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 doesn’t 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 Durbin’s 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, Amazon’s 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.”
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.
Dimwits.
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.
Exactly!
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.
Which, ironically (intentionally?), will end up hurting brick-n-mortars because they do most of their purchasing online not to mention having an online presence themselves.
I don't know who these organizations are that are supporting this legislation but my spidey senses tell me they don't give a flying fig about the fate of mom-and-pop operations. They are in it for themselves and they are in tight with polluticians which will make things easier for themselves, not small businesspeople.
And, don't you love the name of the legislation? Who could possibly oppose legislation with a title like that. Who cares if trillions of dollars of unrelated spending is tacked on. It's a great name!
Heading out to Sturgis?
I picked it up...from NC to Maryland back to NC...Peewee's big adventure.
Sturgis...my wife might let me go one of these days. :-)
That's why I'd like to do away with all sales taxes and make sure that the 50% who aren't paying any taxes are put into the mix. I personally think two flat rates that are tied to each other make sense. Ex: 50% of earners pay 15% (of gross income) and and 50% pay 25% of gross. If taxes go up to 27% for the top group it must go up to 17% for the bottom group. And corporations would be taxed in the middle (20% upped to 22% in the above example), again on GROSS. No deductions, subsidies, write-offs for ANYTHING. All businesses on the same playing field. Also, no reason for the mutha-f***ing lobbyists, either. Lastly, EVERY regulation affecting business would have to be approved by 2/3 of the states to be implemented. Lastly (again), no 503(c)s & etc. No non-profits, and no deductions for them. Waaaayyyy too much corruption. And, the above listed tax rates would be the max taken from earners taxes at all levels; fed, state, local and for all tax types (property, car reg, telephone service, SSA, etc.).
The systems we have been saddled with ensure our doom. And, offer nothing but corruption in return.
The “new” plan of raising taxes sure looks like the old plan of raising taxes.
Too bad we can’t tax liberal BS..............
Why the hell is this jackass meddling in state taxation affairs?
I can live with that. My hope is that we can achieve real simplification of the tax/regulatory framework so we can eliminate as many opportunities for corruption as possible, reduce the massive costs of regulatory compliance, and have a system that everyone can understand and that is transparent (not to over use a word).
There is a bizarre web of tax treatment of personal property for people moving same from one state to another.
Even more complicated than that. Various states impose sales tax on some items, and not on others. Pennsylvania has a list of taxed and not taxed items that runs 100 pages, some identical items also depending on the place of the transaction (supermarket vs. convenience store, for instance).
Same points my accountant made as a matter of fact.
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