E-tailers and sales tax

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kiryan
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E-tailers and sales tax

Postby kiryan » Thu Mar 17, 2011 6:45 pm

http://online.wsj.com/article/SB1000142 ... tions_tech

I don't know how to feel about this. So we all know that if an online company doesn't have a store in your state, you don't have to pay sales tax when buying things online.This is an interesting problem and question.

There is obviously an unfair business advantage if one type of company has to collect sales tax and another type doesn't have to... on what amounts to the same action (making a purchase).

On the other hand, there is a legal responsibility for people in a state with sales tax, to pay the tax on their purchase (None do, California says only 1% voluntarily pay the tax).

The problem really boils down to enforcement... and to state rights... The state being harmed has no jurisdiction over companies in the state of the retailer. So this is really a problem that probably should be solved in federal government and courts.

While you could make the case that states can solve their problem simply by going after their residents who don't pay their tax as required by law... the state can really only do that if it knows who bought stuff... So they would almost need banks and retailers to send them a list of your transactions (man privacy issues)... and you still again end up with the problem of trying to "force" a company in another state's jursidiction to do something (a federal problem).

Not sure if you can take the traditional approach either... For example "licensing" e-tailers... which is how they keep local businesses inline (obey the laws or we take your license and shut you down). Could you license etailers and if they don't file they can't sell to your state's residents? (you could determine this primarily by looking at where you're shipping the item, obviously not perfect).

In principle, I think the playing field must be leveled. I think federal law must cover how this all works, specifically I think federal law should allow states to collect sales tax... whether directly or through some sort of information sharing.

Now my problem is the further loss of privacy... especially in the case of sharing information. Additionally I think this represents a further entrenchment of the idea of the ownership of people by the state. Sales tax laws basically establish an ownership interest in any transaction of its residents. Other states can't siphon off any of those taxes through things like online retailers. What it all boils down to is you're a cow and some other state is getting some of the milk.
Pril
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Re: E-tailers and sales tax

Postby Pril » Thu Mar 17, 2011 9:27 pm

kiryan wrote:http://online.wsj.com/article/SB10001424052748704396504576204791377862836.html?mod=WSJ_hpp_sections_tech

I don't know how to feel about this. So we all know that if an online company doesn't have a store in your state, you don't have to pay sales tax when buying things online.This is an interesting problem and question.

There is obviously an unfair business advantage if one type of company has to collect sales tax and another type doesn't have to... on what amounts to the same action (making a purchase).

On the other hand, there is a legal responsibility for people in a state with sales tax, to pay the tax on their purchase (None do, California says only 1% voluntarily pay the tax).

The problem really boils down to enforcement... and to state rights... The state being harmed has no jurisdiction over companies in the state of the retailer. So this is really a problem that probably should be solved in federal government and courts.

While you could make the case that states can solve their problem simply by going after their residents who don't pay their tax as required by law... the state can really only do that if it knows who bought stuff... So they would almost need banks and retailers to send them a list of your transactions (man privacy issues)... and you still again end up with the problem of trying to "force" a company in another state's jursidiction to do something (a federal problem).

Not sure if you can take the traditional approach either... For example "licensing" e-tailers... which is how they keep local businesses inline (obey the laws or we take your license and shut you down). Could you license etailers and if they don't file they can't sell to your state's residents? (you could determine this primarily by looking at where you're shipping the item, obviously not perfect).

In principle, I think the playing field must be leveled. I think federal law must cover how this all works, specifically I think federal law should allow states to collect sales tax... whether directly or through some sort of information sharing.

Now my problem is the further loss of privacy... especially in the case of sharing information. Additionally I think this represents a further entrenchment of the idea of the ownership of people by the state. Sales tax laws basically establish an ownership interest in any transaction of its residents. Other states can't siphon off any of those taxes through things like online retailers. What it all boils down to is you're a cow and some other state is getting some of the milk.


I would say to use the billing address rather then the shipping address.
The best of WTF statments of '06
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Danila group-says 'afk, koala bear trying to mount my car'
Teflor Lyorian
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Re: E-tailers and sales tax

Postby Teflor Lyorian » Fri Mar 18, 2011 3:34 am

Citizens are still supposed to pay sales tax in their state. We're supposed to report and pay our sales taxes when we do business with someone out of state.
"You see, the devil haunts a hungry man.
If you don’t wanna join him, you got to beat him."
- Kris Kristofferson (To Beat the Devil)
Corth
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Re: E-tailers and sales tax

Postby Corth » Fri Mar 18, 2011 8:13 pm

You will likely see a lot of enforcement action against retailers by the states in the coming years. New York has forced Amazon.com to collect sales taxes even though there are no Amazon facilities in NY. I believe Texas was doing that as well.
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth

Goddamned slippery mage.
kiryan
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Re: E-tailers and sales tax

Postby kiryan » Fri Mar 18, 2011 8:55 pm

How did NY pull that off?

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