US Senators introduce bill to tax Internet shopping

[mandy]

This may be the last holiday season to enjoy tax-free Internet shopping, thanks to new legislation in the U.S. Congress.

Two bills introduced Wednesday propose sweeping changes to how Americans are taxed for online and mail order purchases. Businesses initially would be required to collect sales taxes on purchases shipped to roughly half of the country, and that percentage is expected to rapidly increase.

State tax collectors would like to change that. They complain that the Internet is sapping tax revenues and are supporting Enzi's bill to force companies to collect taxes on many out-of-state shipments in the future. Traditional retailers such as Wal-Mart Stores, which collects taxes on shipments from Walmart.com because it has physical locations in every state, are also supporting the bill.

full article: http://news.zdnet.com/2100-9595_22-6004917.html

related topics:
Tax time: Streamlined Sales and Use Tax Agreement  http://community.tuliptools.com/index.ph...102.0.html
18 states preparing to clear the path this weekend for imposing online sales tax  http://community.tuliptools.com/index.ph...618.0.html
Michigan, New Jersey, and 11 Other States Pushing For Internet Tax Starting 10/1 http://community.tuliptools.com/index.ph...291.0.html

[Kristijntje]

Two proposed federal bills submitted in the Senate that support mandatory collection of Internet sales tax are likely to be forged into a single bill that will settle issues like exemptions for small retailers...

One of the main issues is whether and how small businesses should be exempt from an Internet sales tax. Enzi’s bill specifies that retailers doing less than $5 million a year should be exempt, but Dorgan has called on the U.S. Small Business Administration to set a threshold for participation. Large multi-state retailers, including Amazon, have expressed concern that a high-dollar exemption could let thousands of small retailers, including sellers on eBay.com doing under $5 million a year, sell tax-free at an unfair advantage.

full article: http://www.internetretailer.com/dailyNews.asp?id=17273

[amy]

Large multi-state retailers, including Amazon, have expressed concern that a high-dollar exemption could let thousands of small retailers, including sellers on eBay.com doing under $5 million a year, sell tax-free at an unfair advantage

After Amazon's refusal to adjust the shipping allowance it gives its small sellers when postal rates increased, I'm not shedding any tears for Amazon. 

[bargainbloodhound]

This is one of those rare times when I'm rooting for eBay('s lobbyists) and against Amazon('s lobbists).  The costs, technical requirements, and time involved, for small businesses of trying to implement this tax proposal would drive many of them out of business or offline.

If Amazon and other large retailers are so worried about one company having an unfair advantage over another, perhaps they should think about giving up the volume shipping discounts that they receive from UPS, etc. that small ecommerce merchants don't receive

[mandy]

The Streamlined Sales and Use Tax Agreement is anything but streamlined, an eBay official testified yesterday at a congressional hearing examining the effect of bills designed to require out-of-state Internet vendors to collect state sales and use taxes...

The SSUTA "is a very complex system, and small businesses using the Internet could never comply without the paid help of technology service providers," Brian Bieron, senior director of federal government relations at eBay, said in written testimony. "The states claim that they will pay those providers, but the amount promised is likely to prove woefully insufficient and would put small businesses at the mercy of a very unreliable system."...

full article: http://www.dmnews.com/cgi-bin/artprevbot...e_id=35640

[mandy]

Last year, Sen. Michael Enzi, R-Wyo., and Sen. Byron Dorgan, D-N.D., introduced similar bills that would require online and catalog merchants (or at least bigger ones) to collect sales taxes for any states that met standards set by the Streamlined Sales and Use Tax Agreement (SSUTA). The Enzi-Dorgan proposal stood no chance with taxophobic Republicans in control of the House.

Next year, with Democrats in charge? "The stars are lined up better," says Harley Duncan, executive director of the Federation of Tax Administrators, which represents state tax officials...

full article: http://www.forbes.com/businessinthebeltw...ltway.html

[BellisimaJ.]

DMA tax counsel George S. Isaacson says. "I would hope the Democratic leadership would say, 'We don't want to get tagged with a bad tax bill as the introduction to our leadership,'" he adds.

Hopefully, this sentiment is shared by a majority of Dems. 

To require collection of state taxes by small ecomm merchants would, IMO, shut them down. It is just too complicated. Even with a single tax rate.

[FiberGuy]

My biggest fear regarding the SSTA is the same regarding any new tax:  Once it's implemented (even with the minimum gross-sales figure in the millions), it's easier to justify expanding, changing, increasing, etc. etc.  Not only that, it opens the door to NEW taxes.  Every bureaucrat, with their hands already out seeking new cash cows, will only be encouraged to extend them farther.

And lets not forget... with every tax (and new tax, for that matter) comes new agencies, additional regulation, government waste and loopholes for the privileged to find.

Politicians...

Can't live with 'em...


... can't shoot 'em...

[chiquita]

[quote author=FiberGuy link=topic=1840.msg34540#msg34540 date=1164994220]
My biggest fear regarding the SSTA is the same regarding any new tax:  Once it's implemented (even with the minimum gross-sales figure in the millions), it's easier to justify expanding, changing, increasing, etc. etc.  Not only that, it opens the door to NEW taxes.  Every bureaucrat, with their hands already out seeking new cash cows, will only be encouraged to extend them farther.

And lets not forget... with every tax (and new tax, for that matter) comes new agencies, additional regulation, government waste and loopholes for the privileged to find.

Politicians...

Can't live with 'em...


... can't shoot 'em...




[/quote]

So true, it never fails that when new business legislation is enacted, the first ones to feel the effects are small business owners. It appears that the obstacles facing small B & M stores have finally found their way to online merchants. I haven't even figured out the tax system for my own state. I can't imagine attempting to maneuver all 50 of them.  :blinkie:

[mandy]

Update:

State and local governments this week resumed a push to lobby Congress for far-reaching changes on two different fronts: gaining the ability to impose sales taxes on Net shopping, and being able to levy new monthly taxes on DSL and other connections. One senator is even predicting taxes on e-mail...

On Tuesday, Enzi introduced a bill that would usher in mandatory sales tax collection for Internet purchases. Second, during a House of Representatives hearing the same day, politicians weighed whether to let a temporary ban on Net access taxes lapse when it expires on November 1. A House backer of another pro-sales tax bill said this week to expect a final version by July...

full article: http://news.com.com/2100-1028_3-6186193.html