Comments on: The myth of tax free internet sales http://www.ecommerce-blog.org/archives/the-myth-of-tax-free-internet-sales/ Ecommerce, Online Marketing, SEO, Web Design and Programming Wed, 04 Jan 2012 19:17:50 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: New Zealand Supermarket http://www.ecommerce-blog.org/archives/the-myth-of-tax-free-internet-sales/comment-page-1/#comment-28781 New Zealand Supermarket Mon, 26 Dec 2011 04:43:21 +0000 http://www.ecommerce-blog.org/archives/the-myth-of-tax-free-internet-sales/#comment-28781 A group of the nation’s governors, state legislators and state tax administrators are asking the United States Congress to require catalog companies, online retailers and live television shopping networks to collect sales taxes from their customers, even if they live in states where the retailers have no operations. While all retailers must collect taxes on sales in a state where they have a physical presence, the Supreme Court has held that it would be a burden on interstate commerce to force retailers to collect and remit taxes for sales in states where they are not located. A group of the nation’s governors, state legislators and state tax administrators are asking the United States Congress to require catalog companies, online retailers and live television shopping networks to collect sales taxes from their customers, even if they live in states where the retailers have no operations. While all retailers must collect taxes on sales in a state where they have a physical presence, the Supreme Court has held that it would be a burden on interstate commerce to force retailers to collect and remit taxes for sales in states where they are not located.

]]> By: DrivingOutSmallBusiness http://www.ecommerce-blog.org/archives/the-myth-of-tax-free-internet-sales/comment-page-1/#comment-28384 DrivingOutSmallBusiness Sat, 17 Dec 2011 06:23:09 +0000 http://www.ecommerce-blog.org/archives/the-myth-of-tax-free-internet-sales/#comment-28384 Here in Missouri the Department of Revenue is conducting audits on businesses going back 5 years. They check all purchases including online purchases. It is the responsibility of the business to provide proof that the "use tax" has been paid if purchase was made from an out of state vendor and shipped into Missouri; or sales tax if the purchase was made within the state. The department is collecting hundreds of thousands from businesses in MO. They compare IRS forms to state forms to verify sales; they audit all payments to all vendors. Businesses are required to turn over all electronic and paper records. Any missing invoices or receipts - they charge tax - plus interest and penalties from the date of the sale. Between EPA, OSHA, IRS, State recordkeeping regs, and insurance... Is it any wonder the price of everything is skyrocketing? I'm thinking the best place to work is for the government. Isn't that what they want??? Here in Missouri the Department of Revenue is conducting audits on businesses going back 5 years. They check all purchases including online purchases. It is the responsibility of the business to provide proof that the “use tax” has been paid if purchase was made from an out of state vendor and shipped into Missouri; or sales tax if the purchase was made within the state. The department is collecting hundreds of thousands from businesses in MO. They compare IRS forms to state forms to verify sales; they audit all payments to all vendors. Businesses are required to turn over all electronic and paper records. Any missing invoices or receipts – they charge tax – plus interest and penalties from the date of the sale. Between EPA, OSHA, IRS, State recordkeeping regs, and insurance… Is it any wonder the price of everything is skyrocketing? I’m thinking the best place to work is for the government. Isn’t that what they want???

]]> By: B Evans http://www.ecommerce-blog.org/archives/the-myth-of-tax-free-internet-sales/comment-page-1/#comment-27281 B Evans Thu, 17 Nov 2011 20:43:35 +0000 http://www.ecommerce-blog.org/archives/the-myth-of-tax-free-internet-sales/#comment-27281 If you have a company that refuses to accept payment for a adjusted invoice that did not include sales tax but you are paying it. You is then the responsible party for reporting the tax? If you have a company that refuses to accept payment for a adjusted invoice that did not include sales tax but you are paying it. You is then the responsible party for reporting the tax?

]]> By: Diva http://www.ecommerce-blog.org/archives/the-myth-of-tax-free-internet-sales/comment-page-1/#comment-26993 Diva Mon, 07 Nov 2011 23:53:49 +0000 http://www.ecommerce-blog.org/archives/the-myth-of-tax-free-internet-sales/#comment-26993 reywalgoh, you are forgetting the fact that any brick-and-mortar business selling items that can sell online and isn't doing so is just being plain dumb for many reasons, the tax issue being one. Sorry there is no other to put it. In fact the majority of consumers have more trust in an online store which is also a brick-and-mortar store. reywalgoh, you are forgetting the fact that any brick-and-mortar business selling items that can sell online and isn’t doing so is just being plain dumb for many reasons, the tax issue being one. Sorry there is no other to put it.
In fact the majority of consumers have more trust in an online store which is also a brick-and-mortar store.

]]> By: reywalgoh http://www.ecommerce-blog.org/archives/the-myth-of-tax-free-internet-sales/comment-page-1/#comment-26683 reywalgoh Wed, 26 Oct 2011 18:39:44 +0000 http://www.ecommerce-blog.org/archives/the-myth-of-tax-free-internet-sales/#comment-26683 Tod, Actually the Illinois company is not responsible for the tax. You are. So legally, you are supposed to pay the tax to the state of Arizona for the purchase. Illinois will get the income/property tax from the Illinois business. What's going on right now is that there isn't a federal law that gives states the right to pass legislation requiring out of state businesses (without what is called a "substantial nexus") to collect and remit the tax for you. States are allowed to pass these laws if businesses have brick-and-mortar operations...so when you shop locally you give the sales/use tax to the seller, then they remit it to the state (probably monthly). Then you don't have to worry about it. Now of course, everyone likes paying less tax (like Fed Up above), but a problem that is occurring is that small businesses have to compete with online retailers unfairly because the Internet retailers help individuals evade state tax laws. When Fed Up goes to the local jewelry store and checks out all the merchandise, drinks the complementary glass of Champaign, and finds the engagement ring he wants to buy his future fiancée...he then heads home and buys it on the Internet from an out of state business. They don't force him to pay the sales tax and he saves himself 6%. He lies at the end of the year and claims $0 in use tax on his return. Not only is he cheating all of us by not paying his taxes (we are the state and the city after all, and the small business pays income and property taxes...and probably sponsors our kids' Little League teams, too), but he's also driving prices up for the rest of us. If the taxes he avoided were 10% (State + County + City), then that means the online seller actually charged him 4% more for the goods (apples to apples) than the local business would have. The online retailer simply didn't make Fed Up pay the tax up front, and instead jacked up the actual profit they made on the sale. The retailer encouraged and facilitated Fed Up's tax fraud, and charged him more than the product was worth. It hurts the small business owner, the state, the city, fair competition, and even the buyer. Tod,

Actually the Illinois company is not responsible for the tax. You are. So legally, you are supposed to pay the tax to the state of Arizona for the purchase. Illinois will get the income/property tax from the Illinois business.

What’s going on right now is that there isn’t a federal law that gives states the right to pass legislation requiring out of state businesses (without what is called a “substantial nexus”) to collect and remit the tax for you. States are allowed to pass these laws if businesses have brick-and-mortar operations…so when you shop locally you give the sales/use tax to the seller, then they remit it to the state (probably monthly). Then you don’t have to worry about it.

Now of course, everyone likes paying less tax (like Fed Up above), but a problem that is occurring is that small businesses have to compete with online retailers unfairly because the Internet retailers help individuals evade state tax laws. When Fed Up goes to the local jewelry store and checks out all the merchandise, drinks the complementary glass of Champaign, and finds the engagement ring he wants to buy his future fiancée…he then heads home and buys it on the Internet from an out of state business. They don’t force him to pay the sales tax and he saves himself 6%. He lies at the end of the year and claims $0 in use tax on his return.

Not only is he cheating all of us by not paying his taxes (we are the state and the city after all, and the small business pays income and property taxes…and probably sponsors our kids’ Little League teams, too), but he’s also driving prices up for the rest of us. If the taxes he avoided were 10% (State + County + City), then that means the online seller actually charged him 4% more for the goods (apples to apples) than the local business would have. The online retailer simply didn’t make Fed Up pay the tax up front, and instead jacked up the actual profit they made on the sale. The retailer encouraged and facilitated Fed Up’s tax fraud, and charged him more than the product was worth.

It hurts the small business owner, the state, the city, fair competition, and even the buyer.

]]> By: Missy http://www.ecommerce-blog.org/archives/the-myth-of-tax-free-internet-sales/comment-page-1/#comment-26137 Missy Thu, 06 Oct 2011 13:43:38 +0000 http://www.ecommerce-blog.org/archives/the-myth-of-tax-free-internet-sales/#comment-26137 What if what you purchase online is a virtual product? Hence... there is no tangible property, no shipping... it's internet access to a course. Does it matter where the business is or where consumer is? I don't see how you could implement sales tax on this? What if what you purchase online is a virtual product? Hence… there is no tangible property, no shipping… it’s internet access to a course. Does it matter where the business is or where consumer is? I don’t see how you could implement sales tax on this?

]]> By: self defense products http://www.ecommerce-blog.org/archives/the-myth-of-tax-free-internet-sales/comment-page-1/#comment-25974 self defense products Fri, 30 Sep 2011 22:54:32 +0000 http://www.ecommerce-blog.org/archives/the-myth-of-tax-free-internet-sales/#comment-25974 I own an e-commerce store and I think the whole concept of an internet sales tax is ridiculous. Brick and mortar businesses say its needed to “even the playing field”. In reality the playing field is already even, with the addition of a sales tax it tilts to the brick and mortar stores favor. The reason…shipping costs. The money that on line shoppers save in sales taxes, they end up spending on shipping. Now they have to pay both online sales tax and shipping cost. This is a clear advantage for brick and mortar stores. I’m glad most shoppers don’t know about internet taxes or refuse to pay them, however I worry that at some point the Gov. may try to force e-commerce stores to collect it for them. I own an e-commerce store and I think the whole concept of an internet sales tax is ridiculous. Brick and mortar businesses say its needed to “even the playing field”. In reality the playing field is already even, with the addition of a sales tax it tilts to the brick and mortar stores favor. The reason…shipping costs. The money that on line shoppers save in sales taxes, they end up spending on shipping. Now they have to pay both online sales tax and shipping cost. This is a clear advantage for brick and mortar stores. I’m glad most shoppers don’t know about internet taxes or refuse to pay them, however I worry that at some point the Gov. may try to force e-commerce stores to collect it for them.

]]> By: Tod http://www.ecommerce-blog.org/archives/the-myth-of-tax-free-internet-sales/comment-page-1/#comment-25595 Tod Sun, 18 Sep 2011 23:39:27 +0000 http://www.ecommerce-blog.org/archives/the-myth-of-tax-free-internet-sales/#comment-25595 I know this is old. Hope you read it. I'm in Arizona. The state just started talking about taxing for online purchases BUT nobody knows how... and I understand why. When I had a business the code said our Use Tax or Transaction Privelege Tax (as it's called here) only applied to other sales within the state. And the city taxes mostly worked the same. BUT... if what you are saying here is right, then a purchase I make online from my AZ home is from a company in IL, then Illinois collects the tax? My purchase in AZ helps AZ by 0% but helps IL by whatever their tax rate is. If that's the case, it's actually better to buy local and pay the tax to your state where it can be used (in theory?) for your benefit. Otherwise each internet purchase that's taxed only benefits that other state! I know this is old. Hope you read it. I’m in Arizona. The state just started talking about taxing for online purchases BUT nobody knows how… and I understand why. When I had a business the code said our Use Tax or Transaction Privelege Tax (as it’s called here) only applied to other sales within the state. And the city taxes mostly worked the same. BUT… if what you are saying here is right, then a purchase I make online from my AZ home is from a company in IL, then Illinois collects the tax? My purchase in AZ helps AZ by 0% but helps IL by whatever their tax rate is.

If that’s the case, it’s actually better to buy local and pay the tax to your state where it can be used (in theory?) for your benefit. Otherwise each internet purchase that’s taxed only benefits that other state!

]]> By: On talk of monopolies « Raptorial Ramblings http://www.ecommerce-blog.org/archives/the-myth-of-tax-free-internet-sales/comment-page-1/#comment-23490 On talk of monopolies « Raptorial Ramblings Mon, 05 Jul 2010 17:20:29 +0000 http://www.ecommerce-blog.org/archives/the-myth-of-tax-free-internet-sales/#comment-23490 [...] They call it the ‘Use Tax‘. It exists outside of South Carolina as well, and you can check up on the various states Use Tax laws here. [...] [...] They call it the ‘Use Tax‘. It exists outside of South Carolina as well, and you can check up on the various states Use Tax laws here. [...]

]]> By: jestep http://www.ecommerce-blog.org/archives/the-myth-of-tax-free-internet-sales/comment-page-1/#comment-23417 jestep Tue, 15 Jun 2010 15:13:56 +0000 http://www.ecommerce-blog.org/archives/the-myth-of-tax-free-internet-sales/#comment-23417 Updated links to the states that were missing. Updated links to the states that were missing.

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