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.
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!
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.
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.
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 XIIINeither 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.
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.
@Let's be realThe 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.
If, suddenly, I have to pay taxes for online purchases... I just won't make as
many purchases.Purchases go down, economy goes down.
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.
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.
There is a free "App" - its called TaxCloud.It handles all
aspects of compliance for retailers, inlcuding:1. Registration2.
Accurate Rate Calculation (including State, County, City, and Special
jurisdictions)3. Automated Reporting and Remittance to every
Jurisdiction4. Secure management of exemption certificates5.
Responds to audits (if any) on behalf of the sellerTaxCloud 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.
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.
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.
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.
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!
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
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.
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.
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!
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.
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.
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.
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.
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.
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.
The government should do whatever it can to stifle more business of any kind.
Jobs? We don't need no steenking jobs.
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
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.