Congress jumps into 'Amazon sales tax' issue

The Orange County Register ^ | 8/1/2011 | Jan Norman

[Yo-Yo]

Are there no Sears brick and mortar stores in Michigan? My understanding is that if the retailer has a physical presence in the State, they are required to charge tax.

If there is a brick and mortar store in the state, then the store is required to collect the sales tax and pass it along to the state. That has noting to do with the fact that you still legally owe the sales tax on any online or mail-order purchases, and you are legally obligated to self-report and pay the sales/use tax.

Nobody ever does, of course, which is why states want to force all online retailers to collect tax automatically. The problem is if a store doesn't have a physical presence in the state, they have no legal jusrisdiction to take the store to court.

A federal law would change jurisdiction to federal district court.

And in spite of popular belief to the contrary, online purchases are not sales tax free. You are still required to pay state sales/use tax on online purchases, and if you don't then you are breaking the law. And no, I don't report my online purchases, either.

[jammer]

The use tax is supposed to be paid by the consumer once the goods have come to rest in the state.

You're correct, but it's nonsense. I'll declare purchases and pay use tax when people who purchase goods within my state (and pay sales tax) also pay a use tax. The goods are "used," no matter where purchased.

Otherwise, the "use tax" is just a subterfuge for a sales tax, and is a violation of the Interstate Commerce Clause. I'm sure court decisions have ruled otherwise, but when has a court decision ever had any relationship to the Constitution?

[this_ol_patriot]

One difference, you can’t pay cash online, now governments of all types will have a nice neat record of all your online purchases.

[absolootezer0]

Only trouble is, more and more, I can’t think of where to buy this or that locally - I HAVE to use the interwebs.

yup. most of the stuff i buy online, i buy because it can't be found locally. some stuff i can get a better brand online at the same price. but the most irritating reason is when the store i'm trying to buy it from has to order it themselves and it takes longer to ship it to them than it would for me to order it online myself.

[Cringing Negativism Network]

How about these idiots do something to bring American jobs back?

America is “led” by idiots.

[IYAS9YAS]

You're correct, but it's nonsense. I'll declare purchases and pay use tax when people who purchase goods within my state (and pay sales tax) also pay a use tax.

The use tax is in lieu of the sales tax. If you paid use tax, then sales tax doesn't apply. If you paid sales tax, then use tax doesn't apply. Check the tax laws. Sales tax covers transactions made wholly within the state. Use tax covers when sales tax doesn't apply. They are usually at the same rate, or some set rate, depending on the state (Sales/Use tax may be called something else depending on the state - in New Mexico it's gross receipts tax for within state transactions and compensating tax for out-of state transactions shipped to NM).

If you paid one, then you don't owe the other, if you paid neither, then the state can come after you for the taxes due. Use tax is not a violation of the commerce clause. States may tax items within their jurisdiction, and the use tax would apply as the item "came to rest" in your jurisdiction. The only time it would be a violation is if the states the product traveled through tried to collect taxes on that item. That'd be like Nevada trying to tax an item that someone in Utah bought from California. That won't fly, but Utah taxing the item is lawful. I'd rather pay use/sales taxes on goods than income tax. What sucks is for the on-line retailers to have to track more than just 50 rates. Some states have one rate than rarely changes (like Idaho - at 6%), some have multiple jurisdictions (in NM, just about every city has its own rate, which changes in January and July every year) and often these rates change throughout the year.

Thankfully, NM taxes out of state items at a fixed rate, regardless of where you live. I live in Rio Rancho, Sandoval County and my sales tax rate is 7.4375% for the last half of this year. But if I buy something from out of state, the rate is only 5.125%.

[CSM]

All your moneys are belong to us!

[jammer]

C'mon. I'm not a moron. You're parroting the government line. I'm saying that's a B.S. way of changing terminology so the state(s) can get around the ICC clause.

It's the same technique as calling tax deductions, "tax expenditures" or what's in that abortion of a debt ceiling deal "cuts."

[IYAS9YAS]

C'mon. I'm not a moron. You're parroting the government line. I'm saying that's a B.S. way of changing terminology so the state(s) can get around the ICC clause.

I'm not parroting the government line. I'm saying it's the law in most states. Nothing yet has come from the USSC to show that it's against the commerce clause, and these taxes have been around for decades. So, for now, they're legal, and enforceable, and punishable. Do I agree with them? Actually, yes, in a manner. They are consumption taxes. I'd rather be taxed on what I buy/consume/use, than my income or property. That way, everyone is taxed, and at the same rate.