I work for an online retailer...midsized...and this would be a nightmare.
Already we collect state tax, with 67 different counties in our state, and many counties charge different sales tax so our program varies the tax according to the county.
Imagine programming costs for 50 states not to mention if they have different rates for different counties, as our state does.
But what no one can answer, even about the state sales tax we collect...how is it redistributed to the individual counties.
And nationally, when tax is collected for different states, how is it distributed back to the states, or if the feds step in, will it just go in one huge “lock box” (haha) for the feds to redistribute to each state as they see fit.
Add a whole new level of bureaucracy to figure out how much is collected for each state. Every purchase online would have to be tracked as to location of buyer, tax rate of that particular state and/or county, Reports submitted to the “collecting” agency as to what tax came from sales in which state. And then how is the money going to be redistributed back to the states...anybody know?
Dealing with the state tax agency is problem enough, add to that the cost of programming, and probably hiring another person just to deal with sales tax issues would definitely hurt businesses like the one I work for.
They’re already taking a hit with Obamacare, how many hits before these businesses start going out of business due to the cost of doing business. Or each buyer is the one ultimately paying because costs will be raised to compensate for the extra personnel needed to implement the tax collecting.
Imagine every brick and mortar asking each customer what state they live in, then collecting the rate of the tax in that state, and keeping it all straight...preposterous, of course. They collect the rate of tax from the state and county they’re in. But they’re asking online businesses to essentially track every customer’s data to determine their sales tax.
The big brick and mortars do it (like Walmart, etc.) Amazon has resisted. But I think it’s a tactic, as you said, to drive the medium and small sized online retailer out of business because of the programming and reporting costs.
And nationally, when tax is collected for different states, how is it distributed back to the states... Add a whole new level of bureaucracy to figure out how much is collected for each state...
Dealing with the state tax agency is problem enough, add to that the cost of programming...
Imagine every brick and mortar asking each customer what state they live in, then collecting the rate of the tax in that state, and keeping it all straight...preposterous, of course...
That's already the kind of issues that retailers that have several stores, even in the same state but in different counties or even in different cities which have their own different sales tax rates, some of them "special" or "temporary," already have to deal with - the expensive programming and reporting nightmare, every time sales tax changes happen in one of their "presence" locations.
But at least it's done only on a one-location-one-tax basis, which doesn't even begin to address the shipping to other states or countries which online businesses often do.
But I think it's a tactic, as you said, to drive the medium and small sized online retailer out of business because of the programming and reporting costs.
Yes, it will disproportionately benefit large online and integrated b-a-m/online retailers at the expense of small/midsize e-tailers and b-a-m retailers.
Unfortunately many Republican single-store b-a-m proprietors don't understand who and what really behind it and think it's a "fairness" issue and may benefit them, without realizing that it's simply a transfer of money from their potential customers (who will have less money to patronize their business) and will make it more expensive for them to do business with potential customers in another state.
This is a large merchants' and states' protection/enrichment power grab, at everyone else's expense.