Amazon to be collecting sales tax in 7 states

Started Aug 30, 2012 | Discussions
Tim in upstate NY
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Amazon to be collecting sales tax in 7 states
Aug 30, 2012

http://www.seattlepi.com/news/article/Amazon-com-to-begin-collecting-Pa-sales-tax-3825046.php

. . . My opinion is that the days of internet shopping without paying sales tax will be gone within about a year.

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azazel1024
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Re: Amazon to be collecting sales tax in 7 states
In reply to Tim in upstate NY, Aug 30, 2012

Yeah, I have to agree with Amazon on this one though, there needs to be federal law/regulation spelling it out.

Also, really PA? You are going to try to claim if a company has an employee who travels to that state "long term" that the company can be subjected to state income tax? That seems like a stretch (and further reason why federal law needs to to happen).

In the end, I could see a lucrative business of re-shippers. Buy the product to be shipped to a state with no sales tax and they'll reship it to you in your state.

That said, I don't disagree with state sales taxes being levied on internet purchases, but it needs to be something that is addressed at the federal level for how it is applicable, not states attempting to mandate/regulate things patch work style. Lastly, why the heck not just have a US style VAT on internet purchases and have the revenues split between the states. Well, whatever.
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Tim in upstate NY
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Re: Amazon to be collecting sales tax in 7 states
In reply to azazel1024, Aug 30, 2012

azazel1024 wrote:

Yeah, I have to agree with Amazon on this one though, there needs to be federal law/regulation spelling it out.

Also, really PA? You are going to try to claim if a company has an employee who travels to that state "long term" that the company can be subjected to state income tax? That seems like a stretch (and further reason why federal law needs to to happen).

In the end, I could see a lucrative business of re-shippers. Buy the product to be shipped to a state with no sales tax and they'll reship it to you in your state.

That said, I don't disagree with state sales taxes being levied on internet purchases, but it needs to be something that is addressed at the federal level for how it is applicable, not states attempting to mandate/regulate things patch work style. Lastly, why the heck not just have a US style VAT on internet purchases and have the revenues split between the states. Well, whatever.

. . . I agree that we need a nationwide VAT tax. The sooner the better.

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MichaelKJ
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Re: Amazon to be collecting sales tax in 7 states
In reply to Tim in upstate NY, Aug 30, 2012

I agree. The financial problems of many states will likely push Congress to pass a law allowing states to tax internet sales.

While we all like to save money, the scope of internet business makes it difficult to justify giving online sellers an advantage over brick and mortar stores.

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azazel1024
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Re: Amazon to be collecting sales tax in 7 states
In reply to MichaelKJ, Aug 30, 2012

One thing I would add in, I would hope that at a Federal level they can come up with a decent method to address things like eBay and revenue/tax collections or independent small sellers. States also vary in how/when sales tax has to be collected (again, please, at least "over the internet national VAT"!).

In some states if you are an individual selling low volume out of your house basically, you have no legal requirement to collect sales tax. In others, technically ANY sale should be taxed.

So I would hope/think if/when this ever does happen we can come up with some kind of happy way to make it work. Even if that is auction sites and such forth assess and collect sales tax on behalf of their members and report the sales tax and provide the revenues to the states on behalf of their members.

Its a hell of an additional burden if suddenly I sell $80 of stuff on eBay in a year, and because of the way the law is crafted not only am I required to collect sales tax, but that I have to then report to maybe 4 different states the few dollars in sales tax I collected and then send them checks as well.
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Landscapephoto99
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Re: Lens Purchase
In reply to Tim in upstate NY, Aug 30, 2012

I made my last major purchase on Amazon 2 days ago because of this, 2 lenses I have been considering for a while. With $150 rebate on Olympus lenses, lots of Amazon points and taxes looming, it was the right time.

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jkrumm
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Re: Amazon to be collecting sales tax in 7 states
In reply to Tim in upstate NY, Aug 30, 2012

I wonder how many states are like ours, where sales taxes are determined at a city/town level? At any case, I'm all for making it compulsory, and I'm not for a national sales tax. Too regressive, and it would really mess up communities that already use it.

I know my local camera dealer would welcome Amazon sending our city a fat check every year. A 5 percent difference is big enough to deter people, and Amazon has already cut margins down to "barely surviving" levels for small shops.
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Landscapephoto99
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Re: Amazon to be collecting sales tax in 7 states
In reply to Tim in upstate NY, Aug 30, 2012

. . . I agree that we need a nationwide VAT tax. The sooner the better.

Only if they eliminate local taxes, which isn't likely to happen. Adding the burden of a VAT onto existing taxes will throw the economy into a recession. People in high tax areas will pay upwards of 20% tax on every item they purchase.

I say tax incomes rather than items or property. It occurs once, is relatively painless and easily monitered. When I was in an area with no sales taxes, I felt like buying more, being a big tipper, etc. That stimulates the economy which no doubts puts more $$$ in the pockets of needy bureaucrats.

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Gregm61
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Re: Amazon to be collecting sales tax in 7 states
In reply to Tim in upstate NY, Aug 30, 2012

Tim in upstate NY wrote:

http://www.seattlepi.com/news/article/Amazon-com-to-begin-collecting-Pa-sales-tax-3825046.php

. . . My opinion is that the days of internet shopping without paying sales tax will be gone within about a year.

Not too surprising just thinking about how much in tax revenues are lost with internet purchasing and how bad economically it's become in so many regions. It's not to hard to see how/why communities don't have the tax dollars to work with they did 15 years ago.

I know Texas is one of the states that got to Amazon. It makes no sense for me to buy on Amazon when there's a full service Olympus dealer in Arlington Camera that's less than a 30 minute drive away and has much of what I want at or very near internet prices. I'm picking up my HLD-6 this evening from them. Paid $279. With sales tax added the final cost was a whopping $3 more than it would have cost me to buy it from B&H before shipping charges, and I am going to get it today.

The problem at this point is, no-sales tax internet shopping has been around long enough there no longer are very many Arlington Cameras around, so what we could eventually be left with is nothing different from what it was like buying something 20 years ago. You'll have to pay tax on it, but you can't just drive down the street and get it. You have to wait on it being shipped to you.

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JimSocks
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Re: Amazon to be collecting sales tax in 7 states
In reply to Landscapephoto99, Aug 30, 2012

I have to pay state and city tax. I use to buy loads from Amazon. Not anymore. Funny thing is all the years I've used amazon, I've never had anything shipped from PA.Ill still buy small stuff but no more big ticket items like camera gear

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Tim in upstate NY
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Re: Amazon to be collecting sales tax in 7 states
In reply to Landscapephoto99, Aug 30, 2012

Landscapephoto99 wrote:

. . . I agree that we need a nationwide VAT tax. The sooner the better.

Only if they eliminate local taxes, which isn't likely to happen. Adding the burden of a VAT onto existing taxes will throw the economy into a recession. People in high tax areas will pay upwards of 20% tax on every item they purchase.

I say tax incomes rather than items or property. It occurs once, is relatively painless and easily monitered. When I was in an area with no sales taxes, I felt like buying more, being a big tipper, etc. That stimulates the economy which no doubts puts more $$$ in the pockets of needy bureaucrats.

. . . We need some input from some Europeans here on how it's been done elsewhere but I would expect that the states would have to forgo their current sales tax incomes and instead rely on their share of a nationwide VAT tax. How are they doing it in the UK and Germany? Without property and financial assets taxation, there's no way to fairly tax that wealthy 1% that spends a proportionately small portion of their wealth on retail purchases IMO.

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Davidwa
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Re: Amazon to be collecting sales tax in 7 states
In reply to Tim in upstate NY, Aug 30, 2012

VAT in the UK is simple and unavoidable for buyers in the UK, its charged by all internet sellers except small traders who's turnover is below a certain level. It does not matter if you live in Scotland, England, N Ireland or Wales we all pay and the tax all goes to central government. Because its a central government tax its very easy for them to raise the VAT rate when times are tough. Out VAT started about 40 years ago at 8% or 12 1/2% its slowly been raised over the years and is now 20%. When times are good it never seems to come back down. So if the US gets VAT beware it may start at a low rate but governments are expert at spending our money and I'm sure your rate will inch up over the years too.

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Cani
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Re: Amazon to be collecting sales tax in 7 states
In reply to Tim in upstate NY, Aug 30, 2012

Tim in upstate NY wrote:

. . . We need some input from some Europeans here on how it's been done elsewhere but I would expect that the states would have to forgo their current sales tax incomes and instead rely on their share of a nationwide VAT tax. How are they doing it in the UK and Germany? Without property and financial assets taxation, there's no way to fairly tax that wealthy 1% that spends a proportionately small portion of their wealth on retail purchases IMO.

Services and goods travel freely in the E.U..

When you buy online, you buy from where the seller is located and pay the local V.A.T.

If I purchase a camera from an online UK seller, I'll pay UK V.A.T. and only UK V.A.T. No other V.A.T. will be due to my state of residence.

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Mark Thornton
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Re: Amazon to be collecting sales tax in 7 states
In reply to Cani, Aug 30, 2012

Cani wrote:

When you buy online, you buy from where the seller is located and pay the local V.A.T.

I believe that from 2015 the VAT rate will be based on the location of the purchaser. This is a reaction to companies like Amazon arbitraging the VAT rates to reduce tax paid. For example, if you buy a paper book from Amazon they will deem the sale to take place in the UK and charge the UK rate (0% on books), but ebooks are purchased from Amazon Luxembourg where the rate is 3% (versus 20% in the UK).

Thus from 2015 I will be paying the UK rate regardless of the location(s) of the retailer. Note that includes purchases from companies outside the EU --- they have to account for all sales made to EU countries and pay the relevant tax.

Note that there is a turnover threshold for VAT such that very small sellers do not have to account for VAT.

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MichaelKJ
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Re: Amazon to be collecting sales tax in 7 states
In reply to azazel1024, Aug 30, 2012

Based on my very limited understanding of tax law, the only thing that Congress is likely to do is to pass a law that allows states to tax online sales in the same way they tax business that have a physical presence in their state. Anything beyond that on states' right to tax would be viewed as an intrusion on states' rights and is unlikely to happen.

So, I think that sellers will be legally responsible for paying taxes to every state in which they have customers. However, I doubt that states will go to the time and expense of going after very small businesses.

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Klarno
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Re: Amazon to be collecting sales tax in 7 states
In reply to Tim in upstate NY, Aug 30, 2012

Under the current tax system, this will be devastating for smaller internet sellers: As it stands now, we have thousands of tax districts and thousands of tax rates simply depending on where you live. Every state has its tax rate, so does every county, and also every city. Items may be classified differently in different tax districts, and thus taxed differently, so there would be more for small sellers to have to be aware of and continue to keep track of. This needs to be reformed.

Whichever direction this goes I'll still probably buy online, because regardless of sales tax, all I can buy locally are Canon, Nikon and Sony cameras $50-300 over what they're listed for online.
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jazzbass62
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Re: Amazon to be collecting sales tax in 7 states
In reply to Tim in upstate NY, Aug 30, 2012

Tim in upstate NY wrote:

Landscapephoto99 wrote:

. . . I agree that we need a nationwide VAT tax. The sooner the better.

Only if they eliminate local taxes, which isn't likely to happen. Adding the burden of a VAT onto existing taxes will throw the economy into a recession. People in high tax areas will pay upwards of 20% tax on every item they purchase.

I say tax incomes rather than items or property. It occurs once, is relatively painless and easily monitered. When I was in an area with no sales taxes, I felt like buying more, being a big tipper, etc. That stimulates the economy which no doubts puts more $$$ in the pockets of needy bureaucrats.

. . . We need some input from some Europeans here on how it's been done elsewhere but I would expect that the states would have to forgo their current sales tax incomes and instead rely on their share of a nationwide VAT tax. How are they doing it in the UK and Germany? Without property and financial assets taxation, there's no way to fairly tax that wealthy 1% that spends a proportionately small portion of their wealth on retail purchases IMO.

Tim: I sit squarely in middle class section of the class-room... the trouble with these VAT style taxes (especially at the 20% level or any level actually) is they damage me waaaay more than the wealthy 1% you mention... My purchases on internet AND brick and mortar stores will be curtailed by a VAT. My guess is any proposed VAT will not be confined to just discretionary purchases on the internet. This would wreak havoc all over an already wheezing economic future.
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noirdesir
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Re: Amazon to be collecting sales tax in 7 states
In reply to Cani, Aug 30, 2012

Cani wrote:

Tim in upstate NY wrote:

. . . We need some input from some Europeans here on how it's been done elsewhere but I would expect that the states would have to forgo their current sales tax incomes and instead rely on their share of a nationwide VAT tax. How are they doing it in the UK and Germany? Without property and financial assets taxation, there's no way to fairly tax that wealthy 1% that spends a proportionately small portion of their wealth on retail purchases IMO.

Services and goods travel freely in the E.U..

When you buy online, you buy from where the seller is located and pay the local V.A.T.

If I purchase a camera from an online UK seller, I'll pay UK V.A.T. and only UK V.A.T. No other V.A.T. will be due to my state of residence.

That applies for purchases by private individuals (and is a reason that some online vendors put up shop in the countries with the lowest VAT rates, it does not strictly save the vendor money but their customers which means they can be cheaper or have compensate with higher margins).

For B2B sales, the VAT in the receiving country is applied. Every business that wants to do cross-border trade gets a 'VAT ID', such that when exporting it can report the buyers VAT ID to its tax authorities. Applying the VAT upon the exporter would be simpler but the countries which import more than they export did not like (and got a majority together in the internal EU decision making bodies) and thus we have the system we have.

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ohmydentist
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taxed enough already . . . . . (nt)
In reply to Tim in upstate NY, Aug 30, 2012
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Cani
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Re: Amazon to be collecting sales tax in 7 states
In reply to noirdesir, Aug 30, 2012

Correct.

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