Senate advances bill to tax Internet sales

[SMR 368]

Why should a small brick and mortar company be forced into spending the extra money for internet sales simply because the internet companies figured a way around the tax laws? Why should internet companies be exempt from paying taxes like everyone else has been? The small brick and mortar stores have been doing things the right way for years, it's up to the newer internet companies to comply just like they have been.

BTW, did you see the part I posted where internet companies with less than a mllion in annual sales are exempt from this new law?

But small brick and mortar companies aren't required to pay taxes to jurisdictions beyond the jurisdiction in which they exist, even though they make sales to people that don't live in their jurisdiction. Making internet companies do so wouldn't be a level playing field.

And as I said, putting a cap on exempt sales creates a whole web of problems and discourages growth.

[GandD 5,966]

But small brick and mortar companies aren't required to pay taxes to jurisdictions beyond the jurisdiction in which they exist, even though they make sales to people that don't live in their jurisdiction. Making internet companies do so wouldn't be a level playing field.

And as I said, putting a cap on exempt sales creates a whole web of problems and discourages growth.

Consumers that buy something in another state with lower sales tax are supposed to report those differences to the state they live in.

Just like you're supposed to pay tax on anything you don't get taxed for in an online transaction. The consumer is supposed to report these to the state.

Edited April 26, 2013 by GandD

[Mr. Big Dog 10,747]

But small brick and mortar companies aren't required to pay taxes to jurisdictions beyond the jurisdiction in which they exist, even though they make sales to people that don't live in their jurisdiction. Making internet companies do so wouldn't be a level playing field.

Brick and mortar businesses collect and pay taxes on their customers regardless of whether the taxes in the location of the business are higher or lower than the taxes in the location where the customer resides. That's not the case for internet companies. Probably because the selling business - at least on paper - are in locations where no sales taxes are due. By the way, none of the businesses pay any sales tax at all on their sales. Their customers do. The business merely collects the tax and pays it to the state.

And as I said, putting a cap on exempt sales creates a whole web of problems and discourages growth.

No business has ever foregone growth opportunities because it would pay taxes. Besides, as I said above, these sales taxes are paid by the customer, not the business.

Consumers that buy something in another state with lower sales tax are supposed to report those differences to the state they live in.

Correct.

[Teddy B 17,252]

I didn't want to take any chances. With my luck I'd be the first person imprisoned for not declaring an out of state purchase on my taxes.

The long arm of Duval would get you.

[GandD 5,966]

I think it's exempt as long as you ate it before you crossed the state line back into Mass.

Shouldn't you have to pass it too? Don't want to be convicted of smuggling.......

Edited April 26, 2013 by GandD

[Teddy B 17,252]

Shouldn't you have to pass it too? Don't want to be convicted of smuggling.......

Who's gonna check?

I don't see people lining up for that job, do you?

[spookyturtle 9,466]

Who's gonna check?

I don't see people lining up for that job, do you?

Maybe one or two from here?

[Teddy B 17,252]

Maybe one or two from here?

Just one or two?

I retract my statement that no one will be lining up for that job. Seems like the line will be quite long.

Edited April 26, 2013 by Teddy B

[spookyturtle 9,466]

Just one or two?

I retract my statement that no one will be lining up for that job. Seems like the line will be quite long.

True since so many seem to have their heads in that particular orifice.

[SMR 368]

Brick and mortar businesses collect and pay taxes on their customers regardless of whether the taxes in the location of the business are higher or lower than the taxes in the location where the customer resides. That's not the case for internet companies.

I'm not denying that the current situation favors internet companies. But the proposed change favors brick and mortar companies. It's much easier to follow one set of tax laws and remit taxes to a single jurisdiction than to follow 9600 sets of tax laws and remit taxes to all of them. If you want it to be fair, make internet companies pay taxes to their own jurisdiction. Although you may see some pull towards tax havens, small companies probably can't move and large companies would have bigger problems to worry about (if you don't believe this, explain why large internet companies today have a physical presence in highly populated states with high sales tax such as New York and Washington). The only issue would be that you would need to somehow make front companies in tax havens impractical, but that can probably be done.

Probably because the selling business - at least on paper - are in locations where no sales taxes are due.

An interesting conjecture. I'm not convinced it really plays out. Large companies have bigger fish to fry (as above, look at Amazon). Small companies probably don't have the flexibility to choose where they are located.

By the way, none of the businesses pay any sales tax at all on their sales. Their customers do. The business merely collects the tax and pays it to the state.

What's your point? The business receives payment from its customers (some businesses choose to label some of this money as tax). A portion of that money is paid to the government as sales tax. Customers naturally bear all of the costs of a business or that business would go out of business. I fail to see how this is relevant beyond semantics.

As far as taxes not hindering growth, I guess I feel like a $1 million sales limit is quite low. The NASDAQ 100 has an average revenue per employee of $500k. That would mean that your third employee would be taking care of taxes. Obviously, the NASDAQ 100 may not scale down to that level very well, but the point is that at $1 million revenue you've only got a handful of people at most. If the cap were set at, say, $10 million in sales, I could see the 21st employee being the tax guy as reasonable.