Obama enthusiastically supports higher taxes -- this time on your purchases online

This isn't about Amazon - they are simply the biggest example. There are plenty of companies that qualify. By structuring your business through subsidiaries and other quirky structures, you can avoid paying sales tax and get a competitive advantage. That goes against the spirit of what was intended by the laws.

Beyond that, sales taxes are designed as a method of funding government of sales that occur in your state. Online sales get around that, thus creating incentive to distort the marketplace based on how you structure your business and where you locate your warehouses. Again, it creates a disadvantage for certain entities that was not intended.

Weird that people are opposed to fixing what essentially has become an accidental loophole in the laws because they were not designed with an internet in mind.

 

I am almost certain that Best Buy and other big-box retailers lobby state and local government for tax breaks. In which case, the locally owned businesses do not have such access. If anything, Amazon is doing the mom & pop a favor by eliminating competition from Wal-Mart and Best Buy.

 

All those B&M stores have the exact same things.

 

You can think that all you want, but the locally owned businesses disagree and support this change. I imagine they understand the economics of their businesses more than you.

 

If you aready operated in the state, you have to collect sales tax. An online only retailer would not. How is that fair?

Would you prefer if B&M stores would just disapper and everyone going to online retailing so that it would remain fair?

 

I suppose we will continue to disagree, so I will draft a brief summary of my final point.

Taxes are meant for raising revenue, not giving certain businesses an advantage or taking advantages away from certain businesses. In fact, I believe such a tax is unfair for small businesses who cannot afford the lobbying power that Target and Wal-Mart have.

Amazon's biggest advantage is their access to credit and equity. They have almost no profit what-so-ever but can easily find people to underwrite their bonds and buy their stock at increasing prices.

So if these taxes are levied and Amazon's already paper-thin margins begin to narrow even further, it will have a distinct advantage over smaller competitors. I think that this will eliminate Amazon's online competition while doing nothing for large corporations like Target, because most of Amazon's customers shop at Amazon (and other online retailers) due to conveniences other than taxation (reviews, easy browsing capabilities, wider selection, etc).

 

A sales tax is unfair because of lobbying power? First I've heard of that.

 

Don't know about other states, but in WI, sales tax on online purchases is already the law and has been for years, just in an idiotic "voluntary" way.

When doing your taxes, you're told to basically add up all your online purchases that weren't taxed at the time of purchase, and calculate the taxes you should've paid. And those get deducted from your return (or you get billed for it).

I've always (*gasp*) actually done this (tends to cost me $100-$200 per year). I figured most people didn't. In fact, around a year ago, over a period of two weeks I randomly asked around 10 acquaintances in passing whether they calculated the taxes they owe for online purchases. NOT ONE PERSON DID. Almost everyone just entered zero. A few entered very small amounts instead. None of them ever got audited for it.

Soooo... yeah. This wouldn't really affect my personal finances at all, since I actually follow the law of the land (of WI). Forcing an online sales tax would effectively just force people to pay taxes they technically owe already. They just won't have an easy lie to get out of it anymore. And, physical retailers will no longer be hurt by this dumb oversight.

So yeah, again, don't know how the laws for every state work. But for WI, I'm all for it.

 

All states have use tax, which is what you are talking about. If you are against this law, you are for tax fraud. That is what this is really about. It isn't worth the cost of auditing every individual for their online purchases, but they are legally supposed to pay the tax.

 

I thought republicans were

1. For regressive taxes
2. For states making decisions over the feds


Hypocrites be hypocrites.

 

Yeah, that's what I figured. Just didn't want to make any assumptions on something I'm not well-read on.

 

Why would a law have to be passed to enforce a law that is being broken? I suspect it is because no law (tax fraud) has been broken.

 

I doubt she or anyone else would. The e-commerce solutions would simply bake it into their software and do it for everyone.

 

It is absolutely law that purchases you make online that you did not pay sales tax on you are to pay use tax in the same amount directly to the state. It is much harder to enforce those laws.

I suspect you don't know anything, or you are a troll. Actually, I figure it is both.

That is like saying why would we need reporting laws to enforce income taxes.

 

E-Commerce solutions don't and can't PAY taxes. They can collect them, but they can't distribute them to the various state entities. To pay Sales Tax to the state of Texas, you have to (a) have a sales tax ID and (b) fill out their online web forms and (c) enter your bank info each month.

People need to stop acting like sales tax is some automated process that takes care of itself - it simply isn't in reality. The real ideal solution was posted earlier - exempt smaller businesses that do less than $x in sales in a particular state.

 

Now you've just gone completely off the rails. If you buy an item from an online site and don't pay sales tax, you are legally required to pay a use tax to your state. No one does it (ie, everyone breaks the law except the one person above who mentioned that they actually pay this), and that's a reason we have stores collect sales tax, even though it's a tax that is technically paid by individuals.

 

This is a bill that attempts to have states enforce taxation against other states. Sales taxes are collected by states. Are you saying all states have the same tax laws governing internet sales?

 

If the state law is such that someone has to pay taxes, then that is the law. That is not what this law is about. States can create their own laws to collect taxes. So honestly, why do states need to create a law to enforce a law that already exists?

 

Retail lobbyist finally bought enough votes? The truth is that S&H in most small purchases already is more than the tax. Amazon caves because they figure it's a great incentive for everyone to buy Prime, and the 1% continue to hide trillions in offshore accounts in order to avoid paying what miniscule tax they haven't managed to bully Washington into reducing even further.

So from a practical standpoint, yes, this is a tax hike on the middle class, a very substantial one.

 

It's not a law that enforces another law - it's a law that updates another law.
The current laws and mechanisms for collection were designed in a different era when the internet didn't exist. Now that it does, the laws need to change to address this new type of business model that wasn't considered before. Laws are updated all the time to adapt to new technologies.