Monday, June 13, 2011

Sales Tax - Who Cares what Amazon Thinks?

Raise your hands if you think there will eventually be an Internet Sales Tax? Of course there will be and and Jeff Bezos can't stop it. It is time the US Government earns some of the tax dollars we are paying them and enacts a sensible plan for managing Internet sales tax.

States need the revenue, consumers are conditioned to pay sales tax and it is fair to charge sales tax for purchases shipped to a state. Right now the States need to shut up and listen. You are better off with a reasonable Internet sales tax for all sales in your state then you are protecting your own sales tax percentage. A reasonable sales tax of 5% with .5% going to the Federal government for managing the program.

California will moan, but we get 8.75% and we can't make it at 4.5% and I say, quit bitching and take the 4.5% because your are fighting for the 8.75% and losing the battle and years of trying to get an additional 4.25% won't get you anywhere.

I say give every State 4.5% of the sales shipped to that state and be happy with it. Even states like Oregon and New Hampshire with no sales tax should charge 4.5%. Ecommerce needs a plan now so we don't play games for 2-3 more years and get stuck with a worse law.

Look, I don't have the lobbying budget that Amazon has but I do have a blog and I do have a voice. Congress wants to say this is an issue for the states so they need to figure something out but getting the States to agree on anything is like herding cats -- its impossible. Congress needs to enact a reasonable solution that is fair for every consumer and still give ecommerce the room to grow.

I say a 5% Internet Sales Tax managed by the US government is the quickest and smartest approach available and regardless how much money Amazon throws at this issue, a national sales tax must be enacted.

Just my 15%


David said...

I am tired of all these so called brick and mortar stores complaining about the unfair competition. Nothing is stopping these brick and mortar stores from going online.

David said...

Oh yeah and where I live the sales tax is 9.3%. Don't think for a second that this wouldn't hurt small business's adding another tax.

People don't have unlimited pockets.

Randy Smythe said...


It is a foregone conclusion that there will be an Internet Sales Tax. I'm just proposing that we get ahead of the eventual tax with a program that will level the playing field for all online retailers, give states the much needed revenue and still give consumers an incentive to buy online because like in your case they would still save 4.3%.

If we don't get behind a sensible plan like this then we will get a complicated and much more costly plan eventually.

Marshall said...

There's been a move for a while to simplify the model so that the "undue burden" clause from the Quill vs. North Dakota decision is no longer relevant:

There are a number of other proposals, but if the remaining states are willing to sign on, there's already a reasonable solution.

In order to get past the undue burden clause, the states will have to simplify their model and reduce the number of complex cases they define. Additionally, that 9.3% rate would decrease if there weren't exemptions for various classes of products and it was just universal across the board.

And if you want to go even further in addressing tax complexities, you can look at FairTax:

Randy Smythe said...

Thanks Marshall! Yes, I am aware of the streamlinedsalestax proposal and Amazon has mentioned that they would support that as well.

I am all for a solution that will get this done soon. Hopefully the states that have not yet signed on will do so soon.

David said...

I'm not arguing with you on whether it's going to eventually happen, although I don't think it's happening tomorrow.

My argument is that it's going to take money out of the pockets of small businesses that we are depending on to create jobs.

It's a joke that these big corporations like Target, WalMart, and Best Buy are fighting for the little guy. They've spent the last several decades putting the little guy out of business, and now when it benefits their profit margins they start fighting for the few little guys that are still in business.

I read the associated press article and here is something that stands out.

We get people all the time who come in, talk to a salesman for 15 minutes to half an hour ... and then go, and we know they are going to buy it online
because they can save money. In theory, they are stealing our time," Burger
said. "We're losing at least 15 percent to online, out-of-state, so we're losing
anywhere between $3 million and $5 million a year in business.

Here's my problem with that argument. What's stopping this person from starting a website and selling that camera online?

Maine said...

It's a big move. How can the Web sales tax be different with the local stores?

Tula said...

I would support a *simple* online sales tax option that would not require me to file a plethora of reports every quarter, have no layers of rules and exemptions, and not require me to interface my ecommerce system with yet another third party, whose performance and privacy issues I would not be able to control (sorry, TaxCloud people). Anyone who dismisses the current complexity of collecting taxes as they stand now does not know what they're talking about. I've seen it first hand in developing software for a big ecommerce player (*cough* Amazon *cough*). It is by no means easy and consumes loads of computer and storage resources.

I just wish the states would stop pushing these silly nexus laws because all those do is ruin small businesses who depend on affiliate revenue and decrease income tax revenue, because Amazon will just dump the affiliates when it happens.

And don't get me started on the "fairness" issues being touted by bricks and mortar businesses :-) Once you factor in shipping and handling costs (hey, all buyers want free shipping these days, so guess who pays?) any perceived advantage goes out the window.

Randy Smythe said...

Tula, thanks for your comments as always. You make some good points.

One clarification on fairness in regards to Brick and Mortar...fairness should only be a consideration regarding their online business, where they have S&H,Sales Tax and price competitive issues. Because many of these businesses are in every state they must collect and remit sales tax for every order.

ms.pat said...

I collect california state sales tax. I wouldn't mind collecting for all state - IF they make it an easy thing to do. As it is, california's tax drives me up a wall with its different sales taxes and add ons....its downright stupid. I cannot imagine having to do that for each state! If they want us to collect sales tax across the country then they have a responsibility for making it an easy thing to do and not a life long chore!

kevin21 said...
This comment has been removed by a blog administrator.
Anonymous said...

Drop dead scumbag, you'll get no tax and like it.

push buttons said...

tax should b paid

Tommy Eastman said...

The states have already proven that they can not use their tax dollars efficiently, why should we give them more to throw down the drain?

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Geoff Granfield said...

We are all aware the taxes in California and Illinois seem to be outrageous, and so in an attempt to sustain total tax rates from escalating, these two states seem to be in a battle over exactly who can implement the silliest tax laws on the oddest products. And that is exactly how you obtain a candy tax! The only real plausible method to make up the income is to require a candy tax. You read correctly, certain candies will probably be susceptible to sales tax while others are perceived as "nutritional." Find out how these states label Americans' most liked sugary treats.

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Amy Archer said...

If they lessen the Sales tax then does this mean to say that the price of ticket going from Singapore to manila flights will be lessen. I've been really planning to spend my summer to an Asian Tour.

permacrisis said...

I'm with ya Randy.

For the Feds to have forced everyone in the country onto health insurance, and not fixed this itty bitty little problem first, sure is lopsided.

Handle the sensible stuff first, do the goofy stuff later. Too hard for Congress, eh?

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Mai Dung said...

Hiện nay, cùng một lúc tồn tại 2 tiêu chuẩn thép xây dựng Việt Nam. (TCVN) đều có hiệu lực về cùng một sản phẩm cốt thép bê tông là TCVN 1651 - 1985 và TCVN 6285 - 1997 được biên soạn từ ISO 6935 -2: 1991.
Sự tồn tại song song của 2 tiêu chuẩn thép xây dựng. này đã gây nhiều khó khăn đối với các đơn vị thi công trong khi thực hiện xây dựng công trình. Để biết thêm thông tin chi tiết các bạn vui lòng truy cập vào website: Thép Hòa Phát để tham khảo.

Nhan Nguyen said...

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Người mất ngủ nên ăn uống gì?
Cách chữa mụn nhọt bằng lá cây
Cách làm rượu dâu tây
Những điều lưu ý khi uống thuốc tây
lá tía tô có nóng không

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