Internet sales tax, yea or nay?

brianlux · June 2018

Legislation has been in the works for some time to reverse a 50 year-old decision that bars collecting tax on out-of-state sales. eBay is concerned to the point to sending emails regarding the issue to eBay sellers like myself (though I'm hardly an eBay seller- I've sold a handful of items over the last 10 years or so and plan on doing even less now that eBay has a policy that states that buyers can return any item for any reason for refund even if they have themselves damaged it or exchanged it with something different-- yes, that happens!).

My own feeling is that if small business retailers have to collect sales tax (like my wife and her business partner do at their used bookstore) then items sold on-line should be taxed as well. I'm not opposed to all on-line sales but I do think fair is fair and on-line sales should be taxed. And I say this as someone who lists books on-line (mostly obscure stuff, not more common titles that do well in the store). It would complicate my business activities but again, fair is fair.

So I'm curious as to how others here feel about this. On-line sales taxed, yea or nay?

Here's an article that explains some of this in more detail:

https://www.npr.org/2018/04/17/603093440/will-you-soon-have-to-pay-sales-tax-on-every-online-purchase

HesCalledDyer · June 2018

I can understand the concern as a consumer, having to tack an extra few cents to a couple dollars for every purchase you make online. No one wants to spend more money than they have to. But at the same time I also understand that many smaller retail shops that offer online sales are just absorbing these costs and paying extra to their state or states in which they have nexus. It's a bigger hit to the small business than it is to each of 500 or so customers that shop there. I do think it is fair in order to keep small businesses around.

I don't think ebay sales should be taxed unless the seller has an actual business license and is operating under said license for income on the site. Or perhaps if a certain % of the business income comes from ebay sales. But for people like me who usually just buy & sell person to person, it's no different than if I was having a yard sale.

pjhawks · June 2018

brianlux said:

Legislation has been in the works for some time to reverse a 50 year-old decision that bars collecting tax on out-of-state sales. eBay is concerned to the point to sending emails regarding the issue to eBay sellers like myself (though I'm hardly an eBay seller- I've sold a handful of items over the last 10 years or so and plan on doing even less now that eBay has a policy that states that buyers can return any item for any reason for refund even if they have themselves damaged it or exchanged it with something different-- yes, that happens!).

My own feeling is that if small business retailers have to collect sales tax (like my wife and her business partner do at their used bookstore) then items sold on-line should be taxed as well. I'm not opposed to all on-line sales but I do think fair is fair and on-line sales should be taxed. And I say this as someone who lists books on-line (mostly obscure stuff, not more common titles that do well in the store). It would complicate my business activities but again, fair is fair.

So I'm curious as to how others here feel about this. On-line sales taxed, yea or nay?

Here's an article that explains some of this in more detail:

https://www.npr.org/2018/04/17/603093440/will-you-soon-have-to-pay-sales-tax-on-every-online-purchase

I'm not opposed to it but there needs to be one tax. right now every state is different and the question becomes how you define the tax. where are you defining the tax from? where the buyer is, where the seller's corporate headquarters is, where it's being shipped from? all those issues need to be addressed. and what about making purchases from companies not in the country? it's kind of a mess and I'm not sure how to start to address it.

F Me In The Brain · June 2018

If you sell to a location you should collect/pay the sales tax associated with that location. Pretty straightforward, to me.

Where the buyer is located is where the tax should be applied and collected.

HesCalledDyer · June 2018

pjhawks said:

brianlux said:

Legislation has been in the works for some time to reverse a 50 year-old decision that bars collecting tax on out-of-state sales. eBay is concerned to the point to sending emails regarding the issue to eBay sellers like myself (though I'm hardly an eBay seller- I've sold a handful of items over the last 10 years or so and plan on doing even less now that eBay has a policy that states that buyers can return any item for any reason for refund even if they have themselves damaged it or exchanged it with something different-- yes, that happens!).

My own feeling is that if small business retailers have to collect sales tax (like my wife and her business partner do at their used bookstore) then items sold on-line should be taxed as well. I'm not opposed to all on-line sales but I do think fair is fair and on-line sales should be taxed. And I say this as someone who lists books on-line (mostly obscure stuff, not more common titles that do well in the store). It would complicate my business activities but again, fair is fair.

So I'm curious as to how others here feel about this. On-line sales taxed, yea or nay?

Here's an article that explains some of this in more detail:

https://www.npr.org/2018/04/17/603093440/will-you-soon-have-to-pay-sales-tax-on-every-online-purchase

I'm not opposed to it but there needs to be one tax. right now every state is different and the question becomes how you define the tax. where are you defining the tax from? where the buyer is, where the seller's corporate headquarters is, where it's being shipped from? all those issues need to be addressed. and what about making purchases from companies not in the country? it's kind of a mess and I'm not sure how to start to address it.

It is a confusing mess. The company I work for used to only charge sales tax in certain states (I think it was the 4 commonwealths). Now we have nexus in all 50 states and it creates a lot of confusion. Not only with the tax rates, but which rates are applied and why. We require resale tax certificates from all of our customers (we deal with retail & commercial businesses, not individual consumers). We do not charge sales tax to any business with a valid resale certificate unless they specifically request to pay it. Where the confusion lies, is that when one of our resellers sells to a consumer out of state, they must also have a resale certificate for that state. Most businesses that are near state borders are already licensed for both (or all three, four, etc) states and go ahead and supply these, but many times it's a one-off sale or the customer is local but buying & shipping to their vacation home in another state. We calculate tax based on the destination of the shipment. If a business is in Texas but the shipment is going to Oklahoma, Oklahoma sales tax will be charged on the order (unless the reseller also has an OK resale license). This usually ends with a frustrated customer wondering why they're being charged tax when they provided us with a resale cert - and we have to explain that they supplied a TX certificate but the shipment went to OK.

As for international customers, we are not required to charge sales tax unless there is a drop-ship to another state. We do have some customers in the Caribbean who have drop ship locations in Florida, so they are required to pay FL sales tax unless they provide a resale certificate.

I do agree a national, flat sales tax rate would certainly alleviate much of the clusterfuck all of this creates. The problem that creates, however, is what to do with NH, OR, MT, AK, DE who do not charge sales tax or rely on it for state revenue. I'm not sure what the answer to that is, either.

brianlux · June 2018

It is a confusing mess! Good points so far.

I lean toward the idea of having the tax be levied at the local level so that if I buy something on-line from out-of-state, I would pay 8 3/4 % sales tax just like I would if I bought a box of nails downtown at Placerville Hardware. But that would mean the selling agent (be it eBay, Bilbio, Amazon, or what have you) having to have in their system a tax calculator for the 3,007 counties in the U.S. or even more because some counties have differing tax rates within certain cities. So a single tax rate makes better sense.

Sadly, if this goes through, figuring it all out will be yet another bureaucratic nightmare that will end up costing tax payers millions of dollars.

F Me In The Brain · June 2018

HesCalledDyer said:

pjhawks said:

brianlux said:

Legislation has been in the works for some time to reverse a 50 year-old decision that bars collecting tax on out-of-state sales. eBay is concerned to the point to sending emails regarding the issue to eBay sellers like myself (though I'm hardly an eBay seller- I've sold a handful of items over the last 10 years or so and plan on doing even less now that eBay has a policy that states that buyers can return any item for any reason for refund even if they have themselves damaged it or exchanged it with something different-- yes, that happens!).

My own feeling is that if small business retailers have to collect sales tax (like my wife and her business partner do at their used bookstore) then items sold on-line should be taxed as well. I'm not opposed to all on-line sales but I do think fair is fair and on-line sales should be taxed. And I say this as someone who lists books on-line (mostly obscure stuff, not more common titles that do well in the store). It would complicate my business activities but again, fair is fair.

So I'm curious as to how others here feel about this. On-line sales taxed, yea or nay?

Here's an article that explains some of this in more detail:

https://www.npr.org/2018/04/17/603093440/will-you-soon-have-to-pay-sales-tax-on-every-online-purchase

I'm not opposed to it but there needs to be one tax. right now every state is different and the question becomes how you define the tax. where are you defining the tax from? where the buyer is, where the seller's corporate headquarters is, where it's being shipped from? all those issues need to be addressed. and what about making purchases from companies not in the country? it's kind of a mess and I'm not sure how to start to address it.

It is a confusing mess. The company I work for used to only charge sales tax in certain states (I think it was the 4 commonwealths). Now we have nexus in all 50 states and it creates a lot of confusion. Not only with the tax rates, but which rates are applied and why. We require resale tax certificates from all of our customers (we deal with retail & commercial businesses, not individual consumers). We do not charge sales tax to any business with a valid resale certificate unless they specifically request to pay it. Where the confusion lies, is that when one of our resellers sells to a consumer out of state, they must also have a resale certificate for that state. Most businesses that are near state borders are already licensed for both (or all three, four, etc) states and go ahead and supply these, but many times it's a one-off sale or the customer is local but buying & shipping to their vacation home in another state. We calculate tax based on the destination of the shipment. If a business is in Texas but the shipment is going to Oklahoma, Oklahoma sales tax will be charged on the order (unless the reseller also has an OK resale license). This usually ends with a frustrated customer wondering why they're being charged tax when they provided us with a resale cert - and we have to explain that they supplied a TX certificate but the shipment went to OK.
As for international customers, we are not required to charge sales tax unless there is a drop-ship to another state. We do have some customers in the Caribbean who have drop ship locations in Florida, so they are required to pay FL sales tax unless they provide a resale certificate.
I do agree a national, flat sales tax rate would certainly alleviate much of the clusterfuck all of this creates. The problem that creates, however, is what to do with NH, OR, MT, AK, DE who do not charge sales tax or rely on it for state revenue. I'm not sure what the answer to that is, either.

Lots of good info, Dyer, and my company has faced similar situations. We do not have physical presence (or even employees in Satellites) in all 50 states we some states still demand that you pay taxes or show that your customers paid the taxes and/or are exempt.

With the states feeling the crunch of dwindling funds this encourages them to go after small businesses and levy huge fines.

It would be wiser to establish a uniform rule and to apply it across -- and to start enforcing it from Day 1.

Taxes are very tricky. I do believe in them, but some states (where I live, NJ) are out of frigging control with the way they tax the shit out of everything.

mace1229 · June 2018

I never understood why tax wasn’t collected online. I’ve enjoyed not paying it, but there doesn’t seem a reason not to.
i have a small Etsy shop online, and I collect tax to items shipped to WA state because by law it is required there.
Luckily Etsy collects and handles all that for me (at least I think they do...) I would hope eBay does the same, honestly wouldn’t be worth the hassle for the 2 or 3 things I sell a year on eBay to now have to worry about taxes.

PJ_Soul · June 2018

I think that if these are state taxes, then those who aren't in that state shouldn't pay the taxes. Sales taxes are specifically meant to benefit those living within the state, or visiting it. Sales taxes are supposed to basically be like a "benefit" to everyone in the state, to which they contribute. When someone is neither living in nor visiting the state, and therefore receives none of those benefits, then I don't think they should have to contribute to the fund. I do understand the other side of the argument though, especially when it comes to products that have a huge out-of-state market, because that "takes" tax revenue from the state in question... but isn't that a reasonable sacrifice for the state, given that if there is a big out-of-state market, that's benefiting that state's economy anyhow?
FWIW, we do pay taxes on things from other provinces in Canada. In fact, the seller charges the taxes that are charged in the buyer's province. For example, if someone in BC sells something to someone in Ontario, the seller does not charge BC's 5% GST and 7% PST. They charge Ontario's 13% HST (different for each province). But I can't speak to what happens to the tax revenue after that (that's handled by a whole other department at my job, lol).

Meltdown99 · June 2018

I say no more taxes...and we need to eliminate some and the government needs to learn to live within its means like the rest of us ... also we are not ATM machines for leeching politicians...

mookeywrench · June 2018

If you can't figure out what percentage to collect, who should benefit from it, who should remit it.... then you shouldn't enact it.

brianlux · June 2018

Meltdown99 said:

I say no more taxes...and we need to eliminate some and the government needs to learn to live within its means like the rest of us ... also we are not ATM machines for leeching politicians...

I'm not against taxes but I very much not thrilled with how the money is spent. It's gotten so bad that I think as a society we just accept the wastefulness as business as usual. Not a very smart way to do things.

mookeywrench said:

If you can't figure out what percentage to collect, who should benefit from it, who should remit it.... then you shouldn't enact it.

True! But I wouldn't be surprised if someone figures out how to do all that. As to who will benefit, see above. More waste.

Meltdown99 · June 2018

brianlux said:

Meltdown99 said:

I say no more taxes...and we need to eliminate some and the government needs to learn to live within its means like the rest of us ... also we are not ATM machines for leeching politicians...

I'm not against taxes but I very much not thrilled with how the money is spent. It's gotten so bad that I think as a society we just accept the wastefulness as business as usual. Not a very smart way to do things.

mookeywrench said:

If you can't figure out what percentage to collect, who should benefit from it, who should remit it.... then you shouldn't enact it.

True! But I wouldn't be surprised if someone figures out how to do all that. As to who will benefit, see above. More waste.

I’m not against taxes either ... I’m against raising taxes. Here in Canada we could lower taxes...

HesCalledDyer · June 2018

I'm not opposed to raising taxes in theory, as long as they are spent the way they are supposed to be - but that's the problem. They're not used as intended. In America, they're used to make the rich richer and the bombs bigger.

And here in Maryland, state taxes are used to give everything to the I-270 corridor (Frederick to DC) and nothing to the other 95% of the state that's poor, has terrible roads, and little to no public services.

Meltdown99 · June 2018

HesCalledDyer said:

I'm not opposed to raising taxes in theory, as long as they are spent the way they are supposed to be - but that's the problem. They're not used as intended. In America, they're used to make the rich richer and the bombs bigger.

And here in Maryland, state taxes are used to give everything to the I-270 corridor (Frederick to DC) and nothing to the other 95% of the state that's poor, has terrible roads, and little to no public services.

Maryland sounds like Ontario ... Ontario stops at London ... we in southern Ontario constantly get the shaft.

Shawshank · June 2018

This seems like a nightmare to try and enforce. If it wasn't a flat rate tax, then it would be insanity to send tax payments to every state/county you've had a transaction in.

HesCalledDyer · June 2018

Shawshank said:

This seems like a nightmare to try and enforce. If it wasn't a flat rate tax, then it would be insanity to send tax payments to every state/county you've had a transaction in.

It's a big clusterfuck for sure. We get audited almost every month, but usually the auditors pick a state or three, so at least we don't have to dig through everything. Thing is we don't know which states until they show up, so we still have to be on top of the entire game.

brianlux · June 2018

HesCalledDyer said:

I'm not opposed to raising taxes in theory, as long as they are spent the way they are supposed to be - but that's the problem. They're not used as intended. In America, they're used to make the rich richer and the bombs bigger.

And here in Maryland, state taxes are used to give everything to the I-270 corridor (Frederick to DC) and nothing to the other 95% of the state that's poor, has terrible roads, and little to no public services.

This!

Meltdown99 · June 2018

brianlux said:

HesCalledDyer said:

I'm not opposed to raising taxes in theory, as long as they are spent the way they are supposed to be - but that's the problem. They're not used as intended. In America, they're used to make the rich richer and the bombs bigger.

And here in Maryland, state taxes are used to give everything to the I-270 corridor (Frederick to DC) and nothing to the other 95% of the state that's poor, has terrible roads, and little to no public services.

This!

Here is the thing. What if the existing taxes were just used appropriately ... then there'd be no reason to keep raising them.

And what's wrong with expecting government to live within their means. How many of you can go to your employer and say "you know boss, I can't live within my means, give me more money".

brianlux · June 2018

Meltdown99 said:

brianlux said:

HesCalledDyer said:

I'm not opposed to raising taxes in theory, as long as they are spent the way they are supposed to be - but that's the problem. They're not used as intended. In America, they're used to make the rich richer and the bombs bigger.

And here in Maryland, state taxes are used to give everything to the I-270 corridor (Frederick to DC) and nothing to the other 95% of the state that's poor, has terrible roads, and little to no public services.

This!

Here is the thing. What if the existing taxes were just used appropriately ... then there'd be no reason to keep raising them.

And what's wrong with expecting government to live within their means. How many of you can go to your employer and say "you know boss, I can't live within my means, give me more money".

If the taxes were used prudently, not only would they not need to be raised, they could be lowered... although I might argue that instead of lowering taxes, use more to clean up our oceans and solve other environmental and social problems.

Meltdown99 · June 2018

brianlux said:

Meltdown99 said:

brianlux said:

HesCalledDyer said:

I'm not opposed to raising taxes in theory, as long as they are spent the way they are supposed to be - but that's the problem. They're not used as intended. In America, they're used to make the rich richer and the bombs bigger.

And here in Maryland, state taxes are used to give everything to the I-270 corridor (Frederick to DC) and nothing to the other 95% of the state that's poor, has terrible roads, and little to no public services.

This!

Here is the thing. What if the existing taxes were just used appropriately ... then there'd be no reason to keep raising them.

And what's wrong with expecting government to live within their means. How many of you can go to your employer and say "you know boss, I can't live within my means, give me more money".

If the taxes were used prudently, not only would they not need to be raised, they could be lowered... although I might argue that instead of lowering taxes, use more to clean up our oceans and solve other environmental and social problems.

In Canada we are over taxed ... estimates have the average Canadian paying half of their income to one tax or another...and our bloated public sector does not provide good service...

Internet sales tax, yea or nay?

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