The days of tax-free Internet shopping is over.

[markw]

Last year they closed the loophole for serious* ebay sellers by having paypal issue 1099-K's, large** internet retailers will now be paying state sales tax. I can see where implementing this will be costly to the retailers and their customers.

"WASHINGTON (AP) — The Senate sided with traditional retailers and financially strapped state and local governments Monday by passing a bill that would widely subject online shopping — for many a largely tax-free frontier — to state sales taxes."

Click here for the linky.

* Serious in that it's triggered by 200 transactions AND $20,000 in sales. That's a small business.

** over $1,000,000 in on-line sales

 

[KEW]

As much as I dislike this and hate paying additional taxes, I must admit that it always seemed unfair that local businesses were disadvantaged by having to charge sales taxes.

 

[brianedm]

It's been this way in Canada for as long as I can remember. Seems more fair to me, anyways.

 

[fuzz092888]

As much as I dislike this and hate paying additional taxes, I must admit that it always seemed unfair that local businesses were disadvantaged by having to charge sales taxes.

NY has had this for awhile now with the Amazon tax. Will this help local businesses out? Sure. However, in my experience it won't matter. If you have time and are comfortable with internet transactions, then local businesses still can't compete with a bottom line price. The main advantage has been and, for the foreseeable future, will be that if you need something quick or need to try it on then local can't be beat. That field is being further leveled with free return shipping, paid memberships where extra fast shipping is included, and even unpaid memberships where upgraded shipping has become standard.

 

[j_garcia]

You mean they are just making it the same for everyone else. We've had this for a long time also, though for Amazon it has only been that way since late last year for us.

 

[darien87]

You mean they are just making it the same for everyone else. We've had this for a long time also, though for Amazon it has only been that way since late last year for us.

Yeah I hadn't bought from Amazon in a while and I bought some BD's last month and I was like, "What the hell? Why am I being charged tax?"

I think it's lame. If local businesses can't match an online price then that's on them. Now that retailers like Fry's will match online pricing there's no point in going to Amazon anymore since I'm paying tax anyway. "You mean I get to pay the same price as local AND I get to wait a week for my item? Yay!"


But I understand how the tax free thing was hurting local businesses. Especially if people are just using them as a showroom and then buying online. Many times I've bought an item, (like my 64" Samsung plasma) from a local Best Buy because their price was within about $200 of the Amazon price. When pricing is that close I prefer to give my money to someone local.

Bottom line is if local businesses can at least come close to internet prices then they won't lose business.

 

[gmichael]

Another tax loophole gone.

 

[j_garcia]

I think it's lame. If local businesses can't match an online price then that's on them. Now that retailers like Fry's will match online pricing there's no point in going to Amazon anymore since I'm paying tax anyway. "You mean I get to pay the same price as local AND I get to wait a week for my item? Yay!"

I have Prime. Almost everything gets to me in 2 days. If a local place has it though, I will often just drop by there too.

 

[lsiberian]

I think it's only fair.

 

[majorloser]

I'm curious how the states will know when a sale was made and how they can guarantee they will receive any collected taxes. And what are the retailers going to do about keeping track of all the local sales tax codes. Do they file taxes with all states? Sounds like total BS to me.

 

[j_garcia]

The other side of that could also easily be: will we now see those online retailers losing sales and we will have a reverse-collapse where those retailers numbers suffer and the smaller ones start to close down? The damage to local SMALL stores is already done - most of them don't exist anymore because of online shopping. So now you harm a second industry.

I'm curious how the states will know when a sale was made and how they can guarantee they will receive any collected taxes. And what are the retailers going to do about keeping track of all the local sales tax codes. Do they file taxes with all states? Sounds like total BS to me.

In California, and likely other states where they already have to cough up taxes, yes, they were forced to open some form of physical location in the state and operate as any other business.

 

[Rickster71]

It's funny to see that we've been slowly brainwashed to think that more and more taxation means more fairness.

 

[j_garcia]

It's funny to see that we've been slowly brainwashed to think that more and more taxation means more fairness.

I think he means fairness only in the sense of business to business, not to the consumer.

 

[Rickster71]

I think he means fairness only in the sense of business to business, not to the consumer.

Didn't mean to single out anyone or a particular post.
I was thinking it was unfair to both business & consumers.

There was a time when there wasn't any sales tax.
Considering all of the government waste, I don't think they deserve anymore.

It's mind boggling when you think of all the taxes and fees we pay, and how many times the same dollar is taxed.
When we earn it, spend it, save it, or invest it.

He is an interesting link from 2009.
So there are even more taxes now: How many times can we be taxed on the same dollar or item? | DEBT DIAGNOSIS

 

[darien87]

I'm curious how the states will know when a sale was made and how they can guarantee they will receive any collected taxes. And what are the retailers going to do about keeping track of all the local sales tax codes. Do they file taxes with all states? Sounds like total BS to me.

I didn't think about the logistics involved. What a pain in the ***. How many different tax rates are there in California alone?

 

[markw]

I didn't think about the logistics involved. What a pain in the ***. How many different tax rates are there in California alone?

Having had a career in software, many in retail POS/order entry and fulfillment systems, I was pondering this exact same question.

quick answer: Some software houses are gonna e very busy soon. But, first it remains to be seen what requirements the federal government slaps on 'em. To me, it seems logical to slap on a massive subroutine at the end of the shipping process to collect the individual state taxes and submit/report to the states quarterly. But, keeping all 50 states updated will be a herculean effort on the poor IT guys and the states themselves to verify the accuracy.

 

[Chu Gai]

It's never enough money is it?

 

[haraldo]

It's funny to see that we've been slowly brainwashed to think that more and more taxation means more fairness.

I'm with you on this one, we have taxes everywhere with no breaks..... and I don't see any fairness coming out of this, even rather the opposite

 

[AverageJoe]

If I've got this straight..

A guy walks into a store in Santa Monica and buys a receiver and pays 9.25% sales tax. If he went a few blocks to a store in Orange county he might pay 7.75%. Doesn't matter to the store what the guys address is - they charge everyone who comes in the same rate.

If he buys the receiver online, the dealer needs to run some cool software that's provided by the States to calculate which of the hundreds of different rates they might need to charge based on where he lives.

So, in my State, where there is no sales tax, the online retailers need to calculate and collect taxes for every other State (but three, I think) for no good reason other than someone's view of "Fair". They don't get anything in return, and the taxes collected don't benefit anyone in his State. Currently, they don't collect any taxes from anyone here, and even the guy who who drives from California to buy that receiver doesn't pay any taxes if he walks in the door - only if he buy's it online. Nothing but more work for businesses.

If "they" really want to give some appearance of being "Fair", they could just have the online retailers collect the same taxes from their sales that the brick and mortar store next door does - Regardless of where the guy who bought it lives. The sellers State gets the money, the store owner next door is not at a pricing disadvantage because of taxes, and we don't need any fancy software or new national bureaucracy to monitor all this.

It'll never happen that way though. Seems like California is losing quite a few businesses for various reasons - They wouldn't like it if they lost online retailers to Montana, New Hampshire and Oregon so their prices to the customer could be 9.25% less.

 

[haraldo]

I must admit that it always seemed unfair that local businesses were disadvantaged by having to charge sales taxes.

It's strange that to make things even, the answer will ALWAYS be raised taxes, you will never see lowered taxes in the name of fairness!