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CNet.com: Republican Senators Push for Internet Sales Taxes


Fergasun

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It's completely and utterly strange to me that the US supreme court has already made a decision on this exact issue.

http://www.law.cornell.edu/supct/html/91-0194.ZO.html

In this decision, they mention the word "sales tax" 1 time. They mention the word "use tax" 19 times. Do you think this might indicate that the last 3 people to respond to this thread have absolutely no idea what they are talking about? Do you think it might indicate that this is about a use tax rather than a sales tax?

With prescient anticipation of ignorant people on ES, the supreme court makes its one use of the word "sales tax" to explain what a use tax is:

Oh, no. Here comes the renegade court telling us that the script has completely flipped and the mail order industry is such a " goliath" that maybe these poor little B&Ms are getting treated unfairly. Sounds suspiciously identical to what we're hearing today about online retailers:

...and yet the supreme court overturned it. They even left this little gem - sound like we're repeating the same mistake?

...yeah. They did.

I don't profess to be a lawyer. Nor do I profess to be a tax expert.

But since I'm 1 of the last 3 posters with prescient anticipation of ignorance who doesn't know wtf I'm talking about, I'll continue my comments in the same vein of not knowing wtf I'm talking about:

http://www.ajc.com/news/news/georgia-amazon-face-off-over-sales-tax/nWJzW/

From the above link:

"Amazon.com is in negotiations with the state about starting to charge sales tax to Georgia shoppers, three people familiar with the talks said. The question is when.

Since Jan. 1, the world’s largest online retailer has not collected the tax, despite a new state law requiring online retailers to charge it at the start of the year. In other states with similar laws, Amazon has made deals to delay collecting sales tax for months or longer..."

Also the following from the same article:

"By negotiating deals to collect taxes at a later date, Amazon could avoid costly litigation and buy itself more time as a tax-free site, which brick-and-mortar stores claim gives it a competitive advantage.

“There’s recognition on Amazon’s part that the tide will eventually turn against them legally,” said David Brunori, a professor of public policy at George Washington University. “They want to buy time before that happens."

And lastly from the same article:

"Building warehouses or distribution centers expand the company’s network, enabling quicker delivery.

Online stores already are required to collect sales tax in Georgia if they have a physical presence in the state. The new law expands the definition of physical presence. For example, Amazon would have to charge sales tax because it gets some customer traffic from other sites that have physical operations in Georgia."

Now, I realize my dumbass is quoting an actual newspaper article and not the Journal of Lawyers Who ****ing Know Everything, but that's because I'm too stupid to subscribe to those types of knowledge sources. So I can only go by what I read from other sources. And what I read in this particular article makes no mention, none, of the the "Use Tax" you describe.

It's completely and utterly strange to me that "Use Tax" is not mentioned at all in this article.

Maybe because this is the dumbed down version of the issue. But it hasn't been in any article discussing sales tax and internet sales that I have read.

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Maybe because this is the dumbed down version of the issue. But it hasn't been in any article discussing sales tax and internet sales that I have read.

No...that certainly couldn't be it.

Arielle Kas bio:

Arielle Kass covers retail business for The Atlanta Journal-Constitution. Her beat includes Home Depot, UPS, malls, grocery stores, boutique shops, retail real estate and several other public companies. Arielle joined The Atlanta Journal-Constitution in 2010. Previously, she was a banking reporter in Cleveland, Ohio. Arielle is a graduate of Emory University, where she studied journalism and creative writing.

Holy smokes, I found an article on Forbes that is written by a guy who seems to actually understand some of what's at stake here: http://www.forbes.com/sites/robertwood/2013/04/22/with-key-vote-click-and-pay-internet-sales-tax-is-here/

The pending Marketplace Fairness Act (S.336/H.R.684), which could be voted on in the Senate as early as today, doesn’t impose a federal tax or even a new state tax. Online sellers are already required to collect sales tax from customers in their own states. But under the Supreme Court’s 1992 Quill v. North Dakota, retailers don’t always have to collect when sending goods to buyers in other states. They must collect sales tax from out-of-state customers only if they have a physical presence (store, warehouse or office) in the customer’s state.

Bio?

Robert W. Wood practices law with Wood LLP, in San Francisco. The author of more than 30 books, including Taxation of Damage Awards & Settlement Payments (4th Ed. 2009 with 2012 Supplement, Tax Institute), he can be reached at Wood@WoodLLP.com. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.

---------- Post added April-23rd-2013 at 11:08 PM ----------

No, you are misreading it. You first should understand the definitions of a sales tax and a use tax then become unemotionally involved in what you are reading.

At the end of the day, the CONSUMER is responsible for the use tax.

I think the whole use tax argument misses the target of the issue.

No, it's the sales tax issue that is missing the target. Sales tax is already collected. Use tax is left up to the individual to self-report. This proposed legislation would make certain retailers collect use tax on behalf of the consumer, because the consumer can't be trusted to self-report. However, it does not require all retailers to collect the use tax. Explicitly, it exempts small businesses. Implicitly, it exempts brick & mortar stores.

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No, it's the sales tax issue that is missing the target. Sales tax is already collected. Use tax is left up to the individual to self-report. This proposed legislation would make certain retailers collect use tax on behalf of the consumer, because the consumer can't be trusted to self-report. However, it does not require all retailers to collect the use tax. Explicitly, it exempts small businesses. Implicitly, it exempts brick & mortar stores.

Sales tax isn't collected, that is where you are wrong.

---------- Post added April-24th-2013 at 12:40 AM ----------

ever consider joining Prime?

LOL, I need to.

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Holy smokes, I found an article on Forbes that is written by a guy who seems to actually understand some of what's at stake here: http://www.forbes.com/sites/robertwood/2013/04/22/with-key-vote-click-and-pay-internet-sales-tax-is-here/

No, it's the sales tax issue that is missing the target. Sales tax is already collected. Use tax is left up to the individual to self-report. This proposed legislation would make certain retailers collect use tax on behalf of the consumer, because the consumer can't be trusted to self-report. However, it does not require all retailers to collect the use tax. Explicitly, it exempts small businesses. Implicitly, it exempts brick & mortar stores.

Holy smokes I read the article you cited and see exactly what I've been saying all along:

"Online sellers are already required to collect sales tax from customers in their own states." Note the "..in their own states" portion of the sentence.

Further, as many of the ES posters with prescient anticipation of ignorance have already stated, your article notes the following:

"They must collect sales tax from out-of-state customers only if they have a physical presence (store, warehouse or office) in the customer’s state." Note the "only if they have a physical presence" portion of the sentence. Let's see, where I have seen that in this thread? Oh, yeah, in a couple of my posts where I said this was the basis of the issue.

Also from your article: "Eventually, the Supreme Court could even get in on the act. Physical presence today might not be interpreted today the same as it was in Quill in 1992."

Oh, so maybe the Supreme Court ruling related to Quill in 1992 might have to change, huh? I'm shocked. It's only 20+ years old. Certainly the use of the internet during that period of time hasn't changed. Why the **** would anyone want to take another look at that ruling?

And, lastly, from the same article you cited:

"Tax increases aren’t popular, but despite the emotion-riddled debate, this bill really isn’t one. Even where sellers aren’t forced to collect sales tax at point of sale, all of us (in 45 states and DC) are supposed to pay use tax after we click...including use tax reporting on income tax returns."

What's that? It's not really a tax increase? It's really what consumers are supposed to be paying? But this only applies when I buy online from a site that doesn't charge Sales Tax, right? Because if I pay Sales Tax online at the time I buy something then I don't have to pay it on my tax return. Gosh, who knew?

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Online sales tax is collected for the state where the item is DELIVERED. I live in VA and right now, there is an agreement that Amazon won't collect sales tax in VA until I think September. Amazon now has a distribution center in VA, thus taxes will be collected for purchasers in VA and for deliveries in VA. When I order an item to send to my family in TX, Amazon collects TX sales taxes because the items are delivered in TX, where I presume Amazon has a distribution center.

That why we sometimes see the disclaimer that residents of certain states are charged sales tax because there is a B&M presence in those certain states.

Collecting internet sales taxes will also slow down the economy. Many people put $$ into the economy by buying online instead of B&M stores because of the sales tax issue. They like not having to pay taxes. If they have to pay taxes over the internet like in their local store, many will stop buying online and just go to their local store, or they may curtail their spending, putting less $$ into the economy.

And I for one, could give a rat's ass if the huge corporations think no internet tax is unfair. Walmart is a great example of a huge, profitable company pays its employees so little that those employes have to go on food stamps, thus we taxpayers are subsidizing Walmart's expenses while they continue to post huge profits. Now there's a problem that should be addressed by raising the minimum wage.

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]

You have absolutely no idea what you are talking about, just for the record. None.

If I'm so ill informed then why does Amazon.com charge me 6% sales tax?

Oh, because I live in Kentucky and we have Amazon distribution centers here so they have to charge me sales tax.

If the store across the street from where I sit opened a website and sold items to Indiana they'd get the same break Amazon does.

No idea my arse.

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If the brick and mortar store would just stop being a brick and mortar store then they could be tax exempt, too! It's they're own fault that they have to pay taxes! They're making stupid business decisions. (By staying in business.)

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What's that? It's not really a tax increase? It's really what consumers are supposed to be paying? But this only applies when I buy online from a site that doesn't charge Sales Tax, right? Because if I pay Sales Tax online at the time I buy something then I don't have to pay it on my tax return. Gosh, who knew?

Once again, your ignorance has backed you into a corner. I will proceed to completely enlighten you once again, but you are so utterly ignorant on this issue that you wont even understand my words and therefore will continue to misunderstand this issue.

It's already what consumers are supposed to be paying.

...exactly.

Consumers are supposed to already be paying a USE TAX. Consumers are not supposed to be paying a SALES TAX on purchases made from businesses located in other states. That is the status quo. This legislation does not increase taxes, or introduce new taxes.

However, it most certainly is not a "marketplace fairness" act if it requires ONLY CERTAIN TYPES OF BUSINESSES to collect the USE TAX, while letting OTHER TYPES OF BUSINESSES only collect the SALES TAX. Do you find it strange that the following 2 transactions will be taxed completely differently under your proposed "Marketplace Fairness Tax"?

- I buy a pair of shoes at a B&M store in Delaware, and bring them back to Virginia, where I proceed to use them

- I buy a pair of shoes ONLINE from a store in Delaware, get them delivered to my house in Virginia, where I proceed to use them

^^^ Under current "unfair conditions", my tax liability in both of these situations is the Virginia use tax rate multiplied by the price of the shoes. Furthermore, neither the B&M nor the online store needed to go through any use tax calculations. After the passage of the "marketplace fairness act", my tax liability will be the exact same. The B&M store will STILL not be required to perform a use tax calculation. The ONLINE store, however, will need to have accounting software that tells it the exact amount of use tax to collect. This makes the marketplace unfair, which is the exact opposite of the stated goal of this legislation.

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If the brick and mortar store would just stop being a brick and mortar store then they could be tax exempt, too! It's they're own fault that they have to pay taxes! They're making stupid business decisions. (By staying in business.)

By not adjusting to market demands yes. See Blockbuster Video.

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At least as I understand it, consumers who purchase something online are supposed to be charged tax for their state, at the time of purchase. Every single time.

The "catch" is that, if the out-of-state merchant doesn't comply with the law, then the state can't punish him.

1) If I purchase something, online, from a company which isn't beyond the jurisdiction of Florida, then that company collects Florida sales tax.
Regardless of where my item shipped from
. I buy something from Disney, and it ships from NC, they charge me Florida sales tax.

2) The sales tax collected is always based on where the customer is located. When I buy something online, they either collect Florida sales tax, or they collect none. They never charge sales tax based on where the vendor is.

Now, can you explain to us dim-witted ignorant idiots, some other explanation for how we wind up at our present status, which seems to me:

1) If the seller and purchaser are face to face, then the laws of the place they're standing apply.

2) If the seller and purchaser are in different states, then the transaction magically becomes exempt from the tax laws of
both
states.

3) Unless the seller has assets, somewhere in the same state as the purchaser. In which case, even if said assets have absolutely nothing to do with this transaction, suddenly the laws of the purchaser's state apply, again.
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Once again, your ignorance has backed you into a corner. I will proceed to completely enlighten you once again, but you are so utterly ignorant on this issue that you wont even understand my words and therefore will continue to misunderstand this issue.

...exactly.

Consumers are supposed to already be paying a USE TAX. Consumers are not supposed to be paying a SALES TAX on purchases made from businesses located in other states. That is the status quo. This legislation does not increase taxes, or introduce new taxes.

However, it most certainly is not a "marketplace fairness" act if it requires ONLY CERTAIN TYPES OF BUSINESSES to collect the USE TAX, while letting OTHER TYPES OF BUSINESSES only collect the SALES TAX. Do you find it strange that the following 2 transactions will be taxed completely differently under your proposed "Marketplace Fairness Tax"?

- I buy a pair of shoes at a B&M store in Delaware, and bring them back to Virginia, where I proceed to use them

- I buy a pair of shoes ONLINE from a store in Delaware, get them delivered to my house in Virginia, where I proceed to use them

^^^ Under current "unfair conditions", my tax liability in both of these situations is the Virginia use tax rate multiplied by the price of the shoes. Furthermore, neither the B&M nor the online store needed to go through any use tax calculations. After the passage of the "marketplace fairness act", my tax liability will be the exact same. The B&M store will STILL not be required to perform a use tax calculation. The ONLINE store, however, will need to have accounting software that tells it the exact amount of use tax to collect. This makes the marketplace unfair, which is the exact opposite of the stated goal of this legislation.

See, once again, you have tried to use my ignorance to show everyone your brilliance, but it has backed you into a corner.

First off, I noticed you ignored responding to my comments about reviewing your coveted Quill ruling from 1992 that you spewed about in numerous posts. Second, you didn’t respond to my comments about a store’s physical presence in a state. Did the author’s bio of the article I quoted not meet your standards?

But I digress. Let’s look at the latest example you provided:

“- I buy a pair of shoes at a B&M store in Delaware, and bring them back to Virginia, where I proceed to use them

- I buy a pair of shoes ONLINE from a store in Delaware, get them delivered to my house in Virginia, where I proceed to use them

Under current "unfair conditions", my tax liability in both of these situations is the Virginia use tax rate multiplied by the price of the shoes.”

Now you’re tossing in a State (Delaware) that charges no sales tax at a B&M into the equation. Okay, let's review: The B&M in Delaware will not charge me sales tax. Legally, I still need to pay Virginia sales tax for it because it was an untaxed purchase. Virginia requires payment of sales tax for untaxed purchases made (Nonprescription drugs and proprietary medicines purchased for the cure, mitigation, treatment, or prevention of disease in human beings are exempt from consumer use tax). Delaware does not have the same Sales Tax laws. What’s your point? The proposed change will require the internet company in Delaware to charge me sales tax because I live in Virginia. So? They’ll have to buy accounting software that tells them the exact amount of use tax to collect on my sale? That's the cost of doing business as an internet store. If they don’t want to do that, they can become a brick and mortar store in Delaware to avoid that cost.

I’ve already used an example of a B&M in a state having to charge sales tax to a customer vs. an internet site from another state selling into the same state where the B&M exists not having to do the same. Per your rationale, the B&M has to buy accounting software that tells them the exact amount of use tax to collect on my sale but the internet store doesn’t. This makes the marketplace unfair, which is the exact opposite of the stated goal of this legislation (notice how I used your own comments to back you into a corner. See, I gots me some smarts, ain't I?)

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What’s your point?

I think his points are:

1) See? I've been trying to claim that a physical store in another state, and an internet business, are exactly the same. And my examples haven't actually been true, and people have been pointing that fact out, but I decided to fix that problem, not by actually noticing that I was wrong, and instead changing my example to try to claim that a physical store and an internet store are the same if the physical store is in a place that doesn't have sales tax.

2) It's completely unreasonable for an internet business to have software that collects different sales tax in 50 states, whereas having software that charges taxes in states where the company has assets, but doesn't collect it in states where the business doesn't have assets, well, that's different.

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I think his points are:

1) See? I've been trying to claim that a physical store in another state, and an internet business, are exactly the same. And my examples haven't actually been true, and people have been pointing that fact out, but I decided to fix that problem, not by actually noticing that I was wrong, and instead changing my example to try to claim that a physical store and an internet store are the same if the physical store is in a place that doesn't have sales tax.

2) It's completely unreasonable for an internet business to have software that collects different sales tax in 50 states, whereas having software that charges taxes in states where the company has assets, but doesn't collect it in states where the business doesn't have assets, well, that's different.

:ols: Yeah, I'm done here.

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