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Push for online sales taxes picks up steam in Congress
Chicago Tribune ^ | February 14, 2013 | Reuters

Posted on 02/15/2013 3:27:45 PM PST by CutePuppy

U.S. states could collect millions of dollars in online sales taxes, with members of both parties in Congress sponsoring legislation Thursday that would resolve states' decades-long struggle to tax businesses beyond their borders.

"Small businesses and states alike are suffering from the inability to collect due — not new — taxes from purchases made online," said Rep. Steve Womack, R-Ark., adding the legislation is a "bipartisan, bicameral, common-sense solution that promotes states' rights and levels the playing field for our Main Street businesses."

Legislation on the Amazon tax, named for the colossal Internet retailer, has languished for years. ..... < snip >

..... The bills introduced on Thursday reconcile differences in legislation that the House of Representatives and Senate considered last year. The nearly identical details in the bills and strong bipartisan support mean the final bill could be sent to President Barack Obama this year.

Members of Congress recently assured state lawmakers they would pass a law in 2013.

In the last decade, Internet sales have gone from 1.6 percent of all U.S. retail sales to more than 5 percent, according to Commerce Department data, a proportion that will likely grow as shoppers make more purchases on handheld devices. In the third quarter of 2012, "e-commerce" sales were $57 billion, the department said.

Large Internet retailers are worried the tax could drive up the cost of doing business. They would also have to create new systems and software to collect the surcharges, adding to their costs. Amazon said in July it prefers having the tax issue resolved at the federal level.

When the 2007-09 recession caused states' revenues to collapse, Republican and Democratic governors backed the tax as a financial solution that would not require federal aid. ..... < snip >

(Excerpt) Read more at mobile.chicagotribune.com ...


TOPICS: Business/Economy; Constitution/Conservatism; Crime/Corruption; Government; News/Current Events
KEYWORDS: amazon; amazontax; camelsnose; commerce; commerceclause; durbin; ebay; fairness; fairnessact; fairtax; internet; interstate; interstatecommerce; jobkillingtax; nexus; physicalpresence; salestax; statenexus; statepresence; states; statetax; taxes; unconstitutional; unfairtax; usetax; walmart; walmarttax
This is exactly why many people say "there isn't a dime worth of difference between Republicans and Democrats"

Article is also making a false statement regarding the Supreme Court 1992 decision that sales tax not be collected by merchants in the states where they have no physical presence - it's not because "the patchwork of state tax laws made it too difficult for online retailers to collect and remit sales taxes" - it's because how the interstate commerce is usually conducted, by catalog or between businesses.

Here is the November 14, 2011 WSJ article Should States Require Online Retailers To Collect Sales Tax? that has a pro (by Michael Mazerov of Center on Budget and Policy Priorities) and con (by Steve DelBianco of NetChoice) arguments for "Internet tax."

You can skip the pro-tax part because it's basically the usual "fairness" and "lost revenues" and "government needs the money" pablum (though the latter is the real reason why it's being stealthily moved in Congress).

Here are some salient points from the counter arguments:

Also, one of the biggest reasons both big-box and small "Main Street" shops don't make the sale is that they simply don't deal with the manufacturers or don't carry the items or don't have the items in inventory which the buyer needs or wants, but which are readily available and can be easily found online. That goes double for "specialty" items or companies that can't get into distribution, or have no interest in or can't possibly succeed by setting up expensive distribution channels (because of additional costs) and the Internet sales are the only way for them to succeed. No tax law will help the brick-and-mortar reseller compete with this issue, and this is becoming more and more prevalent pattern of shopping. Just because your local stores don't stock or manufacture the items you need, why should you pay additional tax if the item is found and bought in another state, via mailed catalog or online?

States already have collection through the "use tax" - they should not burden resellers in other states to be tax collectors for them... An eventually, if this legislation goes through and is unchallenged in courts, this sets up a perfect detour into (additional) national sales tax - to "simplify" states' sales tax collection and then redistribute the sales tax "fairly" between the states.

This is simply a "camel's nose" legislation and the Republicans should be fighting it tooth and nail, not helping it move along.

1 posted on 02/15/2013 3:27:56 PM PST by CutePuppy
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To: CutePuppy

I believe this a misprint “ Rep. Steve Womack, R-Ark.,”
Should read “Rep. Steve Womack, R-Walmart”

I’d like to know how may of Steve’s citizen constituents have call his office and asked for a an internet sales tax. Let me offer a guess - 0


2 posted on 02/15/2013 3:32:34 PM PST by azcap (Who is John Galt ? www.conservativeshirts.com)
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To: azcap

Call me a raisin bran but this is inevitable.


3 posted on 02/15/2013 3:37:56 PM PST by shineon
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To: azcap
Should read "Rep. Steve Womack, R-Walmart"

My first thought, exactly. Many people who will be squeezed out of their small business (both online and brick-and-mortar) have no idea that this is coming, and that this is at this late stage that it looks like a done deal already.

It will take time for it to be challenged and/or declared unconstitutional in courts, while small businesses and jobs will be killed.

4 posted on 02/15/2013 3:42:30 PM PST by CutePuppy (If you don't ask the right questions you may not get the right answers)
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To: CutePuppy

It will be a nightmare for small online businesses to meet the tax requirements of all the various tax districts within the nation.

Womack needs needs a serious challenger in 2014.


5 posted on 02/15/2013 3:45:29 PM PST by TomGuy
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To: CutePuppy

For so many of us, the blood has already been squeezed from the turnip. All the taxes and fees will only make things much worse.


6 posted on 02/15/2013 3:49:53 PM PST by dforest (I have now entered the Twilight Zone.)
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To: CutePuppy

We pay too many stinking taxes as it is. WTH are these so called Republicans doing with this nonsense?

These elected morons will always try to get more out of us that earn a living so they can fork it over to the lazy SOBs takers. Every politician that proposes yet another tax should be smacked upside the head until the show some common sense or get a real job.

I do wish ill upon any scumbag trying to take more of our EARNED money.


7 posted on 02/15/2013 3:55:47 PM PST by soycd
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To: CutePuppy
So, these goofballs who don't actually live in the same world as the rest of us want to continue to drive us into a barter and subsistence economy?

Fine. Bring it on. Been living that lifestyle for decades and happy to continue.

8 posted on 02/15/2013 3:58:57 PM PST by elkfersupper ( Member of the Original Defiant Class)
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To: soycd
WTH are these so called Republicans doing with this nonsense?

Lots and lots of Republican owned, brick and mortar small business folks want online retailers to pay sales tax. They don't see it as a new tax, they see it as currently unfair that they have to collect sales tax and that online merchants don't. There is lots of pressure on Republicans from otherwise conservative small business folks to "even the playing field" when it comes to tax collection. For the record, I don't buy those arguments and will be furious if a GOP House actually goes through with this.

9 posted on 02/15/2013 4:05:27 PM PST by Longbow1969
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To: elkfersupper

YEP...been spending the last 5 years preparing so that our needs are met....if an internet tax hits...barter/trade/sell locally it will be...Amazon has to be worried.


10 posted on 02/15/2013 4:15:40 PM PST by goodnesswins (R.I.P. Doherty, Smith, Stevens, Woods.)
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“I’ve put forward a series of proposals that will foster economic growth from the bottom up.”


Click The Pic To Donate

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11 posted on 02/15/2013 4:16:07 PM PST by DJ MacWoW (My faith and politics cannot be separated)
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To: Longbow1969; soycd
I don't buy those arguments and will be furious if a GOP House actually goes through with this.

I think they should "know what's in it before it passes" (to channel Nancy Pelosi).

As the arguments "against" from the WSJ article and others show, these small business owners will be mighty surprised when the tax does absolutely nothing for them, except possibly destroying their and others' small brick-and-mortar shops' opportunity in online business.

It would simply limit their opportunity to compete against the big multi-state retailers.

12 posted on 02/15/2013 4:28:20 PM PST by CutePuppy (If you don't ask the right questions you may not get the right answers)
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To: CutePuppy

yes this will help the economy. /s


13 posted on 02/15/2013 4:39:37 PM PST by Secret Agent Man (I can neither confirm or deny that; even if I could, I couldn't - it's classified.)
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To: Longbow1969

lots of small brick and mortar people also sell product on the internet they don’t have to collect taxes on, too.


14 posted on 02/15/2013 4:41:15 PM PST by Secret Agent Man (I can neither confirm or deny that; even if I could, I couldn't - it's classified.)
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To: CutePuppy

“You can skip the pro-tax part”
Only if you like state income taxes LOL!

Sales taxes are the fairest taxes.
And enforcement of ‘use taxes’ would be extraordinarily intrusive: Orwellian!

So internet sales must, at some point, be taxed by the states the purchase is made in.
I expect the courts to find that the physical infa-structure of the internet is the “brick and mortar presence” of the store.


15 posted on 02/15/2013 5:06:41 PM PST by mrsmith (Dumb sluts: Lifeblood of the Media, Backbone of the Democrat Party!)
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To: Longbow1969
I agree with you. This may not be a popular sentiment here on FR, but I can see this issue from both sides.

An interesting exercise would be to imagine your own personal life with absolutely no "brick and mortar" retail stores except for those that sell things with a very limited shelf life (fresh fruit, dairy products, etc.). If every durable product was sold through an Internet retailer, your life could be miserable. Imagine a UPS tractor-trailer -- not your typical brown box truck -- making its way down your street to deliver things to the entire neigbhorhood on a daily basis.

16 posted on 02/15/2013 5:50:20 PM PST by Alberta's Child ("I am the master of my fate ... I am the captain of my soul.")
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To: CutePuppy

I read elsewhere about this strong bi-partisan support amounts to 53 co-sponsors.

Well that is less than 10% of congress. I think the media is carrying water for the democrats, again because I don’t think they have the votes to pass it.


17 posted on 02/15/2013 6:03:33 PM PST by Valpal1
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To: CutePuppy

I work for an online retailer...midsized...and this would be a nightmare.

Already we collect state tax, with 67 different counties in our state, and many counties charge different sales tax so our program varies the tax according to the county.

Imagine programming costs for 50 states not to mention if they have different rates for different counties, as our state does.

But what no one can answer, even about the state sales tax we collect...how is it redistributed to the individual counties.

And nationally, when tax is collected for different states, how is it distributed back to the states, or if the feds step in, will it just go in one huge “lock box” (haha) for the feds to redistribute to each state as they see fit.

Add a whole new level of bureaucracy to figure out how much is collected for each state. Every purchase online would have to be tracked as to location of buyer, tax rate of that particular state and/or county, Reports submitted to the “collecting” agency as to what tax came from sales in which state. And then how is the money going to be redistributed back to the states...anybody know?

Dealing with the state tax agency is problem enough, add to that the cost of programming, and probably hiring another person just to deal with sales tax issues would definitely hurt businesses like the one I work for.

They’re already taking a hit with Obamacare, how many hits before these businesses start going out of business due to the cost of doing business. Or each buyer is the one ultimately paying because costs will be raised to compensate for the extra personnel needed to implement the tax collecting.

Imagine every brick and mortar asking each customer what state they live in, then collecting the rate of the tax in that state, and keeping it all straight...preposterous, of course. They collect the rate of tax from the state and county they’re in. But they’re asking online businesses to essentially track every customer’s data to determine their sales tax.

The big brick and mortars do it (like Walmart, etc.) Amazon has resisted. But I think it’s a tactic, as you said, to drive the medium and small sized online retailer out of business because of the programming and reporting costs.


18 posted on 02/15/2013 6:06:37 PM PST by memyselfandi59
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To: memyselfandi59
Imagine programming costs for 50 states not to mention if they have different rates for different counties, as our state does.

And nationally, when tax is collected for different states, how is it distributed back to the states... Add a whole new level of bureaucracy to figure out how much is collected for each state...

Dealing with the state tax agency is problem enough, add to that the cost of programming...

Imagine every brick and mortar asking each customer what state they live in, then collecting the rate of the tax in that state, and keeping it all straight...preposterous, of course...

That's already the kind of issues that retailers that have several stores, even in the same state but in different counties or even in different cities which have their own different sales tax rates, some of them "special" or "temporary," already have to deal with - the expensive programming and reporting nightmare, every time sales tax changes happen in one of their "presence" locations.

But at least it's done only on a one-location-one-tax basis, which doesn't even begin to address the shipping to other states or countries which online businesses often do.

But I think it's a tactic, as you said, to drive the medium and small sized online retailer out of business because of the programming and reporting costs.

Yes, it will disproportionately benefit large online and integrated b-a-m/online retailers at the expense of small/midsize e-tailers and b-a-m retailers.

Unfortunately many Republican single-store b-a-m proprietors don't understand who and what really behind it and think it's a "fairness" issue and may benefit them, without realizing that it's simply a transfer of money from their potential customers (who will have less money to patronize their business) and will make it more expensive for them to do business with potential customers in another state.

This is a large merchants' and states' protection/enrichment power grab, at everyone else's expense.

19 posted on 02/15/2013 7:43:25 PM PST by CutePuppy (If you don't ask the right questions you may not get the right answers)
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To: Valpal1; All
I read elsewhere about this strong bi-partisan support amounts to 53 co-sponsors. Well that is less than 10% of congress.

Actually, 10% is a huge number, there are very few bills that have this many co-sponsors. Most of them are Democrats, but too many Republicans signed on to this.

From Lawmakers claim momentum in push for Internet sales tax - The Hill, by Brendan Sasso, 2013 February 13

$1M exclusion doesn't really help much for most single-store b-a-m retailers who are mistakenly so gung-ho for it (because they think it will help their sales, instead of just killing some business who they think are their direct online "competitors") so how long after this bill passes, whatever exclusion that is "fair" now will be considered a "loophole" because, you know, "the states need money" and the "loophole" is "unfair"? Or maybe just to "simplify" things, why not have the IRS collect the new "national average states' sales tax" and then distribute to the "states that really need them"?

"Camel's nose" - that's why Dick Durbin et al are rushing it to pass "sooner rather than later"... ya'll can deal with [un]intended consequences after "you find out what's in it."

20 posted on 02/16/2013 2:37:35 PM PST by CutePuppy (If you don't ask the right questions you may not get the right answers)
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To: CutePuppy

Dickie Durban has been promising passage of this bill to his paymasters every congressional cycle. He’s never yet delivered. A few names have changed over the years but the numbers haven’t.

I live in Oregon. Our senators and reps fight this tooth and nail because sales tax is the 3rd rail in Oregon politics. Many a dem has suddenly found himself thrown out on his keester for forgetting that all politics are local and thinking he could say one thing to the deep pockets and another to the voters.


21 posted on 02/16/2013 2:47:28 PM PST by Valpal1
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To: Valpal1

Good to hear. Thanks.


22 posted on 02/16/2013 2:59:05 PM PST by CutePuppy (If you don't ask the right questions you may not get the right answers)
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To: All

John Boozman from Arkansas, Bob Corker and Lamar! of Tennessee and Enzi from Wyoming are the 4 Republican Senate co-sponsors.

And 16 Republican U.S. Representative Aaron Schock (R-IL), Dennis Ross (R-PA), Chris Gibson (R-NY), Mario Diaz-Balart (R-FL), Ander Crenshaw (R-FL), Renee Ellmers (R-NC), Don Young (R-AK), Ted Poe (R-TX), Rick Crawford (R-AR), Michael Grimm (R-NY), Charlie Dent (R-PA), Mark Amodei (R-NV), Mike Conaway (R-TX), Kristi Noem (R-SD), Lou Barletta (R-PA), Tim Griffin (R-AR)

That is 7.2% of the GOP delegation and they are all benchwarmers, not one of these dweebs chairs a committee.


23 posted on 02/16/2013 5:03:10 PM PST by Valpal1
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To: Valpal1; All
This is gaining momentum, and this is the year to do it, Sen. Mike Enzi (R-Wyo.), the lead Senate sponsor, said during a Capitol Hill press conference.

Thanks for the update. A few names on the list are surprising but most are from the states that have "WalMart"-sized constituents or are broke and want businesses from other states be their tax-collectors (with all the empowered state tax bureaucracy and courts that it usually entails).

When I am in another state and buy something from the store, nobody is asking me which state and city I am from to collect the sales tax and send it to that state sales tax/revenue agency)

The reason it's more worrisome this time than in previous times is that now Amazon is interested in multi-state "simplification" (because Amazon is quickly becoming b-a-m via their "affiliates' and expansion of warehousing/distribution centers in many states where they want to expedite and lower the cost of deliveries, to compete with smaller e-tailers and big-box stores) and this bill supposedly addresses "several proposals from the last Congress and includes revisions aimed at winning over skeptics."

Hopefully it will not go anywhere this time as well, because so many Republicans who are "local" small-business owners are confused by and don't see beyond the phony "fairness" issue and misunderstand the nature of this bill and how it will actually hurt them (instead of providing "competitiveness") as well as millions of other businesses and customers.

From interview with the co-founder of Reddit and other ventures (he also actively worked to kill SOPA and PIPA):
The Start-up Guy: Alexis Ohanian - CEA Vision, by Cindy Stevens, 2013 January 06


24 posted on 02/16/2013 7:02:03 PM PST by CutePuppy (If you don't ask the right questions you may not get the right answers)
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