To tax or not to tax out of state internet sales

OCD_OCD: WASHINGTON -- Tax-free shopping on the Internet could be in jeopardy under a bill making its way through the Senate.

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.

Under current law, states can only require stores to collect sales taxes if the store has a physical presence in the state. As a result, many online sales are essentially tax-free, giving Internet retailers a big advantage over brick-and-mortar stores.

The Senate voted 74 to 20 Monday to take up the bill. If that level of support continues, the Senate could pass the bill as early as this week.

Supporters say the bill is about fairness for businesses and lost revenue for states. Opponents say it would impose complicated regulations on retailers and doesn't have enough protections for small businesses. Businesses with less than $1 million a year in online sales would be exempt.

"While local, community-based stores and shops compete for customers on many levels, including service and selection, they cannot compete on sales tax," said Matthew Shay, president and CEO of the National Retail Federation. "Congress needs to address this disparity."

And, he added, "Despite what the opponents say this is not a new tax."

In many states, shoppers are required to pay unpaid sales tax when they file their state income tax returns. However, states complain that few people comply.

"I do know about three people that comply with that," said Sen. Mike Enzi, R-Wyo., the bill's main sponsor.

President Barack Obama supports the bill. His administration says it would help restore needed funding for education, police and firefighters, roads and bridges and health care.

OCD_OCD: Yet another tax in the offing. *sigh*

sebtheanimal: These kinds of new taxes must be fiercely opposed to the point of throwing the individuals out of office. They MUST deal with existing sources of tax revenue to support good causes. If they cannot, then it is they who must be cut not the end consumer's spending income.

OCD_OCD: I couldn't agree more, Seb. Just because you have the ability to institute a new tax doesn't mean that you can institute a new tax to cover up the financial disaster that is State, Local and Federal governmental financial abuse of the tax dollars they already receive.

OCD_OCD: Since when was the answer to overeating feeding someone more?

sebtheanimal: Their pensions created budgetary deficits. The end consumer should never be asked to fork more money for massive failures of the state.

OCD_OCD: Rather than fix their own problems, it's easier to demand more from the taxpayers. Because they can.

sebtheanimal: No they can't. There will be a limit somewhere as to how much people are willing to have taken away from them. This won't be it but a step towards that.

sebtheanimal: Maybe I'm wrong and there's no limit how much direct spending income they will reduce in an exchange for a non-binding promise to do some good.

OCD_OCD: The government seems to only want tax increases and bigger government despite the fact that we have multiple agencies handling the same programs, fraud and graft is rampant, but the answer isn't to work on the problems, just raise taxes and let it roll. madness.

Ka0tic: They have been talking about this in oz for the last two years,hopefully this isnt the precedent our politicians are waiting for..

sebtheanimal: They've been talking about this since the late 90s in the states.Back then it was a ridiculous notion to hamper commerce.

OCD_OCD: Now they want to punish, naturally via taxes, those entrepreneurs who build a better mousetrap with a virtual store and in some instances, having a chance to maximize their profits without having to have the expense of a brick and mortar store. So, in order to REGULATE success, they prefer to manipulate the system so that this innovation is brought down and punished for success.

OCD_OCD: A 1992 supreme court ruling that said a state could not force a retailer to collect sales tax unless the retailer had a physical presence in the state. Photo: Scott Sady/AP

The US Senate on Monday passed a bill aimed at ending tax-free shopping on the internet but the move looks set to face fierce opposition before it becomes law.

The Marketplace Fairness Act, which has cross-party supporter and the backing of powerful retailers, would give states the power to require retailers with sales over $1m to collect state and local sales taxes for online purchases.

The bill has the support of president Barack Obama the majority of senators including Republican John McCain but Marco Rubio, seen a potential Republican presidential hopeful, and Rand Paul both voted against the bill.

The bill passed the Senate by 70 votes to 24 but faces a second test in the House of Representatives where internet retailers and conservatives are already lobbying against the tax. House leaders have yet to schedule hearings or votes on their version of the measure.

The legislation would overturn a 1992 supreme court ruling that said a state could not force a retailer to collect sales tax unless the retailer had a physical presence in the state.

The bill has aligned unlikely parties. Amazon, the largest online retailer, has joined its bricks-and-mortar rivals including Walmart to support the act. Amazon was once a staunch critic of the tax but as it has built more distribution centers it has become liable for sales tax in more states and is now a backer.

The largest online opponent is eBay, which has campaigned against the bill and organised a mass protest by its sellers. Other opponents include numerous conservative and antitax groups including Americans for Tax Reform, FreedomWorks and Heritage Action.

Ahead of the vote the National Retail Federation called for Congress to "level the playing field" and tax online retailers. "The Marketplace Fairness Act is a commonsense piece of legislation necessary to modernize and streamline our federal and state understanding of sales tax laws so that they can keep current with real world change in the marketplace," said NRF senior vice president David French.

"As the retail industry evolves and digital commerce becomes a more prominent portion of total retail sales, it is critical that the tax laws not discriminate between businesses based on how their products are distributed," French said.

"This collection disparity has tilted the competitive landscape against local stores, creating a crisis for brick-and-mortar retailers around the country and in your state," French said.

http://www.guardian.co.uk/technology/2013/may/06/senate-passes-internet-sales-tax-amazon/print

OCD_OCD: The Senate apparently believes that they can pass a bill in direct conflict with a U. S. Supreme Court ruling. Amazing.

Of COURSE it's going to meet with "fierce opposition"

Secret Mastermind: They taxed the US for its tea. We know how well that went.

Dennae:
"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."

Which state gets the sales tax if the shopper is international?

Succinct Verbosity: "They taxed the US for its tea. We know how well that went."

I can't get my copy of Friends Season 2 without attached Sales Tax. The humanity.

OCD_OCD: The Federal government gets the sales tax.