US Senate Passes National Internet Sales Tax Mandate 297
SonicSpike writes with the news that the U.S. Senate yesterday "passed a nonbinding proposal to allow states to collect sales tax on Internet sellers that have no presence within their borders. The proposal was an amendment to a 2014 budget bill that the Senate debated Friday. It was pushed by Senators Mike Enzi, a Wyoming Republican, and Dick Durbin, an Illinois Democrat, and was designed to give backers a sense of whether they had enough votes to push forward with final legislation to impose an Internet sales tax. The vote showed they have plenty of backing to overcome any filibuster seeking to block a final sales tax bill."
First! (State) (Score:2, Informative)
Not to worry (Score:5, Informative)
They've been trying to pass legislation like this for the last seven Congressional terms, this makes it eight.
http://www.netchoice.org/library/sales-tax-collection-myth-vs-reality/ [netchoice.org] ...legislation has been proposed in each of the past seven Congresses that would reverse decades of history and legal precedent preventing out–of-state sales tax collection, and another bill is being circulated for cosponsors by Senator Mike Enzi (R-WY). It would impose on all states and all retailers the provisions of the now voluntary Streamlined Sales Tax Agreement (SSTA). SSTA proponents have touted this measure as a simplified, streamlined method for collecting sales tax. Unfortunately, the reality is far different – the SSTA promises to increase significantly the complexity and compliance burdens for interstate sellers.
Re:Define "presence" (Score:0, Informative)
No, the law today dictates that having a presence within the state already requires that they pay sales tax. This is why Amazon and Apple already charge sales tax, as does any other company that has as little as a warehouse or fulfillment center located within your state. As it stands currently the state of the recipient can't charge sales tax if the company has no presence at all within the state and that is what this legislation intends to change. If this legislation passes then all companies will be required to charge the sales tax based on the jurisdiction of the recipient.
Today:
1. Someone living in New York orders a product online from a company based in New York. The company charges New York sales tax.
2. Someone living in New York orders a product online from a company based in New Jersey. That company has a warehouse in New York. The company charges New York sales tax.
3. Someone living in New York orders a product online from a company based in New Jersey. That company has no presence in New York. The company does not charge any sales tax.
If this Legislation Passes:
1. Someone living in New York orders a product online from a company based in New York. The company charges New York sales tax.
2. Someone living in New York orders a product online from a company based in New Jersey. That company has a warehouse in New York. The company charges New York sales tax.
3. Someone living in New York orders a product online from a company based in New Jersey. That company has no presence in New York. The company charges New York sales tax.
Of course there is the question as to what happens with international companies and various reasons why this won't work 100%, but that probably doesn't matter much. The reason, aside from generating state revenue, is to level the playing field with brick and mortar stores who have lobbied heavily for this legislation for many years.
People living in Delaware and Oregon won't notice much either way as their state doesn't charge sales tax. Businesses in Hawai'i get a double-whammy, though as instead of a sales tax they have a business excise tax which the business is required to pay and may pass along to the consumer, so if someone in New York orders something from Hawai'i that business would be required to pay the Hawai'i business excise tax and charge New York sales tax.
No taxation without representation? (Score:5, Informative)
This will be struck down. You can't tax a person or business not in your jurisdiction. You could try to make your citizens pay the tax but you can't require an out of state business be a collection agency.
Re:Define "presence" (Score:4, Informative)
And why should they be taxed if they don't have a physical presence in the state?
Sigh. They proposal isn't to tax Amazon. It's to tax *you*. That's how consumption taxes work. So if you live in California and you order something from Amazon you'll pay CA sales tax, in the same way you would if you walked into Fry's.
Re:So now the US is forcing foreign online purchas (Score:3, Informative)
Re:First! (State) (Score:4, Informative)
That's a fair point, but there's more to it than that. A lot of these mail order and online places are located in places where rent and labor is cheap or receive subsidies for being located there. What's more, by only having a couple of warehouses, they save a ton of money.
Which is why the total cost is often times the same or less. And some businesses like BestBuy will charge the same amount of money whether you buy in store or they ship it to you, part of that is because shelf space is quite expensive compared with warehouse space.
As far as in state infrastructure goes, that's infrastructure that the buyer uses, not the retailer, it's called a use tax for a reason, it's use that the buyer gets out of the infrastructure. And no, it's perfectly fair, the buyer uses it regardless of where he or she buys from.
Comment removed (Score:5, Informative)