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Senate To Vote On Internet Sales Tax (For Real This Time) 326

Posted by timothy
from the even-more-of-other-people's-money dept.
New submitter JoeyRox writes "On 3/22 the Senate approved a non-binding proposal to allow states to tax online sales to residents outside their state. That vote was a trial balloon to gauge the support for the Marketplace Fairness Act. This week Senate Majority Leader Harry Reid filed a cloture to allow the law to be voted on for real this time. The vote may occur as soon as tomorrow. eBay is attempting to rally Americans against the bill via a massive email campaign."
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Senate To Vote On Internet Sales Tax (For Real This Time)

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  • But very practical, and should have happened sooner. The overall efficiency of our society will increase if people buy more things at local stores. Less gas wasted on shipping, more money staying in its own communities.
    • by subanark (937286)

      Screw the constitution. It is out of date, but people keep standing behind it trying to justify their stance. The constitution is difficult to change and enough people will lose power if any part of it does that they can put a stop to it changing. Some parts I approve of, but that is no excuse for people to keep treating it as the absolute unchanging principal that defines the United States.

      I do agree with allowing tax of online sales should not be different than local stores, but I disagree with your reaso

      • by paiute (550198) on Sunday April 21, 2013 @01:40PM (#43510541)

        treating it as the absolute unchanging principal that defines the United States.

        Except for the fact that it is, you are otherwise correct.

      • by Mashiki (184564)

        Screw the constitution. It is out of date, but people keep standing behind it trying to justify their stance.

        I'm sure you feel that way about the 1st amendment too. And thus is the problem when people believe that founding documents are "living breathing" documents, instead of foundational.

        • by subanark (937286)

          Some of the amendments (in addition to the original) have aged well over time, and I agree with mostly. Others I disagree with. Others still are simply irrelevant in today's time (like the 3rd). I won't let the decisions of past people define the proper way for civilization to be run. Any law, or guideline has a limit to how long it is relevant as long as society changes. In 100 years many of our laws work seem barbaric, short sighted and simply ones that can't be used in the light of changing technology.

        • by dryeo (100693)

          The first amendment is out of date. It needs to be extended with the word electronic as currently it seems that electronic papers aren't covered and many people seem to think it should have some exceptions added for things like child porn and national security. Currently it is disregarded in the above circumstances.
          The second amendment needs to have "well regulated" better defined as that language has changed, same with arms and also why is it OK to have a blanket ban on a class of people owning arms, namel

    • by Warhawke (1312723) on Sunday April 21, 2013 @01:35PM (#43510495)

      Um, what?

      If it's "unconstitutional as heck," then no, no it absolutely should not have happened sooner. You don't just get to flagrantly violate the Constitution -- you know, the document that enumerates states' and citizens' rights -- because it somehow promotes local tribalism. Go amend the Constitution if you want to make something unconstitutional suddenly constitutional. Otherwise, you just basically said it's a good idea to flagrantly violate the fundamental law that has serves as the core of the United States because it affirms your limited idea of what constitutes economic efficiency.

      If a state's sales tax is so high that it is more economically efficient to ship the product from a different state at least 48 hours transit time away than to buy from within the state, it's a pretty clear indication that the tax is too high, or the distribution models within the state are lacking. By your logic, we should violate the GATT 1994 and place punitive tariffs on incoming products from China because they rob hardworking Americans U.S. jobs. Because clearly that's a more logical and economically friendly policy than reducing the number of domestic legislative restrictions that sent those jobs overseas in the first place.

      • by lord_mike (567148) on Sunday April 21, 2013 @01:43PM (#43510561)

        I think the commerce clause is pretty clear that the constitution authorizes the federal government to regulate interstate commerce. Considering that this bill is specifically targeted towards goods ordered and shipped from out of state, it clearly falls under the purview of the commerce clause. It's not even a taxing bill, since it merely specifies that retailers such as amazon must conform to state and local laws in regards to sale. What is exactly "unconstitutional" about this idea?

        • by hedwards (940851)

          Yes, but the states had that right already as they weren't regulating interstate commerce with the taxation. They were taxing in and out of state retailers the same based upon where the items were being shipped to and the person buying the goods was the one being taxed.

          The federal government is just stepping in to provide an enforcement mechanism that the states didn't have due to a lack of jurisdiction over the retailer.

          The only change here is that the states will be paid for the money that they were suppo

        • by Warhawke (1312723)
          What you describe is mutually exclusive, and therein lies the problem. If it's a federal tax then it does fall under the purview of the Commerce Clause, which would make it legal although nevertheless a very bad idea, because it doesn't solve the alleged problem (i.e. states not able to recoup revenue). However, as you point out, that's not what is going on at all. The bill specifies that Amazon must conform to state and local tax laws which are attempting to tax Amazon based on sales to the state despit
    • by WhitePanther5000 (766529) on Sunday April 21, 2013 @01:36PM (#43510499)

      But very practical, and should have happened sooner. The overall efficiency of our society will increase if people buy more things at local stores. Less gas wasted on shipping, more money staying in its own communities.

      Less gas wasted on shipping? Considering that the vast majority of consumer goods are not produced locally, how do they get to the local stores?

    • by shmlco (594907)

      "The overall efficiency of our society will increase if people buy more things at local stores. Less gas wasted on shipping..."

      Right. Because one hybrid-powered UPS delivery truck delivering 50 packages to 50 homes on a computer generated best-path-least-turns route is less efficient than 50 people climbing into 50 SUVs and driving to and from 50 different local stores to buy 50 different items that were themselves shipped to each of those stores.

      Remind me never to hire you to as an efficiency expert...

      • by green1 (322787)

        While I mostly agree with you, it's not quite that simple, and calculating the net environmental impact would be in fact a monstrous task.

        When I order a widget from some guy in china, and he ships it to me directly, it will generally go air mail, if I go to the local walmart and buy the widget, it probably came in a container of widgets by sea and by train. both of which are far more efficient shipping methods than air. for the local part of the delivery you are correct, the UPS truck is probably more effic

    • by Trepidity (597)

      In what sense is it unconstitutional? Congress expressly has the authority to regulate interstate commerce. Here they are planning to add a requirement, to inter-state commercial transactions, that the seller collect whatever sales taxes are required at the destination of the sale.

      It would be unconstitutional for states themselves to levy a tax on out-of-state retailers with no local presence, because 1) they lack jurisdiction over out-of-state retailers to regulate them as local retailers; and 2) they cann

    • by rudy_wayne (414635) on Sunday April 21, 2013 @02:00PM (#43510673)

      But very practical, and should have happened sooner. The overall efficiency of our society will increase if people buy more things at local stores. Less gas wasted on shipping, more money staying in its own communities.

      Wrong on every count.

      While people do buy things online out of convenience, that is only one small part of the story. While I would really like to support local business, I can't because of one simple fact -- local stores rarely have what I want. And so I buy a lot of stuff online. If I need something like computer components, the only "local stores" are a Best Buy which only carries an extremely limited range of products at inflated prices and a MicroCenter 50 miles away. Where's the efficiency in that?

      If "local stores" had everything that people wanted, then online business couldn't exist. But they don't. And it's not even possible. You can't have gigantic stores that stock millions of items in every city and every small town. That would be ridiculous, horrendously inefficient and unworkable, not to mention unprofitable. But large online businesses, like Amazon, etc. can have a few big warehouses around the country that stock millions of items. This gives consumers greater choices and the ability to buy what they want rather than be limited to whatever is sitting on a shelf in a "local store".

      Buying from large centrally located business, like Amazon, Ebay, Newegg, etc is in fact more efficient than 200 million people driving all over the place, going from store to store trying to find what they want.

      • I drove to Target just to get some dinner plates. They were out of stock - not a single plate on the shelf. While walking out of the store I ordered some off of Amazon. They arrived 2 days later on my doorstep.
      • Dude, give up while you still can. Grandparent has 'buy local' religion...you're essentially trying to convince the same kind of person who believes that vaccines cause autism that they might be wrong about something...

    • I doubt it's unconstitutional.

      Article I, Section 8, Clause 3:[3]

              [The Congress shall have Power] To regulate Commerce with foreign Nations, and among the several States, and with the Indian tribes;

      • Think of that word 'regulate' to mean 'make regular' instead of the modern definition of 'control every aspect'. Congress is authorized to fix issues like not being allowed to purchase health insurance from a provider outside of one's own state of residence. Congress is not authorized to redefine state tax laws, except in very specific cases [uscon.mobi].
        • Poppycock.

          Here is the definition of regulate from Samuel Johnson's Dictionary which was considered authoritative in 1755.

          To Régulate. v.a. [regula, Lat.]

          To adjust by rule or method.

          Nature, in the production of things, always designs them to partake of certain, regulated, established essences, which are to be the models of all things to be produced: this, in that crude sense, would need some better explication. Locke.

          To direct.

          Regulate the patient in his manner of living. Wiseman.

          Ev'n goddesses ar

      • by Animats (122034)

        [The Congress shall have Power] To regulate Commerce with foreign Nations, and among the several States, and with the Indian tribes;

        Right. Regulating state taxes is well within the Commerce Clause. What states can't do by themselves is force other states to collect taxes for them.

    • The Constitution was written to preserve a republic, not the environment.
  • this is what Harry Reid decides to push through the senate for a vote? There are dozens of other issues that should be addressed before the senate even considers something like this.
  • Does the Internet sales tax only apply to those who use USD?

    • by green1 (322787) on Sunday April 21, 2013 @02:14PM (#43510737)

      Considering that taxes officially apply even to barter transactions (not that anyone ever declares them), and especially considering that there was another recent article on here talking about how bitcoin is now subject to many of the same regulations as normal currency (like reporting transactions over a set dollar threshold) then yes. this does.

      Of course some currencies and transactions are easier to hide than others, but that doesn't make it legal, only likely.

  • Don't. Every state already has the power to equalize internet and local sales taxes, by abolishing its local sales tax.

    The sales tax is regressive and discourages commerce. Because this goes contrary to the welfare and commerce clauses of the U.S. Constitution, the federal government should be actively discouraging the use of a sales tax, not encouraging it.

    Further, the sales tax encourages cities to offer incentives to big-box stores and give them a competitive advantage over small businesses. On the other

    • Not going to happen. The likelihood of Congress passing up a chance to extend a tax is about the same as them passing up a chance to let themselves off the hook for insider trading. Which was cute, by the way...amazing the lack of debate, and pure speed with which that bill was apparently passed into law.

  • Smarten up (Score:5, Informative)

    by fnj (64210) on Sunday April 21, 2013 @02:10PM (#43510715)

    The title of the summary is STUPID and most of the commenters have absolutely no clue whatsoever what this is. It's not an "internet sales tax", guys. It is simply legilation which would ALLOW the states to collect state sales tax on purchases made via the web, just as they do on other purchases. It doesn't mandate that any state has to do it. It just removes a barrier that currently exists, whereby no state may enlist and compel the services of internet sellers to collect that state's sales tax for them. It doesn't give the FEDS any additional power to collect any new federal tax whatsoever.

    Most or all states already require their own taxpayers to volunteer purchases they made out of state, by WHATEVER means, and cough up the sales tax for same on their tax return. Of course only about one millionth of taxpayers are sucker enough to so volunteer. All this does is make payment unavoidable by burdening the red tape and collection on the sellers.

    I am entirely against the measure, on various grounds, but come on, let's at least realize what this is.

    • It is simply legilation which would ALLOW the states to collect state sales tax on purchases made via the web, just as they do on other purchases.

      Wait, what barrier currently exists? Because California already collects taxes for purchases made via the web. It's called the Use Tax, and there's a space on your 540A tax form to fill it in.

    • "to allow states to tax online sales to residents outside their state" is exactly backwards! The taxing would, if directed by the state, apply to sales to residents _in_ that state. The writer probably confused "sales by vendors outside the state" with "sales to residents outside the state" for some bizarre reason.
    • by stenvar (2789879)

      All this does is make payment unavoidable by burdening the red tape and collection on the sellers.

      That seems like a good thing if you think "Amazon". It doesn't seem like such a good thing if you think "mom-and-pop business" or "part-time open source hardware hacker". They now need to deal with dozens of different states' tax laws and regulations.

      The fact that Amazon backs this tax shows you that they view it as a great way of protecting them from competition by creating barriers to entry.

      • They now need to deal with dozens of different states' tax laws and regulations.

        More likely thousands - I can think of a dozen tax districts within 30 miles of where I'm sitting without even making a real effort...

  • Is to read a tax thread on slashdot, that the rest of the world isn't this burblingly insane gives hope.

    Yes states can collect excise taxes, and yes this bill is constitutional. "On a computer" or "over the internet" do not make fundamental law vanish. Whether state sales taxes are a good idea, is a different question, one of policy, not law.

    • The states can collect the taxes from entities within their jurisdiction. My understanding is that this bill requires entities outside a given state's jurisdiction to collect the taxes. That is unconstitutional.
  • UNLEASH THE HOUNDS!
    (filter was telling me I was yelling, well fuck it, I was yelling)
    AND SEND THE TROLLS TOO!
    (I know, that is a bit redundant, but funny shit none the less)

  • The feds should impose an interstate commerce tax, say 9% and give 3% to the ship-from state and 3% to the ship-to state and the feds grab 3%.
    States with no sales taxes, their 3% is omitted.

    This will give states a bite of in and out traffic, that they get little of now. Not as much as the states full taxes, but they lose most of that now. 3% of both ways is a lot btter than what they have now. It will give the feds something to erase debt, it waill act as a leveller of the playing field.
    States will have to

    • by macbeth66 (204889)

      Hey!

      Don't give them any stupid ideas! They've already got plenty of their own.

      • by aurizon (122550)

        No, It is a good idea. It would get tax to both states and the feds abd be a great leveller of I/S commerce

  • Every year average Americans pay dozens of different types of taxes, and yet many of our politicians are very open about the fact that they want to raise rates even higher and invent even more ways to bleed us all dry. Someday historians will look back and be absolutely amazed at how stupid we were. We have the most complicated tax code in all of human history and at this point the federal tax code is more than four times as long as the entire collected works of William Shakespeare (close to four million
  • by Animats (122034) on Sunday April 21, 2013 @03:27PM (#43511135) Homepage

    All the software and systems for this are already in place for 24 states. [streamlinedsalestax.org] There are services which will do a sales tax calculation for you [taxcloud.net], or you can download all the data files The required inputs are ZIP code (9 digit ZIP code in a few cases where a ZIP code crosses a tax boundary), product class, and date (for "sales tax holidays"). It's complex because the interstate consortium that does this has to accommodate all the vagaries of state sales tax law in each state.

    The idea is that small businesses sign up with a service provider, and send them one check for all state taxes plus an XML file of the transactions. Big businesses will probably run their own software. Expect to see this as a standard component of most shopping cart programs.

    What the Federal law is about is getting all the states on board for this, and applying it nationally. There's even a huge loophole - "Online sellers with less than $1,000,000 in remote sales annually will be exempt from collection requirements. Remote sales are sales to customers in states where the seller does not already have a physical presence." eBay lobbied for that, yet they're still whining about the law.

    • Right, because that's just what I want. Someone else who has all of my online purchase history.

      Plus, it's not that simple. 99% of all retailers calculate total price as base plus tax. Almost all online shopping software supports doing state taxes, but retailers are going to want to charge you the tax at checkout time. This means you feed an XML file into your software, then write a different check to each government. You could have an organization write the individual checks, but you're still billing t

  • by RKBA (622932) on Sunday April 21, 2013 @05:38PM (#43511821)
    Have none of our legistraitors ever read the United States Constitution?

    CONSTITUTION OF THE UNITED STATES
    Article. I, Section. 9: "No Tax or Duty shall be laid on Articles exported from any State."
  • Skip the sales tax and simply apply a VAT tax to everything that is sold to a retailer. In addition, if anything is shipped from foreign sources directly to the user (i.e. a retailer), then they pay the VAT as part of the import.

    This way NOBODY is happy, but the bill will be paid all the same.
  • Screw this. Hard. (Score:4, Insightful)

    by RogueWarrior65 (678876) on Monday April 22, 2013 @10:35AM (#43515339)

    Everyone seems to be missing a key issue here. Everyone is constantly complaining about the high costs of everything. Gasoline? Too expensive. Food? Too expensive. Healthcare? Too expensive. Satellite TV? Too expensive. And on, and on, and on. Why the hell isn't government too expensive? If I have to make do with less, then so does the government.

    Most people have never run a business selling something and therefore have no clue how much time it takes to deal with sales taxes. In most states, even if you have no sales in any given month, you still have to file the paperwork. Proponents of this tax keep saying that it will "level the playing field for brick&mortar stores". Bzzzt. Wrong. A mom & pop brick & mortar store only sells locally therefore they don't have to deal with the out-of-state sales taxes. That effectively gives them an advantage rather than leveling the playing field. Furthermore, big box stores such as Wal-mart don't give a damn because they already have an army of accountants to deal with the paperwork.

    And then who in each local state government is going to process the paperwork suddenly coming in from 49 other states? Oh, well, gee whiz, we don't have enough bureaucrats to deal with it so we'll have to hire more...and pay them...and give them benefits...and a pension...all at taxpayer expense. But wait, this tax was supposed to close budget shortfalls. Oops. Now you've compounded them.

    And ultimately, this will lead to only one thing: inflation. Because nobody is going to take the extra costs up the a$$. They are going to pass it on to the consumer. A VAT tax won't solve this either. In fact it will make it worse because invariably there are sticky fingers all along the government food chain.

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