Power Sellers Unite

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

"The Surge to Impose Online Sales Taxes"

Amazon tax fever is spreading. In the months since a New York State law took effect that imposes sales taxes on products promoted through Web sites based in the state, other governments have moved to get in on the action, and online retailers aren't happy.

Last year, New York became the first state to pass legislation requiring large Web-based retailers, including Amazon.com (AMZN) and Overstock.com (OSTK), to collect state sales taxes on products promoted through affiliated state-based Web sites. Cash-strapped states across the country are mulling similar legislation and a federal online-sales tax bill that may be introduced in Congress could be signed into law as early as this year.

The growing impetus for taxes on online goods has touched off a flurry of lobbying activity and lawsuits from online retailers hoping to defeat legislation that would take away some of the price advantage they enjoy over brick-and-mortar retailers. ""We'll do everything in our power to assist our sellers so they are not harmed," says Tod Cohen, deputy general counsel and vice-president for government relations at eBay (EBAY). "We want to make sure than small businesses aren't strangled in their cribs."

State Sales tax collections are down
States and local governments hope sales taxes would help them recoup part of the revenue lost amid a recession that has diminished property values and crimped demand for items sold in stores. In the fourth quarter, state sales tax collections dropped 4%, the steepest decline in 50 years, according to the Nelson A. Rockefeller Institute of Government. Online sales taxes could help states generate at least $52 billion in added revenue over the next six years, according to an Apr. 13 study conducted by three University of Tennessee professors. Requiring virtual stores to collect taxes, even in parts of the country where they don't have physical operations, would also place e-tailers on a more even footing with brick-and-mortar stores such as Wal-Mart (WMT), which collect sales taxes on in-store as well as online purchases.

Companies that sell products over the Internet say the taxes would hamper growth. "The introduction and passage of an Internet tax bill would have adverse effects on e-commerce," George Askew, an analyst at Stifel Nicolaus , wrote in a recent note. After New York's law was passed, Overstock.com says it had to terminate agreements with some 3,400 Web sites that once promoted the closeout retailer in the Empire State.

Overstock ceased operating in New York altogether, says the company's president, Jonathan E. Johnson III. After losing a court battle seeking to repeal the law, Overstock plans to file an appeal in the coming weeks, Johnson says. "These states are signing up for a lawsuit, or for businesses to pull out of their states," he says.

Cover the E-Tailers collection costs?
more.. link to news article

Leafgreen · Joined: 22 May 2009 Posts: 30

Quote: › docWrite("quote")Overstock ceased operating in New York altogether
Isn't it clear to these state governments that there will be a backlash and market reaction?! In other words, some states will become tax free zones, and there will be a massive diaspora to those states by mail order businesses. Taxing states are just being silly and shortsighted. Well it'll cost them.

By the way, many states already get around the interstate Internet tax prohibition by charging use tax. Here's the wikipedia article on use tax Very valuable reference for you.

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

"Internet Sales Tax Returns to Congress; eBay Makes Their Case"

eBay’s Todd Cohen made a spirited plea to the House of Representatives Committee on the Judiciary earlier today against the proposed remote sales tax. Were the proposal to pass, Cohen fears that small businesses will suffer the most and, given that small businesses are a thriving market for eBay, they’re right to look out for the little guys. Cohen also voiced his and eBay’s support for H. Res 95, which would protect Internet entrepreneurs and small businesses from the new tax proposals.

In defense of small businesses and what they stand to lose, Cohen explained :

The share of online sales being done by retailers with less than $20 million in sales is falling. Under the current mix of business costs, including the remote sales tax rules, the small business competitors are not taking over the field. Instead, it is the largest retailers that are growing. And not surprisingly, those giant retailers are lined up united in proposing a change in remote sales tax law that will harm the smaller retailers who do not have national physical presence. If small business retailers using the Internet were gaining unfair advantages from current remote sales tax laws, one would expect that their share of Internet sales would be growing. But it is not.

http://www.webpronews.com/internet-sales-tax-returns-to-congress-ebay-makes-their-case-2011-11

portlandmovers · Joined: 08 Dec 2011 Posts: 1

:D Yeah, this is nice one. This thread really rocks my world. keep it up.
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This is nice Portland Movers would like to thank you