mayors collect taxes that are already owed.
Amazon opposed a California online sales tax law and is leading the effort to overturn it. The online retailer, however, supports Durbins bill, arguing a nationwide system of sales tax collection is preferable to a patchwork of laws.
Amazon.com has long supported a simple, nationwide system of state and local sales tax collection, evenhandedly applied to all sellers, no matter their business model, location, or level of remote sale, said Paul Misen, Amazons vice president for global public policy.
The Computer & Communications Industry Association, a trade group, opposes the bill.
E-commerce has enabled businesses to broaden the scope of their activities beyond traditional geographic limitations," said Ed Black, president of CCIA. "Sadly, this bill seeks to reimpose onto e-commerce businesses the very burdens that innovation has enabled them to overcome and has given them a chance for success."
Online auction site eBay also released a statement Friday bashing Durbin's proposal.
The giant retailers jockeying for new Internet sales taxes have national store networks that they combine with their major online sales platforms, a business model they know brings some tax collection duties," said Brian Bieron, director of government relations at eBay.
"Forcing small businesses to take on the same costs and tax burdens as national retail businesses is unrealistic, unfair and will unbalance the playing field between giant retailers and small business retailers on the Internet.
Just More Taxes !!! Too bad they don't care about the average American. Something like this tax will hit the lower income the hardest - more taxes more jobs lost!!!
I noticed that they leave out the point that you have to pay for shipping for the majority of your online purchases.
By the time you add the shipping cost on, it will cost more to buy online.
It doesn’t matter what tax is levied; every tax dollar, no matter what specifically is taxed, harms the economy by removing that dollar from the discretion of the previous owner of that dollar. The specifics are irrelevant, except for it’s ability to give the gov’t apparent sense of “fairness”
Oh. Right. If there’s one thing RATS are for, it’s for Main Street.
It’s stupid to do this. But even more stupid to do it in a depression.
Isn't it The Constitution that prohibits one state from taxing the residents of another state?
An increase in tax bill? Done by Democrats? Surely you jest!
Here in Ohio we have a line on our state tax form to report untaxed purchases. My accountant said that I am only one of a handful of clients that report taxes due.
DOA in the House.
doubt if the house will pass it.
Since when did liberals let that get in their way?
Typical dimocrat, always looking for more ways to tax.
Of course the playing field should be leveled and they could do that by ABOLISHING the taxes that are charged in the ‘brick & mortar’ counterparts.
Rats are Tax Junkies.
Or as former Vacuumer Of The House Nanzi Pelosi put it, "Are you serious? The Constitution? You expect us to....The Consti.....bwa ha ha haaaaaaa....you flyover people......"
Sens. Tim Johnson (D-S.D.) is an idiot. The reason internet sales are big in states like SD is because for 80% of the state it is the only way of getting certain items (especially if you are a ‘foodie’).
From what I see every day, if they can get the item, many (if not most) buy local (even if it costs a bit more) because they are helping their friends and people in the community and that is a big part of the rural plains states.
But it is impossible to get Hungarian paprika, saffron, Thai basil or certain Asian noodles (just a few examples) without driving 250 miles. That is where online shopping comes in handy. Books are another problem, sadly.
The whole “Main Street Fairness Act” is just a naming ploy for more taxes. The dims don’t ca
Why would Amazon be agreeable to this?
I have already sent them an email that their support of this will cause me to end my business with them, and that be assured, I will not be the only one to end business with them. =.=
Another brilliant Democrat with pretentions toward the status of all-knowing Socialist/Progressive lover of humanity has decided that taxes are the answer to the problems of humanity.
I always report a small amount on our taxes in CT. It helps to avoid an audit since almost everyone buys something on line.
Or, a "NOS YAMAHA FRONT MASTER CYLINDER ASSY 2G2-25850-00" that I bought on eBay today for my '79 XS650 Special. These were made for late '70s Yamahas, and are no longer made by Yamaha. I was lucky to get one.
Shoot...I even BOUGHT the motorcycle on eBay!
This will go nowhere.
Everyone is supposed to be filing their use tax return where applicable. This is NOT a tax increase per se, it is an enforcement change.
Apple already does this, collecting the tax on online computer purchases, figures, Democrat company, LOVES to collect taxes.
P.S. It also gives corporations the opportunity to skim money that is supposed to be going to taxes-—they don’t have to turn it over immediately, so they can make money off it first.
I’m with you. Email to Amazon is circling cyberspace now.
Screw this piece of trash.
They always do. More job killing from hussein's hit squad. Online purchases amounts to life support for the USPS.
LOL. Shipping musta been rough for the bike.
Heading out to Sturgis?
Then it’s good bye online shopping for me.
S&H AND a tax. NO thanks Amazon.
It’s been nice knowing ya.
The minute any online dealer outside my state I purchase from starts collecting sales taxes, they’re off my purchase list - Amazon included.
To be COMPLETELY fair then, the main street stores should have to charge the equivalent of a “shipping fee”...you know to compensate the government for the use of the highways and airways used to get the product from where it was made to the store that sells it. Just watch. They can find a way to rationalize ANY tax or fee to seem “reasonable.” FAIRNESS is an unreachable goal and is just a phoney reason to do lots of not so good things in its name.
I will not buy things online and pay for shipping PLUS tax. Nor would I buy the same item on main street because it is too hard to find it. Easily located and often used items are already purchased on main street. Oh and what about those itunes downloads, Kindle books, ebay from private vendors, etc. Coming soon, tax garage sale purchases, tax Craigs’ List purchases and throw people who barter into jail, right?
Watch those Kindle books...i paid $8 for one that I then discovered was about 15 pages long........complete ripoff. At least at the bookstore you can page through to see if it is for real
Brick-and-mortar have to build "shipping costs" into their prices, because the good have to get to their stores somehow. Remote suppliers explicitly charge for shipping (and usually give the buyer an option). So much for "shipping costing being a leveler."
Government service have to be paid for somehow. Many places use consumption taxes on non-essentials to avoid putting an undue burden on the poor while meeting the need for money. This proposal tries to have each resident of a locale pay "their fair share" -- remember that the residents control that share by voting, and being locally represented.
For brick-and-mortar outlets, the tax is is based on where the store is physically located, not where the customer lives. The so-called Internet tax disrupts this model because a seller can be located in an area with no consumption tax. Out-of-area and out-of-state buyers pay the local rate, even when they don't live there. In some cases, such as automobile purchases, the out-of-state buyer gets nicked twice, first at point-of-sale, and again in his/her home state.
The core of the whole problem is that, across the country, we have a crazy-quilt hodge-podge of consumption taxes, so complex that even a single five-digit postal ZIP code can have multiple tax rates applied to it. The table of tax rates changes daily, because some locations permit changes to be made by ordinance, not election, in particular in "special-use" zones that can come and go.
Finally, to whom does the out-of-state operator pay the tax? Are there fifty checks each month? Tens of thousands of checks each month? And how about the paperwork -- how many different forms are involved?
Remember that the Constitution allows Congress to regulate inter-state commerce, so providing a scheme for simplifying the problems of states having the use tax be picked up by the remote seller is within the four corners of that document. It's not that the proposal law attempts to levy a tax -- the citizen of a state is required, by state law, to pay the tax. That's law in many places. The rub is how the payment is collected. What the proposal does is make the remote seller the collection agent, the same as the brick-and-mortar seller is a collection agent.
The whole idea of "presence" or "nexus" is that someone who lives in the taxing area involved can know the tax rate structure, just like the brick-and-mortar store knows the tax rate structure. It's less of a burden to the seller to have the tax calculated by an entity in the tax zone, particularly if the satellite office or affiliate collects the tax and submits the paperwork. That's why Amazon is closing down warehouses and shutting out certain affiliates -- it eliminates any claim of "nexus" and knowledge of local tax rates.
Some of the earlier proposals tried to go beyond simplification. Other proposals limited themselves to trying to reduce the burden on the remote out-of-state sellers to track sales tax by address. Remember that taxes can be by state, county, city, town, village, school district, park district, "improvement" district, and I don't know what-all. The current system, make the buyer pay, isn't working out all that well -- too many people don't even know they have to pay the "use tax" because they never heard of it. Not to mention the nightmare many states have for paying tax -- here in Nevada, with no income tax, you have to know to get a special form that is not available in the Post Office. Frankly, I'm not even sure where to go to get one. (Glad I don't do mail-order buying!)
There are still a lot of questions I have about the proposal. I think it's too soon to try to attack it.
I sent my opinion to Amazon.
You pay shipping for all purchases, it’s just cheaper for a company to ship a large number if items to a store, than to ship a single item to your house.
On the other hand, I virtually never pay shipping with Amazon because i use their $25 free shipping, and a lot of other stores will waive shipping costs from time to time.
And if I look at how much it costs to drive to a store, I’m really saving money even if I do have to pay shipping.
And sales tax is not dependent on how much money you were saving or paying on shipping, it’s a tax on the value of items purchased by residents of a state, used to pay for the government services those residents use like roads, police, fire, and emergency services.
Yes, but if you need to collect $X of taxes, collecting it over a broader spectrum of the population means it hurts each person less. Right now, online purchasers are getting a free ride on the backs of those who buy from local businesses that employ their neighbors.
Because they already have the ability to collect the tax — it will cost them nothing. Meanwhile, since they are so big, they are the one company that is getting targeted by individual states over sales tax, which is costing them money to fight.
And they make money on the associates program, which they keep cancelling in states where legislatures pass online tax bills.
A federal law will make it so that all online retailers have to collect the tax, so it will be fair, and not just hit Amazon while their competitors get off because they are smaller.
Note though that this is the same benefit Amazon has against many other large online retailers who happen to run local stores as well. So this will level the playing field for everybody.
I’d like to see the law written to exempt online retailers with fewer than, say $10 million in sales a year, and fewer than, say, $1 million in sales to a particular state.
I also believe the bill needs to require states to make online tax computation and payment simple. Under my plan, each state would have to set up an online system where a company can report an address, and the upc codes for the items being purchased, and the system would return the tax due. That system will be forbidden to keep records for privacy purposes.
Since this is a state sales tax issue, if people in a state don’t like the new tax, they can elect representatives who won’t tax online sales. This law would be the federal government enabling state’s rights.
I have avoided such businesses for years. Illinois is hopeless. Durbin is a disaster.
If this crap passes, no more Amazon for me. Would still buy online, since most “B&M” stores never have what I want or need. I understand Amazon would benefit from this, it would hurt their competition.
So, I will give Amazon a piece of my mind, and if this BS becomes law, I will not shop Amazon ever again.
I sold my 2 laptops for a pc buyer in Craigslist.
Went to his shop, asked’ me to sign a form (most probably for his records) and gave a fake name and number. Got $100 for 2 broken laptops that would have cost me $200 to repair.
The playing field is already level. Online, you pay shipping charges....at the bricks and mortar, you pay sales tax. It balances out.
If you buy antiques online, many of them are one of a kind and not available in your local area.
Sure. To democrats.
Anything that isn't taxed, regulated, is levied, and/or controlled by DC is a "Loophole".
*** Isn't it The Constitution that prohibits one state from taxing the residents of another state? ***
That isn't the case here.
What every on-line retailer will have to do is have 50 different tax rates in their database. So if I here in IL buy something from NY, I'll get charged the IL Sales Tax rate, not the NY State Rate. Then the NY Co. will have to send that money to IL.
This will result in added overhead for all on-line companies and as such their prices will have to go up. Which comes down to them charging more than a 'Main Street' store.
So it doesn't make it more 'fair', it actually penalizes on-line stores. And it will also mean less jobs as UPS & Fed-Ex deliveries will drop so they'll have to layoff drivers and Dock Workers.
Not to smart to do during Barry's self created Great Depression.