Posted on 04/30/2013 7:34:09 AM PDT by Lorianne
“I have some concern about the legislation,” says House Judiciary Committee Chairman Bob Goodlatte.
Not that it’s stopping him from supporting an Internet sales tax. Not when it could raise $24 billion for state and local governments. (Where do they get these figures? It was only half that when we covered the issue in depth in late 2011.)
After 13 years of going nowhere, the idea suddenly has traction in Washington. Last Thursday, the Senate voted 63-30 to send the measure to a final vote one week from today, “and that tally is likely to be even more strongly in favor,” reports this morning’s New York Times. “House action, once seemingly unthinkable, may be unstoppable.”
Goodlatte’s “concern” notwithstanding, “We also recognize the fairness issue — certain items being taxed in certain circumstances, other items being not — is a problem for brick-and-mortar businesses, so we’re going to try and solve that.”
Ah yes, fairness. The bill’s even called the Marketplace Fairness Act. Who could be against that?
Certainly not Amazon. “Sometimes the biggest enemies of capitalism are not socialists, but the capitalists themselves,” quips Jeffrey Tucker in Laissez Faire Today.
As we first noticed 16 months ago, Amazon is fully on board with the idea. With it, Amazon can throttle smaller online competitors who don’t have the means to sort out which of 9,600 tax rates apply to an individual customer. That is, unless those competitors buy proprietary software from Amazon to do the calculations. For which Amazon will take a 2.9% surcharge of each transaction, thank you very much.
I don’t think Congress can set tax policies for the states.
Isn’t that an overreach into the state’s sovereignty?
Tenth amendment stuff. Look for a lawsuit.
Nothing new here - big business has always supported regulations that hurt them less than their smaller, nimbler competitors.
” The GOP can go FTS if they join uber-lib Martin O malley to collect that 6% from me.”
The GOP is committing suicide anyway.
Download and store any technical/agricultural information (wherever free for downloading, how-tos: DIY stuff) that you might use in the future on CDs/DVDs—especially projects that will save on energy bills. Make a list of contact and ordering information for out-of-state vendors of low-priced things that you might need in the future. Then consider cutting Internet service at some point in future for an extended length of time. Might have to do it anyway, as the economy continues the slow crash. Starve the B.
Several billionaires who support both political parties have publicly supported various Internet tax and population monitoring schemes. Big business has had emissaries pushing for local government regulations against new, small manufacturing shops, private property rights and small agricultural operations for decades, at least.
Pray tell, where does the Federal Government get the authority to enable the States to collect taxes from businesses and suppliers located in other states?
I'd like the citation. Be specific.
That’s the commerce clause. It’s one of the few things that the federal government is really given the power to do, set up rules by which trade between the states will be conducted.
In this case, the federal government is debating whether to require, as part of doing a trade over a state line, that a company wishing to do so commit to collecting the sales tax for that state.
Whether you think that is a good idea or not, there is no constitutional problem with the federal government creating such a system.
IF they do so, each company can still choose whether to perform this service, by choosing whether to sell their goods and/or services to people within a state.
I want to be sure I understand where you are coming from, so I can understand what level of insult you deserve.
Are you saying that it is the duty of a liberty-loving person to NOT pay any of their taxes? Or are there just SOME taxes that you think should not be paid, while others should be.
Should I be lying on my income tax forms? Or is it just the sales tax that you think is overly burdensome on your freedom.
I don’t know what state you live in, so I don’t know if you have a sales tax.
Assuming you have a sales tax, you are already obligated under your state law to pay tax on purchases made for which a company does not collect the sales tax. That is true for all 45 states that have a sales tax. You may not know this, but I am now telling you. If you tell me your state, I’ll send you links to the law, and to the forms you need to fill out to properly pay your taxes.
Also, in many of these states, they use the income tax form as a method of collecting. For example, in Virginia there is a line on your income tax form where you are supposed to write in the amount of “use tax” you owe.
If you write in “zero”, and you sign your return, you are swearing under penalty of the law that you had no out-of-state purchases for which you owe a sales tax. If that is a lie, you are committing perjury and tax fraud.
Now, maybe you think that you have a right to not pay sales tax. You mention “willingly give away”, so let’s explore that.
What do you mean by “willingly give away”? Clearly, we are not talking about voluntarily paying a tax that is not due. That would be silly. So I assume by “willingly” you mean “pay a tax for which you can somehow get out of paying it”. See, the law says you owe the tax, but since the store didn’t collect it, you are supposed to pay it, by law. That’s not really “willingly giving away”, that is “complying with a properly passed and legally binding law”.
But, you seem to suggest that your liberty obligates you to ignore laws if you think you can get away with breaking them.
So, I will ask you one more question. In most every state with a sales tax, there is an exemption for charity purchases. It is very easy to get this exemption, you simply need a form which identifies you as a representative of a qualified charity (I’ve done this for church purchases, for example). You tell the store that you are making a qualified purchase, and they don’t collect sales tax.
SO in fact, it is easy for you to avoid ALL sales tax. All you need to do is to forge a tax-exempt letter, and lie when you buy stuff.
This is no different from forging your tax bill and lying about not buying stuff from out-of-state, so I would think that, if you believe it is your moral obligation to cheat on your use tax, that you must also be using this method to cheat on your sales tax.
Or is your principle based solely on whether you think you can get away with being a tax cheat without getting caught? Because if you really think there is a principled reason to not pay your sales tax, it seems that principle requires that you publicly announce this fact, and stand like the great figures of civil disobedience against this tyranny.
Or maybe you just like the idea of making your neighbor pay higher taxes while you cheat on yours.
Or maybe you pay all your taxes, and your high-minded principles are only for speaking to others and insulting them.
So, what is it? Do you just want to be insulting? Do you have a principle you are willing to go to prison for? Do you break laws when you think you can get away with it? Do you just like to make others pay for your government?
I do not believe the current incarnation of the bill requires monthly reimbursements, but I could be wrong.
I also believe that each state under this bill will be required to offer exactly the same assistance or rules to out-of-state companies that they do to in-state companies. That seems to be a principle based on constitutional strictures against tariffs between states.
I support the principle of collecting sales tax. I will likely oppose whatever the senate ends up doing because it will be a bad implementation. I would expect them to exempt small business, make payments at most quarterly, require states to provide streamlined processes (there is such a movement to make state sales tax easier), and to provide incentives to companies, such as a small percentage on a sliding scale of the taxes collected, or maybe a fixed fee system.
I was sure the bill was targeting large sales, like over a million.
I disagree with the use of the term “enslavement”, because you can choose NOT to sell things to any state for which you don’t want to collect taxes.
Otherwise, you could equally argue that if I have a business IN a state, that the state is enslaving me by making me collect tax. It’s the same principle, and again it is not slavery because you can choose NOT to operate a business.
But I do agree with you in the end — I don’t think ANY business, in state or out, should have to cover the cost of collecting tax for the government. That should be reimbursed for all businesses.
Apples and Oranges. When you live in a state, you are subject to their legal jurisdiction by reason of physical location.
This law subjects business not physically present to the legal jurisdiction of every sales tax authority in the US whether they are present or not.
It is unfair because brick stores will not be subject to the same laws and rules as click stores.
It is stupid because it fails to realize that bricks plus clicks is the current retail trend. The idea that they are leveling the playing field between bricks and clicks is not reality based and is typical of ignorant government protection of old business methods over innovation. That never helps anyone but the government that administers and regulates the alleged "help". It is just more proof that Congress is ignorant and disconnected from the world that the rest of us have to live in.
The really stupid thing is that it will prevent click businesses from growing organically because instead of spreading state by state as they grow and subjugating themselves to that states taxes as they build warehouses (as Amazon has done, but wants to prevent its competitors from doing). Instead, they will be forced to absorb the costs of collection and compliance at a paltry $1M mark which is far too small a sales volume to absorb those costs.
Everyone thinks that $1M is a big number. It is not. Sticking with the concept of physical nexus is perfectly sufficient to corral all the big national chains, all of which also sell online with free ship to store pick up as well as the big online outfits with warehouses in half the states like AZ.
The fact that this lets business and consumers pick and choose between high tax and low tax states is economically right and morally correct.
Profligate states should be afraid they will lose out to the states that are good stewards of taxpayer funds and keep their taxes low.
Government at ALL levels is becoming more oppressive.
If our way of life is to be destroyed it will be at the hands of sadistic humans that inhabit our State, local and Federal government.
You seem to look on government as a necessary "good." I look at government in the way our Founders did, as a necessary evil. Have a good day.
Why do you think that? If my local store ships something to another state, won't they have the same obligation to collect sales tax as an online-only store does? All business would be treated equally -- every business will have to collect sales tax for sales to any state they choose to sell to.
And for purposes of YOUR argument about this being "enslaving", it makes no difference whether you are subject to a legal jurisdiction or not -- if you are forced to collect taxes, and are not reimbursed for it, you are being made to work for free for another, which is a good illustration of slavery. At least, by your argument. There is no difference in the act just because you live in a state vs some other state. IN both cases, you will be made by the force of law to collect tax for the state as a condition of doing sales within a state.
Again, why do you argue that it is oppressive to pay the taxes you owe by law?
I’ve said nothing about government one way or another. I have made a simple argument — if the government has passed a law implementing a tax, as a citizen of that government, we have an obligation to pay the tax that the government has imposed.
And if you think those taxes are invalid, the appropriate response is to oppose them publicly. And if you want to use civil disobedience, you need to do that publicly as well.
Even if you see government as a necessary EVIL, you are still saying it is necessary, and if it is necessary, it needs to be funded.
And if your argument is that you don’t have to pay the taxes, while others do, and you do that under color of darkness so that nobody knows of your action, then you aren’t advancing liberty, but anarchy.
It is a bizarre world view that tries to claim honor from the dishonor of being a tax cheat.
First of all jurisdiction based on physical presence is a basic concept of law.
Remote regulation and taxation (tribute) to distant ruling bodies has historically led to rebellions and revolutions.
So a business collecting for it’s own state is not enslavement. Plus the business benefits from its local taxes and uses the roads, fire and police services paid for by the taxes it collects. The business derives no benefits from collecting taxes for distant states, that is why it is akin slavery.
Mostly this bill makes a cock up of jurisdiction based on physical presence. Where is the sale taking place? Is the buyer a virtual tourist? Tourists must pay the sales tax rate of the state they are visiting rather than the rate of their home state.
It is more logical to make the sellers location the sale location because it maintains the concept of physical nexus. It also means business, whether brick or click or a combination would only have to deal with the tax rates of the tax jurisdiction they are in for however many jurisdictions they choose to maintain a physical presence in.
This allows businesses to grow organically and only taking on the tax liabilities as they expand to new regions instead of being forced to assume massive amounts of liability and compliance costs based on a static dollar number. Not all businesses are the same or have the same ROI or profit margins. Having to suddenly absorb these costs for all jurisdictions at once will be a strain that can break a business.
It’s easy, it’s cheap and requires a one sentence law.
I will sue on the basis that this law is not equally applied.
Stores are not force to collect and remit taxes to the tax area their customers live in. But if I sell on the internet that is exactly what they want me to do.
So I want the law applied equally.
So every time someone buys anything in that over priced gift shop in Washington DC I want them to have to ask for proof of where they live, and the store has to collect and remit taxes to that location.
I want the House of Mouse to have to collect VAT to send to France. I want the Starbucks in the UN to have to send sales taxes to 193 different countries in the world.
You want to turn me into a unpaid tax collector for the world?
You're are going with me.
BTW in real life “brick and mortar” businesses are told that when they buy something it is up to them to make sure sales tax is properly paid.
If I get a invoice for an item that needs sales tax paid on it, I have to note it and the amount and send a check to the state on a monthly basis.
If I am audited and I have not done so I will be fined and they will "estimate" how much I should have paid and I will be charged that amount.
And what happens to the vendor who didn't change me sales tax? Nothing. It is not their job to make sure I pay the taxes owed by my company. It is mine.
So once again they are pushing for me to do something even the “brick and mortar” businesses are not made to do.
I do believe I see an equal protection violation there.
No, they won't.
Challenge accepted.
In one week you will submit a program that will accurately say what taxes should be sent where on a variety of transactions that cover the US and its territories.
Put up or shut up.
Maybe you like the idea of someone else being forced to do your taxes for you rather then doing them yourself?
Why is it my job to pay your taxes?
But the sales tax is not a tax on the business, it is a tax on the purchaser. The business is just collecting the tax.
So this would not be a remote taxation to a distant ruling body.
And it is not regulation by another state. The regulation, as it were (I assume in this case we define regulation as the imposition of a rule regarding the collection and remittance of sales taxes), would be imposed by the federal government on all businesses within the jurisdiction of the United States.
Your argument about “enslavement”, to the degree we accept the comparison (which I don’t), is that a company is forced to provide a service without payment for that service. I argue that since the company has a “choice” (whether to sell products or not), it is not “enslavement”, it is simply a cost of doing business, just as having to pay the electric company for power and the water company for water and sewer.
And that “cost of doing business” applies equally whether a business is collecting tax money for the state in which they have a building, or a state in which they don’t have a building, if that regulation is imposed by the federal government, which it would be in this case.
The burden placed on the company is equal whether the tax is remitted to their own state or another.
I would also note that this tax COLLECTION is not considered a cost for which the business receives services. The business pays an actual business tax in the state they reside, and usually property tax as well, which pays for the government services they get. These taxes are not based on profit or sales, because the cost of the services they receive from the state are not tied to their sales or profits.
The problem I have here is that I disagree with your premise that it is “enslavement”, any more than it is “enslavement” that the government forces me each year to take my time and fill out tax forms, for which they don’t give me money. But whatever that burden is, it is clear that the burden of tax collection under this bill would be identical for all companies in similar circumstance — every business above the threshold that sells items to a people living in a state will have the SAME job of collecting and remitting taxes to that state.
You said that the business derives “no benefits” from collecting taxes for a distant state. But they do — they get a sale on a product to that state. It is that sale that imposes the regulatory burden. If they don’t think sales to a state are a benefit, they can refuse to sell to a state, and not get the regulatory burden.
And as I said, companies collecting tax within a state are not doing so to derive benefits, the state benefits come from the property, income, and business license taxes they pay to the state.
As to your idea that we should just tax based on where the business is located — that isn’t necessarily a bad idea. That’s how physical stores work today, if I go to Maryland, I pay Maryland sales tax (there may be a way to get them to not do so by proving out-of-state residence and use). But the internet stores aren’t collecting taxes from any state, plus you’d still have the unfair competitive advantage if you set up your store in a non-sales-tax state.
But realize that you then WOULD be imposing a new tax burden on people. Because, as people keep forgetting or ignoring, every state with a sales tax already requires their residents to pay a “use tax” equal to the sales tax, when sales tax is not collected for the state.
But the “use tax” is based on the taxes within your state. So, if we had all internet companies collect their own state sales tax, and that was LESS than your state, your state would still expect you to pay them the difference. But if the other state had a HIGHER tax, you wouldn’t get a refund, and would end up paying a higher tax than you owe today.
(BTW, the “use tax” generally applies to things you buy for use in the state; so if you are a literal tourist, and buy food for lunch, you eat that food in the other state, and you have no use tax burden. If you buy groceries and drive them to your house and eat them, you owe the use tax).
In 2012, I paid $250 in “use tax” for online purchases. It took me about a two hours to collect all the information and calculate what I owed, so it wasn’t terribly bad (Amazon could make that easier, if they gave me a way to dump a summary table of ALL my order payments/taxes/shipping, instead of requiring me to pull up each invoice individually).
If Amazon had collected the taxes, that’s an hour of my life I would have, plus I wouldn’t have to come up with $250 all at once. And I’m pretty quick at the Amazon thing since I have been doing this for years. If you buy a lot of stuff from all around, you probably have to keep the information during the year, since most companies don’t have an easy old-order search function.
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