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Old 04-30-2012, 07:09 AM   #21
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Combs also said consumers who will start paying more for Amazon products come July 1 should keep in mind that this change was designed to help their "friends and neighbors" who own businesses and "show up at the football games on Friday*night."
Boy, I am such an unpatriotic neighbor, as I do not attend the Frday night (high school) football games to demonstrate my local spirit. Is that a requirement of joining the local chamber of commerce? My husband grew up in a tiny Texas town with such a lack of local entertainment that everybody went to the Friday night football game, and that was all everyone talked about all weekend. And it's not like the local team was really any good either. The high school was so small that almost every male student had to be on the team. Wow - the tradition thrives!
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Old 04-30-2012, 07:38 AM   #22
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Watch for Amazon's revenue to drop, put your sell orders in now
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Old 04-30-2012, 08:11 AM   #23
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This is one example where I think Congress needs to get involved and lead. This is undeniably an interstate commerce question in most cases, and that is clearly the role of Congress to sort out. It should be done in a way that doesn't add excessive bookkeeping responsibilities on consumers, but to me it's clearly something Congress needs to settle once and for all.
Congress did get involved. They passed a law exempting internet transactions from local/state sales taxes unless the internet company had a physical presence. The states came up with the idea of saying residents must "self-report" the sales taxes they "owe" by buying from internet companies without a physical presence in their state. I would think these laws are superceded by the Federal law since they are regulating interstate commerce. The states, IMHO, are attempting to tamper with the federal statute unconstitutionally.

As a Texan, I'll be looking for alternatives to Amazon.
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Old 04-30-2012, 09:12 AM   #24
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Congress did get involved. They passed a law exempting internet transactions from local/state sales taxes unless the internet company had a physical presence. The states came up with the idea of saying residents must "self-report" the sales taxes they "owe" by buying from internet companies without a physical presence in their state. I would think these laws are superceded by the Federal law since they are regulating interstate commerce. The states, IMHO, are attempting to tamper with the federal statute unconstitutionally.

As a Texan, I'll be looking for alternatives to Amazon.

This is not a new thing.... and the 'use' tax is also not new... it has been around even before there was an internet...

Anything that you have bought from out of state you were supposed to file a use tax return and pay the tax... this goes way back to the 800 number catalog sales... do not think that the state has changed just because there is an internet...

Also, it does not matter if you have a physical presence... it is nexus... if you read the article they talk about making sure executives etc. do not even visit some states. Some states will claim a company has nexus just by attending some trade shows...

With the states having all these budget problems, they are not going to let these sales taxes go away without a fight... we are talking billions of dollars that would go to states...

US Supreme Court Petitioned to Rule on Nexus Confusion | Nexus Negotiator

Here is the original Supreme Court case that said that an out of state company did not have to collect sales taxes:

Quill Corp. v. North Dakota - Wikipedia, the free encyclopedia
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Old 04-30-2012, 09:19 AM   #25
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There are a few companies that will do all this for you....

But you also forget about what is taxable and what is not... electronically delivered programs in a number of states are not taxable, but in others they are... again, the companies keep track of this for you also...
Yes, I thought the same thing--somebody's offering to take care of this for Amazon. Or Target, or Macy's, or Sears, or PetSmart, or anyone who sells online across state lines. It's been somewhat of an unfair advantage for Amazon imho.
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Old 04-30-2012, 10:35 AM   #26
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There are a few companies that will do all this for you....
Sure, and the complexity of several hundred thousand taxing authorities in the US ensures this is very costly for the company whether done internally or outsourced. The end result is the customer pays twice - for the tax plus the cost built into the product to collect and remit the tax.

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But you also forget about what is taxable and what is not...
No, I covered that complication as well:
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- and what is exempted.

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It's been somewhat of an unfair advantage for Amazon imho.
I agree.

My point isn't about unfairness to Amazon, it's that the current interstate sales tax structure is unnecessarily complex and costly for ALL retailers. Congressional action to standardize and simplify the process would appear to make sense. States are losing major tax revenue today so why not have them work with Congress to reach an agreement for an interstate sales tax policy?

But then we're talking about politicians, so all bets are off...
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Old 04-30-2012, 02:17 PM   #27
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+1

The "excessive bookkeeping responsibilities on consumers" pales in comparison to the burden placed on the Amazons of the world to accurately collect and remit sales tax.

Think about it - for every single shipping address in the US the seller must know the correct state, city, county, metro transit district, etc. sales tax % - and what is exempted. Plus, the tax rates and taxing entities are constantly changing.

Sales tax collection and remittance is a huge burden for a company to implement and administer, capped by auditors from each of the 50 states who want to spend a couple of weeks each year bugging the finance staff to verify the company has been collecting and paying their fair share. Been there, done that and can attest that it is an onerous business responsibility.

Standardization of interstate sales taxes by Congress makes a lot of sense, which means it will not happen for many years to come...
Seems no worse than any other tax to me. B&M chains have websites. I can type in my address and they'll give me the addresses (with a map) of their closest stores. Retailers don't all write their own software to do this. They buy a service from some map utility that does it for them.

The same concept would work for online sales tax. Online retailers would buy a package that reads a shipping (or credit card) address and tells the website what tax to charge.

At remittance time, the service produces a summarized list. The tax service could send out the individual checks if the online retailer doesn't want to. 90% of the auditing is done once at the tax service.
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Old 04-30-2012, 02:29 PM   #28
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Seems no worse than any other tax to me. B&M chains have websites. I can type in my address and they'll give me the addresses (with a map) of their closest stores. Retailers don't all write their own software to do this. They buy a service from some map utility that does it for them.

The same concept would work for online sales tax. Online retailers would buy a package that reads a shipping (or credit card) address and tells the website what tax to charge.

At remittance time, the service produces a summarized list. The tax service could send out the individual checks if the online retailer doesn't want to. 90% of the auditing is done once at the tax service.
This points the reasoning behind exempting online retailers from withholding sales tax. It differs around the country - there are more than 7400 different sales tax "areas", or different codes. A small B&M business needs only to deal with the local sales tax rules. A large B&M needs to know them all but also has the size and scale to afford the cost of doing so. The reasoning to exempt online retailers is that many are also small and would be disadvantaged buy having to now each different regulation, and many would close shop.

The point is valid, and is taken advantage of by businesses such as Amazon.
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Old 04-30-2012, 02:38 PM   #29
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My point isn't about unfairness to Amazon, it's that the current interstate sales tax structure is unnecessarily complex and costly for ALL retailers. Congressional action to standardize and simplify the process would appear to make sense. States are losing major tax revenue today so why not have them work with Congress to reach an agreement for an interstate sales tax policy?
The States could do this without Federal involvement. There is an initiative, Streamlined Sales & Use Tax Agreement (SSUTA). Their progress can be tracked at their website here Streamlined sales tax
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Old 04-30-2012, 02:53 PM   #30
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This thread ignores the underlying problem: Many different tax paths: Income tax, property tax, sales tax, cigarette tax, boating license fees, alcohol tax, gasoline tax, car license tax, dog tax, corporate tax, carbon dax, inheritance tax, and so on.

There are some valid reasons for different taxes (to influence behavior, to selectively tax users of some product/service, or tax richer people more) but most of it is just a bother.
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Old 04-30-2012, 02:54 PM   #31
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The States could do this without Federal involvement. There is an initiative, Streamlined Sales & Use Tax Agreement (SSUTA). Their progress can be tracked at their website here Streamlined sales tax

Great idea, and I wish them success. A bit disappointing to see this initiative appears to have been underway since 2005 but just under half the states seem to be on board.
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Old 04-30-2012, 03:20 PM   #32
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My point isn't about unfairness to Amazon, it's that the current interstate sales tax structure is unnecessarily complex and costly for ALL retailers. Congressional action to standardize and simplify the process would appear to make sense. States are losing major tax revenue today so why not have them work with Congress to reach an agreement for an interstate sales tax policy?

But then we're talking about politicians, so all bets are off...

It actually is not that costly... probably a few cents per transaction (maybe less with an Amazon)...

And big retailers are already doing it... if you buy something online at Wal-Mart, they have to figure out the correct tax for your address. I do not know of any state where there is not a Wal-Mart so I would assume they have nexus in all of them.


The technology is already out there... and it is pretty cheap...


As a note, the streamlined sales tax does not get rid of all the differences... they are just making them a bit less different... I do sales tax returns for 9 states and some are pretty easy and some of very difficult... even if in the group...
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Old 04-30-2012, 03:22 PM   #33
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It actually is not that costly... probably a few cents per transaction (maybe less with an Amazon)...

And big retailers are already doing it... if you buy something online at Wal-Mart, they have to figure out the correct tax for your address. I do not know of any state where there is not a Wal-Mart so I would assume they have nexus in all of them.


The technology is already out there... and it is pretty cheap...


As a note, the streamlined sales tax does not get rid of all the differences... they are just making them a bit less different... I do sales tax returns for 9 states and some are pretty easy and some of very difficult... even if in the group...
OK, you win.
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Old 04-30-2012, 03:53 PM   #34
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[I]According to its website, it already collects sales tax in five of the 50 states -- Kansas, Kentucky, New York, North Dakota and Washington -- on purchases made by people who live in those states.
Hmm, I live in Arizona and Amazon collects sales tax on me as well and has for a while. Plus, starting this year (applied to 2011), we have to report all things we buy online that we don't pay sales tax on. We then send the unpaid sales tax to the state when we pay our income taxes.

I'm sure compliance will be low...but I wonder if people realize that 10 years from now when company XYZ turns over their records to the state that there could be interest and penalties involved as well under threat of tax evasion charges. Chilling...!

This seems to me like a situation where Congress needs to act. States either need to be prevented charging sales tax for online purchases or we need a consistent framework for companies to follow. I'm not expecting this do-nothing Congress to tackle the issue though.
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Old 04-30-2012, 04:09 PM   #35
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It makes more sense if you think of it as a tax the customer is paying rather than the retailer.

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I'm on the fence on this. On one hand, it seems to give internet companies an 'unfair' advantage over brick & mortar stores. OTOH, an internet company with no B&M presence also isn't using any resources of the State, so why do state taxes need to be collected? The delivery companies operating within the state are paying taxes to the State - isn't that enough?
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Old 04-30-2012, 04:13 PM   #36
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OK, you win.

Didn't know it was a contest
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Old 04-30-2012, 04:17 PM   #37
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Didn't know it was a contest
Don't worry, it only costs a few cents a transaction....
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Old 04-30-2012, 04:21 PM   #38
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Congress did get involved. They passed a law exempting internet transactions from local/state sales taxes unless the internet company had a physical presence. The states came up with the idea of saying residents must "self-report" the sales taxes they "owe" by buying from internet companies without a physical presence in their state. I would think these laws are superceded by the Federal law since they are regulating interstate commerce. The states, IMHO, are attempting to tamper with the federal statute unconstitutionally.
The translation is that Congress mostly punted, though, and didn't really resolve the matter.
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Old 04-30-2012, 04:24 PM   #39
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The States could do this without Federal involvement. There is an initiative, Streamlined Sales & Use Tax Agreement (SSUTA). Their progress can be tracked at their website here Streamlined sales tax
Frankly I'd like to see Congress pass some uniform sales tax on all interstate transactions, say 4-5% and that could be the end of it instead of every retailer negotiating (or being strongarmed by) every state that collects sales taxes. People from no sales tax states wouldn't like it, but they could lobby their own legislatures to reduce other taxes to compensate, or they can shop locally and pay no tax at all. States that charge more than that wouldn't be completely satisfied but they will be getting a lot more than they are getting now in most cases without having to fight with every major retailer.

Not perfect, but simple, Constitutional and I think a reasonable compromise.
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Old 04-30-2012, 04:40 PM   #40
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Frankly I'd like to see Congress pass some uniform sales tax on all interstate transactions, say 4-5% and that could be the end of it instead of every retailer negotiating (or being strongarmed by) every state that collects sales taxes. People from no sales tax states wouldn't like it, but they could lobby their own legislatures to reduce other taxes to compensate, or they can shop locally and pay no tax at all. States that charge more than that wouldn't be completely satisfied but they will be getting a lot more than they are getting now in most cases without having to fight with every major retailer.

Not perfect, but simple, Constitutional and I think a reasonable compromise.

I think that you are missing that this is a sales tax paid by the citizen of the state... it is not the retailer that is paying the tax, they only collect the tax and pass it on to the state... I do not see how they can pass a federal law to mandate what a state can charge on sales...

Also remember that the state requires you to pay the tax as a 'use' tax if a retailer does not collect it for them. So let's say you go to a store and they did not charge you sales tax for whatever reason. You are supposed to report this to the state and pay it yourself.

I would think that they could pass a law on the nexus question. The current 'law' is the decision in the Quill case... but as mentioned, states are getting a bit more aggressive in claiming that you have met that threshold by just showing up to their state... IOW, you have transacted business in our state, so you are required to withhold taxes.... and if you did not, then you have to pay it....
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