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Online sales tax could hit Utah companies

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  • buckbeaver Lake Forest, CA
    Aug. 31, 2011 2:38 p.m.

    John has been in the TV sales business for 10 years. Larry decides to go into the TV business and opens his store one mile down the street and has a grand opening sale where each TV is 10% off. John gets mad demands the government pass a law saying nobody can sell TV's for 10% off. The government passes a law that all TV's must be sold at set prices. Tom, Dick and Harry decide they are not going to buy a TV. Who loses in this scenario....EVERYBODY. Online buyers still pay shipping while not a tax is still cost of doing business. Fact: If state and local governments would live within their means, we would not be having a dicussion of this nonsense.

  • Joggle Clearfield, UT
    Aug. 30, 2011 3:17 p.m.

    People usually pay shipping on their online purchases, but not tax. People pay tax at the brick and mortar stores, but not shipping. Sounds fair to me! It's called competition. If the brick and mortar stores can't survive internet competition they should put a closed sign on their door or open a store on the internet....or have both types of stores!

  • Ultra Bob Cottonwood Heights, UT
    Aug. 30, 2011 2:48 p.m.

    A better solution would be to eliminate the sales tax entirely. The best solution would be to eliminate all income and sales tax on businesses. Take taxes out of the success/failure equation and allow the free market to exist. Businesses would pay tax fees for government services as the property tax like we all pay. That's the only part of the cost of goods sold that should be a part of the price.

    Finance the federal and state governments by a personal flat rate income tax on every commercial income for every person who derives their income from business operations in America, from every source without exception and without deduction. Rich people could no longer blackmail states by threatening to come or go according to tax.

    Businesses don't pay income taxes. Those that say they do, are only forcing their customers to pay the taxes for the business. This would eliminate the problem of the for-profit and the not-for-profit businesses. Again helping create a free market system.

  • Built2Last Provo, UT
    Aug. 30, 2011 1:45 p.m.

    There really isn't such a thing as sales tax free purchases online now. Most states have a Use Tax, and you are supposed to figure out what your sales tax would have been on online purchases and declare it on your taxes. I have no idea how many people are honest and fill this in, but it is there.

  • Jack-P West Valley, UT
    Aug. 30, 2011 1:15 p.m.

    Do States or the Federal Government have the right to force me to collect taxes for them?
    I don't wish to volunteer to perform this service for them. What are you going to do about it?

    US Constitution: Amendment XIII
    Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.

  • BH Tremonton, UT
    Aug. 30, 2011 12:04 p.m.

    The U.S. Gov't has no business regulating the way the states administer taxation. If the states want to attempt to collect sales tax online businesses, then great. But the Feds should stay out of it.

    Scuba's little scenarios are so inaccurate. Contrary to his account, online retailers such as Overstock to pay property tax, income tax, social security taxes, etc. They also employ a lot of employees, all of whom pay income tax, sales tax, property tax, gas taxes, etc. The only difference is that the online retailers are not required to collect sales tax.

    Hmmm. Given the choice, I would much rather have the stimulus to the local economy that a company like Overstock brings in, rather than force online companies to set up store outside the U.S. borders so they can avoid collecting sales tax.

    It is unrealistic for brick and mortar businesses to expect an even playing field. The very nature of brick and mortar businesses vs online businesses is different. They each attract customers for different reasons.

    This same protectionism logic is what many small stores used against big box stores. Yet the great stores have survived Walmart and Lowes and the like.

  • TaxCloud NORWALK, CT
    Aug. 30, 2011 11:56 a.m.

    @Let's be real
    The Main Street Fairness Act is not the "Federal Government...getting into the States' business" If you read the bill (S.1452/H.R.2701), you will see it is quite the inverse - It actually empowers states to enforce their existing laws, but only if they simplify their sales tax laws, as Utah has already done.

  • Goet Ogden, UT
    Aug. 30, 2011 11:16 a.m.

    If, suddenly, I have to pay taxes for online purchases... I just won't make as many purchases.

    Purchases go down, economy goes down.

  • Let's be real Salt Lake City, UT
    Aug. 30, 2011 11:13 a.m.

    I see it like this. The Federal Government is getting into the States' business again. If a State wants to collect money from sales tax off the internet do you not think that it is a States' problem? Of course, what State in their right mind would let even a drop of sales tax go by? For the Federal Gov't to intervene in a state matter may be against our constitution. There they go again, selling the States and our rights down the river.

  • unaffiliated_person Saratoga Springs, UT
    Aug. 30, 2011 11:08 a.m.

    scuba,
    What this law would do:
    Joe still whips out his iPhone and buys from a Canadian retailer for 1900 dollars who ships the merchandise for cheaper than Susie. Amazon moves to the UK, laying off 33,000 US employees, and all their physical US properties. These properties no longer pay property tax, and their former employees no longer pay many taxes as they draw unemployment.
    As the article notes, there are several large Utah online retailers and countless small ones this affects. Do we then give priority to the local brick and mortar retailers or the local online retailers? The online retailers have to deal with shipping, whereas the brick and mortar stores deal with tax. Let's leave them both alone.

  • TaxCloud NORWALK, CT
    Aug. 30, 2011 10:46 a.m.

    There is a free "App" - its called TaxCloud.

    It handles all aspects of compliance for retailers, inlcuding:
    1. Registration
    2. Accurate Rate Calculation (including State, County, City, and Special jurisdictions)
    3. Automated Reporting and Remittance to every Jurisdiction
    4. Secure management of exemption certificates
    5. Responds to audits (if any) on behalf of the seller

    TaxCloud has been certified by the State of Utah, and the other 23 member states to the Streamlined Sales and Use Tax Agreement - and again, it is completely free for retailers of any size.

  • Zadruga Guy West Jordan, UT
    Aug. 30, 2011 10:24 a.m.

    State sales taxes should be repealed and replaced with a national value-added tax collected (for efficiency's sake) by the federal government. The federal government would remit each state's share of the tax back to each state, which would then remit back to counties and cities their shares.

    Requiring online companies to collect sales taxes is tantamount to killing the goose that is laying the golden eggs.

  • scuba Orem, UT
    Aug. 30, 2011 10:09 a.m.

    Susie owns an electronic store, has five employees. She is a tax collection agent for the State. In addition she must pay property tax, income tax, security tax. She joins the chamber of commerce, and makes contributions to the honor strawberry parade.

    Amazon doesnt do any of those things.

    Joe walks into Susies shop to learn more about the latest giant TV. The sales rep spends an hour going over all the features. Joe then pulls out his iPhone and buys the $2,000 TV, saving $200 in sales tax.

    Susie closes her store because she cant buy in bulk to compete with Amazon and she cant lower her price to compensate for the sales tax. Six people are out of a job, increasing demand for unemployment, property taxes drop since the building is owned by the bank, 1 police officer is let go because of a decrease in tax collections, the local parade to celebrate strawberries has to be cancelled because Susie wasnt able to contribute, and the park and library have to close an hour earlier for the remainder of the year.

    Joe saved $200 in sales tax.

    Seems like a good trade.

  • ksampow Farr West, Utah
    Aug. 30, 2011 9:45 a.m.

    Overlooked in most of this discussion is the fact that Utah already has a tax on internet purchases - the "use tax" that we pay with our state income tax returns. It is a tax that should be repealed, since it is unenforced and virtually unenforceable. As it stands now, it is an "honesty" tax because only the honest, conscientious taxpayers pay it.

  • AzPete Mesa, AZ
    Aug. 30, 2011 9:42 a.m.

    Re: County Resident,
    You are only touching the tip of the iceberg. Don't forget the cities that also collect sales tax. Add hundreds, if not thousands of additional reports - each with their specific format, tax rates, inclusions and exclusions. It becomes an impossible logistical nightmare!

  • XelaDave Salem, UT
    Aug. 30, 2011 9:41 a.m.

    So DN Subscriber I should follow an atheist (fictional in the form of Galt and real in the form of Rand) who believed that rational self interest would regulate the markets in such a way that no harm would ever be perpetraited by another because rationality would supress any thoughts of real self interest and all of its inherent joys that it brinsg upon humanity- you really do have faith- not sure what atheist faith looks like but you have a much higher opinion of human nature than I have ever been able to muster

  • Bearone Monroe, UT
    Aug. 30, 2011 9:23 a.m.

    Greetings! Enjoy another stupid taxing idea brought to you by your government politicians!!

    Let's see--another freedom lost so that local entities can have more of your tax dollars to waste.

  • Western Rover HERRIMAN, UT
    Aug. 30, 2011 9:07 a.m.

    An "app" is going to have to be pretty complicated in order to classify items for those states that apply different taxes to different categories (e.g. food, clothing, books). You may think it's easy to determine whether an item is food or not, but high-powered lawyers and top judges have spent lots of their expensive time on making such determinations (look up Jaffa Cakes in Wikipedia for an example). I don't see how an "app" is going to make that easy.

  • DN Subscriber Cottonwood Heights, UT
    Aug. 30, 2011 8:44 a.m.

    The taxophiles never heard of John Galt.

    States may pick up some money from sales taxes, but will lose more from the unintended consequences.

    Many small on line retailers will quit business rather than mess with monthly calculating, charging, accounting for, reporting and remitting taxes on hundreds or thousands of tranactions every year.

    Even an "app" to crunch the numbers (probably not a "free" service either!) does not remove the drudgery and adminstrative burden of reporting and remitting, and then responding to whatever other bureaucratic nonsense 50 states and thousands of other taxing entities can spew out.

    I, and many others will simply quit working for pennies on the dollar and the states will lose the income tax we now pay. As well as sales tax on all the thousands of dollars of consumables used in my business every year. And, not having to do business travel will reduce gas and hotel and restaurant income for those struggling sectors.

    And, how much will it cost states to administer and enforce sales tax collection from every small business on line? Bureaucrats are not free!

    Businesses exist to make profits, not to generate tax revenue!

    Going Galt is always an option!

  • Jack-P West Valley, UT
    Aug. 30, 2011 8:34 a.m.

    If you really want to stimulate business drop the sales tax altogether. The economy would soar and government would more than make up the sales tax revenue in other areas.

  • County Resident Kearns, UT
    Aug. 30, 2011 8:16 a.m.

    Beware of streamlined sales tax, the first push Utah did several years ago was burdensome, not streamlined, for brick-and-mortar small business, only the big guys could comply. In fact, each state that passed Streamlined Sales Tax that I shipped to, I would have to remit a roughly 4-page tax return (Utah's was 4-pages) each month to each state. Multiply by the 45 states that collect sales tax and that is a 180-page monthly tax return (4 page per state) and 45-checks to mail in with 45 stamps. I'm filling out more paperwork than selling goods. Do a Google search on Streamlined Sales Tax. Unless they make some changes, it is NOT good for Utah brick and mortars.

  • JP Chandler, AZ
    Aug. 30, 2011 7:51 a.m.

    As much as I enjoy tax-free online purchases, I have to side with the brick and mortar stores on this one. 10% is enough to make or break a store, and it's entirely unfair to spot online companies that advantage.

  • mohokat Ogden, UT
    Aug. 30, 2011 7:49 a.m.

    Bring it on. I want more Government in my life. Like above, the politicians can not stand to have something that they can not tax. Leave us alone.

  • unaffiliated_person Saratoga Springs, UT
    Aug. 30, 2011 7:32 a.m.

    In adding competitive advantage to local sellers, we create a huge disadvantage for "mom and pop" and small online sellers. They have to compete with locals with tax and shipping. ALl we are doing is shifting the disadvantage and discouraging local retailers. I predict this law will result in more ecommerce moving offshore (Canada or Mexico perhaps?), creating more job losses domestically and less tax revenue than the goverment intends.

  • SME Kearns, UT
    Aug. 30, 2011 7:08 a.m.

    Losses from not collecting state and local sales taxes from Internet purchases will expand from $8.6 billion in 2010 to $11.4 billion in 2012...

    There may be arguement for taxing online businesses, but to argue that taxing them will result in 11.4 billions dollars in additional revenue is wrong. When the taxes are added people's behavior will change. The revenue collected from new taxes never matches the original claims.

  • T-Jeff Uinta Basin, Utah
    Aug. 30, 2011 6:56 a.m.

    The government should do whatever it can to stifle more business of any kind. Jobs? We don't need no steenking jobs.

  • AmPatriot Kearns, UT
    Aug. 30, 2011 5:46 a.m.

    The federal government cannot impose or write laws on state sales taxes, its constitutionally forbidden. The supreme court will have a picnic with this law. Or the law will force states to give all their sales taxes to the federal government for equal distribution of wealth so all states can have equality in sales tax. No more state control or imposition of sales tax because of the double taxation laws. But who knows, we get double taxed for income (state and federal) so why not spending that income?

    Such a law would create a federal sales (consumer spending) tax that would not go to any state. Then we would have two (2) federal taxing departments.

    A federal law will boil down to more economic recession with consumers buying less and fewer homes being sold or even built. We can always resort to the Communist system and have state built communal buildings to house peoples that are paid poorly but must pay the government to live (the Obama care plan) of enlightenment and government permission.

  • Baron Scarpia Logan, UT
    Aug. 30, 2011 5:16 a.m.

    The argument that it will be an accounting nightmare to collect different taxes from every tax district across the country rings hollow. There's probably an app for that.