Internet Sales Tax

[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.

[hotreds]

Originally Posted by Subvet642

I'll never pass the House.

Even if you're driving right by it?

[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...

[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.

[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.

[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.

[688sonarmen]

Originally Posted by Subvet642

[b][color="Red"]U.S. Constitution, Article I, Section 9, Clause 5: No Tax or Duty shall be laid on Articles exported from any State.

This. I have paid sales tax for any online purchase inside the state of VA. As far as the "Shoe instance" stated by Brad I'm not sure if they ordered them online from the same state. If not, no harm no foul IMHO. Also, I know my wife has paid sales tax on items ordered online from other states and I'm not sure where that fits in. What is missed by buying cigars online is the sales tax AND tobacco taxes. Which one are we talking about here? Both?

[shark]

Originally Posted by 688sonarmen

This. I have paid sales tax for any online purchase inside the state of VA. As far as the "Shoe instance" stated by Brad I'm not sure if they ordered them online from the same state. If not, no harm no foul IMHO. Also, I know my wife has paid sales tax on items ordered online from other states and I'm not sure where that fits in. What is missed by buying cigars online is the sales tax AND tobacco taxes. Which one are we talking about here? Both?

Sales taxes, although a good argument can be made regarding tobacco taxes as well.

[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.