Tax free shopping spree can end soon.

archer1960 wrote in post #12070031
States without sales taxes have other major sources of income. TX, for example uses taxes on oil production, and NH has tourism and their state-run liquor stores.

Or higher state income taxes.

RDKirk wrote in post #12064863
That is my point. There is no unfair advantage for the internet seller who is based in any US state. What can be done without taxes from state A can also be done without taxes from state B, what's taxed in state A can be taxed in state B. Neither state has an unfair advantage.

Now, if an internet seller is based in a state with no sales taxes, that could be considered an advantage, but it's not an unfair advantage because taxing states could also vote to abolish their taxes.

I think you are missing his point. Companies like Best Buy, Walmart, Barns and Nobel ect are in all states so they must charge tax on all of their online sale at the rate dictated by the state in which the buyer resides in. While a company like Amazon ''operates'' in all states yet has no store front and avoids taxes in that manner. The favor now leans towards amazon and forces the storefronts to have a disadvantage. Your theories on the rest of it are just as flawed

Rmitchell248 wrote in post #12070125
I think you are missing his point. Companies like Best Buy, Walmart, Barns and Nobel ect are in all states so they must charge tax on all of their online sale at the rate dictated by the state in which the buyer resides in. While a company like Amazon ''operates'' in all states yet has no store front and avoids taxes in that manner. The favor now leans towards amazon and forces the storefronts to have a disadvantage. Your theories on the rest of it are just as flawed

You're missing my point. "Unfair" would be a condition in which a company becomes disadvantaged by a new law passed to the benefit of another company, or when one company is restrained by the law from adopting a profitable business model that another company is free to follow.

That's not the case here--every company is free to adapt new business models as necessary to survive. The internet has injected a huge "free enterprise" space that everyone can play in equally.

All of those businesses operate as both internet businesses and brick and mortar businesses. They can all do what Calumet Photo--a long-time brick-and-mortar business with stores in several states--has done: Spin off their internet business as a separate legal entity so that it can operate without collecting taxes.

runninmann wrote in post #12062449
I guess I'm just a goody two-shoes. I dutifully record and report mine every year.

And all sales tax you paid, online or local, is a deduction for your federal tax return. Did you also report that? If so, you may well be breaking even. I assume you make a lot more taxable local purchase than online throughout the year.

digirebelva wrote in post #12065157
So basically they are double taxing you for the same item, since you already paid taxes on it in the other state...nice..gotta love the greed...

No supposedly, you keep a record of what you purchase in your travaled state or even country. You can send in the proof and get you tax back. So you got to pay tax once. however, this is just overall troublesome. I highly doubt anyone will go through the trouble and do that.

thenextguy wrote in post #12069750
A very important point. Nobody is trying to add new taxes. They're trying to collect existing taxes.

No actually it is a new tax.. (see physical presence)..Supreme Court has already ruled there must be physical presence in the state for them to be compelled to collect taxes in that state...So in that light, they are trying to collect on something that doesnt belong to them (otherwise the court would have sided with them)...why else would NY & others try & say an affiliate is now classified (in their eyes) as a physical presence. If it wasnt about trying to grab more money because they dont know how to actually manage a budget, the issue would never have been broached.

digirebelva wrote in post #12071474
No actually it is a new tax.. (see physical presence)..Supreme Court has already ruled there must be physical presence in the state for them to be compelled to collect taxes in that state...So in that light, they are trying to collect on something that doesnt belong to them (otherwise the court would have sided with them)...why else would NY & others try & say an affiliate is now classified (in their eyes) as a physical presence. If it wasnt about trying to grab more money because they dont know how to actually manage a budget, the issue would never have been broached.

It's not a new tax. The issue at hand is whether or not retailers can be forced to collect the taxes. Sales taxes aren't taxes on businesses; they are taxes on consumers. Businesses merely collect them.

Whether or not online retailers collect taxes has no bearing on whether or not the sales tax exists. This is why states with a sales tax still expect you to pay your taxes for goods you purchased online.

eelnoraa wrote in post #12071252
And all sales tax you paid, online or local, is a deduction for your federal tax return. Did you also report that? If so, you may well be breaking even. I assume you make a lot more taxable local purchase than online throughout the year.

You can never "break even" on a deduction, only on a credit.

digirebelva wrote in post #12071474
No actually it is a new tax.. (see physical presence)..Supreme Court has already ruled there must be physical presence in the state for them to be compelled to collect taxes in that state...So in that light, they are trying to collect on something that doesnt belong to them (otherwise the court would have sided with them)...why else would NY & others try & say an affiliate is now classified (in their eyes) as a physical presence. If it wasnt about trying to grab more money because they dont know how to actually manage a budget, the issue would never have been broached.

No, it's not a new tax if you live in a state that has a use tax -- which many or most states do (I haven't looked up the exact numbers). In those states, you're required to track purchases from any out of state retailers and pay it yourself. Few people do, and few states enforce it. The use tax already exists, and it's there for the situations where sales tax is not being collected by the retailer you are working with. States feel it's easier to force companies, which already track their sales, to collect it for them rather than try to enforce it on individuals, who generally don't track their purchases that way. But regardless, it's not a new tax if you live in a state with a use tax.

RDKirk wrote in post #12069926
Easily. Amazon is not doing anything Best Buy could not make a business decsion to do--that's why it's not unfair. It's also not unfair that my local camera shop opened up an internet business and can make internet sales just like Amazon.

The current state laws on the collection of taxes existed before Internet sales began. Best Buy decided they could profit more by putting stores in every state; Amazon decided they'd profit more operating in as few states as possible. There is nothing unfair when everyone is free to choose their business models and take whatever advantages are available.

Added: We have said the same thing about the impact of the internet and digital imaging on professional photography: Change your business model or die. Everyone is free to change his business model. Best Buy could do what Calumet Photo has just done: Spin off the internet business completely separate from the brick and mortar business so that the internet business no longer has a legal presence in the same states as the brick and mortar stores (except in the one location where the internet offices and warehouse are).

Well, first off, the current status in most states only gives Amazon and advantage because use tax isn't enforced. If people were forced to pay use tax, Amazon wouldn't have any advantage in operating in as few states as possible.

You're looking at it at a macro (economics, not photography) level, which isn't necessarily invalid. But comparing two competitors, one of whom is present in the state (either because they operate a brick and mortar business model or because that's where they have a warehouse), and one of whom isn't, the one out of state has an advantage by not being required to collect tax. For those two companies, marketing to a given consumer in a given state, the unfair advantage is that you have the option of not paying the tax (despite it still being required via use tax laws) if you buy it from someone out of state. You don't have the option of not paying when you buy locally. Since the tax is due regardless, I don't see it as fair to the in state company.

Back at the macro level, the business model you're suggesting would basically mean the end of brick and mortar. Maybe that's OK. But I don't think we want all local shops to close up their local businesses and focus exclusively on marketing to out of state customers as an online/mail order business, with an emphasis on encouraging people not to pay sales/use tax. And if that were to happen, it'd only further hasten the collapse of state and local governments. The only fair solution for states and businesses is to either have a system of federal laws that allows the tax to be collected on all sales, or to eliminate sales tax altogether and replace it with something else. Purchases should either be taxed consistently or not taxed at all.

RDKirk wrote in post #12069926
The current state laws on the collection of taxes existed before Internet sales began. Best Buy decided they could profit more by putting stores in every state; Amazon decided they'd profit more operating in as few states as possible. There is nothing unfair when everyone is free to choose their business models and take whatever advantages are available.

Sorry but is sounds like "let's make tax break for gays only. It is very fair as anyone has rights to be be gay", that's what you mean ? Sorry but I see no logic in your reasoning. Currently we have two sets of laws: One for internet companies, another for local stores. How can it be fair ?

Refresh Image wrote in post #12074239
Sorry but is sounds like "let's make tax break for gays only. It is very fair as anyone has rights to be be gay", that's what you mean ? Sorry but I see no logic in your reasoning. Currently we have two sets of laws: One for internet companies, another for local stores. How can it be fair ?

There are no "two sets of laws." There are no state tax laws that I know of specifically for internet companies, at least not in my state. There are tax laws for entities that have a presence in a state--but those are the same old tax laws. There are no state laws specifically giving a tax break to internet companies--states have never been able to tax businesses that have no presence in their states.

RDKirk wrote in post #12075049
There are no state tax laws that I know of specifically for internet companies, at least not in my state. There are tax laws for entities that have a presence in a state--but those are the same old tax laws. There are no state laws specifically giving a tax break to internet companies--states have never been able to tax businesses that have no presence in their states.

The sales tax isn't a tax on the business, it's a tax on the purchaser. The intent of the use tax is to levy the tax on the resident of the state for goods used or consumed in that state, regardless of purchase location.

runninmann wrote in post #12075079
The sales tax isn't a tax on the business, it's a tax on the purchaser. The intent of the use tax is to levy the tax on the resident of the state for goods used or consumed in that state, regardless of purchase location.

In my state, the tax is specifically written as a tax on the business which the business is permitted to reimburse itself by collecting from the customer. The Use Tax is a totally separate law, a completely separate legal device, which is a tax on the purchaser. I know because I have to collect it in my business--the tax is on me for making the sale, not on the purchaser for making the purchase.

This is not a new thing. I've been purchasing photo equipment out-of-state from B&H since the 70s by telephone. My state could not tax B&H then, they can't tax B&H now. This is not new. Out-of-state sales have been going on for decades and decades. Sears has been doing out-of-state sales for over a hundred years.

The state law already explicitly covers any sales I make to out of state purchasers--and has for decades. I am supposed to pay the state a tax on every retail sale I make even if the purchaser is out of state--that's what the state charges me for the privilege of doing business in this state. There is no exemption for out-of-state sales. Never has been, isn't now.

RDKirk wrote in post #12075156
In my state, the tax is specifically written as a tax on the business which the business is permitted to reimburse itself by collecting from the customer. The Use Tax is a totally separate law, a completely separate legal device, which is a tax on the purchaser. I know because I have to collect it in my business--the tax is on me for making the sale, not on the purchaser for making the purchase.

This is not a new thing. I've been purchasing photo equipment out-of-state from B&H since the 70s by telephone. My state could not tax B&H then, they can't tax B&H now. This is not new. Out-of-state sales have been going on for decades and decades. Sears has been doing out-of-state sales for over a hundred years.

The state law already explicitly covers any sales I make to out of state purchasers--and has for decades. I am supposed to pay the state a tax on every retail sale I make even if the purchaser is out of state--that's what the state charges me for the privilege of doing business in this state. There is no exemption for out-of-state sales. Never has been, isn't now.

That's interesting. I never knew that and, because the consumer pays the tax, I always considered it tax on the purchaser.

Do you charge sales tax to your out-of-state purchasers or do you eat it as a cost of doing business?