Internet Sales Tax

[captain53]

I was curiously scared of this being part of the internet scam tax and did some research finding this disturbing article by Stogie Guys.


News: Internet Sales Tax Bill Poised to Hit Cigars Hard


http://www.stogieguys.com/2013/04/04...it-cigars.html

[mahtofire14]

Yup.....I've been hearing it a lot here in MN because I would say the majority of smokers around here get their cigars online with no tax because our state tax is so high. Going to really suck when that one pushes through.

[cmitch]

It'll never pass as it's written. It will take a national collector entity to get the tax money and distribute it to every city and state. A potential boondoggle. But, taxes on internet sales is representative of no government service. Businesses located physically in cities collect tax because it's a 'social' benefit. Taxes go for roads, police protection, schools, etc. The business gets the benefit of city services in exchange for collecting tax. Not so with internet sales. Where's the city and state services?

[Subvet642]

I'll never pass the House.

[forgop]

Originally Posted by cmitch

It'll never pass as it's written. It will take a national collector entity to get the tax money and distribute it to every city and state. A potential boondoggle. But, taxes on internet sales is representative of no government service. Businesses located physically in cities collect tax because it's a 'social' benefit. Taxes go for roads, police protection, schools, etc. The business gets the benefit of city services in exchange for collecting tax. Not so with internet sales. Where's the city and state services?

All the more reason for this to happen...

[hotreds]

Originally Posted by Subvet642

I'll never pass the House.

Even if you're driving right by it?

[dave]

Originally Posted by cmitch

It'll never pass as it's written. It will take a national collector entity to get the tax money and distribute it to every city and state. A potential boondoggle. But, taxes on internet sales is representative of no government service. Businesses located physically in cities collect tax because it's a 'social' benefit. Taxes go for roads, police protection, schools, etc. The business gets the benefit of city services in exchange for collecting tax. Not so with internet sales. Where's the city and state services?

I suppose that if you're assumption is correct, it is still pretty easy to see how the FEDEX, UPS, USPS trucks, airplanes, trains, etc. all benefit from roads, police security, etc.

I know little about sales tax history and intent; however, I always envisioned them as a tax on the consumer (who does live in and benefit most directly from government services) vice a tax on the business.

There are coporate taxes for them - separate from sales tax. Isn't sales tax a consumption tax; -- NOT a production tax? If so, I think it is imposed on the consumer. It is simply up to the B&M business making the sale to collect and act as an agent for the respective tax juristdictions.

[equetefue]

lets pray it doesnt pass. That would be a very sad day for all of us

[DennisP]

Originally Posted by dave

I suppose that if you're assumption is correct, it is still pretty easy to see how the FEDEX, UPS, USPS trucks, airplanes, trains, etc. all benefit from roads, police security, etc.

I know little about sales tax history and intent; however, I always envisioned them as a tax on the consumer (who does live in and benefit most directly from government services) vice a tax on the business.

There are coporate taxes for them - separate from sales tax. Isn't sales tax a consumption tax; -- NOT a production tax? If so, I think it is imposed on the consumer. It is simply up to the B&M business making the sale to collect and act as an agent for the respective tax juristdictions.

That is true. And in reality all this bill does is require the consumer to pay taxes they are legally obligated to already pay, just most break the law and do not.

[DaBear]

Originally Posted by equetefue

lets pray it doesnt pass. That would be a very sad day for SOME of us

FTFY

Not all of us buy our sticks online. Personally, outside of the CA and OLH WTB forum, have only made two purchases of cigars online. I highly doubt I'm the only one with such a case.

[Brlesq]

I got news for you: Your State doesn't need much to find you guilty of tax evasion. The State simply puts a question of your state tax return that says "Did you make any internet purchases during the year that didn't have sales tax included? If so, enter amount of purchases here ______". And it can't be all that difficult to match up sales records of dot.coms and other retailers to customer bases. If you fail to file honestly, its tax evasion, plain and simple. And most internet sites put something in the fine print that says "We do not collect your local taxes. Customer is responsible for these."

They've already been doing this on the NY Tax returns for a few years. But NY also gives you the option to pay a fixed dollar amount (graduated, based upon your income) to cover all of these unpaid taxes without itemizing them. I have been just taking that route to be safe.

[bobarian]

Originally Posted by cmitch

It'll never pass as it's written. It will take a national collector entity to get the tax money and distribute it to every city and state. A potential boondoggle. But, taxes on internet sales is representative of no government service. Businesses located physically in cities collect tax because it's a 'social' benefit. Taxes go for roads, police protection, schools, etc. The business gets the benefit of city services in exchange for collecting tax. Not so with internet sales. Where's the city and state services?

I'm not sure how you come to the conclusion that a "national collector entity" would need to be created to collect sale tax on these transactions.

I am in an industry that pays both sales and excise taxes in all states that it is required by law. That business involves the shipping of wine from California to consumers in other states. It is the winery's(internet retailer) responsibility to collect the appropriate sales tax and pay each state on a monthly/quarterly/yearly basis. Anyone who buys wine pays their states sales tax when ordered from a legitimate shippper.

Excise tax is an entirely different matter and the OP's post referred to a StogieGuy's article that was completely speculative regarding the payment of excise taxes. IF an excise tax was passed on out of state purchases those become the responsibility of the shipper not the consumer.

[cmitch]

Originally Posted by bobarian

I'm not sure how you come to the conclusion that a "national collector entity" would need to be created to collect sale tax on these transactions.

I am in an industry that pays both sales and excise taxes in all states that it is required by law. That business involves the shipping of wine from California to consumers in other states. It is the winery's(internet retailer) responsibility to collect the appropriate sales tax and pay each state on a monthly/quarterly/yearly basis. Anyone who buys wine pays their states sales tax when ordered from a legitimate shippper.

Excise tax is an entirely different matter and the OP's post referred to a StogieGuy's article that was completely speculative regarding the payment of excise taxes. IF an excise tax was passed on out of state purchases those become the responsibility of the shipper not the consumer.

You sell and ship to xx number of customers in all states and thousands of cities. So, your company or distributors cut a check every month to every city you do business with? It would seem not a huge task to keep up with sales and use taxes to 50 states but it would be prohibitive for any business to pay every single city they've sold to consumers in. Let's not forget counties/parishes either.

Internet sales taxes won't stop at new items either. It will eventually be passed to used items as well. It never stops once it starts. Our state used to exempt used items from sales and use tax. Then they started collecting taxes several decades ago on used cars that individuals sold to individuals. Now, even the old tool man at the flea market isn't safe. The law is the same. The interpretation keeps changing.

I understand it's coming. But a way will have to be found for ebay or amazon to collect taxes for every city and county an item is shipped to and that's going to require a central authority to do it. They'll have to pay into the private tax collector and then the private company will wire the appropriate funds to each municipality. Our state has such an authority known as RCS (Revenue Collection Systems). Technically, it's the consumer's responsibility to pay use tax in our state.

[bobarian]

Originally Posted by cmitch

You sell and ship to xx number of customers in all states and thousands of cities. So, your company or distributors cut a check every month to every city you do business with? It would seem not a huge task to keep up with sales and use taxes to 50 states but it would be prohibitive for any business to pay every single city they've sold to consumers in. Let's not forget counties/parishes either.

Your understanding of sales tax and its collecting seems to be a bit lacking. Do we cut checks to each state that we have delivered wine to in the corresponding period. YES. Do all states require payment to local entities. NO, only the state collects the tax then it is distributed down toe the counties, cities and parishes. Most states have chosen to make this simpler by only charging one rate and then disbursing the difference(usually less than 1% of sale). They want to make paying tax easier so more shippers/wineries are likely to pay.

Internet sales taxes won't stop at new items either. It will eventually be passed to used items as well. It never stops once it starts. Our state used to exempt used items from sales and use tax. Then they started collecting taxes several decades ago on used cars that individuals sold to individuals. Now, even the old tool man at the flea market isn't safe. The law is the same. The interpretation keeps changing.

I understand it's coming. But a way will have to be found for ebay or amazon to collect taxes for every city and county an item is shipped to and that's going to require a central authority to do it. They'll have to pay into the private tax collector and then the private company will wire the appropriate funds to each municipality. Our state has such an authority known as RCS (Revenue Collection Systems). Technically, it's the consumer's responsibility to pay use tax in our state.

The failure of most states to enforce its laws on "use tax" has led to the change to "sales tax" being the responsibility of the retailer/seller.

[Sadden]

The article highlighted something that everyone here has left out. It mentions "That the cigar smoking community is a relatively small group of taxpayers/voters making them a relatively easy target".

As a Canadian living that line right now let me explain the dangers of that statement.

Once they have a solid way to tax cigars country wide , online and offline. Once they have control. They are going to raise the tax on cigars to an obscene level.

Want to know what a Rocly Patel 1992 costs me at my local B&M. 35$ PER STICK.

Canada gained control by making tobacco sales between provinces illegal. Then imposing a ridiculous federal tax and allowing the provinces to tack on whatever extra taxation they felt like. IIRC Alberta and NFDLD have the highest tobacco taxes in Canada.

Fight this tooth and nail boys.

[Subvet642]

Originally Posted by DennisP

That is true. And in reality all this bill does is require the consumer to pay taxes they are legally obligated to already pay, just most break the law and do not.

U.S. Constitution, Article I, Section 9, Clause 5: No Tax or Duty shall be laid on Articles exported from any State.

U.S. Constitution, Article I, Section 10, Clause 2: No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing it's inspection Laws: and the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States; and all such Laws shall be subject to the Revision and Controul of the Congress.

That's what they are trying to do and that's why it will take an act of Congress. Furthermore, they cannot expect foreign entities to collect it, either. Besides, like I wrote before, it'll never pass the House of Representatives.

[jjirons69]

I'll stay with foreign vendors...

[OLS]

I listened to the arguments on the Newshour last night and in the end it left me feeling like
we SHOULD swallow hard and start paying taxes. I had many years of free internet business
and would not mind paying taxes if it kept my town or city alive with businesses. They
talked about a huge problem with a55holes in this new smartphone world who go into shoe
stores, try on shoes, get them fitted by a clerk, find exactly what they are looking for,
then waste all the store's time by saying 'No Thanks', and just ordering the 5hit online in the
car outside the store. Just because you CAN do something doesn't mean you should.
But then again, the world's full of a55holes and always will be. EVERYONE in this country
is wondering where the jobs are, why has our country taken a nose dive off the economic cliff.
Greed and stupidity. Wanting everything, but not willing to do the hard part of keeping
an economy moving. It's like that 'story' told in a thread this month about the "green generation".
No perspective, no shame, so common sense.

All that said, if the policing agency just turns into another IRS, what did we gain?
And another good point made up above here in the thread, What about the giant
increase in road use by all the delivery trucks Amazonning that crap to your house?
Your roads are torn up, just like the ones in my city. And in Memphis we are on a
25 year paving cycle. TWENTY-FIVE YEARS! That's a generation. And with less and
less money on hand every year because more and more people get brave enough to
enter their CC# online, it gets worse and worse. You are seeing it happen right in front
of your face and you still want to keep on with no taxes? I got an advisory from Amazon
2-3 months ago saying that they had not given the info to Tennessee, BUT that I had
$500 dollars+ worth of internet buys I owed state sales taxes on. I went to the state
site and paid it, it was something like 35 bucks. I got my printed receipt and was happy
and satisfied to have done it.

[Subvet642]

I say let the USPS compete for the shipping business. As for Amazon, with their one-day and same-day shipping options they have, or will have, a physical presence in every state anyway, and would be required to collect sales tax for those jurisdictions under the current laws. That costs money and they just want the government to make their competition pay for their expansion of services by artificially inflating their competition's costs, interfering in the marketplace by further incentivizing Amazon's new shipping services.

[oldforge]

There will come a day when on-line cigars are a distant memory.

Stock up on your favs--you won't regret it.

I just smoked an El Rico Habano that I bought back in 2006--and it was even better than I remembered it.

The strong smokes can be aged a long time.