Skip to comments.Internet sales tax embraced by no-tax Republicans (in Senate)
Posted on 04/25/2013 5:55:21 AM PDT by sickoflibs
WASHINGTON (AP) You don't see this very often: a majority of Senate Republicans voting to make people who buy stuff on the Internet pay state and local sales taxes.
The Senate could vote as early as Thursday on a bill to empower states to require online retailers to collect state and local sales taxes for purchases made over the Internet. Under the bill, the sales taxes would be sent to the states where a shopper lives.
On Wednesday, the bill passed a test vote in the Senate, 74 to 23, with 27 Republicans voting in favor. Senate Majority Leader Harry Reid, D-Nev., vowed to pass the bill this week, before senators leave for a scheduled vacation.
"This is a matter of equity and fairness," said South Dakota Gov. Dennis Daugaard, a Republican. "The same people who are selling the same products should be paying the same taxes."
Under current law, states can only require stores to collect sales taxes if the store has a physical presence in the state. As a result, many online sales are essentially tax-free, giving Internet retailers an advantage over brick-and-mortar stores.
It is part of GOP orthodoxy to oppose higher taxes, a central issue that divides Democrats and Republicans. That's why the bill faces an uncertain fate in the House, where some Republicans regard it as a tax increase.
But supporters of the bill insist it is not a tax increase. Instead, they say, the bill merely provides states with a mechanism to enforce current taxes.
(Excerpt) Read more at news.yahoo.com ...
OK, that’s a one-time tax called a “use tax” which is just a way of them collecting sales tax on something not purchased in their state. A more accurate description of that tax would be “excise tax.”
The use taxes I’m referring to are paid *every year* that the property is used in business.
I understand. I paid use taxes (as a business) when I’d use merchandise rather than sell it. I also pay use taxes (as a consumer) when I buy something out of state and bring it into the state for my use. Commercial or non-commercial use doesn’t matter. The exception is for businesses that buy products out of state for resale in state. In that case, use taxes don’t apply, because the state collects sales tax on those transactions.
The tax party indeed.
NO, businesses do not support this bill and they are NOT losing sales to the internet.
Absolutely nothing stops any brick and mortar store from selling on the internet. I do.
Pretending this is about fairness is crap. Business owners too stupid or lazy to figure out how to sell on the internet are now whining that somebody stole their cheese. It’s BS, what they are really demanding is protection from competition.
The worst part of this bill is that it makes many small businesses liable for sales tax collection in states that they have no physical presence in (unlike the big box stores who all have their own websites). This is about big business using the power of government to hamper smaller competitors.
Messing with the concept of nexus based on physical presence to establish legal jurisdiction enshrines taxation without representation and further erodes our freedom.
It’s a bad law that is stupidly written and creates a complex system while ignoring the simple fix that requires no federal legislation whatsoever.
States have always had the power to enact origin based sales tax and have their businesses charge sales tax on ALL sales whether physical or virtual, basically making internet shoppers virtual tourists who must pay the sales tax on purchases made in the state they are visiting.
It’s that simple. but politicians prefer a complicated system that asserts vastly more control while eroding a basic legal concept of jurisdiction based on physical presence.
So stop spreading the lie that it’s about fairness or that business wants this. Some do, but not for honest reasons.
First of all, it *automatically files* sales taxes for 24 states.
It can tell you the sales tax rates for *all* states and localities. The ability to automatically file sales taxes might (and probably) depends on the online infrastructure of various states.
Now, as to the totality of their coverage: first, there are five states that have no retail sales tax, so there are only 21 states where they won’t be able to file the sales tax return for you.
The legislation, as it now stands in the Senate, doesn’t mandate the collection of sales tax for online sales from out-of-state vendors. It permits states to start requiring payment of sales taxes.
If a state wants to start collecting said taxes, they’re going to have to make it easy to pay taxes. Taxes that aren’t easy to pay don’t get paid.
Then they need to re-examine their value proposition.
How will the online taxes that are collected get funneled down to the local level?
Suppliers (wholesalers) and manufacturers do not collect sales taxes. They only sell to holders of resale certificates.
Sales taxes apply only to retail sales.
The same way the currently collected sales taxes do.
And when I buy “wholesale” from a for-real wholesaler who doesn’t want to collect sales tax, I have to show my retail sales tax cert #, or go find a retailer who will do the collection of the sales tax.
There’s a plumbing supply place in town where I do a lot of business. They’ll sell to homeowners and DIY repair folks, but the actual sale of the parts has to go through a plumber. My plumbing shop calls over to the wholesaler, tells them I’m coming over, I pick up the part, the plumber bills me their wholesale price on the item, plus sales tax, and I do the plumbing.
Taxes, taxes, taxes. :)
That’s what it’s all about. :D
States already have the power to do “origin” based sales tax. Federal legislation is not required for this idea.
State legislators don’t want to do this because of their local business lobbies, because they don’t want to be seen as responsible for enacting additional taxes and because high sales tax states like CA, NY and IL would be disadvantaged when shoppers flock and businesses relocate to states with lower sales tax rates.
This legislation is their cluster**** solution to their political problems. The states pass the buck to the Feds and the Feds claim its not a new tax, just a new enforcement method, plus these are state taxes so blame your state for the high sales tax rates.
I live in a non sales tax state by choice, but this law will force me at my own expense to become a tax collector for 45 states that I do not live in and cannot vote in while making me legally liable for any errors I might make and subject to their tax law, audits, fines and punishment.
It’s not enough that I am a tax slave to the Fedgov and the state I live in. I now get to be everybody’s tax b*tch.
Keep in mind that Cornholio IS the Senate Minority Whip.
He really can herd them cats, can’t he?
Can’t wait to “retire” him during his next primary race. Ted Cruz needs a better pardner in the Senate.
this is the “Best Buy” tax.
Best Buy has out of date products, HORRIBLE service, terrible staff, scamming contracts, so to save themselves they want to eliminate competition.
they will not.
People will just buy from overseas sources.
Bypass the USA entirely.
States cant create money to spend like the Fed can so they have to raise taxes instead.
This bill in effect raises taxes while leaving all parties: congress and same states denying that they raised taxes.
So they tax our Amazon making Walmarts happy to get $$$ to their campaigns and then they all (Congress and states) Mdeny they raised any of our taxes.
Its a perfect crime.
But if the GOP joins in this then they are traitors who only see $$$ as important.
McCain has obviously decided this is his last term in Senate and to stab us in the back on every issue that comes up.
” Democrats stare you in the face, tell you they are going to take more of your money, and then do it every chance they get.
Republicans stare you in the face, tell you they believe in lower taxes at the same time they are doing a reach-around to clean out your wallet.”
Politics in 2013.
I think I will imitate Diogenes, grab a lamp, and walk the darkened streets, looking fo an honest REPUBLICAN.
” We are nothing to the (Senate) GOP. Between this and amnesty I am pretty close to writing them off completely, not that they care.”
Don’t forget the Drinker of the House.
” The masters $$$$ command both parties in the Senate with $$$, and they DEMAND amnesty workers and demand raising sales taxes on us and those online businesses, by being the tax collector for the states here.
Like i said, the GOP will fight tooth and nail against a Warren Buffet tax on themselves, but raising taxes on us the middle class who use the internet with credit cards is on the top of their lists. “
GOP = Got Our Perks
GOP = Got Our Pension
What’s in YOUR wallet?
Democrats try to increase federal government spending for their favored constituents.
Republicans try to increase local government spending (including spending from federal funding) for their favored constituents (see teachers, social workers, planners, building inspectors, other regulations for NGOs, emergency/rescue, etc.).
Republicans tell us to vote for their candidates to avoid legislative attacks against our freedoms, but Republicans don’t repeal bad laws that were already passed.
Remember that, and see where politics will go in the future (more into the socialist toilet, until there’s no more production or money of value for anyone to spend).
Both parties love internet sales tax bills.
Not a shock.
Obama will sign it Monday.
Find software engineering an interesting field, but outsourcing kept me from pursuing any technology career despite a passion for it.
Robert J. Dole started that in 1982 with one of the Reagan tax hikes, yes there were tax hikes under Reagan too.
Once again we find Linda voting against our best interests and Sen. Scott taking care of his constituents.
South Carolina Ping
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I am sure they can find a way to automatically calculate the taxes through databases when the customer enters their info on checkout.
Still, I don’t like the bill. Already have to pay shipping. Paying tax too really makes online shopping unattractive.
The retailers will also have to pay for access to the databases.
Just a general comment.
This bill will eventually have to go to the House. Since it appears to be a lost cause in the Senate, the time to start bothering your House Rep about this is NOW, TODAY. And everyday until the House takes it up. Let’s start building the firewall now instead of waiting till the last minute.
To be most effective, hand write, no computer printer needed, a short, legible letter expressing your misgivings about this, put it in a hand addressed letter size, not business size, envelope and send it to your Rep’s local office. Mail sent to DC gets delayed due to scanning for anthrax and other bad guys, etc. Mail to local offices is not scanned, yet.
“States already have the power to do origin based sales tax. Federal legislation is not required for this idea.”
I know full well why states like NY and CA oppose such a change: they want to tax their residents who buy stuff out-of-state to avoid paying high sales taxes. Well, I think we can get this passed in the House even without any votes from CA or NY (there are only 21 Republicans from those states in Congress, and some of them would be willing to vote for the proposal).
I got an email from Ebay asking to help lobby Congressrats against this.
$1million and under are exempt, but I’m sure that will be downgraded quickly till it’s $1 or under.
We buy nothing we don’t absolutely need. Well except good red wine. :)
Yes I had an online site for 3 years. It still going to be a pain in the azz. Plus it will up the cost of the online products. Its not going to be good. But of course neither is the cyber security bill they just passed.
Your proposal is “origin” based sales tax, that is what it is called in the think tanks and the corridors of power and it doesn’t need congressional approval. A state has the right to regulate the retailers in their state.
The reason no state has pursued origin based sale taxes is no one wants to be first because it will disadvantage their local etailers. So they have come up with this mutual we will all do it together simultaneously plan that requires federal permission because the states are essentially agreeing to give each other jurisdictional authority over each others businesses in regards to sales tax.
Origin based sales tax would create downward competitive pressure on sales tax rates because buyers and business would tend to gravitate toward lower or no tax states.
But if buyers are forced to pay their own states rate regardless of where they shop, then their is no incentive to shop for lower tax rates or for business to relocate to lower tax rate states. That’s why the state legislatures have come up with this skunk of a bill, a sort of mutual assured risk sharing come vote time.
It is business getting screwed here, because we are being made tax collectors for 45 states at our expense of time and money and are liable for audits and fines and punishment to states where we don’t reside and can’t vote.
Both parties are all in for crony capitalism. This is all about keeping the little people from starting businesses.
Except when I buy something at Amazon on my Chase card then Maryland has no record of that to use against me. ‘
I have read that CA brow beat Amazon into charging the tax for CA residents by threatening their other businesss interests,
I think you misunderstand how origin based sales tax works. Your state wouldn’t be regulating the citizens to pay the Use tax anymore. They would simply regulate businesses located in your state to collect sales taxes on all sales whether the buyer was physically present or on line.
If you bought from AZ you would be charged WA sales tax instead of no sales tax unless you were actually purchasing from an affiliate seller located in some other state and then you’d be paying that state sales tax.
You would probably start looking for sellers that live in one of the five states with no sales tax or one that was much lower... that is why states don’t want to go their.
It would cause huge demand to lower the sales tax to a lower rate in order for their retailers to be competitive with other states and then there goes the cash cow.
The MFA lets them keep their high rates and prevent you from avoiding the sales/use tax.
We are where Europe is right now with both major parties looking for tax revenue to keep up the spending pipeline.
No talk from the supposedly conservative party of a quick balancing of the budget.
I hear the platitudes of Senator Pat “One Term” Toomey about trimming “fat” after he said last year he wants to balance the budget in ten years.
The crisis is here that demands real spending cuts, government agency (EPA, OSHA and more) total shutdowns and more to put the fiscal house in order.
The GOP plays to our resentments about items of wasteful spending without balancing the budget. Toomey played that game on the radio this morning and I’m not taking RINO bait anymore.
BALANCE THE BUDGET NOW.....
Then Wyoming needs to go after its own citizens who aren’t paying their use tax or get a state income tax.
Bingo and worse this will end of hurting Brick and Mortars. What is stopping their localities from raising taxes? The Internet.
Once that’s gone they’ll all raise taxes up. We’re ready to do just that right here in Illinois.
It hurts federalism as well. We need states to compete on price. That price or cost of living in one state or another is partly a function of local, county and state taxes. This is a power grab by large, urban dominated states that are in a death spiral over “right to work” and low tax states.
Let them die or change.
Yep, like the Income Tax was only for the top 1% of incomes...
Whoops, sorry folks. We need more money. Who would have guessed?
I would assume the money would go to the state and then it would be up to the state as to how those taxes get spent within the state.
Firms Will Regret Deal With Devil On Internet Tax
Investor's Business Daily | 24 April 2013 | Editorial
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.
Full story source:
“They are tired of losing sales to the Internet.”
Then make your own Ebay or Amazon account? What’s the problem here?
I have lot of friends at the Fabric district who sell on both marketplaces as they have the initiative to realize you can ship to someone a hundred miles away instead of relying on walk in customers for your business.
I just need do a 180 on my ebay sales and purchases.
Rather than refuse to ship to overseas, maybe ONLY sell and ship to overseas.
F these bass turds.
Just how is a state supposed to “go after its (sic) own citizens who aren’t paying their use tax” without creating a complete police state?
And no, we’re seeking to avoid any income tax. A sales tax is a better way in our “free trade” economy to spread the tax load. The thing that is most infuriating about income taxation now is that the GOP has pursued a “cut taxes” agenda to a point where a near majority of income earners pay zero tax. Everyone should pay something, and sales taxes are the best way to insure that no one escapes taxation.
Hmm. Excellent point.
This bill will have huge unintended consequences, i.e., creating more sales in other countries.
It’s just like the out-sourcing disaster. The more you tax and over-regulate, you more you drive business out of the U.S. Will they never learn?
You’re mixed up on this one. First, “its own” isn’t a grammar error, but is correct.
What Wyoming is dealing with is its own citizens rejecting its “low tax” system. It is an internal problem to Wyoming. It is not a nationwide problem. It is a Wyoming problem.
Here in Illinois we have a spending problem. Our government is socialist and crony capitalist. That is an Illinois problem. We don’t have a revenue problem, but a spending problem.
I cannot speak to Wyoming’s problems, but let Wyoming solve them. Instead you’re calling for more government and more invasiveness. The Senate bill undermines federalism. We need states to compete.
As has already been clearly stated in this thread:
1. Any brick and mortar store can gain an online presence.
2. Brick and Mortar stores are suffering from bad local/county/state tax and regulatory policies that make it expensive to do business in those locales.
3. America has a federal, not a national government. Federalism means states compete and pay for their good or bad decisions.
4. Liberty is undermined and reduced as federalism is undermined and reduced.
Let Wyoming fix its own problems. The truth is that Wyoming’s politicians don’t have the political will to go after your free-rider problem. So they’re asking America’s Senate and House to nationalize their problem.
It’s just another crony capitalist bailout. It won’t help either the Brick and Mortars to be more competitive or our individual liberty.
You’re thoughtful and I know how you feel, but if you came from Illinois you’d see the problem for what it really is.