OT Amazon to begin charging state sales tax

[John Doe]

They are "not raising taxes" they are "just helping to collect taxes". There is a big difference...

[Paul Drahn]

Not in Oregon!

Paul

[dagmargoodboat]

That initiative is well under way nationwide.

The states have quietly joined together to create this entity (below), whose purpose is to create a system to collect sales tax for your state on all your purchases, no matter whose goods you buy:

Here's current legislation: It's coming, folks.

-- Cheers, James Arthur

[Caesar Romano]

On Tue, 22 Nov 2011 21:14:04 -0800 (PST), [e-mail] wrote Re Re: OT Amazon to begin charging state sales tax:

Bricks & Mortar retailers are big supporters of that legislation. But it won't matter. On-line retail merchants will still beat the B&M sellers in price/selection/convenience.

[Nate Nagel]

>

yup... whatever scheme they come up with I'm OK with so long as it's fair and doesn't put anyone at a disadvantage. The only reason that there's such a huge issue w/ sales taxes is because the B&M stores are so incredibly overpriced that people are flocking to online merchants in droves. Even if you add 5% or whatever to online prices to allow for sales tax on many items it's still not worth driving to the store. Just one example would be cables - I just bought a lot of HDMI, optical S/PDIF, and RCA cables online for about what just three HDMI cables would cost me in a store - and for the same cost as store prices... alternately if I were going high end for about the same as what a B&M store charges for generic stuff I could get the real high end stuff from Blue Jeans Cable. This isn't a unique example... it's true for a lot of items.

nate

[G. Morgan]

Fuck 'em. I'm in Texas and will only collect tax for Texas. What a bunch of convoluted nonsense. How are online stores supposed to keep up with all that?

[Vic Smith]

It'll be easy for the big outfits. A minor hassle for small-timers. Some will ignore it. Some will charge the tax and pocket it, not sending it in. Some will get caught, some won't. "Cut-out" services might pop up in no-tax states.. Those will be squashed pretty quick.

When I plug my zip into this I get 9.5%.

But I already knew that. Probably won't make much difference in affecting on-line sales. Even the tax hit doesn't stop me. Already pay it with some on-line vendors.

It'll be a minor boon for locales that charge sales taxes. Then where the local pols are corrupt they'll boost their salaries and retirement benefits, and the same for public employees. Cleaner areas will put it to better use. Otherwise it won't make a hill of beans difference. Just money being shuffled around like it always is. Death and taxes.

--Vic

[Peter]

It's called software. It will be automatic, similar to the way the on-line web sites calculate shipping costs based on destination zip code, package weight, and choice of shipping method.

[PeterD]

Not in NH either!

[HeyBub]

It's considerably more complicated than dropping in a sales tax calculator. First, there are about 11,000 sales tax jurisdictions in the U.S. Second, the boundaries of these jurisdictions change on an almost daily basis, for example, when a city with a sales tax enlarges its corporate limits or changes its tax rate. The "drop-in" software will require periodic updates. It's not for nothing that tax lawyers are often called "loose-leaf lawyers." Several hours a week their associates are tasked with updating the tax law reference books with tax law changes that took place in just the past few days.

But these confusions pale into insignificance when compared to two other considerations:

1. What is taxed is highly variable. In New York, magazines are tax exempt while newspapers are subject to the sales tax. It's the exact reverse in California (that's why the NY Post has a staple - it's thereby permantly bound, exempt from the tax, and has a 9% competitive advantage over its competitors). Just in my state, a single donut is taxable, but six or more are not! This oddity, alone, could require 11,000 possible taxing flags (plus quantity modifiers) for each item the company sells. In some places, prescription drugs are exempt while OTC drugs are taxed. What about an OTC drug on a prescription? (See the recent changes to Medical Savings Accounts regarding drug purchases.)
2. The reporting requirements are staggering. Imagine sending several hundred or thousand reports - and checks - monthly, quarterly, semiannually, or yearly depending on the reporting requirements of each taxing authority.

It's more than a body can bear!

Brick & Mortar stores have one competitive advantage: the convenience of immediacy. Just like your neighborhood Stop & Rob, you can get your merchandise right now. If the B&M stores can't make it with this advantage, they should hire an 11-year old male as a web master and start selling online.

Aside: There IS an alternative: Amazon, or whoever, could simply provide a list of each purchaser's name, address, and amount to each state comptroller and let the STATE struggle with trying to collect the taxes. If it's too big a job, or financially imprudent, to do so, what makes anyone think that putting that burden on hundreds of thousands of merchants is better?

[Kurt Ullman]

But taxes don't work like that, especially sales taxes. YOu have state taxes, but many places also have local sales taxes, and often more than one. There was an area around O'Hare at one point (don't know if it still exists) where there was state, city, airport authority and some other entity sales tax. This is very similar to a vinter I was talking to. He said there are counties where UPS refuses to accept wine shipments because a person on one side of the road may be legal and the other side not.

[Frank]

Interesting thread.

Delaware has no sales tax, although there is a hidden

[Kurt Ullman]

This usually the way it is SUPPOSED to be done. In Indiana, for instance, I am supposed to pay a use tax for things I get out of state that aren't taxable.

[Vic Smith]

All of this is extremely simple on the software/comm side. Already being done. Ever think about the mechanics of walking a step? You can write a thousand pages to make that look complicated too. And it is. Sales tax is trivial in comparison. Of course taxes are man-made.

--Vic

[George Herold]

Hmm, here in 'tax-happy' New York State there is a line on the state tax return where you are 'required' to add in all the state tax that you did not pay on 'out of state' purchases.

George H.

[George]

But surely the additional local sales taxes aren't just arbitrary and are defined with geographic boundaries? In my state the sales tax is 6% with the counties of Allegheny and Philadelphia adding an additional 1%.

[George]

PA has had the same self reporting requirement for as long as I can remember.

[Frank]

PA sends revenue agents into DE and MD to stake out liquor stores for PA buyers returning to PA. While back, I recall liquor store owners in MD chasing them out of their parking lots.

[krw]

I believe most states have this in their income tax forms. It doesn't cost anything to put it there but likely gets just about as much in return. Have you ever put anything there?

NY did that 20-30 years ago. They'd send agents to the malls in NJ, about this time of year, and send "kindly" reminders to everyone with NY plates parking there. I doubt that it generated any revenue but it did generate a lot of bad press (can you say Scrooge?).

The "Staties" should escort them to the border with a suggestion that they not return.

[Peter]

I'm amazed that so many technically sophisticated posters consider the issue of automated software managing the sales tax calculation for on-line business to be unworkable. We probably all have been exposed to essentially real time updating of huge relational databases. We're not computing in the 1980s folks. Look how long it takes google to accomplish a search with their custom algorithms, even for arcane keywords. I think you over-estimate the difficulty. I suspect some company, maybe even a start-up, could make a bundle by developing the software accompanied by a user subscription charge for ongoing auto-updates of the database (analogous to the auto-updates of the signature files for our anti-virus programs).