http://story.news.yahoo.com/news?tmpl=story&u=/nm/20030917/wr_nm/congress_internet_dc_6 Why do businesses that conduct their transactions over the internet deserve a break?
Umm, any tax is passed on the customer, so who really is getting the break? They just raised the state sales tax in Ohio, so I charge the new higher rate, I still pay that tax to the State every month. Who got screwed? Not me. The key here is the states' ability to tax something new. Seattle just downed the "Latte tax" that was positioned to "help the kid" by linking it directly to such programs. The Congress thanks to the leadership of Al Gore created the internet and they want to keep it tax free. Yea! Besides, you think the states need a new revenue source when they don't know what fiscal restraint is all about? While they are at it, they should address the "Free Porn" issue. We all know that it ain't free as advertised half the time.
For an Idaho perspective....I don't know if I would classify collecting sales tax on products purchased from out-of-state merchants as "new". By law...you are required to submit a 5% sales tax on items purchases via "mail order, Internet and other nontaxes purchases"...it's right there in black and white on the second page on the Idaho individual income tax return. It's been on the books for as long as I've been here. Using income tax data from 2001 for married/joint returns (it's the latest that has been released by the Idaho State Tax Commission), the amount collected from these sales totaled almost $135,000. For othe filers: Single: $51,437 Married but seperate: $634 Head of Household: $4,225 Widow: $0
> Umm, any tax is passed on the customer, so who > really is getting the break? The internet company is, compared to local merchants. The customer is getting a 9% discount over items bought in a San Jose store, so the local stores suffer more.
If shipping is free, then yes. But, then again, this is how the free market works, right? It is like buying cigarettes before visiting NYC. If you don't you'll be paying about $8. It is like going to Canada to buy goods. It only works of you live near the border. I think your anger is misplaced or the wording is incorrect. Internet businesses are not getting a break, they are getting an advantage over local businesses. Then again, some potential consumers are not being satisfied or their needs met. Also, you could consider the folks who go out of their way to buy locally or enjoy the face to face interaction. Most older folks will never get onto the internet bandwagon anyway. Also, if you re-read the article you posted, the local tax issue is to be addressed by the simple fact that the Senate bill is in direct conflict with the House. Look at it this way. I do business all over the USA. I am based in Anytown, USA. If I am forced to collect local slaes taxes for every single community where something is shipped, then I'd be rather busy setting up accounts with local agencies, paying them, etc. I think an internet based company would have to collect their own local taxes, and if you think it is unfair to play their local tax which seems to be a lower rate than San Jose, then go ahead and complain. I don't think it holds much water because that area of California is soooo over over (sales) taxed and the cost of living is so high anyway. You could buy something (including your local tax) cheaper on the internet based on local economic forces. Besides, California seems to have more fair (ie: less) property taxes than Ohio. It is like a person that works in one city and lives in another. Happens all the time, but who gets a cut out of your check? The city where you work? Taxation without representation? Oh, the potential services and roads you use to get to work are enough reason to tax? I happened to have an accountant who used to tell me that cities have no US Constitutional right to levy taxes in the first place. Since it is an internet transaction, where does the sale occur? I'd say since I am in Anytown, the sale is completed in Anytown. I like your thinking, but I doubt the Congress will spend enough time to get this issue correct.
Spejic, why do you hate our freedoms? Why? Why? Seriously, the Internet is the great equalizer. It allows small mom-and-pop outfits to compete with the Walmarts, etc. These small businesses may not have the means to levy and collect taxes on their customers without adding a lot of additional costs that they may not be able to bear. So, by encouraging Internet purchasing you are enabling the lean and efficient small businesses over the largesse of the multi-national corporations. You would be driving a lot of small-time operations off the Internet, leaving the behemoths, who will then set the price for their products rather than having them to compete.
State taxation is based entirely on nexus or presence in a state. They can't figure out how to tax Internet sales. Unless I'm mistaken, there are no sales taxes on out-of-state catalog sales either. The Idaho tax system mentioned above is not a sales tax, but a "use" tax. Use taxes apply when a retail purchaser uses property in his/her state of residence that were not taxed by the state where the goods were purchased. It is largely unenforceable (unless it is property that has to be registered, like a car) and is almost voluntary, which accounts for the whopping $135k that Idaho collected from joint filers.
Re: Re: House Votes to Make Ban on Internet Taxes Permanent Becuase I am a facist. How? Walmart sells stuff cheaper than the mom and pop stores can buy it wholesale. Mom and pop stores are not more efficient than big companies. And they certainly can't compete with the Amazons (that don't care if they never make money) or Walmarts (who leverage already existing storage/databases/volume buying) or Safeways (which lose money on internet delivery but do it to gain customer loyalty). They only compete by handling niche markets that the big guys don't want. No, I'd be making a market for someone to come up with a boxed solution for handling taxes, just as people already sell solutions for other aspects of web sites. It is the inevitable result of capitalism that causes behemoths run over the little guys.
This tax was only for internet connections, not on taxes for the sale of products and service sold on the web.