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FORUMS Marketplace & Market Info Market Watch 
Thread started 20 Mar 2011 (Sunday) 18:37
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Tax free shopping spree can end soon.

 
RDKirk
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Mar 23, 2011 14:35 |  #61

runninmann wrote in post #12076934 (external link)
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?

I just finished doing my return for last quarter, just within the last few minutes.

First, the tax is officially called an "Occupation Tax." It's not a "sales tax" at all. The tax is based on my "total receipts" with a few special deductions allowed.

Interestingly, "Professional Photography Services" are allows a ful 90% deduction from "total receipts" as long as I never, ever itemize my fees on my invoices or show any kind of breakdown in a price list between tangible goods and services. That means the tax rate is applied to only 10% of the total taxable receipts.

"Total Receipts" is irrespective of where the receipts originated. Yes, indeed, and there is section for "Receipts from locations outside the state" where those are supposed to be identified and added to the total.


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Mar 23, 2011 18:24 |  #62
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bkrodgers wrote in post #12067398 (external link)
It's absolutely unfair to businesses with a local presence, and I don't see how it can be argued otherwise.

As you see above some still argue that is fair. In fact I found that most argue for not what is logical or makes sense but for what is beneficial to them. As I mentioned the current state of things is illogical saying the least. It just removes incentives to buy locally and keep or open new stores locally. And we wander where the jobs go.




  
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Mar 23, 2011 19:19 |  #63

Refresh Image wrote in post #12079217 (external link)
As you see above some still argue that is fair. In fact I found that most argue for not what is logical or makes sense but for what is beneficial to them. As I mentioned the current state of things is illogical saying the least. It just removes incentives to buy locally and keep or open new stores locally. And we wander where the jobs go.

As I said before, I do buy locally when the price is comparable or close...but when the price is consideribly higher locally where would you logically spend your money, I dont know about you but I only have so much money to spend.."a fool and his money are soon parted"..taxes are not the consideration..total price is..

Wal-Mart has shut down more local business than anything the internet has done...period...
and lo & behold they have both brick & motar & a online presence...and are still opening stores across the country (as is Target, BB etc..) even with the "unfair" advantage of the internet....and since they have a store in every state well you pay taxes on every online purchase from them...and it doesnt seem to hurt them one bit...
Online purchases doesnt create an unfair advantage as much as it gives the local guy a much larger presence in front of a much wider audience..what would that kind of presence cost them in advertising dollars....we can argue this till the cows come home and the issue will still be there in the morning unresolved...hopefully the powers to be will come to a realistic solution..though I highly doubt it..


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Mar 23, 2011 19:32 as a reply to  @ digirebelva's post |  #64

Excuse me. Is there at a certified public accountant in the house? :D

This thread needs a knowledgeable professional to settle the "it is a new tax" and "it is not a new tax" debate.




  
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Mar 24, 2011 12:02 |  #65

isoMorphic wrote in post #12064851 (external link)
Income tax is basically a loan to the government since there are so many deductions, rebates and loopholes in the tax code that it's hard to even call it a tax. In fact most people paid far less in Income tax due to all the credits last year then they had paid for a long time.

No, people paid less income tax because many people lost their jobs in the recession. Less taxpayers means less revenue. And as for the "so many deductions" line, I don't think so. Many of the deductions were phased out in the 1986 tax reform legislation.

Property tax helps to pay for roads, schools and some of the fees associated with providing public services but they don't cover everything which is why we have federal grants to plug holes. Gas tax helps to maintain roads and build bridges but again there are usually short major falls.

States have budget shortfalls because they spend more than they take in, not because the people are not taxed enough. In my state of Connecticut, we implemented an income tax in 1991. For 200 years before that, Connecticut balanced its budget without any income tax and became the richest state in the bargain. But now we have a $3 billion deficit despite having income taxes, sales taxes, property taxes, etc. etc. etc. Why? Because the tax revenue stimulated a spending binge and big pay raises for state workers. The year before the income tax was enacted, Connecticut's government expenditures per capita ranked in the middle of all states; now it ranks in the top 10. Per capita real spending has nearly doubled since the income tax was enacted.

The problem is not that the people are not taxed enough. The problem is that the government spends too much -- and a lot of it on wasteful or stupid things.


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Mar 24, 2011 20:33 |  #66

Too many un-funded Federal mandates...


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Mar 25, 2011 00:16 |  #67

Amen!! Does anybody remember the "Boston Tea Party"!!

tgara wrote in post #12083718 (external link)
No, people paid less income tax because many people lost their jobs in the recession. Less taxpayers means less revenue. And as for the "so many deductions" line, I don't think so. Many of the deductions were phased out in the 1986 tax reform legislation.



States have budget shortfalls because they spend more than they take in, not because the people are not taxed enough. In my state of Connecticut, we implemented an income tax in 1991. For 200 years before that, Connecticut balanced its budget without any income tax and became the richest state in the bargain. But now we have a $3 billion deficit despite having income taxes, sales taxes, property taxes, etc. etc. etc. Why? Because the tax revenue stimulated a spending binge and big pay raises for state workers. The year before the income tax was enacted, Connecticut's government expenditures per capita ranked in the middle of all states; now it ranks in the top 10. Per capita real spending has nearly doubled since the income tax was enacted.

The problem is not that the people are not taxed enough. The problem is that the government spends too much -- and a lot of it on wasteful or stupid things.


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RDKirk
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Mar 25, 2011 05:49 as a reply to  @ BamPhoto's post |  #68

No, people paid less income tax because many people lost their jobs in the recession. Less taxpayers means less revenue. And as for the "so many deductions" line, I don't think so. Many of the deductions were phased out in the 1986 tax reform legislation.

Both things happened. You're talking about the phasing out of the Reagan era tax cuts, but did you forget the tax cuts of the 2000s?

The fallacy of the latter tax cuts, however, is than in the 80s the US economy was relatively closed on the production side. It was quite difficult to export labor, and in fact we were importing manufacturing jobs from both Japan and Germany during those years--that's why we've got Japanese auto plants in the US today. Tax cuts in the 80s financed corporations to move factories from the Northeast (away from all that expensive union labor) to the South (where tacit slavery is still accepted).

That disappeared in the 1990s and US corporations began exporting manufacturing jobs. So Reagan-type tax cuts would no longer work--the government was giving up money to allow corporations to finance factories in China (where even more extensive tacit slavery is still accepted) instead of the US.

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Mar 25, 2011 07:09 |  #69

Eventually you will be paying sales tax for online goods...and when that point comes i wonder how popular bh and adorama will be with those outside of nj/ny.


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RDKirk
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Mar 25, 2011 08:37 |  #70

bigcountry wrote in post #12089265 (external link)
Eventually you will be paying sales tax for online goods...and when that point comes i wonder how popular bh and adorama will be with those outside of nj/ny.

As I mentioned earlier, started buying from B&H and other NYC stores in the 70s. I have never even considered the matter of avoiding sales taxes--and I suspect B&H does brisk business with purchases in states that don't have sales taxes.

The main reason has been that I've seldom lived in a metropolitan area that had local stores sufficient to meet my needs, and in those cases, ordering from NYC has been more efficient than ordering from a store 200 miles away that had only a hazy concept of taking a phone order and shipping it out rapidly.

Even if the local store did have the item I needed, the volume-purchasing power of B&H often still gives them a significant price edge. That's why Costco and Sam's Club are in business despite having to collect the same tax.


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Mar 25, 2011 12:19 |  #71

You're the exception to the rule, well for the most part. States are losing way to much money.


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Mar 25, 2011 13:20 |  #72

bigcountry wrote in post #12090846 (external link)
You're the exception to the rule, well for the most part. States are losing way to much money.

I don't think I've ever seen real numbers proving that Internet business is the cause of states revenues diminishing. Just stating overall numbers like "Amazon grosses X billion annually" does not mean that number can be divided by 50 and used as a loss of revenue to any state.

There are too many more direct causes of the loss of revenue, such as the loss of manufacturing. Factories are not shutting down because of Amazon. If internet marketing were the problem, we would clearly see revenues shifting the way they did in the 80s when factories moved from the northeast to the south and southwest: One state's losses would show up as some other state's gains.

And for that matter, we should also see it in individual spending. If I were saving big money over the internet, that should still be reflected in my home state--either because I'm spending it or saving it. It doesn't just disappear, nor does that money--the tax savings--go out of state. The money stays in my pocket, and I will either spend it or save it right there in the state. Maybe the state government doesn't get it...but the state does.


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Mar 25, 2011 13:26 |  #73

The biggest competition to local shops is not the sales tax, IMO, it is the volume. Once an online shop gets going, it is like a snowball and the high volume means economies of scale which keep prices down which increases sales volume, etc. It is almost impossible for anyone else to catch up. How could you start a real Amazon competitor without billions in funding? My local shop sells online, too, but who is going to go to pictureline.com when Adorama and B+H can beat their price 49 times out of 50. Even if I had to start paying taxes at B+H, I would still shop there because they have the same products for 10% cheaper, and if I have to pay tax either way, it is still 10% cheaper.

It's kind of a continuation of what the Lowe's, Costco and Walmart did to all the small shops in other retail segments.


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Mar 25, 2011 13:30 as a reply to  @ tkbslc's post |  #74

Ref. the OP.
This is good news, time to level the playing field.


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RDKirk
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Mar 25, 2011 13:40 |  #75

tkbslc wrote in post #12091266 (external link)
The biggest competition to local shops is not the sales tax, IMO, it is the volume. Once an online shop gets going, it is like a snowball and the high volume means economies of scale which keep prices down which increases sales volume, etc. It is almost impossible for anyone else to catch up. How could you start a real Amazon competitor without billions in funding? My local shop sells online, too, but who is going to go to pictureline.com when Adorama and B+H can beat their price 49 times out of 50. Even if I had to start paying taxes at B+H, I would still shop there because they have the same products for 10% cheaper, and if I have to pay tax either way, it is still 10% cheaper.

It's kind of a continuation of what the Lowe's, Costco and Walmart did to all the small shops in other retail segments.

Ah, but "Amazon" is to a great degree comprised by local shops--and it's those local shops that are being targeted by their own state governments.


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