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Online sales tax
Rhamlin
Posts: 8,913 ✭✭✭✭✭
Looks like its up to the house now. I figure they will pass it. I'm still a little blurry on how it would work. But it looks like you will be charged for sales tax for the state you live in. I wonder how long online retailers will have before they have to start doing it. This will definitely put a damper on the ol cigar budget. Better get a cooler and start stocking up.
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Taxitty taxitty tax tax tax tax tax
Well, at least they put it to good use
"If you do not read the newspapers you're uninformed. If you do read the newspapers, you're misinformed." -- Mark Twain
Bet that won't be easy/cheap for them to do .... I imagine lots of extra paperwork for the retailers.
(Sarcasm??)
LOL
Death and Taxes 2012 Chart
(Click the image to enlarge/zoom in)
* I have a new address as of 3/24/18 *
The administrative costs will be huge. Even if a software based solution comes out (which one will), it will have a monthly cost associated with it that is another small dagger in the heart of the small businessman.
Even the bills author, Mike Enzi (D-WY), has no idea how many taxing authorities this bill will create. We have 50 States, about 9,000 cities and municipalities that have taxing authority, as well as about 600 indian tribes, all of which tax.
The Supreme Court already ruled that States themselves can't tax out of State sales, this bill is an attempted end-run around that.
The bill started out authorizing all 9,000 or so taxing entities to tax, then the language was changed so that "States" can tax - problem is, the bill doesn't specifically rule on what a "State" is - so the nation's 600 or so indian tribes might be considered as well as the 50 State. But the fun doesn't stop there - the bill also allows "any territory or possession" of the US to tax as well -so say hello to Guam, Puerto Rico, Virgin Islands, etc, taxing internet sales as well.
The most outrageous thing about this bill, is that it's advocates are saying this bill "levies the playing field for brick and mortars" - but it does so by penalizing the entrepeneurs, instead of lifting the burden from B&M's. It's like saying you're going to even the playing field in a race by breaking everyone's kneecaps - that way everyone's equally hobbled, and everyone's got the same burden.
The problem is a million a year is not a huge number in gross sales. I am significantly over that, but the burden of collecting, tracking, and paying is huge.
You can bet that all penalties for late filing or errors will land squarely on me. I will then have to pay my accountant to verify all filings were correct, etc etc etc. I figure this to be $10k + out of my pocket on an annual basis. before lost sales are counted.
And I agree with pross ... the initial cost/time for business owners to implement this would no doubt be expensive....add on a monthly/annual fee for "software updates", time spent filing compliance paperwork, etc. Would put a lot of small online businesses in a tough spot I bet.
* I have a new address as of 3/24/18 *
As to the 'complexities' of 9,000 taxing locations, there is simple software that uses zip code and county to do the complex variety of taxes.
And lastly, just my opinion, sales tax and shipping wash each other now. B+M have to charge tax and internet have to charge shipping (or eat it but then isnt that really the same thing?) So there really is no advantage to internet sales today.
1) You're incorrect; the bill applies to where the good is sold, not where the distributor is located. Texas store sells a good online to a guy in New York: he's gotta collect the tax for NY from the buyer
2) Maybe, but being taxed by 9,000 entities also means you're subject to being audited by 9,000 entities; even if the bill is narrowly tailored to only include 50 States (which at this point, it most surely is not) - that's 50 times more taxing entities than any business is subject to. I don't think a business in Ohio or Florida should be subject to a tax audit from San Francisco, and likewise, a business can always be hit with multiple State audits in a single year.
3) The companies that are behind this, the Amazons and Microsofts . . . are the ones that make the software that computes tax that everyone will have to use.
4) There really isn't any point to a sales tax; it'll only bring in an estimated $23 billion; which is about 1% of what State and local tax entites bring in now - so they're going to raise taxes on everyone and subject business' to multiple taxing entities each year . . . to raise their revenue 1%
http://www.gpo.gov/fdsys/pkg/BILLS-113s743es/pdf/BILLS-113s743es.pdf
"If you do not read the newspapers you're uninformed. If you do read the newspapers, you're misinformed." -- Mark Twain
i wish more people would understand that this is exactly what is going on.