If your state has a sales tax, you are supposed to pay it now. Most people don’t know that, or have no idea how to pay. So if you order something from Amazon, and don’t pay the sales tax, you are breaking the law.
But this will not help local stores. I went into Best Buy last week, and it was like a ghost town. The local electronics store went belly up last year. Even with sales tax, they couldn’t compete. To much overhead.
What? You don’t think Best Buy has an Internet Store?
TT
At least some states (probably all the major ones?) now have a line on their State Income Tax return for taxpayers to report sales tax due on items purchased out of state. IIRC, Illinois, for one, made significant note of this in the instructions when it was added to the IL-1040.
According to reader comments I read in WSJ Online, there is software out there that makes the calculations fairly easy for operations with automated online ordering setups. But from experience I know that not all online sellers work that way (automated ordering). I also do not know how expensive the software for the tax calculations is, or how easy it is to integrate into systems most medium size sellers have presently in operation. Surely some Freeper who has direct experience in Internet sales can comment?
It is true that many medium and small size operations selling on the Internet are working with razor thin margins, so $1 million in sales could translate into very little extra money (and time is money) to address the new tax law.
Government never seems to realize: It is not usually any one regulation, tax, etc., that is the big problem. It is the accumulated weight of them all that crushes business activity and job creation.
I think that the larger issue is that this is yet more money taken out of the private sector. I would also guess that the taxation itself will prove to be mildly regressive in nature, excepting perhaps very poor persons and those who do not have internet access. In the end, I could probably accept this law if it was balanced by tax reductions elsewhere, but of course it will not be.
I'm not torn about this. If this passes the House, they have now put a cap on every small business in the country. Any who dare reach for a million dollars in sales will now have to think twice about if that's a good idea or not. It takes about 25 minutes to handle all the digital paperwork for filing California sales taxes for our business, and each time it is done at a loss, not only in time, but also in money, as our business pays high fees for transactions, and that includes the money collected for sales taxes.
To do that for each tax jurisdiction? Won't do it. Can't even come close to affording spending two days filling out sales tax paperwork. So if our sales reach $995,000, we will shut down for the year, everyone goes home until the next year.
Every new law creates yet another hurdle for small business to grow into a large business. The amount of regulation that hits a business that reaches 50 employees is massive now, and absolutely no incentive to grow past that point. So let's call these laws what they REALLY are: Protectionist laws to keep others from growing enough to compete.
At the core, that's what this really is. Amazon's big enough to absorb these costs (even though they rarely post a profit.) So is Apple, so are others. But they and the senate just emptied the bleachers of competition. Marketplace fairness for already big business who feared competition from below.