4:59 pm
May 25, 2012


Retailers Push GOP on Online Sales Tax

    • Hope the GOP holds firm on resiting this. The big box retailers are trying to use “tried & true” govt regulation to suppress internet merchants.

      Instead, why aren’t the BB lobbying their state govts to ~reduce~ sales tax rates and reduce govt spending? That would also “level” the playing field.

      In Calif, these sales taxes mainly go toward transfer payments (ie, welfare in its various forms) and paying for the extravagantly high wages and pensions of the govt labor unions.

      A couple blocks over, we’ve got a retired fireman (age mid-50s) who’s raking in a guaranteed $200K pension for the next 35-50 years of his life, plus virtually fully paid healthcare, plus guaranteed cost of living increases. When the money runs out and all the private sector taxpayers have moved out of state, I’m sure these govt unions will be rioting and burning down the state, like in Greece. A pox on them all.

    • We already pay too many taxes… why should a state tax a company who is not receiving any state benefits.. As far as big box stores seeing no taxes as unfair.. What I would have paid in taxes usually goes to shipping… a level playing field in my eyes. The shipping charges create jobs, not like taxes

    • I agree with Kirth. What’s the point of adding another “revenue” stream that politicians (on both sides) would just spend in their endless quest to buy votes? It would be OK if these new taxes were offset with real spending cuts. But spending is never really cut, so the GOP would be idiotic to help pass this new tax and facilitate the continued growth of the government blob.

    • Is the problem the big box stores face really state taxes? I’ve been in to Best Buy and I will compare the price with Amazon or some other online store. Most of the time the prices are significantly different and that is before sales tax is added in. If I see the prices are the same I’ll get it from Best Buy so I don’t have to wait. But that is rarely the case. Amazon has a larger selection, user reviews, and are generally cheaper.

    • The irony is they tap the GOP to push taxes up….. when they should be pushing my party to eliminate them all together. That would make it fair and square. But herein lies the hidden agenda of the GOP… they don’t want fair, they want more taxes.

    • Some atrocious thinking going on in these posts.

      A basic principle of tax policy is horizontal equity: similar entities (humans, businesses) engaging in the same behavior ought to be taxed similarly. You would be furious, are rightfully so, if Congress decided to give a coworker working the same position at the same hours for the same salary as you a pass on paying taxes without a compelling reason to do so. After all, that revenue hole has to be eaten by someone else, which will likely be you. It’s a basic principle of equal treatment under the law, only applied to taxation. And that is precisely the problem here: companies engaged in the same business are getting a free pass solely because of their method of sale. Thus the problem with the first 5 comments as well as the Republicans who oppose equal treatment under sales tax. Not having to pay sales taxes gives an unfair competitive advantage on online retailers, and the cost doesn’t simply disappear, it must be made up by balancing the lost revenue on everyone else’s shoulders.

      Call it corporate welfare and call it a tax loophole, and do so with the conviction that you’re using the terms correctly. Meaningful tax reform cannot happen when blatant unfairness is condoned. Those who are so staunchly opposed to tax revenue increases that they couch and even promote basic unfairness need to seriously reexamine their policy priorities. Orrin Hatch, as well as Kirth, Mckraft, and Tom willingly promote an unequal system that incentivizes loophole exploitation and produces disastrous allocation of capital, which would inevitably take an axe to economic efficiency.

      In short: If you want to play the game, you need to play by the rules. The rules should be changed, and when they are, they need to be changed for all the players, not just some.

    • You will get no argument from me that we too many taxes. However, one small fact seems to escape many residents minds. The ballot initiatives constantly voting in favor requiring funding for increased educational demands, state medical facilities, fire and police protection and so much more all require constituents to honor their existing tax obligations. Unfortunately, states are being forced to raise and implement existing taxes as their residents demand more while evading existing tax obligations. For over 50 years sales and use tax on out of state purchases are legally required to be remitted by residents to their jurisdictions. Many continue to both knowingly and unknowingly evade sales and use tax legally due.

      The good news is! Technology available today easily rids consumers’ burdens of having to deal with sales and use tax remittance. In a recent study %86 percent of consumers surveyed unanimously agreed they would prefer to have the tax collected at point of purchase and remitted by the retailer. But how can a retailer possibly calculate and remit sales tax for over 10,000 different tax jurisdictions?

      Amazingly, technology freely available today on the Internet automates tax calculation, collection and remittance procedures for any jurisdiction in any state eliminating even todays burdens encountered in single states’ procedures. Twenty four states currently utilize one standard automated e-file remittance procedure. Passage of Federal legislation will encourage remaining states to adopt similar simplification standards before being granted authority to request tax be remitted on out of state purchases.

      As a small business owner currently employing modern technology enabling tax processing for any jurisdiction in any state. Modern technology easily eliminates the many tax processing burdens encountered by businesses today providing new found efficiencies for consumers, merchants and governments.


    • To you Tax hawks… please explain “why should a state tax a company who is not receiving any state benefits..”

    • Nexus is an important element of tax fairness and is not present in this proposal. With that precedent gone, what other state taxes will come to be? Equity needs to understand the customer, not the business pays the tax. Sten may have a product to sell or promote that lets technology do all the work, but sales taxes come at the state, county and city level and all require significant accounting to prepare correctly. The Use tax is the responsibility of the buyer and enforcement needs to be there.

    • Anne and all the Romneys we buy all we can online. We hide our wealth in tax havens and Switzerland. We also get tax extensions all the time and we pay lower tax rates than most americans.

    • The obligation to pay the tax is on the buyer. Most states have a ‘use’ tax or something similar that their citizens are supposed to pay in lieu of the online sales tax. The problem is that most people don’t pay it voluntarily. B&M retailers want the federal govt to force internet retailers to collect the tax that the states themselves can’t collect from their own citizens. Why should an out of state retailer become an unpaid tax collector for some far-off state? Make the states collect their own taxes from their own citizens.

    • The current law actually discourage businesses from establishing a location in a state because this triggers Sales tax to be collected, recorded, calculated and submitted. This creates an extra burden on the company. The tax itself creates an extra burden on the customer because the cost is passed through to them.

      In every state in which I am aware the taxpayer is asked if they made any un-taxed out of state purchases and the tax is supposed to be submitted with their state return… My experience (I have prepared returns since 1969, worked for DH&S and ran my own firm for the last 19 years) is that higher income individuals, (i.e. those over $350,000 annual income) are more likely to declare and pay the excise/sales tax.

      We are over burdened with taxes and regulations and some tourist state have high sales tax and little or no income tax other states are just the opposite. If we were to resolve the differences in sales taxation it may result in additional jobs if physical presence in the form of distribution centers, Customer service, repair and service centers will be more appealing to companies. Plus the same technology that allows comparisons is also technology that eases the work to compute and submit the tax.

      Most of the clients I have, about 53%, paid no income tax so sales tax was their state contribution. And almost 30% got back more than they paid in by as much as $10,000. So the tax structure already encourages high income individuals to invest, contribute and legally shelter as much as they can. The entire tax structure needs to be revamped and the embedded social engineering in the deductions and credits need to be examined…..

    • Like many here on this post, I too am not willing to pay taxes to a state that benefits from my purchase. The state did nothing to facilitate the transaction and bears no cost of the sale. This is a matter of sour grapes for Walmart and politicians looking for another revenue stream. The Supreme Court made clear 20 years ago – no taxes collected for out-of-state sales. If Walmart was benefitting from this tax law, they would dig in like Amazon and other Internet retailers. Don’t rain on Amazon’s parade or mine. A better business model will win every time. Instead of layering on another tax policy, Congress ought to focus on the national tax policy in general. Taxes are not the problem here.

    • no new taxes, fed,state city gov have been growing for 50 years along with taxes fees surcharges of all sorts to pay for this bloated mess, In NH we pay 58 cents a gal in gas tax, 18 1/2 to feds 38 to da state.
      lets get accurate accounting of the money gov collects in taxes then close down old outdated ofices agencies a real scale back of the size and cost of gov.
      Do you know how many people work for the dept of ed federal state city country? look it up its scary.

      in NH we have 60 miles of toll roads, for thrirty years we paid for one toll road commissioner to manage this 60 mile mess, but law makers have add 5 more toll road commissioners, guess they cound’nt find one person smart enough to manage the whole 60 miles so they hired 6 dummies to manage 10 miles each, come on state thats
      tax payer abuse.

    • The Tweet of this said regular retailers pay sales tax and online ones don’t. Well I’ll let you in on a LITTLE SECRET. Regular retailer DON’T PAY SALES TAX. They COLLECT the tax and pass it on. Where’s the inequity???? And BTW business owners…until you learn what Customer Service means…until you hire human beings instead of the self-absorbed, constantly texting creatures who act as if you have completely screwed up their life by coming into the store…I’ll buy online. I don’t need to pay to be insulted or treated as lower life form!

    • “A problem is that many Republicans are reluctant to take any action that looks like a tax increase.”

      Another words they realize that taking capital from the productive side of the economy and transferring it to the “overhead” side of the economy will lead to the same economic success attained by Cuba and North Korea…..(and Greece, Spain and Venezuela).

    • Notice that it is always the Democrats that want to kick down your front door and take more of your property in order to perpetuate their gluttonous, debt-mongering socialism?

    • Despite previous comments, it’s still a fairness issue. Our laws and constitution have plenty to say on unequal treatment before the law, which is what this is. Many small retailers now find they can’t sell expensive items because customers go online to get a no-tax price. internet taxation would just level the field.

      It’s true the state did not facilitate the transaction but taxes don’t pay states for facilitating transactions. They pay for schools, prisons, etc. The logic of internet taxation is inevitable.

    • This is an opportunity to eliminate all sales taxes everywhere and not to impose a tax online sales.

    • When the price of energy involved with travel to a brick and mortar retailer, I occasionally order online to save cost. No footwork or time lost. Has little to do with tax.

    • @954,
      You are on the money, great post.

      Unlike “Mitt the untaxable” alias liberal anonymous @852, whose desperate, immature post sticks out like a sore thumb, on a hand full of sensible, mature phalanges.

    • @Mckraft They are not taxing the company, they are taxing their own inhabitants. The inhabitants of a state are subject to sales taxes in return for the “services” that are given to them by the state. One can argue that the services are not worth the tax, but that is a different argument. One argument that I see that has merit is the one about the size of the internet firm and the complexity of the tax system. Yes, Amazon can probably figure out if you owe taxes given your ship to address. But what about the mom and pop internet “boutique”? One distinct advantage that the internet has is that it allows you to expand your customer base geographically at virtually no cost to the vendor. That makes otherwise faulty business models viable for the vendor and gives value added to the buyer. The market for left handed smoke shifters is just too small to allow me to find folks who will buy enough of them in my area to pay the rent. But if I put up a storefront on the net, I can find a sufficient number of folks and make a go of it. If I had to know all the obscure sales tax policies of all the various states, counties, and municipalities, I would be in deep manure. About the only way to make your way around this would be to have your storefront on (say) Amazon/eBay or use a centralized payment system like Paypal. That would introduce additional overhead costs. The bricks and mortar shops now have the advantage that they only have a single tax law at a single location to understand and do not have to know all of them. Bought bought it here, you pay taxes on it here because you took delivery here. I do not want to hear about the fact that you are from West Knob Hill in Aracacalifornetexas and do not owe it. The concept of being subject to a Federal law with audits and all the rest over sales tax withholding is quite the parade of horribles in my opinion.

    • Give the “brick and motor” retailers a break from the Internet retailers no tax controversy
      “The tax-adverse Republicans” are again squeezing the middle class retailer out in favor
      of the rich retailer. Small business are the backbone of our economy !!
      Give them a level playing field to compete !!
      All is fair in love and war (retailing)

    • Currently you can LEGALLY buy items through internet retailers and pay no sales tax. Making internet sales subject to tax sounds like a tax increase to me. Certainly, the low tax GOP should support continuation of this current system right? This should be very interesting.

    • I buy online all the time. It is great- I buy goods generally from small mom and pop operations, no sales tax, why should the state be entitled to any of the money i spend anyway. Stuff shows up at my door a few days after i buy it, it is fantastic.
      Give my one good reason why the government should be entitled to take a percentage of a transaction between me and someone else.

      Come on Republicans for small government and less taxation…answer that one!!

    • The issue isn’t “new tax”, it’s “fair tax”.

      The kerfuffle over online sales taxes is structurally similar to the tax incentives cities routinely pay businesses to relocate. WalMart loves it because the taxpayer is underwriting their development costs. Cities love it because they get to say they brought in new jobs while kicking the issue of actual sales tax revenue down the street for some other legislative session to address. Main street businesses despise it because WalMart and Amazon are unfairly using their scale to drive them out of business. Fair taxes pay for police, fire fighters, schools, and infrastructure. Unfair taxes that favor one business over another lead to urban blight and underfunded obligations.

      The author of this piece and @Mike T CPA are applying an older definition of nexus, the same definition favored by Amazon. Simply open up your cell phone bill and look at the tax line. This sales tax on your wireless service is being attributed based on where you live, not the location of the wireless carrier headquarters.

    • Take you time congress. No hurry. You guys look tired. You should take a vacation.

    • 8: 59

      It’s give and take. You do not expect to be the only “hallf witted” one here. my dear. Stings when they get tough with the Mitt huh?

    • So, the government should tax online retailers because “brick and mortar” stores are losing business? That sure sounds like a rational argument for a tax increase to me. In fact, it sounds an awful lot like the domestic equivalent of imposing tariffs on imported goods because foreign companies can make and sell them for less than American companies. Why not just go all the way and throw in a VAT as well? Given government’s insatiable appetite for money, spending, and expansion, the last thing we need to be doing is asking for a new tax.

    • It is not a tax increase. Sales taxes are actually sales and use taxes. If the retailer does not collect the sales tax, then the consumer is supposed to pay the corresponding use tax. The argument is not that online retailers should collect sales taxes because “brick and mortar” are losing business, it is to require all retailers to have the same sales tax collection responsibility so that the government is not arbitrarily favoring one type of retailer over another type. Once again, it is not a new tax, it is just allowing states to require all retailers to have the same sales tax collection responsibility.
      “Give me one good reason why the government should be entitled to take a percentage of a transaction between me and someone else.” – This is questioning the validity of the sales tax in general, not about whether online and instore retailers should have the same collection responsibility. If you don’t want to pay sales taxes, how should the local government finance the roads that allowed delivery of the product and police that protect your neighborhood?

    • Online retailers didn’t get a windfall. Citizens that never sent in use taxes did. Please try to get the facts straight.

    • A sale is a sale. Sales/use tax has been the honorable obligation of the consumer in most states since 1935. This is in no way a new tax. Bipartisan legislation to simplify existing tax schemes benefiting all businesses, local governments and consumers is excellent, much needed and long overdue. Whether tennis balls are bought online or locally they are taxable in the jurisdiction of use no matter their origin or place of production. All retailers whether online, brick and mortar, or catalogue should be grateful to their consumers doing everything possible ensuring the highest quality product, fairest price, highest level of customer service including the simple collection and remittance of sales tax due. Removing the pesky task of use tax tracking and remittance from individual returns, and returning sales and use tax proceeds back to their consumers’ jurisdictions funding education, local medicare, infrastructure and so much more should be a top priority of all businesses.

      States also strongly desire to undue harmful tax schemes and and increases resulting from their constituents tax evasion over the past years. Higher property taxes are forcing rent increases challenging families ability to stay in homes. West Virginia favors eliminating existing harmful tax on groceries favoring being enabled to efficiently collect use tax already due. Other states wish to remove harmful estates taxes. Tennessee has no desire to impose an income tax on residents, but may have to as local businesses close, jobs are lost and sales and use tax continue to be evaded by residents and uncollected by Internet merchants. Connecticut residents are now enduring the highest tax increase in State history to compensate for evaded sales and use tax revenue.

      Technology freely available on the Internet makes tax processing simpler than processing shipping for any business. I strongly support and urge Congress to immediately pass S.1832 the Marketplace Fairness Act, and ask that all state legislators do the same.

      Cite as: 504 U. S. 298 (1992) 333
      Opinion of White, J.

      Although Congress can and should address itself to this
      area of law, we should not adhere to a decision, however right
      it was at the time, that by reason of later cases and economic
      reality can no longer be rationally justiﬁed. The Commerce
      Clause aspect of Bellas Hess, along with its due process holding, should be overruled.


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