Posted on 04/16/2009 9:09:31 AM PDT by Snoopers-868th
If a little-known but influential alliance of state politicians, large retailers, and tax collectors have their way, the days of tax-free Internet shopping may be nearly over.
A bill expected to be introduced in the U.S. Congress as early as Monday would rewrite the ground rules for mail order and Internet sales by eliminating what its supporters view as a "loophole" that, in many cases, allows Americans to shop over the Internet without paying sales taxes.
Currently, Americans who shop over the Internet from out-of-state vendors aren't always required to pay sales taxes at the time of purchase. Californians buying books from Amazon.com or cameras from Manhattan's B&H Photo, for example, won't pay sales taxes at checkout time that they would if shopping at a local mall.
"We will have the bill ready for introduction by next Monday," said Neal Osten of the National Conference of State Legislatures. "We finalized the language and now we're working out the remaining issues and adding some new provisions at the request of various stakeholders."
This is hardly a new debate: pro-tax officials and state governments have been pressing Congress to enact such a law for at least seven years. They argue that reduced sales tax revenue threatens budgets for schools and police, and say that, as a matter of fairness, online retailers should be forced to collect the same taxes that brick-and-mortar retailers do.
(Excerpt) Read more at news.zdnet.com ...
One of their biggest objections to the idea of collecting sales taxes on out-of-state shipments is the dizzying complexity of state laws.Take candy, which would seem to be a straightforward item to tax. It isn't. During a 2003 discussion of tax policy, a representative of Indiana, James Turner, noted that a proposed definition of candy would have taxed the Milky Way Midnight candy bar but not the original Milky Way bar.
But further investigation showed that Turner's counter-proposal would have treated "certain flavors of Pop Tarts" and Cookies and Twix Crunchy Cookie Bars as candy--but not Cookies and Snickers Crunchy Cookie Bars. Peanut butter Girl Scout cookies would be candy, but Thin Mints or Caramel deLites would be classified as food.
And that's not to mention other bizarre activities on the part of legislatures such as sales tax holidays, means of payment rules, sales tax caps, and gross receipts taxes.
How are online retailers supposed to keep up with a situation such as when a state declares in May of 2009 that generators less than $500 are to be sold tax-free from June 1st to June 4th in both 2009 and 2010?
The article mentions the Streamlined Sales Tax Agreement idea (you can find it here) as if it were some sort of solution; well, here's section 304 from that agreement:
Section 304: NOTICE FOR STATE TAX CHANGES A. Each member state shall lessen the difficulties faced by sellers when there is a change in a state sales or use tax rate or base by making a reasonable effort to do all of the following: 1. Provide sellers with as much advance notice as practicable of a rate change. 2. Limit the effective date of a rate change to the first day of a calendar quarter. 3. Notify sellers of legislative changes in the tax base and amendments to sales and use tax rules and regulations. B. Failure of a seller to receive notice or failure of a member state to provide notice or limit the effective date of a rate change shall not relieve the seller of its obligation to collect sales or use taxes for that member state. C. Each member state failing to provide for at least thirty days between the enactment of the statute providing for a rate change and the effective date of such rate change shall relieve the seller of liability for failing to collect tax at the new rate if: 1. the seller collected tax at the immediately preceding effective rate; and 2. the seller’s failure to collect at the newly effective rate does not extend beyond thirty days after the date of enactment of the new rate. D. Notwithstanding subsection C, if the member state establishes the seller fraudulently failed to collect at the new rate or solicits purchasers based on the immediately preceding effective rate this relief does not apply. E. Member states may provide for relief of liability for failing to collect tax as a result of a tax change beyond the liability relief required by subsection C.
Note 304(B): "Failure of a seller to receive notice or failure of a member state to provide notice or limit the effective date of a rate change shall not relieve the seller of its obligation to collect sales or use taxes for that member state." Ignorance of any of the tax jurisdictions change of laws (even temporary changes) is no excuse.
they did not actually lose, my understanding is they VOLUNTARILY settled.
oh :( I wasn’t aware of that.
Wait for Congress to unleash fees on Internet access ...look at all the taxes and fees added on your phone bill...mine amount to almost 40% of the basic phone access cost ...including a federal excise tax first imposed to fund the Spanish American War. I see the same thing coming to your ISP fees.
Thanks for providing those points of law. Interesting.
You are right. The real solution is to shrink government and limit its power over our lives.
Got that right! I haven’t paid tax or shipping in years.
Status quo;
Status quo, with the addition of tax parity between Internet and local b&m businesses;
A small reduction in taxes;
A small reduction in taxes, with the addition of tax parity between Internet and local b&m businesses;
An infinite number more similar choices; each involving an infitisismal greater tax reduction; and,
No taxes.
My kids got me Amazon Prime as a gift.
We buy darn near EVERYTHING from there now.
My daughter even buys diapers (3 kids worth) that way, says it’s the best deal going.
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