Politics & Current Events
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Tax free internet shopping may soon be gone :(
Re: Tax free internet shopping may soon be gone :(
We already have to start paying tax on Amazon in August. That's about the only site I use that doesn't charge tax. Since you're supposed to claim it on your taxes anyway, it's never really been "tax free"...just now you can't not pay it. :P
I love online shopping too but I'm not upset about it. Paying taxes, in general, does not bother me because the money is being used for important things like schools, roads, community parks, etc.
As an Internet Retailer we already collect sales tax for orders we ship within our home state of OH but the additional rules could turn into an accounting nightmare for us:
The bill would empower states to require online retailers to collect state and local sales taxes for purchases made over the Internet. The sales taxes would be sent to the states where a shopper lives.
I read somewhere it would exempt small business with sales less than a million a year.
Other than that, I don't think it will affect my shopping habits and I sure hope it would hurt our online business.
So do you pay the sales tax rate according to where you live? So since I live in Oregon, where we don't have sales tax, I wouldn't have to pay? Or is it one rate and distributed according to where the customer lives?
I think it's only fair that people pay the same tax regardless of whether they shop online or in a regular store (I don't get a break on my income tax for shopping online, or even for working in another state), but since there are so many distinct areas charging sales tax across the country, it also sounds difficult. On the other hand, figuring out how much tax to add for each state and send it to the correct place, with the assistance of computers, will probably not be more difficult than figuring sales tax and keeping that money separate and sending it to the local state government was for conventional businesses before computers.
From what I understand if your state doesn't currently asses a sales tax, then this would not affect you.
Where it becomes an accounting nightmare (IMHO) as a small business owner who sells online will now have 50 jurisdictions in which to file a sales tax return quarterly versus just one in their domiciliary state.
And while computers can be programmed to collect the correct sales tax, it still takes time to compile that data and enter the information on the prescribed form for the state.
Some states have different sales tax rates in different counties. I would be interested to learn how that would be handled.
The only thing I've been charged our sales tax online was Norton Internet Security.
Nothing else.
Weird
I usually only buy on amazon or ebay which don't have tax. I did buy DD a tshirt for her bday a couple months ago and noticed there was a tax line on it and that was news to me. I'm always pinching penny's so I'm kinda annoyed by it because I always feel I'm getting a deal online than in the store and that money I save can go towards a bill or retirement.
That's only because it's not in your state...I know NYers pay tax on Amazon because they are located there. If you buy from a seller on ebay that resides in your same state, you're supposed to pay sales tax (unless you live in NH or some other state w/o sales tax, of course).
It does stink that we'll have to pay tax on Amazon...not so much for small purchases but for the bigger ones. But we've been lucky not to have been made to do it sooner, I think.
Yep, that's right. I sell on eBay too and if you live in OH and you buy from me I have to charge sales tax. But, I am sure for every eBay seller who is following the law there are 10 who are not.
As an aside, my inbox has been lit up with emails from eBay encouraging me to contact my Senator etc to oppose this. I really don't have an opinion strong enough either way to go to the lengths of contacting my Senator about it.
Do y'all think this will change your online shopping activities at all?
I wasn't aware of that, thanks for the clarification. It could change online shopping for me. For example if my hair products will be the same amount or more because of the tax I will go back to buying them at the store with a coupon. Things like diapers though I will probably still buy online.
Probably not. I like the convenience of Amazon Prime. Even with tax I still think a lot of their products will be cheaper, or at least the same, as in store. It would be worth it not to have to take DS and drive to the store for just one thing, and even more so when we eventually have #2 and I don't want to take both kids out. For big purchases it might be worth it to go to a brick and mortar store since that was one big benefit to not being charged tax on Amazon but we'll see.
Paying taxes for online purchases would not deter me from buying online....the selection is wider than what is available in stores and for that reason alone I think online shopping rocks!
But I do have a question.
I thought I read somewhere that these taxes would only have to be calculated and charged by businesses making $1M+ in profits each year. Small retailers would not have to do this.
Has anyone found anything about this? And, if this is true, wouldn't that mean that pretty much all eBay sellers were in the clear??? And, if that's true, why is eBay getting so involved?
ML, I had read that retailers who has less than $1M in gross sales would be exempt. One think to keep in mind, may eBay sellers also have an online store separate from eBay, those sales would be included in the calculation I would imagine.
You would be surprised how many eBay sellers actually hit the $1M mark. eBay has made it increasingly more difficult for little sellers to make it on eBay and they have been really trying to be more like Amazon with the big sellers (Overstock, HP, Apple, etc). I think they are so involved because it may help keeping those big sellers around.
That's great unless you're the store owner and your customers are going online to buy the same things you sell in your store solely because you're required by law to charge sales tax and they're not.
That's true, but it's also a convenance factor to me as well. Not having to get in my car and go to the store, so in turn I'm saving on gas too
I had no idea about this. Thanks for responding. I learned something new!
The bill may die in the house.
http://news.yahoo.com/internet-sales-tax-bill-hit-roadblock-house-162524097.html
Cnon
yea
No, I agree. It's more convenient to buy stuff online sometimes. But I don't really see why your local mom and pop store should have to charge sales tax, but Amazon doesn't. It's really not fair to small businesses for the government to give online sellers this huge advantage.
you make a good point. it's not fair
But how is it fair to the internet retailer to all of the sudden have to deal with 50 different taxing jurisdictions, become knowledgeable about 50 different taxing jurisdictions and be subject to audit from those 50 different taxing authorities. Brick and Mortar stores only have to deal with the taxing authorities of their state of domicile.
Most states have a use tax (OH does and KY too). If you want to be fair, I think it makes more sense to crack down on the people who are already buying stuff from Amazon, eBay or my little online store - but not paying their use tax to their residential state.
I think the argument is this: Because you're getting the benefit of being able to sell to people in all 50 states (and bringing in dollars from people across the nation). The brick and mortar store only gets the local dollars. If it's too much of a hassle, then only sell locally. But it is fair because you are getting those dollars.
Well that's all well and good but you missed my point. Most (if not all) states have a use tax, which means for anything you buy out of state you should report that to the state you reside in and pay tax on it. Why not enforce the rules we already have instead a coming up with new ones.
I wouldn't go as far as to say dealing with 50 different taxing jurisdictions will be a "hassle" and you are making an assumption that online business make tons more money than a brick and mortar store. That isn't necessarily so.
I can safely say if this passes it will force a lot of small (online) Mom and Pop businesses to close their doors. And how is that good for the economy?
I know a lot of women who sell on eBay and probably would love to open a brick and mortar store but cannot because of their family obligations. These women have spent years researching the ins and outs, put their blood sweat and tears into their business. So how are they any less important than a brick and mortar store?
No one is saying they have to open brick and mortar stores. And no one is saying they are less important...just that they should pay the taxes owed. If you have sales of more than $1M I don't think that's too much to ask.
With all due respect, I am sure that is easy for you to say if you have never ran you own business. But certainly entitled to your opinion.
And you seem to miss my point that I would much rather enforce the laws currently on the books versus passing brand new legislation. If a consumer makes a choice to purchase something over the internet why should they not pay the use tax themselves with their state income tax return? Why should the onerous fall upon the business owners?