Skip to comments.Report: Congress Set to End Tax-Free Online Shopping
Posted on 04/18/2009 10:00:00 AM PDT by sheikdetailfeather
Friday, April 17, 2009
Print ShareThisThe free ride may soon be over.
For the past decade and a half, most Internet shoppers haven't been forced to pay sales tax while buying goods online.
But now, according to CNet News, an alliance of "brick-and-mortar" retailers and state governments has teamed up to end that and they've crafted federal legislation that may be introduced in Congress as early as next week.
Previous attempts in past years to do so have flopped.
(Excerpt) Read more at foxnews.com ...
This will destroy Internet commerce. The politicians are needing to be purged from DC ASAP.
We do not want their cheesy stinking handouts.
We just want them to go away.
Many states have a use tax on “untaxed” purchases. Those states could easily use that method to harvest online taxes and strong-arm retailers into giving up sales records.
By “current” law, an on-line seller would have to get a Resale Tax Permit from every state they sell in.
You said — PS I would bet with that attitude, you were probably not at one of the hundreds of Tea Party protest?
Heck no, I think the state should not have “sales tax” or any tax at all, in fact. I think that all conservatives should stop paying all their taxes, but I doubt that they will do that.
You see, I came from a state that *had no sales tax* so I don’t like the idea of sales tax. And even if all states started charging the sales tax that they are supposed to get on sales of goods, that state that I was in — would *not* charge *any* sales tax on those online purchases...
I think the problem you have is that you’re living in the wrong state that *has* sales taxes. You should be living in a state that has *no sales taxes* if you’re protesting.
I would suggest moving to Oregon for *no sales tax*... LOL...
But, no, I do protest all taxes, however, I do not think I’ll be winning that argument, despite all the tea parties attended.... LOL...
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And as a last note here, you said — How about we keep it that way.
The only problem with that idea is that *from the beginning* this was *always* a temporary moratorium. It was *never* anything else other than that. For some, that may be a *total surprise* — but it was always that way.
That’s like saying, when you go to a grocery store, you had this on sale last week but it’s not on sale this week and I want it for the same price as last week. The store manager would tell you that today’s price is the *normal* price — and that the price last week was the *temporary* price and you’ll have to pay the normal price this week.
And so, it was that way with the tax moratorium, in that it was *always* said to be a temporary abatement to allow time for certain of these online store to build up their presence....
The “sale” is over now... that was last week... LOL...
I’ve known that from the beginning. I’m surprised you were not that informed on the issue...
Hey, gotta pay off that stimulus debt somehow.
Either your response went right over my head or you did not understand my point.
My taxdollars pay the out of state worker who spends their money in their state—not mine. So for my state to boost their revenue they could bring the work back home or they can go after me for sales tax on purchases I make in another state.
Why can the State cross state lines and do business where they get more value for their dollars (my tax dollars paid) while the simple person/taxpayer cannot?
The use tax is an obligation of the purchaser not the Seller. They could not demand the sellers books—if there is no agreement to collect the sales tax.
You said — The internet was originally established as a tax free zone. Theres no way in hell we should surrender that distinction. And since taxes have not been collected, it hasnt really be a taxed zone yet, in practice.”
No, you’re wrong there..., the Internet was never established as a tax-free zone. *Originally* the Internet was established as a “business-free” zone. I should know since I’ve been on it from the National Science Foundation days... when you could be *ejected* from the Internet, have your account closed and be knocked offline for *merely* trying to sell an old worn out book online.
If you were caught so much as advertising *anything* for sale on the Internet (i.e., not “taxes” but *anything for sale*) you would be kicked offline and you would not be able to get an account.
The key was “doing business” and “for sale” online. That was *absolutely forbidden* on the Internet — and *not* taxes.
Now, move forward to when the government turned over the Internet to “business interests” and then it became “okay” to sell something online (about the mid-90s). States were definitely going to get their cut of sale taxes. However, the Federal Government wanted to give “online businesses” the chance to “start up” as much as possible. It was then agreed to allow a “tax moratorium” for online sales taxes. This was *always* from the very beginning, a temporary moratorium. It was *never* something that was said to be permanent.
It was always stated that it was to give online businesses a chance to get a foothold and become established and then the sales tax moratorium would be lifted.
Well, that time is pretty close to now, because online businesses are quite prevalent and well-established at this time.
As I said — the Internet was *never* started as a “tax-free” entity... That’s a complete misunderstanding of the entire process and displays a bad understanding of the facts...
I was there and I remember it all and that’s how it all happened...
Federal law exempts the internet.
You get charged sales tax in your state, and I get charged sales tax in your state.
Then you go to another state and you get charge the sales tax in that state and the resident gets charged the sales tax in that state.
If I work in your state and make money there and I go back home to spend it in my state, that’s simply my own choice to do so. If you come to my state and make money there and then take it back home and spend it in your own state, that’s your choice to do so.
I don’t see any big deal with all that I’ve mentioned above....
Do you report your online purchases to local taxing authorities at the end of the year or on your state income tax forms?
Maybe your crap-hole state requires you to pay sales taxes for every out of state purchase you make. My state doesn't. All I have to do is add about 60 bucks to my income tax return when I file each year. It's a pittance compared to what I save in taxes by shopping online. I pay my state exactly what it demands I pay. I'm not slipping through some imagined loophole.
Absolutely not..., and didn’t have to, since I was in a no-sales-tax state... LOL...
Now, however, I’ll have to be reconsidering that standpoint..., since Oklahoma and Texas has been charging me sales tax on everything that I’ve been buying around here... LOL...
“I dont think we should think of this in terms of its a natural inevitability. We should fight this tooth and nail.
The internet was originally established as a tax free zone. Theres no way in hell we should surrender that distinction. And since taxes have not been collected, it hasnt really be a taxed zone yet, in practice.
We need to scream bloody murder about this.”
Agreed. I’ll be contacting my RINO congress critter about this on Monday and will encourage others to do the same.
Neither did I..., as Oregon never did charge me sales tax on anything I bought... LOL...
But, as I said, even when I was *merely* a “visitor” — Texas and Oklahoma *never stopped* charging me sales tax on *everything*... hooo-boy!
You said — Federal law exempts the internet.
Yes, I’m aware of the tax moratorium that the Feds put on the states collecting their sales taxes, in order to give online businesses time to establish themselves.
But, now they’re ending the moratorium... :-)
It isn’t about an individuals right not to pay sales tax on out of state purchases, it is about a businesses right not to collect taxes on behalf of other states. You just confusing the issue. L^O^L If states want their money, they should pursue the individuals, and face the consequences for doing it. It is bullshit coward politics to hide from the people by quietly making business do the dirty work. LOL.
Neither do I, however if I can purchase a product on the internet from your state and you from my state why should either of us pay sales tax (unless there is a storefront in my state or your state which would mean there is an agreement in place between the business and the state to pay sales taxes).
As far as taking my taxdollars for contractual work outside my state. The state is taking revenue from the people of the state and handing it over to another state (via workers) while at the same time they are complaining they are losing revenue.
I guess we will have to agree to disagree.
Note post #58..., you’ll see that the Internet was originally established as a *business free zone* — and *not* a “tax free zone”.
Originally, if you were ever caught doing “business” on the Internet, you were suspended from the Internet and your account was closed. Good luck in getting another account... LOL.. That’s the way it was and it was *fiercely enforced* by ordinary “netizens” of that day. They *fiercely* kept “business” off the Internet. You better dare not do a single little bit or item of business — or — you were a “dead duck”... LOL..
BUT, then the Internet was turned over to “business” and it could be done, for the first time. States were already and immediately *working* to apply sales taxes in the beginning, and the Federal Government decided to give a moratorium to online businesses in order to allow them time to establish themselves. Well..., they have established themselves and all moratoriums do finally end...
And that’s the way it was...
Leaving the ethics of it aside, the computer age has made that quite possible. It would be extremely easy to build a type of cash register that would immediately determine, assess, and send taxes off to every taxing authority covered by a person's nine-digit zip code. Chances are, it would be imbedded in your next credit and/or debit card, you won't even have to tell them where you live.
Big Brother will indeed be watching everything you and I do commercially, we just needed enough politicians with the will to decree it. Tax money is usually enough of a justification.
Simple. One flat Federal sales tax.
Well, the way it will work is if I buy “online” and ship it to my address in my state, I’ll only pay *my state’s sales tax”.
And then, likewise, if you buy online and buy it from your address in your state, you’ll only pay *your own state’s sale tax” for the residence that you have in that state.
They’ll do it that way, or else, what you’ll see is everyone buying homes, cars, refrigerators and *everything* online and no one paying any sales taxes anywhere. The states see that thing “down the road” and they’re basically not going to have that happen to their “funding stream” from “sales taxes”.
I would think that should be plainly obvious to anyone...
[... in addition to the fact that this “moratorium” on state sales taxes from the Feds has *always* been “billed as a moratorium” and nothing else...]
It won't consist of active protests on street corners with tiny bags of dried beverages. It might consist of more underground means of protest. I can see people using fake IDs (much as illegal aliens do) to establish addresses in states that don't have sales taxes to get out of paying.
You said — It won’t consist of active protests on street corners with tiny bags of dried beverages. It might consist of more underground means of protest. I can see people using fake IDs (much as illegal aliens do) to establish addresses in states that don’t have sales taxes to get out of paying.
Heck! Can you imagine how upset I was to be buying stuff online and getting charged sales taxes, and yet, I lived in a state that did not have sales tax. There was nothing I could do to convince some of these online retailers to not charge me sales tax (and they did have my home address). They said that if they “shipped it” elsewhere, other than to my home address, they would have to charge sales tax for that state it was shipped to. If they shipped it to my home address, then they wouldn’t have to charge me sales tax.
I couldn’t convince them to do it any differently, even though I wasn’t at “home” at the time... LOL...
So, you see, there are “always problems” no matter what...
You said — It is bullshit coward politics to hide from the people by quietly making business do the dirty work. LOL.
Ummm... from what I’ve seen in traveling around in Oklahoma and Texas — *that* — is exactly what they do — and they do it at the cash register that I’m at, when I pay for my goods... LOL..
You might have missed that “procedure” in your state.. :-)
I used to live in Vancouver, Washington, and every place I went to shop asked me if I was an Oregon resident. (Of course, I groaned that they would have to go ahead and tax me.) That didn't happen when I went to restaurants, because I was eating the meal in Washington, and that would have been the case for you if you were traveling in WA yourself. The exemption is only for things that it was presumed you'd be taking back to Oregon.
Isn't that the same thing with items you wished shipped to states that online retailers were authorized to collect sales taxes for? The presumption is that you'd be using or consuming those things there, and not in Oregon.
As a side note, if this goes through, expect many fake Washingtonians to "move" to post office boxes in Oregon! If I were still back there, you can bet that I'd be one of them!
Yes, having lived in Portland and being so close to Washington, I know all about sales tax issues... LOL..
A follow-up here...
There was even a time, many years ago, that I got a “Tax-ID-card” (can’t remember what it was called, though) — in order that, being an Oregonian, I would not have to pay sales tax in the state of Washington. It worked and whenver I showed it, I would not have to pay the sales tax.
But, that was a very long time ago, and I gave it up and figured it just wasn’t worth the continual hassle. I paid the sales taxes after that... :-)
Which I constantly bought over in Oregon, by the way!
LOL... yeah, “micro-brew city”....
Ya know..., in Oregon you always wonder what to do with your pennies..., while when I’ve been traveling around in Texas and Oklahoma, I know what to do with my pennies — use them to pay the sales taxes... LOL..
If you go to any stores in SW WA, and announce up front at the checkout that you’re an Oregon resident, just showing your driver license, you’ll likely face no hassle in getting a tax-exempt purchase. The outlet malls in Centralia, WA routinely ask, as well. Often, the stores on the WA border lower prices a bit so that WA residents will shop there, rather than going to OR.
I have been collecting and paying sales tax on products sold instate for years. Doesn’t amount to much, but the state of MA is pretty insistent that we report and pay.
Full steam ahead President Obama, Nancy Polosi, Harry Reed. We will rebuild it when you are through.
What they are proposing should require a Constitutional amendment. It violates clauses in Sec 9 & 10 of Art I.
But you’re OK with them just passing a law to do it, huh?
You said — But youre OK with them just passing a law to do it, huh?
Ummm..., I think you forgot what happened. The “law” was already passed, a very long time ago, to put a “moratorium” on the individual states putting sales tax on items sold in their state — i.e., “stop” the states from collecting their sales taxes in their states. Some might even consider that a violation of the states 10th Amendment rights, and the Feds “interfering” into state sales tax business (but the Feds did do it, anyway).
So, that was the law that was passed. No one complained about the moratorium to give time for “online stores” to build up their business before the states started collecting their sales taxes.
However, there’s no “law” that says the Feds *have to* continue the moratorium. All they have to do is let it lapse and that’s the end of the moratorium on state sales taxes. Then all the states *jump right into it* and start collecting their individual sales taxes, just like they intended to do, originally, about a decade and a half ago.
All it requires for this to happen is to *not continue* the federal legislation... :-)
I see people here on this thread are pretty ignorant about what is going on with this “sales tax” for online purchases... LOL..
Perhaps this will help clear away some of the “fog” of what is going on...
Bush extends moratorium as states move to streamline sales tax systems
Publication: Government Finance Review
Date: Friday, February 1 2002
Bush Extends Moratorium as States Move to Streamline Sales Tax Systems. In November, President Bush signed legislation extending the moratorium on Internet-related taxes for two more years. A recent study by the University of Tennessee estimates that uncollected sales taxes will cost state and local governments $13 billion this year and $55 billion by 2011. One of the major stumbling blocks to the implementation of any sales tax on electronic commerce is the disparity between state tax codes. To address this, 19 states and the District of Columbia recently began an initiative to streamline their sales tax systems by establishing uniform definitions, standardizing rules, and simplifying the registration process.
(Sources: Associated Press, November 28, 2001; National Governor’s Association, November 29, 2001)
Y’all haven’t been paying attention. All that has been happening over the years, is a *continuation* in a few-year extension, of a “moratorium” on state sales taxes.
NOW..., many could consider this *interference* by the Federal Government, into *state affairs* of how they should be able to collect their sales taxes for items which are sold to citizens in their states. It effectively *stopped* the states from collecting those sales taxes.
But, all good things don’t last forever, and neither do “moratoriums” last forever. All that is needed for a “moratorium” to *not last* — is simply *not to extend it*... nothing more than that...
Okay, another article (I think around the year 2000) which also speaks about making the “moratorium” permanent — but that was never done, so all it has to do is “expire” and nothing else...
House Limits Internet Tax Moratorium to Two Years; Senate Allows it to Expire
With the Senate failing to act on extending the Internet tax moratorium and lawmakers not returning to session before its October 21 expiration, the moratorium on new and discriminatory Internet taxes and the ban on Internet access taxes will lapse, opening the door to “economic mischief” by local and state taxing authorities and implanting further uncertainty in the already crippled technology market.
Senate failure to pass an extension to the moratorium is the direct result of obstruction by some members, led by Senator Byron Dorgan (D-North Dakota), who refused to deal with the issue without provisions allowing states to shift their tax collection duties onto out-of state businesses. The House of Representatives overwhelmingly approved a clean extension of the moratorium, H.R. 1552, on October 16, but for only two years.
The limited two-year extension passed in the House is a watered down version of H.R. 1552, sponsored by Representative Christopher Cox (R-California), which initially called for a five-year extension of the ban on multiple and discriminatory taxes that do not apply to offline purchases, and sought to make permanent the moratorium on Internet access taxes provisions in line with recommendations by the Advisory Commission on Electronic Commerce authorized by the Internet Tax Freedom Act (ITFA) of 1998. An amendment by Representative Spencer Bachus (R-Alabama) in the House Judiciary Committee to limit the extension to two years set the stage for the House vote.
[ ... ]
All this time, I fully well expected the moratorium to “expire” with a lot of states opposing the extension of it. However, the moratorium kept being extended — but — *never* permanently. So, once again, this is a *moratorium* and it can expire and not be renewed. In addition, it can be considered *interference* by the Federal Government into state affairs and a violation of 10th Amendment issues that the states are currently fighting for right now...
In case anyone doesn’t realize it, what everyone is facing, soon, is an “all out assault” on the Internet — by the various states — in order to get their “sales tax revenues”...
This is *not* a Federal issue, but a “states rights” issue in that the individual states have a right (they say) to collect the sales taxes for items sold to residents in their states — or else — it’s simply a “get-out-of-jail-free card” by online retailers to avoid, totally, the states’ sales taxes.
What the Federal “moratorium” did was to avoid that *all out assault* by the individual states — upon the Internet and Internet retailers. It’s not the “Feds” who are trying to “tax” here — they are trying to “squash” it, for now. It’s the *states* who are trying to tax here, via their “sales taxes”.
Furthermore, the states *also* intend to *tax your internet service* to make up for the lost revenues on their sales taxes ... hoo-boy! Now, *that* is something else that was prevented by this Federal “moratorium” on the Internet and Internet retailers...
This is also one of those 10th Amendment Issues, where the states maintain their rights (and not the Feds) to tax the citizens in their own respective states.
People should *get their facts straight* before accusing someone or some agency ignorantly... LOL...
Commentary: Assault begins on federal Web sales tax moratorium
By Gartner Viewpoint
By French Caldwell, Gartner Analyst
Although California’s governor may still veto the Internet tax bill coming to his desk, the bill may be the opening salvo on the federal moratorium on new Internet taxes.
In California, sales of goods over the Internet are treated as sales of tangible goods and are subject to the rules of “nexus” and California’s sales and use tax.
In the case of retail sales, when a California resident buys goods over the Internet from a retailer that maintains a physical retail presence in the state, sales taxes are collected.
However, to compete with e-tailers such as Amazon.com, many brick-and-mortar retailers have established separately incorporated e-tail operations. In this case, the new e-tailers are building off the brand name of the parent and may share other corporate functions such as marketing, advertising and buying. Besides allowing brick-and-mortar companies to get around their own internal cultural and corporate barriers, the independently incorporated e-tail outlets have the added advantage of being “tax free.”
Bill AB2412 is an interesting attempt to rein in those e-tail outlets of brick-and-mortar companies. The proposed law extends the concept of nexus, which up to now has been dependent on physical presence within a territory, to include branding and other intangible relationships that may tie an e-tailer to a brick-and-mortar parent.
Although California’s governor may veto AB2412, this bill is definitely the beginning of an assault on the federal moratorium on new Internet taxes. The U.S. House of Representatives has extended the federal moratorium beyond its current sunset of October 2001, but passage in the U.S. Senate is less sure.
Whether California’s bill becomes law, other states will likely attempt similar legislation. The growth of online sales and the potential erosion of the sales tax base, which is being masked by a good economy, is too much of a threat and an opportunity for the states to ignore. Regardless of the extension of the federal moratorium, this issue will be ultimately decided in the courts. Alternatively, but less likely, under its power to regulate interstate commerce, the U.S. Congress could settle the issue through national sales and use tax simplification.
There is already a mechanism to pay sales tax on internet purchases, and the burden is on the individual to pay it. If the state feels it is so important, let them try to enforce it.
It isn’t a 10th amendment issue. The Constitution forbids States from keeping the proceeds of such a tax.
I believe the states would say that the Feds interfering in their business of collecting sales taxes for things sold to their citizens was indeed, that very thing... LOL...
The only reason why a majority of the states have “held off” during this time is for the promise of a all-encompassing and smooth system being put into place where they wouldn’t have to have a “mish-mash” of competing state regulations, fighting against one another. They’ll hold off for the promise of that one to come...
You said — Does thw cashier in Oklahoma have a chart of all the sales tax rates in all the states, and municipalities in the country? Do they make a check to the state comptroller in California for 9.75% when a resident of California buys something? Why would laugh at the burden of collecting taxes for California being placed on an Oklahoma business?
You’ll note what you originally said here... (LOL...) It is bullshit coward politics to hide from the people by quietly making business do the dirty work. LOL.
AND, in answer to that, I replied in regards to that “procedure” of the state — Ummm... from what Ive seen in traveling around in Oklahoma and Texas *that* is exactly what they do and they do it at the cash register that Im at, when I pay for my goods... LOL..
You might have missed that procedure in your state.. :-)
It seems to me, that you’ve missed the fact that this is *precisely* what the states do — already — in collecting the sales tax in their own states. They *very precisely* allow the retailer to collect it for them. OR, haven’t you noticed that, yet? LOL...
And as far as all the competing and different rates of sales taxes in all the various states, that’s going to be one of the problems that all states involved are hoping to work out *among the states* in order to solve that problem.
Believe me — *each state* wants to collect that sales tax — and they will with the cooperation of the other states. You see, each state knows that it’s going to require the cooperation of the other states to make the whole system of collecting the individual state sales taxes be a “smooth operation” and not a “free-for-all” among the states. That’s why the individual states are “holding off” for the time being, in order to get that system, between them, to work...
Maybe the reason you’re making a series of non sequitur replies is that you haven’t actually read the Constitution, or at the least, you haven’t read Art I Sec 9 & Sec 10.
Or maybe you think State law trumps the Constitution’s State restrictions.
I know that currently there are states who are collecting these sales taxes, as they were allowed to do so by the initial moratorium. And without that moratorium, all the states would jump in there, immediately and start collecting the sales taxes for their respective states (as indicated by the above articles supplied for all to read...).
As far as the Constitution trumping the 10 Amendment rights of the states in collecting the sales taxes for their individual citizens..., I think you’ll be surprised when the new comprehensive sales tax regime comes into place, with all the states working together on it, to enforce it across the board. It’s being worked on right now with all the states.
They’re not going to work against *each others’ interests” because they are the same interests for their own states... LOL...
You have zero Constitutional arguments, so there is no point in continuing this.
Well, sorry that you think so, but notice that it wasn’t me who posted this article and I did point out that it was a “moratorium” on sales taxes that was going on, contrary to the opinions of others, who thought it was to “impose” sales taxes. It’s the states, themselves who impose the sales taxes and it was the Federal government who kept the states from doing it, during this time, by means of that temporary moratorium.
We’ll see what happens when the Feds don’t impose the moratorium on sales taxes any longer...
Businesses in Oklahoma only collect tax for the state of Oklahoma. The burden is if 49 other states can ask a business in Oklahoma to collect tax for them. Trust me, the folks in California would love to collect income tax from you next.
I think Oklahoma would be happy for the Oklahoma resident purchases to have sales tax applied. And I think California would be happy for the California resident purchases to have sales taxes applied...
I don’t think too much more than that is going to happen...
1. If this is being pushed by “brick-and-mortar” operations, you can bet that I’ll REDOUBLE my efforts to by nothing from them.
2. If this is being pushed by my state, this will only make me FURTHER limit my spending (and they should be warned that Delaware is only a few miles away...)
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