States Push to Tax Internet Shopping

[Ed Hansberry]

<a href="http://news.com.com/States+push+to+tax+Net+shopping/2100-1028-6060450.html?part=dht&amp;tag=nl.e433">http://news.com.com/States+push+to+tax+Net+shopping/2100-1028-6060450.html?part=dht&amp;tag=nl.e433</a><br /><br /><i>"Online purchases from sites like Amazon.com and eBay may seem to arrive in a state of untaxed bliss. But the law actually requires shoppers to pay their own state's sales tax rate--the concept is called a "use tax"--and voluntarily cough up the exact amount owed each year at tax time."</i><br /><br />New York state has gone so far as to add a line on the income tax return to report your amount of online purchases so you can easily calculate the amount of taxes owed. If you are audited and you under-report, penalties and interest could be 300% of the amount you would have had to pay if you had been honest.<br /><br />Seems the benefit of online buying in the US is an illusion that is coming to an end as bureaucrats everywhere look to take more money out of your wallet and spend it on whatever social program they deem important at the time. :evil:

[Phillip Dyson]

I guess the presence of the tax doesn't bother me so much. Its the fact that it becomes my responsibility to track it throughout the year.

I'd rather see the online stores have to incorporate state taxes into their systems.

[keirmeister]

They'd be hard-pressed to get people to "volunteer" their online purchases. For myself, I ignored that section of the NY taxes (like I could remember everything I bought online anyway).

Besides, screw the gov't and their online-buyer tax. Let them close the tax loopholes for the megacorporations, big oil, and millionaires...then talk to me about an online tax.

:roll:

[mscdex]

I'd have to agree. Although I'd prefer not pay tax on things I buy online, you ARE supposed to pay the use-tax for your state for items you did not pay sales tax on. But I also believe that if they are going to require you to pay the use-tax anyway, there might as well be some sort of law requiring businesses online to take the right amount out at checkout. This would make things so much easier on us consumers.

[Damion Chaplin]

Believe me, avoiding sales tax is not the benefit of buying online. It's the conveniece of buying Ant Stakes from the comfort of your couch. Don't laugh - I sell a whole lot of Ant Stakes over the internet.

Really though, letting us consumers determine what taxes we need to pay only guarantees that either A) we forget something and under-pay or B) don't pay it at all. Why don't they just repeal the no-tax-if-bought-out-of-state law? Then we'd all be paying the taxes we're supposed to.

In business they have a term "Setting yourself up for failure", and this is exactly what the US government is doing... For Bob's sake, I can't even remember everything that I've bought over the internet this month, let alone the last 4 months or even 12...

[PPCMD]

States should either require the online sellers to collect it or stop asking. Goodl luck tracking down everyone who has ever bought online to begin with. Not to mention I don't see NYS offering up the local sales tax to the individual cities and counties either.

[msafi]

Seems the benefit of online buying in the US is an illusion that is coming to an end as bureaucrats everywhere look to take more money out of your wallet and spend it on whatever social program they deem important at the time. :evil: i'd rather have it spent on social programs rather than unnecessary and costly war...


sorry about the political comment. i had to say it.

[ibmiked]

The problem with State-based sales tax is that within each state there are counties with different tax rates. An online vendor could conceivably charge such a tax based on region, but until there is a way to file thousands of sales tax returns each quarter (including tracking returns and filing for refund checks), the burden will fall on the consumer.

Strangely enough, the US Supreme Court did not rule that inter-state collection of sales tax was not required by Mail Order (and now internet) companies, only that such a collection of taxes would be an insurmountable burden to business, and could not be expected of them. With the advent of the digital age though, many companies (at the request of the states) are working on software to automate the process for even the smallest companies, thereby removing the Court's objection, and thereby forcing us all to pay our own state's sales tax rate on ANY online purchase.

Maybe more than was needed, but I figured you'd all like a glimpse at the near future.

[lapchinj]

Death and Taxes is something that can't be avoided. While I don't welcome the tightening of the screws with regards to use taxes I think that its time has come or will come shortly simply because we're not talking about chump change here we're talking about big bucks for the states in lost tax revenues along with the lost revenues for local businesses.

But I feel that it's very wrong for states to make shoppers the tax collectors when this job really belongs to the merchant. After working for several years as a programmer at a large tax data house I don't think that the average person has the knowledge to find out what's taxable, what or how much goes to the state and or local government etc. Many times the taxes collected along the borders with other states are different than those collected inland (NY/NJ border comes to mind). There are tax holidays etc. Is the use tax rate the same tax rate paid in the state? This is not necessarily true, they can be different rates. Does the average person have to know all this? Do we really want to know all this? This should be a merchants headache not the shoppers. Do shoppers have to start reading state ordinances to figure out what taxes to pay. While use taxes are not rocket science and in most cases are pretty straight forward there is enough room for the average shopper to goof up and get screwed with a hefty fine.

There is enough software and data available (for a price) for a merchant doing business on-line to purchase or subscribe to help them calculate any use tax for any US place (ie. zip code). If states can figure a way to make the telecomm companies figure out and pay the those complicated taxes then they can figure out a way to make on-line merchants do the same for simple use taxes. (For example: cell phone call made from Alabama to California, billed to a company in New York, paid for by a company in Florida and owned by someone in Texas.)

Many of these on line merchants know and planned on business coming their way because use taxes were simply being ignored. How many people from NY buy merchandise on-line from NY web sites. This is the same for Texans and people in other states. Let the merchant carry the burden of collecting taxes.

Jeff-

[Raphael Salgado]

I agree with keirmeister wholeheartedly.

I don't mind paying taxes just as long as it's going for the right reasons.

Don't even consider taking another $3.00 for my $100 online purchase if you're going to make me pay for typographical errors (http://www.msnbc.msn.com/id/11638039/), lavish spending of Senators and Congressmen for their leased luxury automobiles (http://www.philly.com/mld/inquirer/14075936.htm), personal acquisitions (http://www.philly.com/mld/inquirer/14329308.htm), and personal vacations (http://www.tracypress.com/local/2006-02-09-Pombo.php), not to mention sex offenders getting sexual performance enhancement prescription drugs (http://sayanythingblog.com/2005/05/22/sex_offenders_get_viagra_at_taxpayer_expense/), frivilous lawsuits by inmates (http://www.lectlaw.com/files/fun30.htm), and the rest of the United States trying to write off abortions and other things as a deductible (http://www.fool.com/taxes/2005/taxes050211.htm?source=eedyholnk0000001), and that's only after 5 minutes of Googling.