Metro Jacksonville

http://news.cnet.com/8301-1023_3-57583140-93/senate-passes-internet-sales-tax-bill-by-2-to-1-margin/

QuoteSenate passes Internet sales tax bill by 2-to-1 margin

Marketplace Fairness Act, which would allow states to levy taxes on Internet purchases, now moves on to the House of Representatives for consideration.

The U.S. Senate on Monday approved a controversial bill by more than a 2-to-1 margin that would allow states to levy taxes on Internet purchases.

The Marketplace Fairness Act, which would allow states to require online vendors to collect sales and use tax on certain out-of-state purchases, was approved in a bipartisan vote of 69 to 27. The bill, which already has the support of President Obama, will now move on to the House of Representatives.

If approved, the bill would overturn a 1992 Supreme Court ruling that found out-of-state retailers generally don't have to collect taxes unless they have a sufficient business presence. The bill, officially known as S.743, does include an exception for businesses that make under $1 million a year in revenue.

Backers of the bill, including Walmart, Macy's, and Best Buy, argue that online retailers often do not collect sales taxes at checkout and thus enjoy an unfair competitive advantage over the big-box stores. The Marketplace Fairness Coalition, a group of companies supporting the legislation, says the act would "level the playing field."

Opponents say the bill amounts to a multibillion-dollar tax hike on American consumers. The National Taxpayers Union set up a petition to Congress in March that said the tax was "really just a way to unleash state tax collectors on the Internet," and 15 conservative groups also sent a letter to members of Congress saying an Internet tax law is is "bad news for conservative principles and the cause of limited government."

A fierce battle over the legislation broke out among Internet retailers in the weeks leading up to the vote. eBay CEO John Donahoe, who argued that the proposed tax places an unreasonable burden on small retailers, sent users of the online auction site an e-mail last month urging them to contact their representatives to express opposition for the bill. In his e-mail, Donahoe singled out rival Amazon, which supports the legislation.

"This legislation treats you and big multibillion-dollar online retailers -- such as Amazon -- exactly the same," Donahoe wrote in the e-mail. "Those fighting for this change refuse to acknowledge that the burden on businesses like yours is far greater than for a big national retailer."

In the FWIW department, internet purchases are subject to shipping and handling and that is often higher than the sales tax one would pay if bought locally.  Basically, to be competitive with the internet companies, local companies just have to be priced fairly, have the item in stock and provide a positive shopping experience. I avoid big stores like Walmart because of poor quality, long lines and bad shopping experiences.  I shop the internet because it saves me time, offers a better selection and goods are often of a higher quality to price benefit than available locally. Paying sales tax in addition to shipping and handling may tip the scales in favor of a local purchase in rare instances, but I doubt my shopping habits will change much.  In fact, I try to at least buy major things local in Florida so pay that sales tax anyway.  Several states have agreements with Florida as it is and charge sales tax now.  Overall, this law does not seem like it will have much effect either way. 

Not sure where I stand yet. Perhaps the tax if passed should apply to all foreign sales not just high volume sellers.

approve...sales tax is sales tax...regardless of how I am purchasing

I voted yes in the interest of fairness... if brick and mortar shops must charge sales tax then internet sellers should have to also...

I approve because it's not a new tax, it's just closing a tax loophole that advantages online sellers over local ones. Online retail would just be bound by the same taxes that brick-and-mortar stores are already having to pay. Additionally, something I didn't realize until recently, was that you're still supposed to pay sales tax on online purchases, but the burden is on you rather than the retailer. Very few people know about this (I sure didn't) so they don't pay, closing this loophole would sort this out.

As I understand it there will be an exemption for companies making less that $1 million a year. I'm sympathetic to the smaller retailers who would be affected by the change, but the fact remains that both small and large brick-and-mortar stores are already being disadvantaged in the current setup, as their products look more expensive because they have to charge for tax. Obviously there are advantages to online retail that brick-and-mortar stores don't have, they don't need the extra help.

^^^All true.  Even with the sales tax, bricks and mortar will find it hard to compete with online sales yet still.  The overhead alone for a bricks and mortar operation is simply much higher than an online distribution operation, and like Tacachale said, this is simply the closure of a tax loophole where we were all supposed to declare at one point all of our online purchases and pay taxes on them (there was never any setup as to how states were actually going to collect the taxes).

This is also a jobs bill and simply levels the playing field.  A distribution retailer who sells only online might employ 1,000 people and have 1-2 large warehouses they ship from.  A bricks and mortar retailer who sells the same volume of goods will employ many times that and feed local economies (jobs, property taxes, etc).

I don't agree with "making it harder" for online retailers to compete, but this isn't that.  This is "making it less hard for bricks and mortar to compete" by introducing some degree of fairness.  It's such a logical bill in my mind, which is an utter rarity nowadays.

And PS: this is a sales tax - what's different about this and the Fair Tax, LoL?  All governments are strapped - this isn't taxing income, Tea Party people should be ALL OVER this, but they're so ironic, because Obama signed endorsed the bill all of a sudden this is a controversial "tax".  I hate hypocrites.

^You're totally right. I'd oppose this if it was a bill for new taxes on internet sales, but it's just closing a loophole.

Put another way, the current setup acts as an incentive for companies like Amazon and Ebay to keep their physical presence out of states with sales tax, and hold onto their extra 7% back in Seattle and Silicon Valley. This way, I expect they'll start branching out their operations, which may actually improve their service. I really think that's what Amazon is thinking about in supporting the bill.

Quote from: simms3 on May 07, 2013, 10:18:49 AM
^^^All true.  Even with the sales tax, bricks and mortar will find it hard to compete with online sales yet still.  The overhead alone for a bricks and mortar operation is simply much higher than an online distribution operation, and like Tacachale said, this is simply the closure of a tax loophole where we were all supposed to declare at one point all of our online purchases and pay taxes on them (there was never any setup as to how states were actually going to collect the taxes).

This is also a jobs bill and simply levels the playing field.  A distribution retailer who sells only online might employ 1,000 people and have 1-2 large warehouses they ship from.  A bricks and mortar retailer who sells the same volume of goods will employ many times that and feed local economies (jobs, property taxes, etc).

I don't agree with "making it harder" for online retailers to compete, but this isn't that.  This is "making it less hard for bricks and mortar to compete" by introducing some degree of fairness.  It's such a logical bill in my mind, which is an utter rarity nowadays.

And PS: this is a sales tax - what's different about this and the Fair Tax, LoL?  All governments are strapped - this isn't taxing income, Tea Party people should be ALL OVER this, but they're so ironic, because Obama signed endorsed the bill all of a sudden this is a controversial "tax".  I hate hypocrites.

simms,

The fair tax is a replacement for federal income taxes.  It requires the repeal of the 16th Amendment.  The fair tax has nothing to do with state and local sales taxes.  The argument against this bill is the fact that it grants state governments the power to audit out-of-state businesses, impose liens on their property and, ultimately, sue them in state court.  There is also disagreement about the arbitrary figure of $1m in out of state sales before the tax kicks in.  Some want $0, some want $10m. 

Google is your friend.

Quote from: simms3 on May 07, 2013, 10:18:49 AM
And PS: this is a sales tax - what's different about this and the Fair Tax, LoL?  All governments are strapped - this isn't taxing income, Tea Party people should be ALL OVER this, but they're so ironic, because Obama signed endorsed the bill all of a sudden this is a controversial "tax".  I hate hypocrites.

I'm not a big Fair Tax guy but at least with that you keep your entire paycheck in exchange for the extra sales taxes. Does this bill mean I keep the 3% of my check that started being taken out again this year?

they’ve voted to make it nearly impossible for small mom & pop businesses to conduct online transactions while large businesses, like Walmart and Target will have the run of the place because they already have the state structure in place.

Quote from: fsquid on May 07, 2013, 12:15:25 PM
they’ve voted to make it nearly impossible for small mom & pop businesses to conduct online transactions while large businesses, like Walmart and Target will have the run of the place because they already have the state structure in place.

Oh we are going to do something out of "fairness" and it crushes small business? Well that has never happened before. 

Quote from: fsquid on May 07, 2013, 12:15:25 PM
they’ve voted to make it nearly impossible for small mom & pop businesses to conduct online transactions while large businesses, like Walmart and Target will have the run of the place because they already have the state structure in place.

Yes, "mom and pop" online retailers will have a harder time with it compared to the big boys, but we're already harming mom & pop businesses that currently pay taxes by making them compete with businesses in other states that sell items cheaper by exploiting this tax loophole.

Quote from: simms3 on May 07, 2013, 10:18:49 AM
^^^All true.  Even with the sales tax, bricks and mortar will find it hard to compete with online sales yet still.  The overhead alone for a bricks and mortar operation is simply much higher than an online distribution operation, and like Tacachale said, this is simply the closure of a tax loophole where we were all supposed to declare at one point all of our online purchases and pay taxes on them (there was never any setup as to how states were actually going to collect the taxes).

This is also a jobs bill and simply levels the playing field.  A distribution retailer who sells only online might employ 1,000 people and have 1-2 large warehouses they ship from.  A bricks and mortar retailer who sells the same volume of goods will employ many times that and feed local economies (jobs, property taxes, etc).

I don't agree with "making it harder" for online retailers to compete, but this isn't that.  This is "making it less hard for bricks and mortar to compete" by introducing some degree of fairness.  It's such a logical bill in my mind, which is an utter rarity nowadays.

And PS: this is a sales tax - what's different about this and the Fair Tax, LoL?  All governments are strapped - this isn't taxing income, Tea Party people should be ALL OVER this, but they're so ironic, because Obama signed endorsed the bill all of a sudden this is a controversial "tax".  I hate hypocrites.

I didn't want to comment until I read a post that covered my view and your's is exactly my view. I work for a large retailer who get's throttled by online companies and many comments I hear from customers as to why they are going to pay the SAME EXACT PRICE for a product we carry is because they can save the sales tax. There is no universe that that would be considered a fair playing field.
And the Tea Party and others are already calling it a tax increase.
ARE YOU KIDDING ME?
It's the right thing to do and it's the right thing to do to exempt the 1 million and less online retailer.

There's so much cognitive dissonance in this thread from our normal bunch of anti-tax folks that the founding fathers are spinning in their graves wrapped in "don't tread on me" flags.

Quote from: If_I_Loved_you on May 07, 2013, 12:04:04 PM
Internet Sales Tax: Here Come the Auditors


T. Elliot Gaiser

April 29, 2013 at 10:28 am

Internet sales tax legislation could subject small online businesses to up to 46 state audits.

And since sales taxes vary among thousands of tax jurisdictions across the country, the chances that auditors will find mistakesâ€"and slap the business owners with penaltiesâ€"are very good. If truth-in-advertising requirements applied to legislation, says Heritage Action’s Dan Holler, the Marketplace Fairness Act would be renamed the Tax Audits from Hell Act of 2013.

Here’s how the bill works: Online businesses would be required to figure the sales tax each customer owes based on where the customer livesâ€"even though the businesses themselves have no other dealings with that state or local government.

There are more than 9,600 state and local taxing jurisdictions in the U.S., and small businesses would be required to send the appropriate number of tax dollarsâ€"state and localâ€"to every one where they sell.

And if the business owner makes a mistake? Or if the state thinks that the business owner makes a mistake? The bill provides for “a single audit of a remote seller for all State and local taxing jurisdictions within that State.”

This provision is intended to streamline the process, but it still means every business could face 46 separate audits (from the 45 states that collect sales taxes plus the District of Columbia).

Audits cost businesses time and resources that could be used to create jobs, develop and market new products, and bolster the economy. To be audited in distant locations where they have no presence other than a few customers makes that burden even greater.

And while computer programs might help them calculate the sales tax they are supposed to collect for each transaction, they still need to send that money to the appropriate place.

As Megan McArdle asks at The Daily Beast, what happens after business collect the appropriate sales taxes? “Do the sales tax fairies simply whisk it off to the nice folks at the state tax department? Sadly, no.” The Small Business Administration explains the process of filing a tax return this way:

    Generally, states require businesses to pay the sales taxes they collect quarterly or monthly. You’ll have to use a special tax return for sales taxes, and report all sales, taxable sales, exempt sales and amount of tax due. Not paying on time can result in penalties. As always, check with your state or local government about the process in your location.

This would be a bureaucratic nightmare. Sarah Parness writes for ABC News:

    [F]ive states do not have state-wide sales tax, but two of those statesâ€"Montana and Alaskaâ€"allow localities to charge a sales tax. So a business owner in New Hampshireâ€"which has no sales taxâ€"sending a fishing pole to a customer in Juneau, Alaska, would have to collect a 5 percent sales tax, but would charge no sales tax to the buyer in Denali Borough.

Small businesses, like Wayne Johnson’s Idaho-based online fly fishing shop Angler’s Habit, or Todd Dickie’s Nebraska-based online ATV parts company Powersports Nation, will have to send money to up to 46 states regularly or endure swarms of audits and penalties.

“t’s going to be hell on sole proprietorships and other small businesses that can’t afford the compliance overhead,” writes McArdle. “Anyone who has had to file income tax returns in two states can imagine why you might not want to file in almost 50â€"monthly.”

Lawmakers should be finding ways to reduce burdens on consumers and entrepreneurs. Instead, this bill would impose new costs on both.
http://blog.heritage.org/2013/04/29/internet-sales-tax-here-come-the-auditors/

The big time internet sellers are so far ahead of the little guy I doubt they will ever be in the same league. And I seriously doubt they will be creating enough jobs to make the same impact that a handful of brick and mortars would make. If they are making over a million in sales they need accountants like any other business.

First, it's not a tax on the business.  It's a tax on the consumer (user) and the business is passing it along to the states.  Yes, there will be some cost involved in the collections, but let's realize that sales taxes are paid by the consumer.

I agree it can be a nightmare.  In Florida, we have those local option taxes.  So while the Florida sales tax is 6%, in Duval County, we pay 7%.  Who is going to keep track of all that?

So, here's an idea.  How about they charge the same amount for every internet sale and all 46 states settle for that?  Take an average of all jurisdictions, and charge that.  If it's 4%, then every internet sale gets charged 4%, and the states all get 4%.  It's more than they are getting now on internet sales, and there will be no need to track sales by jurisdiction.

Oh, wait!  That's too easy and makes too much sense!  We'd rather involve auditors, draconian book keeping, and such.

Quote from: Debbie Thompson on May 07, 2013, 01:51:20 PM
First, it's not a tax on the business.  It's a tax on the consumer (user) and the business is passing it along to the states.  Yes, there will be some cost involved in the collections, but let's realize that sales taxes are paid by the consumer.

I agree it can be a nightmare.  In Florida, we have those local option taxes.  So while the Florida sales tax is 6%, in Duval County, we pay 7%.  Who is going to keep track of all that?

So, here's an idea.  How about they charge the same amount for every internet sale and all 46 states settle for that?  Take an average of all jurisdictions, and charge that.  If it's 4%, then every internet sale gets charged 4%, and the states all get 4%.  It's more than they are getting now on internet sales, and there will be no need to track sales by jurisdiction.

Oh, wait!  That's too easy and makes too much sense!  We'd rather involve auditors, draconian book keeping, and such.

Your idea makes sense only it wouldn't make for a fair playing field. All those people who buy online to save tax would still buy online to save 2 or 3%. To me the only way it works is a Jacksonville shopper pays 7% to buy online. Unless this is just about states collection more income then it has to be that way.

"Unless this is just about states collection more income then it has to be that way."

This.

My quickbooks and many websites can make the calculations simply based on zip code.  The municipalities upload their tax changes all the time this will be simple for the payment processors to turn on for more people.

The customer just enters their ZIP Code and now it will calculate sales tax as well as shipping costs.

does it also automatically do all the returns for each municipality?  For example, if one did business in Tennessee alone, then they would have to file a return with each of the 96 counties.  Very time consuming for a small business making internet sales. 

But won't this mean that every online retailer will have to remit taxes to dozens of states each month?  That is a burden. 

The Florida Dept. of Revenue has made it pretty easy to do online and by bank draft, but I'll bet that a lot of other states aren't so advanced.

Intuit needs to get working really quick to automate the process in Quickbooks.

I'm also curious, if this is about state taxes, why is the Federal Gov't making a rule about this?

^ all the Feds are doing is making it available to states....plus the internet is governed by the FCC and falls under the Commerce Clause

Why not have it that you pay the sales tax in effect in the jurisdiction FROM which you ship the goods, not the destination?
Then each vendor only has to deal with one locality, presumably the one it knows best and also the one best placed to enforce the law.
Then you'd have places engaging in tax competition to lure Internet businesses. Name something wrong with that.

I think you could have the payment processor be Heartland, Visa or MC withhold and pay the tax directly.  No work now for the small business and no getting in trouble with the government later.

Quote from: fsquid on May 08, 2013, 11:04:10 AM
Why not have it that you pay the sales tax in effect in the jurisdiction FROM which you ship the goods, not the destination?
Then each vendor only has to deal with one locality, presumably the one it knows best and also the one best placed to enforce the law.
Then you'd have places engaging in tax competition to lure Internet businesses. Name something wrong with that.

The tax is really on the purchase from the buyer's end. At brick-and-mortar places, the seller charges for it . In the current setup, the buyer is actually supposed to be paying the tax for out-of-state purchases, but no one does it. And the online retailers obviously don't do it, so it makes their items seem cheaper. Again, it's just a loophole.

Places already engage in tax competition to lure Internet business; South Carolina recently gave Amazon a big sales tax break so that they'd build a distribution center there (states can tax online retailers with a physical presence in the state.) This will continue even if the loophole is closed. And of course localities will be better placed to compete for brick-and-mortar businesses as well.

South Carolina's break to Amazon was to allow them not to collect sales tax on sales to SC residents for the first couple of years.  However, Amazon was required to notify SC customers of their duty to pay use tax on their purchases.  Like most states, SC has a line on its individual income tax return to report use tax due on out-of-state purchases.  Florida has a tougher job of collecting use tax since individuals here don't pay income tax.

Tacahale is correct in that the federal bill does not automatically impose sales tax on remote sales.  All it does is remove the existing Constitutional restriction on the states from doing so, at least with respect to larger retailers.  And as it has been pointed out repeatedly, it would not be a new tax, but rather would shift the burden of collection and payment from the customer to the out-of-state retailer.  Think of it like federal income tax withholding.  Employees can't be trusted to pay their own taxes on a timely basis, so the government makes the employer collect and remit it monthly.  Same idea.

Im a bit surprised at the results so far...  ???