Power Sellers Unite

elgato · Joined: 24 Feb 2005 Posts: 17235 Location: Texas

Whether you call it a recession or depression, the only way to cope is to cut expenses and eke out more revenue. That applies not only to individuals but also to state governments. Like many of us, states are strapped for cash and struggling with the faltering economy. So who could blame them for being very interested in the research that projects just how much states could gain in revenue if they collected sales taxes on Internet purchases. What does it mean for you, the online businessperson? Chances are that soon you'll have to collect sales taxes from the majority of your customers, not just those in the state where your business has a physical presence.

The movement is already underway. Recently, the state of New York enacted a law that requires big online retailers like Amazon.com to collect sales taxes if they compensate affiliates and publishers located in the state, even if the marketplaces themselves have no presence there. California and other states are considering enacting similar legislation.

In the next few weeks, a bill called the Main Street Fairness Act will be introduced in Congress, according to Neal Osten, Senior Policy Analyst with the National Council of State Legislators, which is helping to draft the bill. Senator Mike Enzi (R-Wyo.) and Representative Bill Delahunt (D-Mass.) are expected to sponsor the bill, which is intended to overturn Quill vs. North Dakota, a 1992 Supreme Court case that concluded states can only require retailers to collect state taxes in territories where they have offices or stores.

The legislation, if enacted, would require all sellers (except small businesses that qualify for an exemption) to collect sales tax on purchases made by residents of certain states. Those are the 23 states that have complied with the Streamlined Sales and Use Tax Agreement. The agreement currently calls for voluntarily sales tax collection; the Fairness Act would mandate it.

more.. link to news article

Hotspur8 · Joined: 05 Aug 2006 Posts: 34 Location: Pasadena, Texas

With Obama at the helm, the passage of this bill is a no brainer. When they say "it's about fairness, not the money", don't believe them. Whenever someone says, "it's not about the money, it's always about the money."

Unfortunately for us online sellers, this law will probably pass sometime with the next month or so. Now is the time to order online, before this bill passes.

Just my 2 cents.

diesel_parts · Joined: 23 Jul 2006 Posts: 723

Someone posted article 1 of the US Constitution which forbids taxing of any kind of items exported across a state line. Do we now burn the constitution and start over?

elgato · Joined: 24 Feb 2005 Posts: 17235 Location: Texas

diesel_parts wrote (View Post): › docWrite("quote")Someone posted article 1 of the US Constitution which forbids taxing of any kind of items exported across a state line. Do we now burn the constitution and start over?

They're just getting started on burning the constitution diesel! Wait until Obama turns off the Internet while the rest of us are battling a somewhat strange flu sweeping through our country not to mention our electrical grids being hacked a couple of weeks ago. :roll:

The terrorists are once again knocking on our door. I just hope someone is listening where it counts.....Washington? Remember we had ALL of the data to alert us to Sept 11, 2001 yet we ignored it. :roll:

Billthebookguy · Joined: 31 Dec 2006 Posts: 410

diesel_parts wrote (View Post): › docWrite("quote")
Someone posted article 1 of the US Constitution which forbids taxing of any kind of items exported across a state line. Do we now burn the constitution and start over?

Those who voted for the current president voted to do exactly that. They are just getting what they wanted.

GregMann27 · Joined: 11 Mar 2009 Posts: 10 Location: Harrisburg, PA

I don't want to get into a political debate here but I actually don't mind this happening. I think sometimes people forget that in order to do things to better a business (or country) you have to spend some money. Personally I have friends that are government workers and their jobs are on the line because of the lack of revenues in their state. Other people might not get unemployment because the money isn't there. I am okay with charging people a sales tax for goods they purchase online when 10 years ago they would have bought the product at a department store and payed sales tax.

I understand why people don't like this bill though. It is yet another change from what has been happening in the past. But remember that most of the laws that we are living under were made when the world was a very different place.

angelsolutions

Very well said, Greg...very well said! (I used to be one of those state government workers too, so I do understand that perspective too.)

Sylvia

Hotspur8 · Joined: 05 Aug 2006 Posts: 34 Location: Pasadena, Texas

From my soapbox:

I think we, as a country, are overtaxed. My wife is a CPA, who does taxes for a living. So I should know about the burdens of taxation. I discuss taxes with her every week. Unless you are one of the uber-rich, like Gates or Soros, you probably don't get by without paying a good portion of your income in taxes. But it's more than income taxes. We pay hundreds of hidden (and not so hidden taxes) every day. Just look at your cable or phone bill. Americans had a tax on our phone bill to pay for the Spanish American War from 1898 to 2006, 108 years after the war ended!

I am a government employee. I am a librarian by trade (working for a city library), yet I do not feel my job is in jeopardy from a lack of taxes brought in by city government. Our city just lost a couple of million it had invested in Lyondell, who filed for bankruptcy. But our city government is still going strong. Sales taxes still bring in a good amount, and property taxes are some of the lowest in my county. (Which is good, because I am also a homeowner.) Overall, I don't think they are ready to cut city jobs. (I also take some small comfort in that the CPA firm wife works for audits the city books every year. She doesn't do it, but she knows the person who does.)

I do feel for smaller towns and cities, whose lack of revenue from internet sales may actually mean the difference between having a library or not. Which is why I try to visit (and support) small libraries when I go on vacation. Support your local library. It is a great resource for those who have internet businesses.

As for the lack of internet tax, I don't buy that it puts brick and mortar stores at a disadvantage. Many of them sell on a website in addition to the storefront, so their out of state customers take advantage of the no tax as well. And for those who don't sell on the web, maybe this would encourage them to do so.

But, in the end, the internet tax will probably pass, and everyone will need to deal with it. I just hope that their is a mechanism in place that will help small online dealers collect the tax, and pay the proper taxing entities without being a burden.

Getting off of soapbox now.

GregMann27 · Joined: 11 Mar 2009 Posts: 10 Location: Harrisburg, PA

I agree with you that we are taxed a lot and the amount of government waste is ridiculous.

It is great that your city isn't in trouble. I know the state I live in is having budget issues and positions are going to be eliminated come June when the new budget needs passed.

Will the sales tax help this? Maybe..maybe not. I don't know enough about this to offer an opinion. I know there is a lot of money lost each and every year from people who buy online and don't pay tax. Many people don't realize that each and every citizen that buys tax free online is supposed to pay the sales tax in April when you do the rest of your taxes. And most people that do know this still don't do it. And it isn't going to change.

As for your other point about it not hurting the brick and mortar places....your right it surely isn't hurting the big box retailers at all. But the mom and pop stores on the corner...its hurting them. Some of those places are barely making it as is so if they lose a few dozen sales a month it might cause them to close.

Should they go online? Maybe, but to some they don't have the time, money, or knowledge to do it. And is that going to help? In order for a company like that to sell online and make their difference it is probably going to cost them money to do it and that just puts them further behind. Not everyone buys online...actually most people don't....so it doesn't make sense on that small a budget to take money from your physical store and convert it online with the hopes that you can make up the difference.

But you are definitely right...we are taxed a lot. And it is ridiculous. There is so much government waste in to positions and programs that we could probably lower the taxes if it all got fixed...but unfortunately it isn't getting fixed anytime soon.

This wasn't intended to be that long. Sorry.

diesel_parts · Joined: 23 Jul 2006 Posts: 723

Everyone should live within their means. The politicians squander billions of dollars unnecessarily then turn to the little taxpayer to get more. The american taxpayer isn't getting a lot of bang for his buck unless you consider roadside bombs.

The founding fathers knew there would be greedy politicians trying to tax interstate commerce and thgey put up safeguards against that. Violating the constitution is worse than violating the other laws. The constitution is the foundation of our country.

We had rights under the constitution that were the envy of the world. They are being stripped away one by one. I remember when there was no sales tax at all. Businesses were more profitable and the country was growing. Every tax, rule or regulation by the government impedes progress and free enterprise.

I am amazed that people concede their inherited rights so easily. Soon there will be no more rights to concede.

GregMann27 · Joined: 11 Mar 2009 Posts: 10 Location: Harrisburg, PA

Good points all of them. I would say though that even a country has to evolve and adapt. When they wrote the constitution the country was much smaller and there were less things to take care of and worry about. At the time who could have predicted the changes that we have seen.

In order to pay for the technology and advances in culture that we have seen you have to pay for it. One example would be roads. When they wrote the constitution there was probably no consideration given to the creation of roads let alone all the work that it takes to provide upkeep. So they didn't consider how much it would cost to maintain, upgrade, and create them. So when they came along they had to raise taxes to pay for them. The same thing can be said across numerous advances in technology.

There are countless advances that we as a country have been a part of. And that stuff is only getting more and more expensive. People want the best. People here in PA whine and cry about how bad the roads are but yet they don't want them to turn into toll roads or raise taxes to pay for them.

There are problems in this country that are obviously wasting much of the money. Programs that have been outdated or useless for some time now that we are still pumping money into. I mean look at NASA. They get billions of dollars to build a spacecraft to see if Mars ever had life. Really? What do I care? Sure NASA does plenty of useful things with satellites and communications and thats fine but do we really need to invest in a space shuttle that costs billions to test Mars?

Sometimes I think people forget that the constitution was written over 200 years ago. Things change. The world is a completely different place then it was then. Heck this country has changed hundreds of times since then. Everything needs to evolve.

CuFF · Posted: Fri May 01, 2009 9:26 pm Post subject:

But remember that most of the laws that we are living under were made when the world was a very different place.

Violating the Constitution is unlawful, period. There are steps that must be taken in order to change laws. Steps that were put in place to protect all of us.

Obama is used to being on the fast track, always taking short cuts to what he wants. Disregarding the Constitution is a path he should avoid. Americans will only take so much before there's an uprising.

DaLizardsLair · Joined: 15 Feb 2009 Posts: 4780

Here in Michigan, there has been a requirement for people to pay a 6% Usage Tax on all out-of-state purchases. While they base collection on the honor system, the penalties are currently 1000% of the tax owed, if caught not reporting it.

Again, here in Michigan, where the unemployment rate is the highest in the country, libraries are being closed on a routine basis, since many local governments don't have the money to continue funding them. Along with libraries are museums, state parks and a long list of other amenities.

State tax revenues are down due to the high unemployment. Gas tax revenues are down due to people driving less, so there is much less money for maintaining the roads. Since the schools here are funded primarily by 2% of the Sales Tax, funding is in jeopardy since people are only buying items that are needed. The list just goes on and on. About one Billion dollars from the Economic Stimulus money from Washington may end up being used to fund the current deficit in the state's budget.

In Macomb County, the 2nd richest county in Michigan, the County Board of Commisioners just voted 16-10 in favor of raising property taxes, for the first time in over 30 years. Their reasoning was simple...they had made pretty much every cut they could without laying off some 60% of the county employees, which would have included the police department. The amount of the increase would be roughly $27 per year for a home valued at $150 thousand dollars.

So yes, I do understand the logic behind the states wanting to collect taxes on purchases. And I can also fully understand the burden this will place on the small online retailer. Having to collect sales tax information for every state AND city (yes, some cities have their own sales tax) and then reporting them on a quarterly or yearly basis is going to be a major problem for many. There was software created a few years back, that was supposedly going to either take care of that problem or provide a means for the retailers to handle it.

I am one among many who hope that this bill does not become law, but at least I can understand why it is happening.

DaLizardsLair · Joined: 15 Feb 2009 Posts: 4780

diesel_parts wrote (View Post): › docWrite("quote")Someone posted article 1 of the US Constitution which forbids taxing of any kind of items exported across a state line. Do we now burn the constitution and start over?

Article 1 refers to FEDERAL taxing. States have the right to impose Usage Taxes on purchases from out of state, and the Main Street Fairness Act simply requires retailers to follow the law for ALL localities.

Many large corporations have done so for quite some time. I remember getting Records, and later Compact Discs from Columbia House and being charged Michigan's Sales Tax for them, even though Columbia House was located in Indiana.

So there is no violation of the Constitution here.

diesel_parts · Joined: 23 Jul 2006 Posts: 723

You should read on down. The states have no authority to impose a use tax. The feds can't grant it because it is unconstutional. The supreme court will have to throw it out or rewrite the constitution.