Sales Taxes On The Way For Shoppers On The Web

Detroit Free Press ^ | February 8, 2003 | Mike Wendland

[ShadowDancer]

The free ride is over. One of the chief attractions of online shopping -- not being charged sales tax -- is coming to an end.

Over the past two weeks, some of the nation's largest retailers -- including Wal-Mart, Target, Toys 'R' Us and Marshall Field's -- began posting notices on their Web sites announcing a new policy of charging state sales taxes.

[ShadowDancer]

I could sit here and target the new Democratic Governor in Michigan for this but true to form with far too many Republicans today, this was championed by the long term Republican Governor before her, too.

[chilepepper]

The free ride is over

Typical socialist doublethink from a typical mindless reporter... all your money belongs to the government -- it is only their compassion and kindness that allow you to keep some of it.

[Caipirabob]

In other the words, there goes the nieghborhood.

[Gorzaloon]

My first reaction is to boycott the online places that surrender.

But NO!

No, I think paying the tax online in order to continue to avoid the shoving, sweating, diseased, rude crowds in malls actually puts the punishment directly on the brick-and-mortars who were as loud in lobbying for this as the states were.

I run a business. An online business with real goods, not a spamfraud. As such, I have a shop rate. Suppose I need a machine part. I can get in my car, and go to the local Discount Tool outlet. Round trip: About an hour and a half. I pay a use tax on the item.

This has cost me the price of the part, $180 in shop rate time, plus the tax.

I order the part online, pay a sales tax instead, and a few dollars for shipping, and it is here in two days.

To me, it's a no-brainer, unless it is a catastrophic situation where I need something within the hour.

Further, online I can shop around and compare prices in a minute, and often beat ANY brick-and-Mortar price.

Recent example: Alternator: Local store: $281 -70 core charge.

Online: $202-70 core charge. Shipping is $12.

Sales tax charged at both places because the onliner was in-state.

Maybe it is because the online retailers do not have to pay surly clerks to annoy and ignore customers, or pay the real estate costs for dangerous parking lots, or absorb shoplifting and liability costs, but for whatever reason, I have not been into a mall in years and am grateful.

[decimon]

The large retailers have the means to determine and charge 50 separate State sales taxes while the small would-bes do not. This will serve the big boys in eliminating competition.

[jammer]

You are correct. The states, like the Feds, are voracious. My question in the entire thing is, "How is this constitutional?" For a real example: if I am in Michigan and purchase, say, the printed Chopin Etudes from a music dealer in San Antonio, that is interstate commerce. The state of Michigan is, under the Constitution, a bystander--only Congress can regulate that, I thought.

[Bernard]

Actually, this will create a whole new industry - services that will pay each state according to that state's rules. "For a small fee, we can pay all 46(?) states for you..."

And state tax auditors are usually the last ones chosen in the accounting picnic choose-sides ball game, if you catch my drift...

[Maigrey]

Instead of insisting on even more taxes for wasteful purposes (and overinflated payrolls) why don't they cut out the crap and make a real budget with real guidelines. (Here in Tennessee, which is also along for the ride, they are jumping on this latest tax wagon)

[wearredcaps]

I thought the web was the "World Wide Web", not "The United States Government Web". Won'T work!!!. Wake Up America!!!

[Kip Lange]

Actually, it grew out of ARPANET, which was a government-funded project, so technically...er...the government did start it. Make no mistake, I don't agree with an online sales tax, just pointing out one of the few useful things the government has ever done. And, of course, true to form, now they want to foul it all up because it actually worked. I second the socialist-doublethink comment -- it ain't their money to begin with. The trade-off in online buying has always been the shipping expenses.

I wonder if this has anything to do with one of the largest online retailers being Amazon and the fact that book sales dropped like 20% last quarter (at least, anyone got any harder #s than that?).

[decimon]

Actually, this will create a whole new industry - services that will pay each state according to that state's rules. "For a small fee, we can pay all 46(?) states for you..."

And state tax auditors are usually the last ones chosen in the accounting picnic choose-sides ball game, if you catch my drift...

I catch your drift like a snow fence. The "how green is my eyeshade" crowd might drool over your proposition but it would create yet another tax-prep drain on the economy.

[badfreeper]

"Sales Taxes On The Way For Shoppers On The Web"

Time to start frequenting foreign merchants it would seem. Other than booking nearly all of my travel online, I don't buy much other than the occasional CD or DVD online. When I do, the online stores (Canadian) always charge significantly less that their US counterparts, due to the strength of the US dollar and the fact that the Canadian music retail business is extremely competetive.

In Canada, no sales tax of any kind is charged on purchases that are being shipped out of the country, with the exception of a $10 per carton export tax on cigarettes. Someone correct me if I'm wrong, but I believe that US citizens do not have to pay duty or tax on incoming parcels with a value of less than US$50.

[FreedomPoster]

>>The large retailers have the means to determine and charge 50 separate State sales taxes while the small would-bes do not. This will serve the big boys in eliminating competition.

Bingo! Only it's worse than that. There are all kinds of local taxes that vary with the county, city, local tax jurisdiction you're in. That's next.

There's an opportunity there, providing all that "divvying-up" as a service, but it'll be ugly, and you'll always be at the mercy of the sales tax audit bureaucrats from 3 states away.

[decimon]

I might add that sales-taxless internet sales should, IMO, pressure the States to lower their tax rates through the elimination of slush rather than demanding ever more sources of "income."

[decimon]

That's why, in my view, large companies usually offer but token resistance to taxes, regulations, etc. They stay even with their large competitors and virtually eliminate the possibility of some guy named Smitty challenging them with a startup business.

[dark_lord]

The retailers listed -- Wal-Mart, Toys R Us, etc -- they have physical stores in all 50 states anyway. It is the law that if a retailer has a "physical presence" in a state then they must collect sales tax for any sale made to a citizen of that state. This is why catalog retailers can get away with only charging sales tax in their home state.

The little "Ma and Pa" retailers, like the catalog retailers, only have to charge sales tax for their home state. I don't see catalog retailers suddenly charging sales tax in all 50 states. This is a non-story.

[dark_lord]

And for those retailers who are "semi-large" like Marshal Fields who don't have a presence in a state but wimp out because they are afraid a state will sue them and start charging sales tax for that state anyway -- the market will take care of them.

The supreme court ruled on this long ago - that catalog retailers did not have to pay tax in a state where they had no physical presence. And there is zero difference logistically from a web based retailer and a catalog retailer. The trivial difference is the presentation media of their catalog - on line versus paper.

[decimon]

The little "Ma and Pa" retailers, like the catalog retailers, only have to charge sales tax for their home state. I don't see catalog retailers suddenly charging sales tax in all 50 states. This is a non-story.

But that is the story:

"Katz argued that collecting state sales taxes on Internet purchases is wrong because many of the online retailers are not located in Michigan and get no benefits from state government.

"They don't require our police service or water service or road maintenance," she said. "Making them charge sales taxes for Michigan residents when they are no draw on Michigan resources is not leveling the playing field, it's exploiting them."

Michigan and 36 other states plus the District of Columbia have been working together as part of a coalition called the Streamlined Sales Tax Project to set up a nationwide system for online retailers to collect and distribute sales taxes."