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[Captain Sparrow]

http://news.cnet.com/8301-13578_3-20009603-38.html

The halcyon days of tax-free Internet shopping will, if Rep. Bill Delahunt gets his way, soon be coming to an abrupt end.

Delahunt, a Massachusetts Democrat, introduced a bill on Thursday that would rewrite the ground rules for Internet and mail order sales by eliminating the option for many Americans to shop over the Internet without paying state sales taxes.

At the moment, Americans who shop over the Internet from out-of-state vendors usually aren't required to pay sales taxes. Californians buying books from Amazon.com or cameras from Manhattan's B&H Photo, for example, won't be required to cough up the sales taxes that they would if shopping at a local mall.

This is hardly a new debate: pro-tax officials and state governments have been pressing Congress to require taxes to be collected for a decade or so. They argue that reduced sales tax revenue threatens budgets for schools and police, and say that, as a matter of fairness, online retailers should be forced to collect the same taxes that brick-and-mortar retailers do.

But with states scrambling for new sources of revenue during what may be a double-dip recession, pro-tax lobbyists are hoping that they'll have better luck this year. The National Conference of State Legislatures applauded Delahunt's legislation, saying he should be commended for allowing states to collect as much as $23 billion in new taxes.

So did the Retail Industry Leaders Association, whose tax committee members include Wal-Mart, Home Depot, Costco, AutoZone, Target, and IKEA.

On the other side are groups that advocate for lower taxes and retailers including Amazon.com and eBay. In a statement on Friday, Tod Cohen, eBay's vice president for government relations said: "At a time when unemployment rates are high and small businesses across the country are closing shop, we are confident that Congress will protect small Internet retailers and the consumers they serve from another Internet tax scheme."

Co-sponsors of Delahunt's bill, the "Main Street Fairness Act," include Reps. Michael Capuano, John Conyers, Stephanie Herseth Sandlin, and Peter Welch, all Democrats. No Republican has signed on as a co-sponsor.

The final version of Delahunt's legislation had not yet been made public on Friday, and his office did not immediately respond to queries from CNET. But it's expected to be similar to other versions he's introduced before.

Earlier versions were drafted in response to a U.S. Supreme Court decision saying that, in general, out-of-state retailers can't be required to collect sales taxes unless Congress changes the law. The justices noted in a 1992 case called Quill v. North Dakota: "Congress is now free to decide whether, when, and to what extent the States may burden interstate mail order concerns with a duty to collect use taxes."

One exception to that rule is a legal concept called "nexus," which means a company can be forced to collect sales taxes if it has a sufficient business presence. If Amazon had an office in California, it already would be collecting sales tax for Golden State residents. (Another exception is the sale of cigarettes, which is covered by the Jenkins Act.)

In response to complexity concerns, the pro-tax forces have offered a proposal that they hope Congress can be persuaded to adopt. The concept is called the Streamlined Sales Tax Agreement, invented in 2002 by state tax officials hoping to straighten out some of sales tax laws' most notorious convolutions.

Since then, some 24 states have signed on, either wholly or partially, to the agreement, meaning they agree to simplify their tax codes and make them uniform. If enough states participate, proponents believe it will be easier to convince Congress to make sales collection mandatory for out-of-state retailers.

"Despite a decade of trying to reduce the unreasonable burdens cited by the Supreme Court, the actual simplification achieved by the Streamlined Sales Tax Project is not nearly sufficient to convince Congress that it should abandon its role in protecting interstate commerce," Steve DelBianco, executive director of the NetChoice coalition, said in e-mail on Friday. Coalition members include AOL, eBay, Expedia, and Yahoo.

There is one caveat under existing law: online purchases from sites like Amazon and eBay only seem to arrive tax-free. Legally, however, purchasers are required to pay their own state's sales tax rate--the concept is called a "use tax"--and then voluntarily report the amount owed at tax time. But, state tax collectors say, few do.

State tax collectors haven't exactly been idle while waiting for Congress. They've been trying to force Amazon to turn over purchase records in North Carolina, attempting to force retailers to become tax-tattlers in California and Tennessee, and putting the squeeze on affiliate programs in Colorado.

Earlier this week, the Direct Marketing Association sued Colorado, saying its law requiring out-of-state retailers to turn over purchase history information is unconstitutional.

How do you feel?

Personally, I think this NEEDS to pass. I'm against new taxes more than anyone else but, this is not a new tax. To get this country back on the path it needs to be, the states can't have budget deficits. Not only do we need jobs like teachers and police officers to make our cities better places, but by them having money, they are able to put it back into our economy.

Also, I feel it will also help local economies by bringing jobs back to retail. I personally know lots of people that shop online mostly because they can evade the sales tax. Retail employees work hard and how many of them have had their positions (full time, supervisor, etc) cut because of what the internet did.

The argument that this is too complicated is complete BS. Look at what technology can do. Where have we been limited before? This is Amazon and eBay talking. If a small business cannot survive because of having to pay sales tax, then they don't deserve to be around. Why should we give online businesses the unfair advantage. Are we doing the same for local businesses that have been hurting?

This would end up costing me like $10 more a year. I know the benefits will be much higher. I know we all want to save $1 here and $1 here, but there consequences. The internet is to blame for a good chunk of this crisis, and we need to stop letting it run amok and destroying everything we have known.

 

[Manos: The Hans of Fate]

Internet Sales Tax A Good Idea:

Seriously screw that crap. I already have to deal with the turds in Albany putting that stupid 8% sales tax on Amazon purchases, PSN, and other digital services.

 

[Trurl]

It seems fair if we're going to have a sales tax. I don't like sales taxes in general, though, as they're regressive.

 

[Vox-Pop]

boooooooooo

 

[johnsmith]

That's it, i'm voting republican.

 

[dudeguy24]

:lol If this happens in CA

If it does, then it pretty much means that I'm only buying used and never buying retail from now on.

 

[McLovin]

I think they need to fix their spending habits before they charge more taxes.

 

[axiomnightmare]

Oh Democrats. You guys just don't want to win any mid term elections, do you?

 

[Dresden]

I wouldn't mind paying it.

 

[Slavik81]

I can't believe there wasn't one already. It seems ridiculous that there's not.

 

[harSon]

I'd prefer not too but that's a purely normative statement. I know people are selfish and only think about themselves, but Internet Taxes is definitely something that I feel should happen.

 

[B.K.]

I already have to pay sales tax on stuff I buy on the internet here in Tennessee.

 

[wwm0nkey]

I say do it.

 

[Drkirby]

But its interstate commerce, isn't it illegal to tax most online sales by there own laws?

 

[JesseZao]

You guys would probably want to pay taxes on your bandwidth usage if they wanted to pass that too...

 

[Evlar]

:lol If this happens in CA

If it does, then it pretty much means that I'm only buying used and never buying retail from now on.

I imagine the market for used milk, used meat, and used hygiene products will be difficult to break into.

 

[Vox-Pop]

:lol If this happens in CA

If it does, then it pretty much means that I'm only buying used and never buying retail from now on.

Meg Whitman won't let it happen (I hope).

I imagine the market for used milk, used meat, and used hygiene products will be difficult to break into.

Isn't food tax free already?

 

[ToxicAdam]

This would piss me off, but thankfully the money is going to great people that are extremely competent and efficient in what they do. Think of it as an investment into our bright futures.

Paying more taxes is the most patriotic thing you can do. God Bless You All.

 

[kai3345]

What the fuck? Who in their right minds would agree with this?

 

[loosus]

I will go for this only if this means that they can lower sales tax rates, since (theoretically) they will collect more taxes.

lol Yeah, I know.)

 

[Slavik81]

You guys would probably want to pay taxes on your bandwidth usage too if they wanted to pass that...

I'm opposed to higher taxes, but I'm even more opposed to market-distorting taxes, which is the current status quo.

 

[Evlar]

Meg Whitman won't let it happen (I hope).


Isn't food tax free already?

Depends on local laws. Anyway, he didn't say he would boycott sales tax; he said he would boycott retail.

 

[Manos: The Hans of Fate]

I say do it.

I'd prefer not too but that's a purely normative statement. I know people are selfish and only think about themselves, but Internet Taxes is definitely something that I feel should happen.

But its interstate commerce, isn't it illegal to tax most online sales by there own laws?

Not if they have minimum contacts with the state. Google International Shoe and I hate you for making me have to mention that case again. :lol

 

[Drkirby]

I imagine the market for used milk, used meat, and used hygiene products will be difficult to break into.

The online used meat market is huge!

 

[Schmitty]

This would piss me off, but thankfully the money is going to great people that are extremely competent and efficient in what they do. Think of it as an investment into our bright futures.

Paying more taxes is the most patriotic thing you can do. God Bless You All.

:lol :lol

I agree, we don't need anymore taxes when we are recovering from a recession

 

[PhoncipleBone]

You guys would probably want to pay taxes on your bandwidth usage if they wanted to pass that too...

The difference is that they dont tax that already, where purchases made at stores within a state already charge tax. This is just making it a uniform thing within the states and not giving certain things such as Amazon, a free pass of not charging the tax that most places are required to do already.

 

[harSon]

Sorry for actually giving a shit about stuff outside my immediate vicinity.

 

[Mabef]

Why are people against this? I mean, besides having to pay more. Is there something unfair about this tax?

I don't understand both sides of this argument.

 

[Neuromancer]

This kind of stuff is why I always regret having voted Democrat.

 

[Veidt]

wow
politicians just want anarchy don't they? It's fucking sad that the government is trying to get tax the consumers more than taxing corporations. But it's mostly their own fault for not doing anything about it. Apathy will be the death of their rights.

 

[GhaleonQ]

I'm opposed to higher taxes, but I'm even more opposed to market-distorting taxes, which is the current status quo.

Me, too (as a rather conservative person), although 1 could argue that related markets have adjusted. I'm no defender of local businesses for their own sake, but I don't think the efficiency is large enough to justify the lost jobs. That said, I'd be against this as a bulwark against further taxation.

 

[Escape Goat]

yes, government. please take my money.

 

[water_wendi]

Good. This needs to happen.

 

[Trurl]

:lol :lol

I agree, we don't need anymore taxes when we are recovering from a recession

Especially sales taxes which directly discourage consumers.

 

[B.K.]

I agree, we don't need anymore taxes when we are recovering from a recession

We're recovering? That's news to me.

 

[Captain Sparrow]

Why are people against this? I mean, besides having to pay more. Is there something unfair about this tax?

I don't understand both sides of this argument.

Me neither.

Actually I do, people are selfish. I understand that the government is far from perfect, but it's right to just let Amazon not contribute to the well being of our society like every other business must do?

 

[harSon]

yes, government. please take my money.

I'll be 100% against tax hikes when citizens start using their amassed savings from lowered taxes to better their respective city's infrastructure and the alternative doesn't require budget cuts to stuff like education.

 

[entremet]

Why are people against this? I mean, besides having to pay more. Is there something unfair about this tax?

I don't understand both sides of this argument.

The problem is that what's next. Taxes are a slippery slope. After taxing Internet purchases, what's are politicians going to think of next, when we're facing our next economic downturn. Plus these aren't temporary. They're permanent.

But, from a demographic point of view, our generation is making more and more purchases online. So that's a lot of tax renevue lost on states that are dependent on sales tax revenue, especially with the budget crises many states are facing.

The issue is far more complex, though. Voters hate new taxes, but they complain about cuts in services. New Jersey is prime example. It has one of the highest property taxes in the nation, yet like many states. It's facing a budget deficit. The current governor won on a platform on helping the states finances back on track, while reducing taxes. However, in order to make do this services have to be cut. Right now his approval rating is tanking, mostly due to his proposed cuts to services.

What really needs to happen is that the American voter needs to make up their mind. They want low or no new taxes, but then they also want to keep SS and Medicare solvent. They want a strong national defense and also improved infrastructure. Where are governments going to this money from?

 

[blame space]

this hits home close to GAF i see.

personally, i rarely if ever order anything online. so...yeah, charge me tax just like you would've if i'd bought it in the store. I don't care either way.

 

[ALeperMessiah]

Me neither.

Actually I do, people are selfish. I understand that the government is far from perfect, but it's right to just let Amazon not contribute to the well being of our society like every other business must do?

Amazon pays corporate taxes. But that's not really the point. The consumer always pays the tax, be it sales or income, or payroll, or any other tax. It all goes back to the customer.

 

[Suikoguy]

I expected this hammer to drop many years ago...

 

[The Faceless Master]

this gives local businesses another unfair advantage. they only have to manage the taxes in their local area, while online businesses would have to organize and manage paying out taxes to thousands of municipalities in 50 states, all with wildly different tax codes.

will those 800 number infomercial products have to charge tax now too?

 

[PhoncipleBone]

The problem is that what's next. Taxes are a slippery slope. After taxing Internet purchases, what's are politicians going to think of next, when we're facing our next economic downturn. Plus these aren't temporary. They're permanent.

But, from a demographic point of view, our generation is making more and more purchases online. So that's a lot of tax renevue lost on states that are dependent on sales tax revenue, especially with the budget crises many states are facing.

DING DING DING! And there is the reason it will most likely pass, and should pass in my opinion. It is simply making sure the money spent IN the state, goes to that state.

 

[Drkirby]

Why are people against this? I mean, besides having to pay more. Is there something unfair about this tax?

I don't understand both sides of this argument.

Really, its the paying more, since it takes one of the major advantages of online shopping out. A 6.5% "discount" is pretty nice on $50+ items.

And don't say Amazon doesn't contribute taxes, they still have to pay corporate income taxes.

 

[Mashing]

I already have to pay sales tax on stuff I buy on the internet here in Tennessee.

That's probably because whoever you are buying from have a warehouse in your state. You have to pay tax on products that are stored in your state of residence.

 

[Manos: The Hans of Fate]

Sorry for actually giving a shit about stuff outside my immediate vicinity.

Donate your own money.

NYC's sale tax just insures I don't buy consumer goods in its state and I'll continue to do that for as long as I live here. I'll just pay 3.5% in Newark or 0% in Chinatown. :lol

 

[Escape Goat]

this hits home close to GAF i see.

personally, i rarely if ever order anything online. so...yeah, charge me tax just like you would've if i'd bought it in the store. I don't care either way.

I dont understand how so many people can have such an apathetic attitude towards their finances. Oh well its only money. Its one thing to be for or against but to be so wishy washy it just confuses the hell out of me.

 

[LQX]

And with Obama at the helm this will surely go through. I use to be ignorant to the fact that the more people are tax the less they buy but it hit home when NY started charging tax on certain online places like Amazon. I use to spend hundreds a year on Amazon. The most I have bought this is year is a damn book and a few bargain bin games.

 

[Trurl]

I'll be 100% against tax hikes when citizens start using their amassed savings from lowered taxes to better their respective city's infrastructure and the alternative doesn't require budget cuts to stuff like education.

A sales tax on Amazon would make text books more expensive for some people. I'm not against taxes, and it does seem unfair that internet businesses get around a burden that brick and mortar stores have to put up with. It's just that sales taxes are the worst of taxes. So I guess I have mixed feelings.

 

[blame space]

I dont understand how so many people can have such an apathetic attitude towards their finances. Oh well its only money. Its one thing to be for or against but to be so wishy washy it just confuses the hell out of me.

i literally bought one thing from an internet site last year. my apathy is due to.. not giving a shit about $10.