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(Yahoo)   For some reason Amazon, eBay and others have a problem with Unsolicited Federal Internet Sales Tax   (news.yahoo.com) divider line 276
    More: Obvious, Amazon, electronic commerce, internet, eBay, tax collectors, Senate, online retailers, Ron Wyden  
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11116 clicks; posted to Main » on 23 Apr 2013 at 11:23 AM (51 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-04-23 09:23:45 AM
I see the argument from the point of view of the Federal Government and the State legislature's but it's an unreasonable(and probably fatal) burden on online retailers to have to try to collect taxes for every municipality everywhere and I don't see how you could possibly enforce this.
 
2013-04-23 09:28:03 AM

Voiceofreason01: I see the argument from the point of view of the Federal Government and the State legislature's but it's an unreasonable(and probably fatal) burden on online retailers to have to try to collect taxes for every municipality everywhere and I don't see how you could possibly enforce this.

 
vpb [TotalFark]
2013-04-23 09:32:29 AM
I think that Amazon has a problem with subby not reading TFA.

It seems fair.  Keeping up with various tax tax rates from different localities would be a trivial job for a computer.
 
2013-04-23 09:34:46 AM
The claim that this imposes an undue burden on internet retailers is bogus. Before the law is even implemented the web devs will have algorithms and plugins that will calculate the tax based on zip codes. And I wouldn't be surprised if  paypal and the major credit card processors will have the ability to forward the tax portion to the appropriate agency, or at least your accounting software will.
 
2013-04-23 09:36:06 AM
UFIST?
 
ZAZ [TotalFark]
2013-04-23 09:37:38 AM
Amazon has become more friendly to nationwide collection as it set up shop in more states and was forced to collect sales tax the old fashioned way.

It is easy to write this law so it is not a major burden. Create a dozen or so categories of goods (food, clothes, vibrators, computers, books, etc.). If a state has a uniform statewide tax on everything in that category, the state revenue boss notifies the U.S. Department of Taxing Your Internet. The USDTYI publishes a chart of 50 states times 12 rates.

More likely Congress will require companies to buy a special software package from a company that lobbied for this bill and subscribe to expensive updates of every time a sales tax city annexes a new block or a revenue officer declares wool socks to have a different tax rate than nylon. But that's politics, not an essential feature of the law.

And one could have everything in between.
 
2013-04-23 09:38:04 AM

vpb: I think that Amazon has a problem with subby not reading TFA.

It seems fair.  Keeping up with various tax tax rates from different localities would be a trivial job for a computer.


It would be a huge job even for a computer since every State and every municipality has their own sales tax laws that are always changing and there isn't any central database of all of them. Plus most online retailers are very very small and can't afford to hire a team of lawyers or buy expensive software to keep track of the laws for everywhere.
 
2013-04-23 09:41:15 AM
Creates an undue burden on smaller retailers, the burden should be on the tax payer and business should not be in the business of tax collecting someone elses burden
 
2013-04-23 09:42:58 AM
All this talk in the article about how we live in the age of the internet and yet nowhere does it mention the bill's name or number, nor does it have a link to the full text. Does Yahoo know how the web works yet?

http://www.govtrack.us/congress/bills/113/s743

I'm curious how this will play out with online retailers if they will start demanding that brick and mortar stores ask customers for their home zip codes to force them to pay taxes on "remote sales" as well.

Also, subby, Amazon supports it while eBay opposes it. Reading comprehension is your friend.
 
2013-04-23 09:46:48 AM
What we must remember here is that online retailing is, like the whole of the internet, a delicate, fragile fawn nestled in a clover patch, eyeing us all with its uncertain eyes. Do you mean me harm? the fawn is asking. I am powerless against you, do you mean me harm? And it can only lie there as we approach with it delicate legs folded beneath it, its tiny button nose quivering in fear, its velveteen ears trembling. You could kill me without even trying, the fawn's eyes tell us. I am here at your mercy. Please, though, spare me.

Look at them, those poor, trembling online retailers. Look at their dark eyes, their heaving sides. Look at their hooves scraping futilely against the ground. Would you take your gun, your tax gun, and shoot this poor creature in the head? Would you? And could you live with yourself afterward?

That is the question we must ask. Are we man or monster -- there comes a point where we must all choose our path.
 
2013-04-23 09:48:23 AM
>As a result, many online sales are essentially tax-free, giving Internet retailers a big advantage over brick-and-mortar stores.

While true, internet retailers are also disadvantaged in that they have no tangible product to show the customer like a trip to a brick and mortar does and cannot do "cash and carry". Your going to have to wait for the products to ship. I consider that a fair trade off for the taxes.
 
2013-04-23 09:49:05 AM

vpb: Keeping up with various tax tax rates from different localities would be a trivial job for a computer.


Heh - you might think so.  However, it's not that simple.  Tax rates change frequently.  Items that are taxable vs not change all the time as well.  And the localities go down to Zip+4.  So not only do you have to know the rates at a point in time, you need to know how every locality categorizes every item you sell, at what time they categorized it as such, and keep up to date with things like tax holidays, development zones, etc.  Sure, a computer can keep track of that, and once you fork out the cash to a service that sends you daily updates you can do it, but it's not something that a small retailer could do.  It's roughly the amount of money you would expect to pay for a mid to high level employee.  So for a larger retailer, it's not a big deal - adding a couple heads for Amazon isn't even a rounding error.  For a smaller retailer, selling $1M per year (gross), maybe making 10% on that if he's lucky, that's a big deal.
 
ZAZ [TotalFark]
2013-04-23 09:49:11 AM
You're a real spoilsport, exick, now we can't speculate wildly any more.

Also at http://thomas.loc.gov/cgi-bin/query/z?c113:S.743:. The law refers also to the streamlined sales and use tax agreement, which is a 200+ page legal document.
 
2013-04-23 09:54:16 AM

EatHam: Sure, a computer can keep track of that, and once you fork out the cash to a service that sends you daily updates you can do it, but it's not something that a small retailer could do.


I really haven't formed an opinion about whether or not I like this bill yet, but to be fair, the bill puts the impetus on each state to join the SSUTA, set up a single point of remittance, and to keep the (freely available) centralized database of tax rates up to date.
 
2013-04-23 09:55:23 AM

ZAZ: The law refers also to the streamlined sales and use tax agreement, which is a 200+ page legal document.


A legal document that the states have to read and agree to, not the retailers.
 
2013-04-23 09:58:45 AM

exick: the bill puts the impetus on each state to join the SSUTA, set up a single point of remittance, and to keep the (freely available) centralized database of tax rates up to date.


And that does help with a part of it.  I wish they'd also standardize on much larger sets of merchandise that is either taxable or not, and on what jurisdiction.  So for Netflix, do they charge sales tax in NY, where I live, or at the point of origin for their stream (as an example, not looking for an answer to that specific question)
 
2013-04-23 10:00:27 AM

EatHam: vpb: Keeping up with various tax tax rates from different localities would be a trivial job for a computer.

Heh - you might think so.  However, it's not that simple.  Tax rates change frequently.  Items that are taxable vs not change all the time as well.  And the localities go down to Zip+4.  So not only do you have to know the rates at a point in time, you need to know how every locality categorizes every item you sell, at what time they categorized it as such, and keep up to date with things like tax holidays, development zones, etc.  Sure, a computer can keep track of that, and once you fork out the cash to a service that sends you daily updates you can do it, but it's not something that a small retailer could do.  It's roughly the amount of money you would expect to pay for a mid to high level employee.  So for a larger retailer, it's not a big deal - adding a couple heads for Amazon isn't even a rounding error.  For a smaller retailer, selling $1M per year (gross), maybe making 10% on that if he's lucky, that's a big deal.


Cannot agree enough.
 
2013-04-23 10:05:25 AM
Businesses with less than $1 million a year in online sales would be exempt.

I think because of that, I am OK with the law.  Anyone saying "ooh, Amazon can't possibly keep up with all the different laws".... they are a multi-billion dollar company, I think they can manage.   The "mom and pop" stores that only do a few hundred thousand a year are exempt anyway.

Also, I (believe) this is just to get state taxes... I don't think these stores have to collect county or city taxes... can anyone confirm that?  I would agree, going to THAT level would get hairy.   Collecting state taxes... that is 50 or so different ones, big deal.
 
2013-04-23 10:05:36 AM

exick: I'm curious how this will play out with online retailers if they will start demanding that brick and mortar stores ask customers for their home zip codes to force them to pay taxes on "remote sales" as well.


That's why I've always felt this was strange. When you buy something online from your house in say New York, from a retailer in Vermont, and have it shipped to a family member in California, what tax rates do you charge?

Also, I've never met someone who felt it was "fair to the brick and mortar stores who have to charge the tax" who ALSO knew what use-taxes were.
 
2013-04-23 10:08:20 AM
Why don't we just let Amazon and other multi billion dollar companies charge the sales tax like they want to, and exempt anyone who doesn't want to charge it, and see how that works out for them?  Sounds like Amazon, who wouldn't be burdened too much by this, is trying to choke out it's competition online by supporting this bill.
 
2013-04-23 10:09:47 AM

dletter: Also, I (believe) this is just to get state taxes... I don't think these stores have to collect county or city taxes... can anyone confirm that? I would agree, going to THAT level would get hairy. Collecting state taxes... that is 50 or so different ones, big deal.


Well, it's 50 * however many categories there are. Some states tax clothes, some don't, I believe my state (MA) taxes clothes over a certain value, like $200 or thereabouts so that 'luxury' clothes are taxed but others aren't. So right there you have 1. It's MA, add 6.25%, 2. Oh wait it's clothes, 0%. 3. Oh wait it's expensive clothes, okay add the tax. Computers can handle cascading logic quickly and easily, but that's one classification of items in 1 state, with an exemption for price, subject to change at a moments notice at the whim of a state legislature.

I'm still annoyed they changed daylight savings time because now there's millions of consumer electronics that used to adjust automatically, which now have to be manually adjusted 4 times per year. Technology is better in theory than in practice sometimes.
 
2013-04-23 10:14:43 AM
First off, FTFA:"It is going to make onlinebusinesses the tax collectors for the nation," said Sen. Kelly Ayotte, R-N.H. "It really tramples on the decision New Hampshire has made not to have a sales tax."

How farking dumb is Ayotte? NH is still free to not have a sales tax.

Anyway, I just don't see how online retailers should be forced to collect the same taxes as local brick and mortar. Especially when it comes to municipal taxes. I always thought those types of taxes were to help pay for police and fire services. Which online retailers do not use those services.
 
2013-04-23 10:15:58 AM

vpb: I think that Amazon has a problem with subby not reading TFA.

It seems fair.  Keeping up with various tax tax rates from different localities would be a trivial job for a computer.




How does one pay the designated state? Mailing a check, EBT? It takes time and money to do this. And the reality is that the buyer is responsible for paying the sales tax. In our state, it is a usage tax.
 
2013-04-23 10:16:05 AM

I_C_Weener: UFIST?


They should've called it "Unsolicited Federal Internet Assessment."
 
2013-04-23 10:16:26 AM

sammyk: First off, FTFA:"It is going to make onlinebusinesses the tax collectors for the nation," said Sen. Kelly Ayotte, R-N.H. "It really tramples on the decision New Hampshire has made not to have a sales tax."

How farking dumb is Ayotte? NH is still free to not have a sales tax.

Anyway, I just don't see how online retailers should be forced to collect the same taxes as local brick and mortar. Especially when it comes to municipal taxes. I always thought those types of taxes were to help pay for police and fire services. Which online retailers do not use those services.


The theory is that online retailers are taking money out of the pockets of local retailers but yeah this is essentially a money grab.
 
2013-04-23 10:16:30 AM
Christ...now I'm gonna have to pay 9% sales tax on my online purchases too??     Although, I think Amazon already does this for CA.  *sigh*    Whatever, it's just money.
 
2013-04-23 10:19:14 AM

Dinki: The claim that this imposes an undue burden on internet retailers is bogus. Before the law is even implemented the web devs will have algorithms and plugins that will calculate the tax based on zip codes. And I wouldn't be surprised if  paypal and the major credit card processors will have the ability to forward the tax portion to the appropriate agency, or at least your accounting software will.


Based off your argument, brick and mortar stores should be scanning everyones ID to make sure that they are paying the appropriate sales tax based of where they live.  And how much do you think that this algorithm is going to cost?  Remember, developers are in this to make money as well.

Personally it I think that it should be the responsibility of the individual taxpayer to pay sales taxes on their own for online purchases.  It is not the responsibility of some small company in Florida to collect state and local sales taxes for some podunk town in the middle of North Dakota.  It becomes costlier and more burdensome when someone has to manage tax payments, pay possible wire fees...shiat, each locale may require individual logins for retailers to pay taxes...Just off the top of my head here, I can see this becoming a massive pain in the ass for businesses big and small.

Sure, there is software that can probably automate most of this, but it will take years to develop and will never be perfect, especially considering all the locales, tax exempt exemptions, tax free holidays, classifications on products (for example - one may consider melamine foam to be soundproofing materials, others may consider it to be a cleaning product)...

There are just too many variables in place to require the thousands upon thousands of tiny online retailers to keep up to date with the thousands and thousands of tax laws in all 50 states.
 
2013-04-23 10:19:56 AM
If you call up a store and order via phone, they charge you sales tax based on the vendor's location.  Why is this different?  Plus, how is a vendor in Seattle  supposed to know that where I work, I pay 3% higher sales tax (Thanks Colts) than the county in which I live?
 
2013-04-23 10:20:24 AM

vpb: I think that Amazon has a problem with subby not reading TFA.

It seems fair.  Keeping up with various tax tax rates from different localities would be a trivial job for a computer.


You said tax twice.

/tax
//40lb box of it
 
2013-04-23 10:21:20 AM

vpb: I think that Amazon has a problem with subby not reading TFA.


Read something about this yesterday

http://www.npr.org/blogs/money/2013/04/22/178407898/why-amazon-suppo rt s-an-online-sales-tax-bill
 
2013-04-23 10:22:48 AM
Should have called it Unsolicited Federal Internet Assessment
 
2013-04-23 10:23:35 AM

I_C_Weener: If you call up a store and order via phone, they charge you sales tax based on the vendor's location.  Why is this different?  Plus, how is a vendor in Seattle  supposed to know that where I work, I pay 3% higher sales tax (Thanks Colts) than the county in which I live?


Maybe it's because I work for a nonprofit, but if you place an order over the phone and you live out of state, you do not pay tax, just shipping.  However, if you do live in the state, then you have to pay for shipping and tax.  This is in California.
 
2013-04-23 10:23:46 AM
Meh, this this is going to happen, you've gotten away with tax free purchases for a long time now, all good things come to an end.
 
2013-04-23 10:24:46 AM

dletter: Businesses with less than $1 million a year in online sales would be exempt.

I think because of that, I am OK with the law.  Anyone saying "ooh, Amazon can't possibly keep up with all the different laws".... they are a multi-billion dollar company, I think they can manage.   The "mom and pop" stores that only do a few hundred thousand a year are exempt anyway.

Also, I (believe) this is just to get state taxes... I don't think these stores have to collect county or city taxes... can anyone confirm that?  I would agree, going to THAT level would get hairy.   Collecting state taxes... that is 50 or so different ones, big deal.


An unintended consequence of this will be retailers purposely not growing their online business beyond $999,999 per year to avoid the hassle of dealing with this new proposed tax collection requirement.
 
2013-04-23 10:27:28 AM

basemetal: Meh, this this is going to happen, you've gotten away with tax free purchases for a long time now, all good things come to an end.


I am not arguing against this because of having to pay sales tax...I can honestly say that I purchased something online specifically to avoid sales tax, shiat is just less expensive online to begin with...

Rather, I am arguing against this because it is too burdensome to small retailers.
 
2013-04-23 10:28:07 AM
You can't calculate the proper state taxes even from Zip+4.  Many of the smaller rates in small towns are in regions that have correlation to zip + 4 boundaries.
 
2013-04-23 10:28:52 AM

raerae1980: I_C_Weener: If you call up a store and order via phone, they charge you sales tax based on the vendor's location.  Why is this different?  Plus, how is a vendor in Seattle  supposed to know that where I work, I pay 3% higher sales tax (Thanks Colts) than the county in which I live?

Maybe it's because I work for a nonprofit, but if you place an order over the phone and you live out of state, you do not pay tax, just shipping.  However, if you do live in the state, then you have to pay for shipping and tax.  This is in California.


Huh.  Maybe I don't have a clue what I pay.
 
vpb [TotalFark]
2013-04-23 10:31:40 AM

Voiceofreason01: vpb: I think that Amazon has a problem with subby not reading TFA.

It seems fair.  Keeping up with various tax tax rates from different localities would be a trivial job for a computer.

It would be a huge job even for a computer since every State and every municipality has their own sales tax laws that are always changing and there isn't any central database of all of them. Plus most online retailers are very very small and can't afford to hire a team of lawyers or buy expensive software to keep track of the laws for everywhere.


It would be simple to create a database and you don't need a "team of lawyers" to collect sales tax, it's something that high school dropouts who run vegetable stands can do.
 
2013-04-23 10:44:01 AM

vpb: It would be simple to create a database and you don't need a "team of lawyers" to collect sales tax, it's something that high school dropouts who run vegetable stands can do.


How many of them could do it for the 250 municipalities of each state, the 70 counties of each state for each of our 50 states...and the territories?  And how long would that take your average veggie stand worker?  And what if those rates changed on an annual basis, at least in some municipalities?  And by annual, I mean on their own schedule based on the town council, city board, legislators calendars....not all on January 1.
 
2013-04-23 10:45:09 AM
Oh and don't forget each state's "Tax Free Weekend!" which doesn't apply to this, that, the other thing, and purchases over $x.
 
ZAZ [TotalFark]
2013-04-23 10:48:55 AM
itsdan

The streamlined tax agreement I linked above has a section on tax holidays.
 
2013-04-23 11:05:49 AM
Online retailers love to talk about how they can sift through terabytes of data from click streams to find useful data, but when you talk about implementing a scheme to map localities to tax rates they throw up their arms and say it's too hard. I guess that's just because in one case you pass the ball to engineers, and in the other case the business people intercept it.
All you have to do is put a gun to their heads, and it will be done. As far as smaller businesses, without the resources of an Amazon, that would be a pretty natural application for a company like H&R Block to provide. Might even keep them relevant for the next few years.
 
2013-04-23 11:09:34 AM

Voiceofreason01: I see the argument from the point of view of the Federal Government and the State legislature's but it's an unreasonable(and probably fatal) burden on online retailers to have to try to collect taxes for every municipality everywhere and I don't see how you could possibly enforce this.


On the flip side, why would the alternative be zero sales tax?
 
2013-04-23 11:13:23 AM

DamnYankees: Voiceofreason01: I see the argument from the point of view of the Federal Government and the State legislature's but it's an unreasonable(and probably fatal) burden on online retailers to have to try to collect taxes for every municipality everywhere and I don't see how you could possibly enforce this.

On the flip side, why would the alternative be zero sales tax?


I'm not sure I understand your question....why would not collecting sales tax be an answer to it being very difficult to collect sales tax?
 
2013-04-23 11:14:08 AM

Voiceofreason01: I'm not sure I understand your question....why would not collecting sales tax be an answer to it being very difficult to collect sales tax?


Correct. Why is one former better than the latter?
 
2013-04-23 11:17:17 AM

Endive Wombat: dletter: Businesses with less than $1 million a year in online sales would be exempt.

I think because of that, I am OK with the law.  Anyone saying "ooh, Amazon can't possibly keep up with all the different laws".... they are a multi-billion dollar company, I think they can manage.   The "mom and pop" stores that only do a few hundred thousand a year are exempt anyway.

Also, I (believe) this is just to get state taxes... I don't think these stores have to collect county or city taxes... can anyone confirm that?  I would agree, going to THAT level would get hairy.   Collecting state taxes... that is 50 or so different ones, big deal.

An unintended consequence of this will be retailers purposely not growing their online business beyond $999,999 per year to avoid the hassle of dealing with this new proposed tax collection requirement.


I don't dispute this to an extent... you'll certainly have a decision to make to either "go big" and really expand your marketing to get sales to a $2 million+ mark to make it "worth it" possibly, or as you said, stay at around $800k.

I think what you'll see is some companies though adding these features to "figure it out" for you to various software packages.
 
2013-04-23 11:24:07 AM

DamnYankees: Voiceofreason01: I'm not sure I understand your question....why would not collecting sales tax be an answer to it being very difficult to collect sales tax?

Correct. Why is one former better than the latter?


I'm still confused. Basically the reason that online retailers mostly do not collect sales tax is that 1) there is not a clear law requiring businesses from out of State to collect sales tax for the place where the customer resides and 2) it would be VERY difficult for online retailers to collect the correct sales tax for every State, county, municipality and township then to remit payment for the taxes collected to those governments(the legal term is "undue burden"). For a company like Amazon who can hire a team of lawyers and mostly automate the process it's not such a big deal but for the little old lady who sells drawings of cats from her geocities page this is completely undoable.
 
2013-04-23 11:27:04 AM
Am I the only one that cant stand the phrase 'brick and mortar store'?  What about the wood?
 
2013-04-23 11:27:40 AM
Voiceofreason01: I don't see how you could possibly enforce this.

The SCOTUS would be ok with you rounding up and gassing die Juden as long as you claimed it was for interstate commerce because the SCOTUS loves the Interstate Commerce Clause so much.
 
2013-04-23 11:29:33 AM

Pocket Ninja: what the fark


What the fark. (+1 funny points.)
 
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