Internet sales tax, your thoughts?

[Bill Barber]

I believe it is coming, first on a state level, than federal.

Next up will be flea markets and garage sales perhaps.

the net is a perfect setup for the tax folks, easy to monitor, everything is in the open.

Just imagine, you buy ex part for your trac with your hard earned after tax dollors,Than down the road you decide to post it for sale in our own swap and sell section.

than the buyer has to pay a so called internet sales tax

Just curious as to what you all think,Sort of spooky I think.

 

[Les]

Sales tax is currently being charge by some (it is rare) companies, but not most. Since state sales tax can only be collected if the product is purchased and delivered in the same state, interstate sales will be hard to monitor. A federal sales tax is a probability to overcome this and I presume will be divided between the feds and the state. I highly doubt buying a part from someone you know or from the "Swap & Sell Board" will be taxed, no way to regulate it and very easy to deny the transaction. Also, this part has been previously taxed when purchased new and this would result in double taxation (much like buying used cars), which is a croc. Easy to follow car transactions since they are registered and licensed, but me selling you something (at a loss) is not likely to be taxed.

 

[Richard L]

I think the states will try to get a sales tax for internet perchases made in the seller's state. They have already talked about trying to get sellers to collect taxes for the state the purchase is being shipped to, but I think that really opens up a big can of worms that cannot be controlled...Seller could easily collect the taxes for other states and just not pay the taxes to those states. Those states really have no control over people doing business in other states and the Sellers have not voting rights in those other states. That would end up being a form of Taxation without Representation



The Federal Government could start some kind of Federal Sales Tax, but it would not be easy to enforce. The Internet is not as wide open as you might think...Particularly when people can set up an internet site anywhere in the world. Kind of hard for States or the Feds to collect taxes on businesses that are on foreign websites. That would involve Interpol and I don't think they want to get involved in USA taxes collection issues.



...Rich

 

[Thomas Rogers]

First, a terminology point. The correct term to use and way to view sales tax is that it is collected, not charged. Collection implies that the money is simply being collected and passed on to the state, or local government, which is a more appropriate way to look at it then "charge", which simply implies that one has to pay the etailer.



As stated; many internet marketers are already collecting sales tax when selling to residents. I see that a lot.



The way I see it, it is fine by me if that practice is executed in a uniform fashion and all etailers collect sales tax when shipping or otherwise providing service to residents. It is easily automatable with technology at-hand (no excuse not to), and the current tax laws, procedures and precedents would call for just such collection.



HOWEVER, I am not a proponent of collecting these same taxes from non-residents. There is little in the way of uniform mechanisms and expectations for taxing people across state (or county) lines as the Internet sales tax is positing. The closest we have is the "honor system" that most states have in their state tax returns in which they allow the taxpayer to pay taxes on untaxed goods or services purchased in another state. Since that is already in place, and has become the defecto mechnism for taxing sales to non-residents by the brick and mortars, it should be used for etailer sales as well.



Fair tax would be better.



TJR

 

[Richard L]

TJR

Fair tax would be better.

No tax would be even better !!:banana:

Since that is not even conceivable...I guess a Fair tax would be fair :grin:



I think the part about sellers collecting taxes for other states would be way too hard to enfoce or regulate. As for volunteering to pay taxes on purchases where you were not taxed is not likely to work either. Why not an honor system for claiming tax refunds if you think you paid too much taxes? It's a nice idea that I'm sure that only a handfull of people would actually volunteer to pay taxes. I know I would not even remember all the things I purchased on the Internet without paying State, County, and City sales taxes on, and I would not take the time to keep records of those purchases just to pay taxes.



Fortunately for now Texas does not have a State income tax, but every other year the legislators bring it up to discuss...so it will probably happen someday sooner rather than later.



One of the stranger things I learned pending my retirement on July 30th is how Social Security works. I knew that there were some limitations as to how much money you could work and earn per month and still collect Social Security. What I did not know is that limit only applies to wages paid for working. That does not apply to anykind of income from interest or stocks, etc. So if you are wealthy enough to have millions coming in every month, you can still get your Social Security check every month without any reduction in benefits



Of course other pensions are also treated like interest and stock dividens, but if you have additional income that exceeds a certain amount, 10%, and up to 85% of your Social Security might be taxed...But that is an IRS rule not SSA's. SSA will normally not withhold any taxes from your benefits unless you request them to.



...Rich

 

[Kevin Lang]

The governor of Maryland has already called upon citizens to report their internet purchases for the sole purpose of collecting sales tax.



Thankfully this isn't enforced at gunpoint, like the normal tax collection, but we're already going down the slippery slope.

 

[EddieS'04]

IMO, it is not fair to tax a resold item. IMO, that includes used cars. To be taxed on a used item is like not using the KY....:banana:

 

[TomT]

In Texas you are charged a sales tax if the place has a retail outlet within the state. So like if I buy from frys.com, since they have lot's of retail stores in Texas I have to pay a state tax but if I buy from newegg.com ar amazon.com which has no retail outlets I don't pay tax. A $1000 computer could save me around $80 in taxes from newegg vs. frys.

 

[David Ponder]

I agree with Eddie... I cant stand the fact that a used, resold car is taxable. The sales tax was already paid at the time of the original sale, and you already get hit for personal property taxes every year... :angry:



Anyway back to topic, I agree that its only a matter of time before an internet tax is established, as there is just too much "potential revenue" there for the government to sit by and not tap it. I will say however that it would be very hard to enforce if you purchased from overseas, and enforcement in the US wouldnt be any easier. State, County, Local taxes based on Ship to address, and some may vary on what was purchased. For instance, here the tax for food items is less than other goods, so they would have to break it down under a per item basis, not a subtotal of the purchase.



For "new" itens, a fair tax would be best, and not just on the internet... What about a flat 1% tax on all purchases, with 50% going to federal, and the remaining 50% split evenly between all 50 states?

 

[Kevin Lang]

I will say however that it would be very hard to enforce if you purchased from overseas

Dave, most everything from overseas has to go through customs, where value is declared, which would make taxing it easier. Unless you persuade people to lie about the value, but there are already issues with that now.

What about a flat 1% tax on all purchases, with 50% going to federal, and the remaining 50% split evenly between all 50 states?

Well, there's a tax that would never be repealed Also, it would not stay at 1%.



Example: Maryland state sales tax started out as a flat tax of 1 cent per purchase, and was only supposed to exist until the Chesapeake Bay Bridge was paid for. The bridge is long since paid for. We still have sales tax.



It started at a flat 1 cent. Then it went to 1%, then it became 5%, and then it became 6% in 2008.



Here's a question--why do I have to pay the government a percentage of my purchase just to have the right to make that purchase?

 

[David Ponder]

Kevin, MY thoughts are based on the "Probability" that a tax on internet sales is inevitable. I was voicing (typing?) a thought of what might be considered fair all the way around for the feds and the states.



Personally, I HATE paying taxes, and I barter whenever I can do so so there is no sale to be taxed whatsoever. For instance, I did some electrical work for a guy (About $500 worth), and he gave me a 78 Monte Carlo in exchange. IF I did the transaction as a "Gift" or a "Transfer of ownership" I would have to pay tax on the Value of the vehicle. Instead I purchased the car for $1.00, and had him sign the bill of sale. At the time, I paid just 7 cents sales tax.

 

[Bill Barber]

bartering is actually on the rise,I do it all the time,lady down the street had a walrus tusk I wanted.

she needed a new fence and some deck work done, we both won

 

[Kevin Lang]

bartering is actually on the rise

I thought you lived in California??



Looks like Atlas Shrugged was a little bit off, it predicted the Village of the Damned where people had forgotten technology and fallen feral and abandoned the jewels of civilized transaction for heathen barter.



Bleh. Barter. It's not business, in fact it was so problematic that cash was invented. If you're bartering to avoid taxes, which is the only reason which approaches a good reason, then it's not solving the problem.



Give up Civilization or give up excessive taxes? The choice is, I hope, obvious.

(Hint: not barter)



Well, again, CA is beyond hope,so....good luck.

 

[Bill Barber]

Will Disagree KL

The barter system is like communism in it's pure form (it works).

In my above post, lady has an item I want and need, she cannot legally sell said item due to the marine mammals act of 1972.

She needs what I have (my labor, knowhow and tools)she has an item that is worth say $500.00 to me, she pays for materials, I provide the rest,very simple, no money, no paperwork, no tax liabilitys.

win, win for both of us.

simple is a good thing,one should never forget the old ways IMO.

 

[Tom Schindler]

Many states, including Ohio, require you to pay sales tax on ALL internet purchases. This is on the honor system.



Of course, I do not see any reason why my state should get sales tax on an out of state sale. I have no issue paying the local sales tax when I purchase anything, though I prefer not to.



My only question is since when is double taxation legal?



If I buy something and pay tax on it and then someone buys it off of me, isn't that tax being paid twice?



Since I pay income tax on my wages, why do I pay tax again when I spend that money?





Tom

 

[Les]

My only question is since when is double taxation legal

?



Apparently since the invention of the automobile...

 

[Kevin Lang]

My only question is since when is double taxation legal

I never knew there was anything saying that it wasn't...sadly.

simple is a good thing,one should never forget the old ways IMO.

Exactly, like how to make currency worth something, by basing it on something with value. Gold Standard. Fiat money has been a time-proven fiasco.



Though I don't ever see pure barter working. Eventually you will have something I want/need, but you'll want/need nothing that I have. Then I'm up a creek. Which is the beauty of cash. Everyone wants it...if (again) only it were really worth something.