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Old 01-15-2018, 10:42 AM   #41
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Just a few weeks ago I was having coffee with a few friends and the sales tax issue came up. Most agreed that the current situation is unfair to local businesses. If we want to have the jobs and benefits of local business in our state, then they need a level playing field to compete.

But....

Somebody brought up that recent tax increases have pushed the sales tax in my area to double digits (10%), along with nearly doubling car tabs and an increase in property taxes. He added that for the first time, he now checks out of state businesses to see if he can avoid the tax on more expensive items. Recently, he bought some camera gear from a place in NY and avoided almost $50 in sales tax.

At some point people, even fair minded people, just start saying 'No'.
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Old 01-15-2018, 10:48 AM   #42
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Somebody brought up that recent tax increases have pushed the sales tax in my area to double digits (10%), along with nearly doubling car tabs and an increase in property taxes. He added that for the first time, he now checks out of state businesses to see if he can avoid the tax on more expensive items. Recently, he bought some camera gear from a place in NY and avoided almost $50 in sales tax.
Except he really didn't avoid the tax. He simply is choosing not to pay it. In other words, he's a tax cheat.
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Old 01-15-2018, 10:51 AM   #43
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I do in Ohio and get laughed at by my work colleagues when I tell them!


My son keeps track of all of his online purchases and he pays any sales tax due with his taxes. I told him that it is so rare for a taxpayer to comply that when his return is processed a bell rings and a state tax agent gets his wings.

But we all know heís doing the right thing.
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Old 01-15-2018, 11:12 AM   #44
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Except he really didn't avoid the tax. He simply is choosing not to pay it. In other words, he's a tax cheat.
Yes, he is supposed to declare the stuff and pay the tax. But, there is no mechanism to enforce it.

I have my own idea about how it can be enforced. Let each state have an Interstate sales tax, which the state collects and then distributes to the various cities and counties based upon the zip code used for delivery. Merchants only have to worry about the sales tax for 50 states and not a zillion various combinations.
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Old 01-15-2018, 11:47 AM   #45
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So when did Oregon stop having a income Tax. I'll have to check with my sons. Oregon has one of the highest income taxes.
I wish I knew about that! I pay lots to Oregon so as far as I know the OR State income tax is still here.
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Old 01-15-2018, 12:02 PM   #46
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I could see the development of a 1099 type form that the sellers send to any shipping address with $500 or more in sales, and a copy to the state taxing authority. Information only, each individual can do with it what they wish. And each taxing authority can do what they wish.

Or develop a "Zipcode plus SALT" address. That along with an analysis of every line item to determine taxability. And a VAT to cover the cost of developing the system. Analytics powered by Google, now with 'Tinfoil Technology!'
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Old 01-15-2018, 12:03 PM   #47
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Last summer, our state tax department sent letters to 18,000 taxpayers "reminding" them that they are liable for use tax on purchases made via the internet and made in neighboring New Hampshire, which does not have a sales tax. Our governor got one as well.

It was a bit of an item for discussion over the summer... I didn't get one but some friends did. We discussed what one would need to do if one wanted to comply.. get the details on any online purchases where sales tax was not assessed or out-of-state purchases, determine whether use tax applies (no sales tax on food or clothing in our state), prepare amended returns and reply to the tax department.

In the end, about 2,600 taxpayers responded (14%) and remitted about $900,000.

As part of the process the local TV station had a piece on the issue and an interview with a CPA who indicated that he was advising clients not to respond. The governor was in the majoirty that did not respond.

Vermont nets $900,000 through use tax letters

Letter:
https://media2.fdncms.com/sevendaysv...?cb=1504188143
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Old 01-15-2018, 12:22 PM   #48
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My state has a "use tax" for things bought from out of state. You're supposed to pay 6% if you didn't pay that to the other state.

But they make it easy on the state income tax return. If you don't have receipts for your online purchases (and I imagine very few of us keep them), then you just use a table based on your income and the state is happy with those estimated amounts. Hardly an onerous amount.

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Old 01-15-2018, 12:33 PM   #49
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As someone who runs a small e-commerce business, the idea of collecting and remitting for all 45+ states that have sales tax, not to mention those that have multiple tax jurisdictions, is a nightmare. (Interacting with state revenue websites is like a bad visit back in time to late 90's internet speed, function, and navigation...)

Just gathering together the data for my own state to file each quarter takes about a half an hour. This is just me, a very small part time business/hobby, so yes there are probably better costlier solutions to do this for me, somewhat automatically.

But just registering, and then keeping track of, all the jurisdictions alone would be hours and hours of work.

It will hit the smaller online seller far harder than the big ones. And it will cause a lot of small sellers to severely limit those states they will do business with. I would look at selling only to states are most profitable to me, vs. the cost of tracking and filing those 1 or 2 sales a year to say, Idaho or something. (sorry idaho). If that one $50 sale to Idaho comes with an extra 20 mins of work, vs. those 12 California sales with the same amount of work... it makes sense.

This year, Amazon started collecting and remitting ST for all purchases in Washington state, including those from small 3rd party sellers. But for independent sellers outside of selling on amazon, they need to make their own solutions.
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Old 01-15-2018, 01:57 PM   #50
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I just looked at the spreadsheet download from Amazon. I occasionally send gifts to TN and, for those purchases, the tax is at the rate in the city in TN I send the gift to. For the ones delivered to me, the tax is at my city's rate. I thought Amazon charged tax on everything sent to me since they are WA state too but I see some exceptions where no tax was paid. They have columns that seem to be for assessing the taxability of the item but all three tax exemption columns are empty. I bought some food and food should be exempt in WA but the columns were empty for these too. (Maybe the columns were provided for the buyer to fill out.) I'd be willing to bet that, if I checked it, the items taxed are those that are linked to Amazon's "fulfillment center" for returns since they are the main trackers of the merchandise.
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Old 01-15-2018, 02:10 PM   #51
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I just looked at the spreadsheet download from Amazon. I occasionally send gifts to TN and, for those purchases, the tax is at the rate in the city in TN I send the gift to. For the ones delivered to me, the tax is at my city's rate. I thought Amazon charged tax on everything sent to me since they are WA state too but I see some exceptions where no tax was paid. They have columns that seem to be for assessing the taxability of the item but all three tax exemption columns are empty. I bought some food and food should be exempt in WA but the columns were empty for these too. (Maybe the columns were provided for the buyer to fill out.) I'd be willing to bet that, if I checked it, the items taxed are those that are linked to Amazon's "fulfillment center" for returns since they are the main trackers of the merchandise.
Check who the seller of the item is in many cases it is an
Amazon associate not amazon.com. If it is sold by Amazon.com you pay sales tax, but if not you may not, some items you find listed as fulfilled by Amazon, and others you find that Amazon serves as an order taker only.
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Old 01-15-2018, 02:18 PM   #52
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......... If we want to have the jobs and benefits of local business in our state, then they need a level playing field to compete..............
I don't buy the "support local business" argument. Anyone can also be in the internet sales business if they want to be.
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Old 01-15-2018, 02:22 PM   #53
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Perhaps, but a lot of our local small business people don't have the skills necessary to set up and run an internet sales business and in some cases, probably not the time either.... but having to charge sales tax puts them at a disadvantage.
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Old 01-15-2018, 03:33 PM   #54
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I don't think the local taxes are required to be paid. If so, then if I went on a trip to, say, San Francisco but lived in Sacramento, I would have to pay a different tax? No, I just pay what ever the local tax is no matter where I hang my hat. If went to another state and bought something, paid the sales tax, how is that any different? Would I then need to declare that on my state income tax? Why can't internet sales be the same as in-person/out-of-state purchase and just pay the prevailing tax of the locale I'm buying from? Tax should be based on where you are buying it from since that's where the infrastructure is needing the financial support. Why should California collect a tax on a product that was solely marketed in another state? What did California incur to justify the expense of a tax for that?
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Old 01-15-2018, 03:39 PM   #55
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Amazon charges sales tax here in Connecticut except for items that come from a third party vendor.

Unrelated to that, despite the convenience and huge selection, I'm avoiding Amazon. Two things influenced me to do this. First of all CVS is buying out Aetna. One of the primary reasons is to compete with Amazon. How's that, you might ask? The article said Amazon had obtained licensing in 14 states to sell pharmaceuticals and was applying in other states. Secondly, the Kmart store one town over recently closed. It was a nice store, clean and convenient. I only went there occasionally so I guess I'm part of the problem but it's a shame. These stores pay taxes in the community and employ people. Maybe they're not high end jobs but they're jobs.

For me, Amazon is getting too big.
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Old 01-15-2018, 03:43 PM   #56
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I don't think the local taxes are required to be paid. If so, then if I went on a trip to, say, San Francisco but lived in Sacramento, I would have to pay a different tax? No, I just pay what ever the local tax is no matter where I hang my hat. If went to another state and bought something, paid the sales tax, how is that any different? Would I then need to declare that on my state income tax? Why can't internet sales be the same as in-person/out-of-state purchase and just pay the prevailing tax of the locale I'm buying from? Tax should be based on where you are buying it from since that's where the infrastructure is needing the financial support. Why should California collect a tax on a product that was solely marketed in another state? What did California incur to justify the expense of a tax for that?
Interesting idea.... and I like the analogy to the sales tax that would be paid if it was an in-person out-of-state purchase. Only thing is, if you pay less than what your home state charges (for example if you did an internet purchase from a NH vendor where there is no sales tax) then you would in theory owe your home state use tax.

But that idea might be a practical way to reduce the burden on small e-commerce businesses. Or perhaps require e-commerce business to collect state sales taxes but not local or city sales taxes so they only have 50 jurisdictions to deal with.
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Old 01-15-2018, 04:04 PM   #57
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Why can't internet sales be the same as in-person/out-of-state purchase and just pay the prevailing tax of the locale I'm buying from?
Reasonable idea but then big sellers like Amazon would move their operations to states with no sales tax.
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Old 01-15-2018, 04:14 PM   #58
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Reasonable idea but then big sellers like Amazon would move their operations to states with no sales tax.
Except that with the idea of same day delivery Amazon is forced to have a physical presence in most states.
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Old 01-15-2018, 04:31 PM   #59
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Perhaps, but a lot of our local small business people don't have the skills necessary to set up and run an internet sales business and in some cases, probably not the time either.... but having to charge sales tax puts them at a disadvantage.
Not having the skills or the time is not my problem. Businesses are supposed to be rewarded for merit, they are not a charity. And every business is a local business to the people that live nearby. "Buy local" smacks of tribalism to me.
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Old 01-15-2018, 05:30 PM   #60
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"Buy local" smacks of tribalism to me.
On a larger basis, so is statehood.
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