

Online Store Owners: Why Don't You Collect Sales Tax? - gierach

I was pondering over the Amazon/California Sales Tax story and wondered why more eCommerce sites don't collect sales tax.  If you don't collect sales tax from your customers, why not?
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glimcat
In the battle of Amazon vs. Walmart, I have to vote Bezos.

Also, healthy interstate commerce is rather important to the continued success
of the Union. WTF, Walmart? If this goes ad absurdum and any jurisdiction can
tax any transaction which has an endpoint on their turf, interstate commerce
would potentially require tracking compliance with thousands of jurisdictions.
"Insane" doesn't begin to cover it.

If I assume that Walmart's strategists are rational, the real intent is
probably something like "make Amazon waste money" or "make Amazon get negative
PR" or "make Amazon be distracted while we update our business strategies."
Probably all of the above, but it's still insane.

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pawn
I think the intent is closer to "we would remove taxes if it were possible but
because we can't, we want you to pay so that we can compete on price." As a
consumer, if I see Walmart selling something for $3 cheaper but with $4 taxes
making it higher, I'll go with Amazon as its cheaper overall. It sucks for
Walmart because they were willing to mark their item down further than Amazon
and still lost the sale. Then there are some items you know that everyone has
to charge one price for. It will always be higher at Walmart

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chelaine
Plus, if memory serve, there is a spot on the taxes form to enter out of state
purchase so taxes can be paid if due.

It is not the responsibility of the out of state merchant because it is that
of the person who makes the purchase.

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orangecat
If you're not legally required to, why on earth would you?

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gierach
I guess I'm a little confused on the legal requirements surrounding sales tax
for online vendors. If brick and mortar shops are required to, why aren't
shops online required to? I understand that technically it's the shopper who
owes the tax, but though businesses were required to collect it on their
behalf.

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orangecat
My understanding is that a state can only require you to collect sales tax if
you have a physical presence in that state. Thus the Amazon affiliate fiascos,
where states claim that if Amazon pays affiliates there, that's sufficient to
create a "nexus" and make them obligated to collect taxes.

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diolpah
Online store owner here. We do collect and pay sales tax for California
residents, but not residents of other states. The reason we don't collect
sales tax for other states is:

1\. We aren't required to.

2\. Doing so would be a disincentive to sales.

3\. Management of, and compliance with, thousands of different
state+county+municipality combinations that change constantly would be way way
way beyond the scope of an organization as small as ours.

