Skip to comments.Online sales tax to be added to defense authorization bill [Goodbye Internet Sales]
Posted on 12/06/2012 11:10:02 AM PST by Red Badger
This may be the last Christmas of online shopping without paying sales tax.
A proposed online sales tax has been offered as an amendment to the National Defense Authorization Act, much to the ire of opponents.
The Computer and Communications Industry Association, a group that opposes this move, says that an online sales tax will burden small businesses, some of the most promising candidates for future economic growth.
This proposal, and other online sales tax collection proposals like it, would allow states to penalize the innovative e-commerce business model by targeting small online businesses as convenient sources (and collectors) of revenue, said CCIA President and CEO Ed Black.
The Marketplace Fairness Act, and its House counterpart the Marketplace Equity Act, seek to clarify, and arguably overturn, a 1992 Supreme Court ruling that requires retailers to have a physical presence in a state in order to collect sales tax on goods.
Severing the relationship between taxation and physical presence would be a fundamental transformation in how we consider taxes, Black continued. Such a significant step deserves more extensive consideration than attachment to the unrelated Defense Authorization bill.
Still, a recent poll indicates that the majority of Americans support the idea, describing an online sales tax as common sense. They also feel that a tax for online purchases would encourage people to buy local and keep tax dollars in their community.
Local retailers invest in their communities and play a significant role in the overall quality of life in the places we call home, said Betsy Laird, senior vice president of global public policy for the International Council of Shopping Centers.
Collecting the tax across state lines however poses as a challenge for small businesses that sell their goods in multiple states.
It is not the job of small businesses to collect taxes to provide tax revenue relief for state and local governments outside their jurisdiction, Black said, suggesting that an online tax would protect existing businesses at the expense of consumers and growth.
Some Republicans are on board, with Wyoming Sen. Mike Enzi as the most overlooked tax loophole.
We are optimistic that once the Marketplace Fairness Act is brought for a vote, it will have enough support to pass, said Illinois Democratic Sen. Richard Durbins spokeswoman, Christina Mulka.
Both Sens. Durbin and Enzi have offered the bill as an amendment to the National Defense Authorization Act.
Sen. Durbin is focused on working with his colleagues to try to get a vote on the bill before the end of this year, whether as a stand-alone bill or part of a larger piece of legislation, Mulka said. They are keeping all options on the table at this point.
Read more: http://dailycaller.com/2012/12/04/online-sales-tax-to-be-added-to-defense-authorization-bill/#ixzz2EIfvANTs
A computer program will handle the taxing. Tax it to the billing address of the person buying.
Right or wrong, this will happen.
Sounds like a business opportunity for some aspiring programmers:
New! Quick Sales Tax! All the states and U.S. Territories! Updated automatically!..................
Let me see if I’ve got this straight, you are of the opinion that because people don’t pay their “use” taxes to their states, small businesses who have a small internet presence should be required to calculate and remit sales taxes to thousands of different jurisdictions?
What about someone like my SIL who’s shop in Delaware does some online sales........Delaware has no sales tax, so they are not set up to deal with collecting/remitting sales tax - but it’s OK with you they would have to incur a huge expense to do this or just shut don their online presence?
You see this as a good thing?
I hear you. Hence my comment about letting it stand on its own merit. If they truly thought they had the votes, they wouldn’t be attaching it, they’d let it ride solo. They know they don’t, so they’re piggybacking it. It’s an outrage. Next they’ll be introducing 10-289.
I was thinking of that too, being in a PA county tht chrges more than the state norm of 6%.
I’m with you on that!
If the damn government CAN extract our money from something, THEY WILL.....
Once they supposedly give the UN “control” over the internet, I wonder if they’ll want a piece of the action too. It would almost be fun to have a bunch of those ‘blue helmet guys show up at the house’ to collect for non-payment, so the family(and neighbors) could have some live target practice!
Sadly, they will probably do this badly.
First, they will exempt businesses with less than “X” dollars of sales. That will take care of a lot of the business.
If they were smart, they would then put into the law a requirement that states have to sign up to be part of this new program, and that in order to sign up, the state has to provide an online resource that will provide current tax rates by zip code.
Or the law can require that the state set a single rate for this type of collection, and the money is remitted to the state, who can then figure out how to send parts of it to jurisdictions within the state.
It’s not like we live in the horse-and-buggy days. If you are doing internet sales, you have a computer and internet access, so it should be trivial for a state to set up a web-based server that will provide tax rates by zip code.
Same thing for the Real ID Act which has been a mess. Sensenbrenner wanted it and no one else did and he mentioned it will be attached as a rider that must pass. Bills should be single topic in Congress like in most state legislatures.
If it has enough support to pass, let it stand on its own merit and don’t piggyback it off a defense bill.
Of course they are. Because small business people exist, like all the rest of us, to serve the state. Right, Comrade ?!
International Council of Shopping Centers wouldn't be too skewed now would it?
In your specific example, the tax would be collected based on California’s sales tax for where the product is delivered.
I would expect that they would use product shipping address to determine the locality for purpose of calculating the sales tax.
Your example is interesting because you are buying something for someone else. In a brick-and-mortar store, there is little ability to collect sales tax based on where you will use the item. So, if I buy something in DC and bring it home to Virginia, I’ve paid DC sales tax.
Virginia law requires that if I buy something in a state that has a lower sales tax than our sales tax, I am supposed to pay the tax on the difference — IF I am buying something to bring into the state. I think pretty much everywhere I’ve bought things has had higher sales tax than Virginia, so I’ve pretty much ignored that.
But obviously 0% is less than 5%, so I do pay the Virginia sales tax on all my online purchases if they weren’t already collected, unless the purchase was a gift for someone in another state.
I wish Amazon would make this easier; I have to pull up each invoice to see whether they collected sales tax or not. They could give me a page view that showed every invoice with the dollar amount and shipping and sales tax, all in one table. But I could also just fill out my spreadsheet during the year.
When this law is passed, I will no longer have to do all that work, nor will I have to fill out an extra tax form every year. So for me, this change is a good thing. But that is only because I already obey the law and pay the taxes due.
For those who do not, and who don’t buy from companies that already do business in their state, this will be a change. But on the upside, they will no longer be committing fraud each year when they sign their tax forms swearing under penalty of perjury that they have reported all taxes due (at least in Virginia, since the use tax is on the income tax form).
Slowly but surely we are being strangled.
Maybe just tax porno sites. Those are the sites most frequented by congress and staff.
Come on guys you know Boehner will never let this get through.
But this is for national defense....................
Nobody is for an “online sales tax”.
On the other hand, ask people if they support making all people in their state pay the same sales tax they do, it gets a lot of support.
And if you ask people if they support legislation that will help crack down on tax cheaters skipping out of the state sales tax they owe, even more people support it.
And since this legislation will not be a “new tax”, but rather a new collection capability for an existing tax, the 2nd way of describing it is more accurate.
Of course, it is possible the democrats could make it into a tax, and then have some bizarre remittance scheme to states, and then they would easily be able to implement a federal sales tax using an amendment to the law.
That couldn’t happen if conservatives worked hard to support a bill that did nothing more than provide a better way to ensure compliance with existing state sales tax laws. But since conservatives are mostly working hard to make it easy to cheat on their taxes, I fear that the democrats will screw this up.
You’ve already gotten your wish - Amazon agreed to collecting and remitting VA sales tax next year.
This forum is beginning to look like DU every day.
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