Renewing the push to collect Net taxes

(continued from previous page)

cannot continue to bear an unfair sales tax burden from which their on-line competitors are effectively exempt."

But neither measure made it out of its respective committee, and no hearings occurred.

"That didn't surprise any of us," said Peterson, the reform project co-chair. "We were thinking, Don't pass this thing now, we're not ready. Let us get this thing up and running, make us prove this thing actually works. Our task is to prove that we can make this thing work."

Outcry from e-tailers
No one's sure how many remote vendors that aren't currently obligated to collect out-of-state taxes will volunteer to do so beginning Oct. 1.

Approximately 94 percent of the 100 largest retailers, including Wal-Mart Stores, Target, Sears, Best Buy, Circuit City and RadioShack, already collect sales taxes from their online customers in states where they operate a physical location, according to a 2004 report by Forrester Research.

"That just leads me to suggest that a big chunk of this 'shortfall' is self-correcting," said Steve DelBianco, executive director of the NetChoice Coalition, whose members include 1-800-Contacts, eBay, America Online and Orbitz.

NetChoice supports the streamlined system in theory, DelBianco said, but the organization is skeptical about whether state tax officials have gone far enough in their plan.

eBay, in policy statements published on its government relations Web site, called the system "remarkably unsimplified," noting that it allows for a different tax rate for each ZIP code--as many as 49,000 jurisdictions--as opposed to the some 7,600 state, county and city zones that exist today.

"Now is not the time to impose new tax burdens on American consumers and small-business owners, or do anything to hamper the growth of e-commerce," the Web site said.

But that wouldn't be the case, said Maureen Riehl, vice president of government and industry relations for the National Retail Federation, a proponent of the streamlined plan. The proposed legislation would include a small-business exception that would compel only sellers that gross more than $6 million per year to collect sales taxes themselves, Riehl said.

The details of that exception, however, are still being ironed out, DelBianco said.

"It is way premature for the states to ask for or even deserve a federal mandate," he said. "No federal mandate should be given unless and until the states truly simplify, compensate sellers for cost of integration and tax processing, and provide a robust small-business exception that's adjusted over time."

[Steve Jordan]

Simple, or nothing.

As a prospective online businessman, I can see charging taxes to customers, and I'm okay with that. But if it's not simple, it's not worth the hassle. The idea of even having to keep track of sales taxes for 50 states is crazy enough, never mind for thousands of zip codes! If I was making serious money from online sales, I'd move offshore just to avoid all that!

[aabcdefghij987654321]

There's a reason this is so complicated

The idea of sales tax being paid to the state where the purchaser lives is flawed. They should be charging sales tax for the point of sale.

But that's just one more flaw in a system rife with flaws. When the government applies both income and sales taxes it's burning the candle at both ends, when they add in property taxes, capital gains taxes and estate (death) taxes they've lit fires at several places along the middle of the candle too. That's why the "flat tax" idea is resisted so hard, if the public truly knew how much they pay in taxes (which would be shown by a flat tax) there'd be another tax revolt.

[mikey001]

Collect - Yes! Pay - No!

It's not so much of a case that on-line retailers won't collect the sales tax; they will be more then happy to add 3-8% onto the sale. The problem is then insuring that these retailers actually pay the states that they are collecting taxes for. As with many of the local computer shows, where the businesses come into the show from out of state, they are happy to add tax to the final sale price, but rarely (if ever) actually send the tax to the state comptroller.

[m.meister]

Tired of being nothing more than a revenue stream

I am growing extremely tired of being nothing more than a
revenue stream to my state and local government.

California is a great example of this absurd behavior (you the
taxpayer are supposed to calculate the difference of the tax you
paid somewhere else and what you would have paid and then
send the state the difference). I say "Up Yours!"

The use tax is absolutely absurd in its nature and shows how
arrogant these states have become.

The Income tax is nothing more than indentured servitude to the
state and federal government. Simply by the act of working, you
owe money -- ridiculous. Combine that with the bizarre sales
tax approaches and you realize that we, the people, are nothing
more than a source of revenue to the folks in the various
legislatures.

Income Tax, Sales Tax, Property Tax, Use Tax, Gas Tax and then
Fees every time I want to actually use services these taxes
should have used for and I think it's time to start holding these
folks accountable before they get one dime more. I'm tired of
working just to supply my various government leaders with
money they can pass off to their buddies and their companies.

I say make income tax unconstitutional (now there's a reason to
change the Constitution), issue a flat tax and start holding these
politicians accountable for all the back-door corporate welfare.

[ross brown--2008]

It may be different in the States...

"The Income tax is nothing more than indentured servitude to
the state and federal government. Simply by the act of working,
you owe money -- ridiculous. Combine that with the bizarre
sales tax approaches and you realize that we, the people, are
nothing more than a source of revenue to the folks in the
various legislatures."

Apologies if this is a difference in the tax systems between the
US and the UK (where I live) but, er, isn't all that tax generated
by your "indentured servitude" used to pay for pesky things like,
oh I don't know, education, welfare, defence, roads etc. You
know, those awkward little parts of life that none of us could get
along without.

As for state sales tax; you guys can't really have it all ways can
you? Either you have a Federal government and individual states
have a lot of devolved responsibility, or they don't. If you do,
then those States need a way of raising cash to run their State.
And whilst I agree that individual sales taxes for each state can
be confusing, surely you allow each state to dictate it's own
needs - and therefore the budget it requires.

Apologies for the mini diatribe, especially from a bloke in the UK
who may not have a perfect handle on America's tax system -
but when I see comments such as "indentured servitude" I see a
person speaking without thinking.

Ross

[dusher]

Which 13 States?

The journalist would do well to identify in the piece the 13 states that have taken the pledge?
dusher

[rhyssleary]

The List of States

? Oct. 1, 2005: Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Nebraska, New Jersey, North Carolina, North Dakota, Oklahoma, South Dakota, West Virginia.


? Within two years: Arkansas, Ohio, Tennessee, Utah, Wyoming.


? States with no sales tax: Alaska, Delaware, Montana, New Hampshire, Oregon.

[bluemist9999]

A Simple Suggestion

If the states want to collect such a confusing set of sales taxes, I feel the states should do something like this:

The states would setup and maintain a distributed web service which implements these rules.

The vendors would each have a vendor ID, would submit a description of the item and the price being paid. The vendor would submit this information to the clearinghouses' web service. Based on this, the vendor would receive a tax amount to charge and location to send it.

Include some random audits of vendors to ensure they are being honest.

Otherwise, forcing online vendors to implement such a complex scheme is an unfair burden.

[m.meister]

a recipe for total abuse

Unfortunately, that would be a recipe for total abuse by the
states, the entity running the shared service and/or vendors.

One of the arguments used is that it gives etailers an unfair
advantage compared with local stores, so to really be fair -- the
shipping costs should be subtracted from any tax owing as well.

States essentially want a tax increase (they say there is $15
Billion in lost "revenue"), so they need to justify this increase as
well. We need to stop giving to these folks blinding and praying
they'll do the right thing -- because they haven't been doing a
great job. When they run out of money, they just TAKE MORE.

[bobby_brady]

No way...I'll buy more fron individuals

if I'm being forced to pay for sales taxes online. We're already getting screwed by so many taxes, why cave in? I'll buy more from Ebay where the government will have a hard time collecting from individuals.

[bobby_brady]

If I'm forced to pay online sales tax...No more buying

online for me. I love buying from Amazon, no sales taxes and free shipping are $$$ in my pocket. But once government tries to screw people AGAIN and force us to pay more taxes for their ineffiecent government programs, forget it. I'm gone.

[jmmejzz]

All taxes are . . .

All taxes are an income tax, whether it is determined by
purchase or by property owned, they are are all income taxes.
The only difference is that a sales tax ( and property tax ) is
regressive in that it punishes the poor, those less able to pay.