Posted on 04/24/2013 2:43:47 PM PDT by IBD editorial writer
Government: Non-Internet businesses claim a looming, unprecedented collection of state sales taxes on their online competitors is not a new tax. They will regret their pact with the devil tax collector. The new Internet sales tax legislation currently being steamrolled through the Democratic-controlled Senate with White House support is not some kind of untax, a government revenue version of the Uncola. It's not that "certain je ne sais quoi, fresh, clean, no aftertaste!" The National Retail Federation imaginatively claims "this is not a new tax" and claims that non-Internet stores "cannot compete on sales tax," and therefore "Congress needs to address this disparity." Calls to "tax the guy across the street," however, always come back to haunt the first guy. For some time, though, Amazon.com — obviously judging the tax as inevitable — has stood together with the non-Internet, pro-tax businesses; eBay, on the other hand, remains committed to "protect small online businesses, not potentially put them out of business" via new taxes. This is not a new issue, and it's no surprise, considering the perennial greed that is second nature to government. In 1992 the Supreme Court, in its Quill decision, unanimously prevented North Dakota from audaciously collecting sales taxes from a company with no physical presence in the state but whose North Dakota customers used its software to place orders.
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I think there will be plenty of deals, just like there are today. There’s no way that say, a local ma and pa computer store can match the deal-power of a TigerDirect or Egghead, but now both will have to pay the same sales tax, is all. In every case I can think of, the “deal” was more than just the difference between sales tax and no sales tax.
Here’s the thing: like it or not someone has to pay to plow the snow, fix the potholes, provide the fire and police protection, etc. I like a deal as much as anyone but I’d rather see the $ going to my local gov’t who are people I know and can call up or go look in the eye than to avoid the sales tax and have to rely on federal tax $ trickling down to the local level to pay for needed services.
The real battle ought to be over keeping more tax dollars at the local level rather than allowing federal and state bload and inefficiency to go on.
Tax or no tax I’m still going to do most of my shopping online. The time, aggro and gas I save vice traipsing around trying to find what I want at brick-and-mortar stores is still worth it.
Had the misfortune of hearing Obammy talk about how this would “level the playing field”. It does nothing of the sort- it is just a revenue grab. If it is a leveling, wouldn’t the by e-tailers have a proposal to make non-Internet purchases subject to shipping and handling fees?
I have a small hobby business and sell a little on my website. Most good years I’m lucky if I make a $500 profit.
If I have to do all the paperwork and legal mumbo jumbo crappola to pay sales taxes all over the country, it’s over, I’ll shut it down and give it up.
It’s a hobby and I do it for fun. Any profits are reinvested in tools and inventory to keep the hobby alive. A guy tries to do things legal and above board to make a little extra cash, and the government has it’s hand in his back pocket from every little angle. I have a state sales tax license, a LLC annual report fee, a town business license, all kinds of time consuminmg paperwork, not to mention the extra work on my income taxes.....
I suppose I could double my prices and hire a CPA, but that wouldn’t work because then I would have no customers, or I could just do it for cash under the table and be a law breaker.
Do I really live in a free country? Not if I engage in commerce, no matter how small.
“Surprising, really, that our various government Masters don’t just stand by the head of the line on payday and simply confiscate all paychecks.”
To stop crappola like this, conservatives need to get off their butts and go to local village, schoolboard and county meetings. That means stop thinking of barbecuing ribs, playing golf, remodeling the kitchen and pursuing mammon as the No. 1 priorities of life.
That will take a mighty effort by so-called conservatives to rearrange their lives. It will require them to think about their kids and freedom first before themselves.
I don't like paying the taxes in either case, but what's good for the goose is good for the gander.
Most “main street” retail and service businesses are now thickly linked to local governments with many having relatives in both. They’ve regulated for decades against nearby neighbors who would otherwise make real products.
You know that the resistance against buying from them is going to intensify. That’s what the slowdown has been all about. Sustainable revenues in a wealthy economy come, in great part, from manufacturing. A wealthy manufacturing economy is kept healthy by new, tiny starts without debt.
So if I pay Amazon sales tax, how does my local government get the money? Does Amazon write them a check?
No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.
The other 99% will probably get right on paying those tax "debts" as soon as there is a widely produced, backed, monetary system to do so...
Those shipping and handling fees are already accounted for in the retail price of an object in a brick and mortar store.
Unlike you, I don’t believe the state I happen to reside in owns me. If I choose to buy something from another state it is none of their business. If anything, the state that I buy the product from would be the one who gets to charge me the tax.
I don’t believe for one single moment that you declare everything that you buy from another state on your state tax form.
Mail-order catalogs never created this “concern”. Corrupt local governments that have promised 2+ generations of taxpayer subsidized pensions have cities and states scrambling for all of the loose cash they can grab.
George Harrison’s song against the taxman STILL makes liberal cuss.
One thing to think about, is the global nature if trade, It’s all going elsewhere.
It is astonishing and quite discouraging, all our products are leaving.
Stop buying things from elsewhere.
Buy American. At a store.
Brick-and-mortar stores collect sales tax for one state. Internet retailers will be forced to collect for all 50, regardless of whether they have a presence in the state.
This will be onerous for small internet retailers, who will have to create a system to pay off 50+ governments for their share of sales taxes - and are liable for audit from any of those governments.
I live 8 miles from the VA/MD state line and have limited availability of supermarkets and so, at times, do my grocery shopping in MD. Do you seriously think I should claim all of my groceries in order to pay the idiotic sales tax on food products that VA charges? Or should WalMart in MD carge me the VA food sales tax on my purchases?
Delaware has no sales tax, so a little gal who sells craft items or maybe specialty jellies and mustards on the internet at times should be required to deal with close to 10,000 different jurisdictions when it comes to sales taxes?
“If I have to do all the paperwork and legal mumbo jumbo to pay sales taxes all over the country, it’s over”
Supposedly the bill (as it stands now) exempts small businesses with under $1 million in out-of-state sales the previous year.
So yes, if you buy something in Maryland and it is exempt from maryland tax, then at the end of the year, when you are doing your Virginia income tax, you need to fill out the "Use Tax" form. On that form, you would report the total purchases for food items. That is, if you spend more than $100. And I'm not sure if it applies to food; reading the general directions, there is some ambiguity.
The actual rules are as follows:
When you purchase goods, other than magazines or newspaper subscriptions, from a business that does not add the Virginia sales and use tax to your bill or you purchase goods tax-free while outside Virginia, you may be liable for the tax and required to file Form CU-7 to report and pay the tax. This tax is 5% of what you paid for the item ("cost price") except for food purchased for home consumption. 'Cost price' does not include separately stated shipping or delivery charges but it does include a 'shipping and handling' charge if listed as a combined item on the sales invoice.I BELIEVE that the "food" exception was meant to say you'd pay 2.5%, not that it didn't apply. Note that the $100 exemption applies to "catalog sales", but not things like walk-in sales in stores outside of the state.Who Should File This Form: If the total amount of purchases was from out-of-state mail order catalog(s) only, and $100 or less for the entire year, you do not have to pay the use tax. If the purchases were from out-of-state mail order catalog(s) and exceed $100, or the purchases were of any amount from sources other than mail order catalogs, then you must report these purchases and pay consumer's use tax on the total amount of all untaxed purchases from all sources made during the calendar year. Nonprescription drugs and proprietary medicines purchased for the cure, mitigation, treatment, or prevention of disease in human beings are exempt from consumer use tax.
Further, it says "untaxed" purchases. But I think the actual LAW covers "undertaxed" purchases as well, meaning if you DID pay tax in another state, but it was less than the Virginia tax, you should pay.
If you don't like this, and most people don't, you should contact your state representative, and your state senator, and also the Governor, and tell them all to change the law.
Here is the link to the Use Tax form you are supposed to fill out. HOWEVER, you can also simply file this with your income tax, there is a line on the state income tax form.
CU-7 Use Tax Form and Instructions
From the instructions, a few snippets:
Line 1b: From Work Sheet Line I, enter the total COST PRICE for food purchased for home consumption for which you did not pay a sales taxThe income tax form instructions can be found here: Form 760 Instructions:
The tax is 5% of the total price except for food purchased for home consumption. The tax rate on food purchased for home consumption is 2.5%.On the income tax form you sign, it says this above your signature:Enter the amount of Consumer Use Tax you owe on Line 21 of Virginia Schedule ADJ, or file Form CU-7.
I (We), the undersigned, declare under penalty of law that I (we) have examined this return and to the best of my (our) knowledge, it is a true, correct and complete return.So, when you do your income tax, if you put "0" on Line 21 of the ADJ form, even though you know you purchased untaxed groceries in Maryland, and you SIGN your tax form, you have just confessed to tax fraud, and are subject to the penalty of law.
That is the law. As I said, if you don't like it, don't blame me -- I didn't write the law, and once a year I write my representatives and explain why it is unfair that I pay this tax and nobody else does, and suggest that if they aren't going to enforce it, they need to repeal it. You should write and ask them to repeal it.
But given that they are counting on money from untaxed sales to fix the roads, it is unlikely they will waive this. In fact, if we don't get a federal right to collect use tax from other companies, our taxes will actually go up MORE to make up for the difference.
As to your question about Delaware -- every bill I've seen discussed has exemptions for small numbers of sales. So it is unlikely a small company doing small amounts of internet sales will be affected. But we need to see the actual language in the bill being debated -- I do not support just ANY fix, I have criteria that I think will mitigate the onerous costs, such that the total compliance costs will be LESS than the current compliance costs (which are in the hundreds of millions, but borne by all the individuals who have to do their own use tax filings every year).
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