Internet Sales Taxes
The Senate will begin debating a bill which would allow states to require Internet retailers to collect sales taxes. Currently, states can require online retailers to collect sales taxes only if the retailer has a “physical” location in that state.
This current situation gives Internet retailers a huge advantage over their bricks-and-mortar competitors. And as anyone who lives in or near an urban area knows, we need our bricks-and-mortar shops to survive if we don't want even more downtown areas to go belly up.
A lot of Republican senators are in favor of this bill. So are most governors, Democrat and Republican. Even Amazon.com — probably the main reason this bill is needed — is in favor of it. An Amazon spokesman said:
“Amazon.com has long supported a simplified nationwide approach that is evenhandedly applied and applicable to all but the smallest volume sellers.”
The bill was sponsored by Senator Mike Enzi (R—Wyoming), who said:
“I believe it is important to level the playing field for all retailers. We should not be subsidizing some taxpayers at the expense of others.”
Dan Crippen, executive director of the National Governors Association, said:
“It's a matter of equity for businesses. It's a matter of revenue for states.”
The House is less favorable to this bill. It’s opposed by eBay — ya think? — and by Heritage Action for America, an activist offshoot of the Heritage Foundation. Heritage Action for America has warned congress that it will be counting votes and keeping score.
OOOOHHHH!!!! In other words, anyone who votes for this piece of communist claptrap will get primaried by a Far Right Teabagger; and said Teabagger will then go on to lose the general election to a Democrat.
The main argument against an online sales tax is that it’s too burdensome for small online retailers, and too overwhelming to grapple with the different sales tax rates in thousands of jurisdictions.
To this argument, Dick Durbin pointed out that if this law is passed, states will be required to provide online retailers with free software that calculates sales taxes based on where a shopper lives. He said:
“We're way beyond the quill pen and ledger days. Thanks to computers and thanks to software it is not that complex.”
posted by Tom Harper @ 10:57 AM
9 Comments:
“It's a matter of equity for businesses. It's a matter of revenue for states.”
Ah yes, it's all about bidness, isn't it?
What about the poor and the elderly who don't have computers, tablets and smart phones? They're stuck paying local sales taxes for everything. As a matter of equity, that doesn't seem to be on the honorables' radar at all.
I will admit I like not having to pay sales taxes on some things I buy online, but I also realize it can be unfair for local retailers and could lead to them disappearing. So, I'm conflicted. Especially so because Washington state is so regressive it has no income tax, meaning consumers are taxed heavily on purchases of most kinds. This, too, weighs heavily on the poor and those on fixed incomes.
I see another fly in the ointment for this: online sales from Hong Kong, maybe Canada, Mexico and China, too, are likely to flourish at the expense of eBay, Amazon et al. Eventually, Uncle Sam will slap taxes on personally imported goods, but it will take awhile. In the meantime, U.S. online retailers will see the rise of powerful foreign competitors they don't have now. Will that be helpful?
“Even Amazon.com — probably the main reason this bill is needed — is in favor of it.”
BULLSHIT!
When California tried to pass the law here for years, Amazon sent armies of lobbyist to defeat it, even threatening to move all of their operations out of the State.
However California Republicans had their hands tied, they couldn’t blame this one on the “tax and spend”, “Anti-business” Democrats because the main support from this bill came from the small business they always claim to worship as well as the Big Box stores.
As I’ve said in the past “I love watching Billionaires fight!”
Even after it passed, Amazon begged and got a year in which to implement it!
Nationally this will take off Amazon and other on-line retailer’s advantage, they may have to re-think their gouging shipping charges!
Erik
OOOOHHHH!!!! In other words, anyone who votes for this piece of communist claptrap will get primaried by a Far Right Teabagger; and said Teabagger will then go on to lose the general election to a Democrat.
I gotta smile when these folks get their dick in the wringer.
SW Anderson: I believe there is a customs tax, but in this country it isn't too horrible. Some other countries have pretty harsh customs taxes where you end up paying a flat fee plus a percentage of the items' value even on things worth like $30.
I don't know the exact ceiling that the US has, but it's definitely pretty high...free trade and all that I suppose.
And would the cost of having something shipped from Asia outweigh having to pay sales tax? I suppose it depends on what you're buying.
SW: I think an Internet sales tax would be particularly beneficial -- in terms of leveling the playing field -- in Washington, since we have a sky-high sales tax and no state income tax.
Concerning online sales from foreign countries, I think Ikaervek (the 4th commenter) has a good point. The shipping costs would probably outweigh the lack of a sales tax.
Erik: Interesting background on Amazon. The linked article mentioned that Amazon had previously been opposed to online sales taxes, but didn't go into any detail.
Yup, "watching billionaires fight" is a gas. I'm looking forward to the slugfest between eBay and Wal-Mart over online sales taxes. And maybe Amazon will flipflop again.
Life: LOL. Let's hope that wringer is wringing on overtime.
Ikaervek: I agree, shipping costs would probably cancel out the sales tax savings on imported items.
The impact of shipping cost does hinge on what you're buying. Smaller and lighter is generally better.
If you want to buy a lithium ion camera battery, the price plus shipping is much less from Hong Kong (or elsewhere in China) than from U.S. online sellers, and several orders of magnitude cheaper than from a brick-and-mortar retailer here -- and that's before sales tax. This would be fairly typical: H.K. seller, $3.99; low-cost online seller, $6.99; and local shop, $18.99. Free shipping for the first two, shoe leather express and your gas for the local store.
Much of the price difference is not shipping. It's overhead and markup.
Tom?
Jumping Jack Flash is a Gas, Watching Billionaires fight is fun
Erik
My guess is that taxing Internet orders isn't going to change things much except in that we have higher taxes.
Here is a true story:
I have cats. I went out to look for a heated cat bed for my elder cat, who has arthritis and greatly appreciates heat. NOT A SINGLE PET STORE IN A MAJOR METROPOLITAN AREA HAS ONE. They're not even willing or able to *order* one because their distributor doesn't carry them. So I ordered one from Amazon.com
Next up: One of my cats figured out how to raid the automatic cat feeder by jamming his paw into the workings and wiggling it a certain way. I go to a pet store to buy a different kind of feeder (I need the automatic feeder because one of my cats has an eating disorder and needs small regular meals, which I can't do manually because I have to work for a living). There is only one feeder there -- the exact same one that I already have. The lady tells me, "there's only one distributor of pet supplies in this area, and this is the only automatic feeder he sells. I suggest going online and buying one on the Internet." Guess what I'm about to do?
In neither of these decisions was taxes even the slightest consideration. In general shipping charges are about the same as what taxes would be, so that's not why I go to the Internet. Furthermore I'd prefer to buy local because of instant gratification -- buying then waiting is a PITA. So why do I go to the Internet? I go to the Internet *BECAUSE THESE SMALL LOCAL BUSINESSES SUCK AT ACTUALLY PROVIDING ME WITH THE GOODS I WANT*. Period. And no amount of attempting to tax Internet commerce will change that.
The advantage online retailers have is in selection, not in saving a few bucks on taxes.
And it's simply amazing that in this "debate", nowhere does the burden of shipping costs that all online retailers must incur come up.
How about the advantage local retailers have? A consumer doesn't have to wait a week to get what they ordered.
What this boils down to is a cash grab by the government, as well as a massive amount of lobby bribes from large retailers such as WalMart and even Amazon, to place more burden on their competition. Amazon already has to charge sales tax on a growing number of states because of their warehouses. They've done a complete about face and no longer oppose collecting sales tax as it doesn't benefit them in any way to do so.
What's really amazing, is that it's somehow completely acceptable to make the nation's businesses also the nations major tax collectors. And for online retailers, that amounts to 10,000 taxing jurisdictions.
That is just crazy.
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