

Democrats Introduce Federal Bill to Collect Online Sales Tax - jenhsun
http://www.pcmag.com/article2/0,2817,2389490,00.asp

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martingordon
The thing to keep in mind is that internet retails will have to keep track of
and pay out to more than just the 50 state-level tax jurisdictions. Many
counties and municipalities impose their own sales tax rules, which are often
more complicated than just a blanket X% of sales. For example, some states
exempt clothing and basic food items from sales tax, and some have periodic
tax holidays.

I understand the desire to eliminate the tax advantage internet retailers
currently have, but I think it would be better solved by a federal sales tax
(either directly or indirectly disbursed to states) than by forcing retailers
to hire a team of tax accountants to keep up with thousands of sets of sales
tax laws.

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IanDrake
The frequent and dangerous assumption here is that a federal sales tax means
the end to state sales tax.

Obviously that didn't work for income tax, and I would go even further to
argue the feds should not be paid one bit of direct tax.

When the feds collect money and disperse it to the states, the states become
enslaved to the federal government and loose their sovereignty. More
importantly, without this sovereignty there is no competition or
experimentation amongst the states.

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drats
I saw someone had downvoted you and went to upvote and gave you another
downvote by accident, sorry.[1] I think you are entirely correct, state
competition and experimentation is a good thing, as is decentralisation. Even
if someone disagrees with your points, I don't see the need to downvote them.

I like the idea elsewhere on the thread of standardizing a database to enable
the calculation to be readily done by the seller (and those places with
systems so complex that they can't be represented with a couple of fields -
state, tax level, exceptions - can just lose out).

[1] pg can we please have some more space between the up and down vote buttons
for touch screens?

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mkr-hn
I downvoted because of the inflammatory language.

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IanDrake
Sorry, sometimes my writing style just comes out that way.

To make my point differently and maybe to make it more tech specific:

I would rather pay individual companies for software I want to run on my PC
than to pay Microsoft a lump sum and have them give me a bunch of software
they think I need (and then distribute the funds to the creators how they see
fit).

It could be argued that it would be easier for consumers to pay only
Microsoft, saving them the headache of creating relationships with multiple
vendors.

Or it could be argued that the chaos of the market is worth the competition
that ultimately benefits the consumer.

I like the bottom up approach because it creates competition and choice.

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hugh3
The "Main Street Fairness Act"

If I got to congress, the first thing I'd do would be to introduce a bill to
ban the use of cute and/or self-advertising names for bills. Let it be the
"Sales Tax Collection Act of 2011" or something like that.

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rawsyntax
>But Sen. Welch also noted that brick-and-mortar shops are also being used as
display cases for products later bought online. "When a consumer can walk into
a store, try out a product and then go home and buy it online without paying
sales tax, Main Street businesses and downtowns lose," he said in a statement.

In my experience, sales tax does not account for the price difference, in most
stuff I buy. What does account for it is the insane markup. Try buying an HDMI
cable at bestbuy, then compare to the $1.50 at monoprice.com

~~~
qeorge
I bought a Nexus S at the shop across the street from me. The price was the
same as I could find online, but I paid an extra $40 in sales tax (NC).

I don't mind paying sales tax (I do enjoy having police, firemen, and
teachers) but let's be honest - $40 is enough for someone to think twice.

~~~
clarkevans
Legally, others still must pay the $40. It's just that they get to pay it at
the end of the year as part of their the "USE TAX" line item in their state
taxes. They don't avoid the expense: they are deferring (er, perhaps,
ignoring? the law).

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petercooper
_The Main Street Fairness Act doesn't ask anyone to pay a single penny more in
taxes. Instead, it would help governors and mayors collect taxes that are
already owed._

This seems to be an interesting selling point, except that people, in the
main, seem to _not_ be paying taxes they actually owe. What I wonder as a non-
American, though, is _how illegal_ is this practice? Is it essentially a form
of tax evasion and, therefore, a crime? If so, why hasn't there been a random
"shakedown" RIAA-style to scare people into declaring these purchases and
paying the taxes?

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viggity
They don't owe anything, the Supreme Court has ruled that you don't have to
collect sales tax unless you have a presence in the state (a la the Commerce
Clause of the Constitution). It isn't tax evasion, pure and simple.

Congress has the sole authority to tax and regulate interstate commerce, and
if they choose to do so via this act, that is fine and dandy but that is a
totally different issue.

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jerf
You've got too many pronouns without antecedents in your post. The merchants
are not liable to collect sales tax, but customers may be liable to pay it
under their state law. This is called a use tax:
<http://en.wikipedia.org/wiki/Use_tax>

Exact details vary from jurisdiction to jurisdiction... and in fact that's the
problem this bill is intended to address. A federal framework is necessary to
avoid the problem of being required to track an arbitrary number of non-
Federal frameworks.

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gopi
I am a anti-tax libertarian type and also a affiliate marketer but even i
think its an unfair advantage eCommerce companies have. Creating a nationwide
eCommerce sales tax system is the best way to solve this

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SamReidHughes
But they require no government services from states they're shipping to so
it's unfair to tax them the same.

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jbooth
That's not how taxation works.

Also, presumably the goods they're shipping are traveling on government-
maintained roads, right?

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yummyfajitas
_Also, presumably the goods they're shipping are traveling on government-
maintained roads, right?_

Presumably Fedex/etc pay state taxes in rough proportion to their use of the
roads.

But I suppose that if you don't believe taxes are payments for public goods
provided, but are instead fidelity owed by vassals to their lord, that doesn't
really matter.

~~~
jbooth
The point is that you pay taxes regardless of your personal service
consumption. I don't consume medicaid and I live in a city so I don't see the
work of the Fish and Wildlife dept that much. Tough shit. That's how taxes
work because it'd cost way more than it saved to break out fine granularity at
the billing level.

Fedex pays for their use of the roads? No, they pay for their corporate
income. They have no billing related to their miles driven on federal, state
or local roads (aside from toll roads, which are a minority case).

Spare me the rhetoric about vassals.

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yummyfajitas
_That's how taxes work because it'd cost way more than it saved to break out
fine granularity at the billing level._

Yes - in principle taxes pay for public goods which are provided to everyone
in a geographic region.

But if you paid attention to the discussion, you'd realize we are discussing
entities who _don't exist in that geographic region_. It's actually quite easy
to figure out that I don't owe NY anything and you don't owe Maharashtra
anything.

 _Fedex pays for their use of the roads? No, they pay for their corporate
income._

The taxes they pay to the states in which they do business cover their use of
the roads, no?

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jbooth
>The taxes they pay to the states in which they do business cover their use of
the roads, no?

Yeah, and they cover grade school education, which FedEx doesn't directly use
at all. That was my point about how taxes work.

Regarding your point about regions,

A) The tax is on the consumers, not on amazon.com (or equivalent, proper noun
provided to eliminate pronoun confusion).

B) Whether or not amazon.com 'exists' in that region, they're certainly doing
business in it, no? Otherwise there'd be no taxes to collect. Brave new world,
used to be it was impossible to do business somewhere you didn't have a shop,
mail order was nothing close to the web. That's why tax codes and enforcement
methods need to be updated for the 21st century. It's less competitive and
less capitalist to have different tax codes for the same goods (or even
different goods, IMO, with rare exceptions).

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Aloisius
Anyone want to summarize the bill?

I'm not sure how a federal tax is going to help the states since it seems
highly unlikely that the federal government would hand revenues over to the
states.

Also anyone know the constitutionality of this? I can make arguments that it
is discriminatory taxation of interstate commerce as well as it not being.

Would I get double-taxed if I bought online from a retailer in your own state?
Does it apply only to online or also to mail-order and phone orders?

~~~
hugh3
Also: what about people outside the US ordering stuff to be shipped
internationally?

Fuck, if it turns out the cheapest way to buy something is to have it shipped
from Washington to Australia and then back to California, I'm doing that.

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Pewpewarrows
I'd much rather be automatically taxed at checkout than having to keep track
of all my online purchases year-round when it comes time to file my tax
return.

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abyssknight
Interesting to see Amazon on that side of the fence. If they ask people to
report on their own, it won't happen. As much as I hate the idea of taxes
online, this makes sense -- collect what is already due.

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troutwine
Reading the language of the bill, I'm unsure on one point: what about those
states which do not have a sales tax? Here in Oregon my income tax is slightly
higher but I pay no sales tax. This is good for:

* the poor

* local commerce (we get out of state folks buying)

* tax code complexity

If this bill passes and the "framework" enforces a federal sales tax I will be
most put out.

~~~
jrockway
My guess is that you will get a refund at the end of the year. Of course, now
you'll have to track how much in "taxes" you paid, so you can ask for the
right amount back.

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troutwine
Jolly. I suppose if this bill passes it will provide further incentive for me
to shop locally or, indeed, exclusively--especially as Portland _has_ shops in
which it is a joy to purchase goods. I dislike the further record-keeping
burden it places on each citizen, though that's somewhat par for the course in
the US tax code.

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BillSaysThis
The complexity seems like an opportunity for the Hacker community to build an
open source, web-based tax computation service. Set up a WikiTaxes Foundation
to pay for the servers, devise a simple API, publish sample code for various
languages and there you go, complexity dealt with in one go.

