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 Internet Sales Tax One Step Closer to Reality

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Dutch

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PostSubject: Internet Sales Tax One Step Closer to Reality   Tue May 07, 2013 8:41 am

A tax on online sales, long sought by bricks-and-mortar retailers, moved one step closer to reality Monday when the Senate voted 69-24 in favor of the Marketplace Fairness Act.

The bill seeks to fix what many see as a tax loophole: Under current U.S. law, an online retailer is only obligated to collect a state's sales tax from shoppers if it has a physical presence in that state. While a few states have circumvented that requirement with "affiliate nexus" laws that primarily target Amazon.com (AMZN), the vast majority of states still don't collect tax on online sales by out-of-state sellers.

The bill before Congress wouldn't impose a national sales tax, but it would empower states to tax those out-of-state online sellers if they so choose. It has the support of numerous retailers, as well as the National Retail Federation, the industry's main lobbying group.

While previous versions of the bill have died on Capitol Hill in recent years, today's vote didn't come as a great surprise: More than a month ago the Senate took a symbolic vote on the measure, and passed it 75-24. And while the bill is opposed by a few key conservatives, it also has the surprising support of e-commerce's heaviest hitter, Amazon. Amazon's support of the bill can be traced to the company's push to establish a wider physical presence to facilitate faster delivery -- and the fact that it can handle the burden of taxation better than smaller online retailers.

The loudest voice of opposition in the business community has belonged to eBay (EBAY). Starting Sunday, the company began sending emails to more than 40 million users informing them of the bill and asking them to write their congressmen. In its current form, the bill only exempts online sellers with less than $1 million in out-of-state sales; eBay wants that threshold raised so that it only applies to businesses that do more than $10 million in sales and have more than 50 employees.

"This legislation treats you and big multi-billion dollar online retailers - such as Amazon - exactly the same," wrote eBay CEO John Donahoe in the letter.

The Marketplace Fairness Coalition, which is comprised of retailers supporting the bill, countered with its own letter noting that the vast majority of eBay's sellers would be exempted from collecting sales tax.

The impact on consumers, meanwhile, would be varied, with many Americans seeing little to no impact on their shopping experience. Five states -- Alaska, New Hampshire, Delaware, Montana and Oregon -- don't charge a sales tax at all, so residents of those states would be unaffected by the law. Several other states, including New York and Illinois, have already passed affiliate nexus laws, which means residents of those state are already paying sales tax for purchases from major online retailers like Amazon. And a few others, like South Carolina and Nevada, have already struck deals with Amazon to start collecting sales tax at a later date.

That leaves the states that charge sales tax but haven't passed affiliate nexus laws. Successful passage of the bill would give these states the option of collecting sales on online purchases. In states that choose to exercise this new right, online shoppers will find themselves paying an addition 5%-10% on their purchases, depending on the state's tax rate.

That passage now depends on the Republican-controlled House, where it's expected to have a tougher time than it did in the Senate. The Wall Street Journal notes that House speaker John Boehner has been largely silent on the issue and Paul Ryan has expressed ambivalence; meanwhile, Rand Paul has editorialized against the bill, calling it an "internet tax mandate."

The question, then is whether the momentum from today's bipartisan vote is enough to overcome conservative opposition in the House. If it does, the days of tax-free online shopping will soon be at an end.

Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama.

http://www.dailyfinance.com/2013/04/22/senate-passes-internet-sales-tax-bill/?icid=maing-grid10%7Chtmlws-main-bb%7Cdl1%7Csec3_lnk1%26pLid%3D309244
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bosun1

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PostSubject: Re: Internet Sales Tax One Step Closer to Reality   Tue May 07, 2013 9:06 am

The problem with on-line/catalog sales is the enforcement of collection of sales tax/other taxes from a states citizens. I am sure the states would be happy to get all of their citizens who buy something on ebay pay sales tax to them, and everyone who buys something from a yard sale do the same, and all of these yard sale sellers (and small time ebay sellers) count that as income on their income taxes. We all know how the Great Recession has affected the revenue stream of the states, requiring them to lay off police, teachers, firefighters and cut back on road repairs and anything else the common citizen feels important! In my state, on their income tax form there is a little chart making it quite easy to figure out what they consider a just tax amount. If you make X amount in annual income then Y amount is what you write in on line Z on the tax form. Dog knows I don't want to avoid any chance of not paying my just tribute to the state! What worries me is if they want to know what you bought. Bought tobacco? Then you owe $xxx.xx amount of excise tax. And perhaps there is some arcane state law requiring you to pay this state excise tax every month you make a purchase, and since you are 'importing' mass quantities then you need a special license for an additional $xx.xx per year. Maybe(?) I'm paranoid, but I distrust this "foot in the door"
And on a side note, I'm glad the politicians quickly found a repair for the FAA furloughing air traffic controllers! Didn't take long for the to realize that they were being inconvenienced! Senator Kerfuffle: "Why are we sitting here?" Flight Attendant: "Since Congress failed to pass a balanced budget and sequester came into effect, we don't have enough air traffic controllers to direct traffic, so we have to wait in line for our turn". Senator Kerfuffle: "Don't they know I'm important? I have to get back to my District (or holiday retreat payed by a lobbyist) in a timely manner. We'll have to fix this so I, I mean the American Citizen, doesn't have to waste his precious time!" Thanks, you self-serving bastiches!
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pepesdad1

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PostSubject: Internet Sales Tax One Step Closer to Reality   Tue May 07, 2013 10:31 am

Time to stock up on your supplies from on-line. This not a question of whether or not it will pass, but when.
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PostSubject: Re: Internet Sales Tax One Step Closer to Reality   Tue May 07, 2013 11:11 am

pepesdad is right. The handwriting was on the wall several years ago. Amazon battled against it and then rapidly reversed it position and started making agreements. At this point, they want it to pass and have clout.
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riff raff

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PostSubject: Re: Internet Sales Tax One Step Closer to Reality   Tue May 07, 2013 11:19 pm

Amazon supporting is a big blow to Ebay. I just bought a Toro lawnmower online, free delivery and no tax, $100 less than Home Depot offered. I guess those kind of deals won't be around much longer.
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docwatson

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PostSubject: Re: Internet Sales Tax One Step Closer to Reality   Wed May 08, 2013 1:47 pm

Here's a case of more taxation to fill politicians pockets IMO. If these extra taxes would actually help the country I'd be all for it, but we know that it won't. Either way we don't have much of a say in it other than to contact our State Senators and let them know what we think and how we would like them to vote.
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scotties22

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PostSubject: Re: Internet Sales Tax One Step Closer to Reality   Wed May 08, 2013 2:09 pm

Yes Doc...it is more taxation. But, how many of us shop online to avoid paying sales tax??? We still live in the state we live and are doing two things. We are directly taking money away from the state (and yes, they probably would just misappropriate the funds anyway) by shopping online and we are seriously hurting smaller retailers. Amazon, Ebay and what have you can go pound sand for all I care...I'm not worried about them. And by no means do I think more taxes is the answer to everything. Riff Raff just bought a lawn mower online and saved $100 off the Home Depot price...good deal. Unless you are the locally owned Toro dealer who is being put out of business not only by the "Big Box Stores" but by online shopping as well.

We're all for saving a buck.....but at what cost to small business owners (of which I happen to be one). I choose, whenever possible, to shop small locally owned businesses. Even though it may cost me more I will support local and small to the bitter end. This bill, if it passes, might actually give quite a few of them a chance to get back in the game.

Just my 2 pretty pennies.
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monbla256

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PostSubject: Re: Internet Sales Tax One Step Closer to Reality   Wed May 08, 2013 2:19 pm

scotties22 wrote:
Yes Doc...it is more taxation. But, how many of us shop online to avoid paying sales tax??? We still live in the state we live and are doing two things. We are directly taking money away from the state (and yes, they probably would just misappropriate the funds anyway) by shopping online and we are seriously hurting smaller retailers. Amazon, Ebay and what have you can go pound sand for all I care...I'm not worried about them. And by no means do I think more taxes is the answer to everything. Riff Raff just bought a lawn mower online and saved $100 off the Home Depot price...good deal. Unless you are the locally owned Toro dealer who is being put out of business not only by the "Big Box Stores" but by online shopping as well.

We're all for saving a buck.....but at what cost to small business owners (of which I happen to be one). I choose, whenever possible, to shop small locally owned businesses. Even though it may cost me more I will support local and small to the bitter end. This bill, if it passes, might actually give quite a few of them a chance to get back in the game.

Just my 2 pretty pennies.

Well said Scottie! If we don't support the smal guy soon we will be buying EVERYTHING from 5 or 6 monopolistic multinational firms, as we do now with our food. It's a matter of pay more to the B&M and have one around to go to, or pay your $s to a few large Corporations. It's our choice Twisted Evil
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docwatson

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PostSubject: Re: Internet Sales Tax One Step Closer to Reality   Wed May 08, 2013 2:43 pm

scotties22 wrote:
I choose, whenever possible, to shop small locally owned businesses. Even though it may cost me more I will support local and small to the bitter end. This bill, if it passes, might actually give quite a few of them a chance to get back in the game.

If this helps the small business owner I am all for it!!! My Brothers are all small business owners as well and I can see where you are coming from. I use online sellers only for items I cannot get locally, and tobacco is one of them. Living in Maine it is especially important for us to support one another and keep the local small communities going. Also living in TAXACHUSETTS you might understand when I say that a lot of the taxation ends up in politicians pockets. And I've never seen so many freebies given away than here in Massachusetts.
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KevinM



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PostSubject: Re: Internet Sales Tax One Step Closer to Reality   Wed May 08, 2013 3:01 pm

Perhaps local retailers will sell more mowers if lawn MowersDirect.com has to charge a tax. But I'm thinking ebuying is the best way to offer a good choice and price to buyers of items like pipes and tobak. For some items the market is broad but thin, so B&Ms have a hard time with marketing. Plus, most of this $$$ will go to funding government overhead, the Great Benefit and Pension Society.
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PostSubject: Re: Internet Sales Tax One Step Closer to Reality   Wed May 08, 2013 3:07 pm

Actually, small retailers on the net will be the most impacted. Collecting tax for the various states is not an insignificant task. Satisfying different forms and standard add to the burden. I can see why Amazon doesn't care; their economy of scale make the process much less costly and give them another advantage.

I had a small business here and the monthly statement was work. Multiply that time 30 or so -- daunting. Of course people will sell software that can help but there is a new expense.
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Thomas Porculo



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PostSubject: Re: Internet Sales Tax One Step Closer to Reality   Wed Oct 02, 2013 1:19 pm

I have read about this in other forums, the general consensus being that it is a "bad" thing for smokers. Obviously I don't want to pay more, but let me play devil's advocate: is it really such a bad thing? could it be a blessing in disguise?

Let's look at the positive effects of taxing your tobacco purchases online.

1.- It may make it possible for us, the smokers, to continue buying online. I love going to my B&M but the variety online is amazing. There are some blends I like to smoke that my B&M will not stock because they don't sell well in this area, I would like to be able to continue getting those. Think about what happened to the cigarette and snuff purchases online, all because the products were "duty free."

2.- This tax could potentially help local shops, and I am all for that. I have no qualms buying a pipe online, but I prefer to go to the B&M and see the pipe, inspect it, get a good look before buying.

3.- If there is an increased tax revenue from tobacco products, wouldn't the government be less likely to whine?

Another think to keep in mind is that a good portion of this issue is coming from "mislabeled" pipe tobacco. The government knows that a lot of the "menthol pipe tobacco" out there is not meant for a pipe, and as a result there is a big push to tax all tobacco products the same.

This is a complex issue, too many variables. Personally, I blame some manufacturers and retailers for selling "menthol pipe tobacco," but this is just an opinion.
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Bluefisher

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PostSubject: Re: Internet Sales Tax One Step Closer to Reality   Wed Oct 02, 2013 2:45 pm

In my state, pipe tobacco is taxed at a rate of + 95% of retail price. $17 for a tin of Nightcap anyone? (based on a average online retail price of $8/tin + 90% tobacco tax + 9% sales tax)
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bosun1

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PostSubject: Re: Internet Sales Tax One Step Closer to Reality   Wed Oct 02, 2013 3:15 pm

Thomas Porculo wrote:
I have read about this in other forums, the general consensus being that it is a "bad" thing for smokers. Obviously I don't want to pay more, but let me play devil's advocate: is it really such a bad thing? could it be a blessing in disguise?

Let's look at the positive effects of taxing your tobacco purchases online.

1.- It may make it possible for us, the smokers, to continue buying online. I love going to my B&M but the variety online is amazing. There are some blends I like to smoke that my B&M will not stock because they don't sell well in this area, I would like to be able to continue getting those. Think about what happened to the cigarette and snuff purchases online, all because the products were "duty free."
**I have no problem with paying sales tax on my on-line purchases. I can afford six percent. It's the excise/sin tax on tobacco that will kill me.**
2.- This tax could potentially help local shops, and I am all for that. I have no qualms buying a pipe online, but I prefer to go to the B&M and see the pipe, inspect it, get a good look before buying.
**The last B&M in this area went out of business in the late 1980's. He just didn't have enough business to stay open. The Next closest shop is in either Detroit or Flint. It's now RYO/cigar/head/porn shops around here.***

3.- If there is an increased tax revenue from tobacco products, wouldn't the government be less likely to whine?
** We are talking about the government aren't we? They already feel that we need to pay more to 'balance their budget" so they can afford to pay for police, teachers, fire fighters, road repair...all of the stuff that taxes were originally designed to pay for but the money just sort of disappeared.**

Another think to keep in mind is that a good portion of this issue is coming from "mislabeled" pipe tobacco. The government knows that a lot of the "menthol pipe tobacco" out there is not meant for a pipe, and as a result there is a big push to tax all tobacco products the same.
**There used to be "pipe & cigarette" tobacco. Then the government changed the cigarette tobacco tax from ~$2.56/lb to $26.00/lb. The companies that didn't rename their product are out of business. Now the government wants to tax all loose tobacco at the $26.00/lb rate. It is not because they want to protect our health or "for the children", it's for the money. The Feds wanted to double their tax per pack to $2.00 to "fund pre-school". WTF? Now they want to make pre kindergarten mandatory?**
This is a complex issue, too many variables. Personally, I blame some manufacturers and retailers for selling "menthol pipe tobacco," but this is just an opinion.
Comments in line from this pessimistic, cranky, disillusioned old guy!
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Thomas Porculo



Location : Grand Rapids, MI
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PostSubject: Re: Internet Sales Tax One Step Closer to Reality   Wed Oct 02, 2013 7:58 pm

bosun1 wrote:
Thomas Porculo wrote:
I have read about this in other forums, the general consensus being that it is a "bad" thing for smokers. Obviously I don't want to pay more, but let me play devil's advocate: is it really such a bad thing? could it be a blessing in disguise?

Let's look at the positive effects of taxing your tobacco purchases online.

1.- It may make it possible for us, the smokers, to continue buying online. I love going to my B&M but the variety online is amazing. There are some blends I like to smoke that my B&M will not stock because they don't sell well in this area, I would like to be able to continue getting those. Think about what happened to the cigarette and snuff purchases online, all because the products were "duty free."
**I have no problem with paying sales tax on my on-line purchases.  I can afford six percent.  It's the excise/sin tax on tobacco that will kill me.**
2.- This tax could potentially help local shops, and I am all for that. I have no qualms buying a pipe online, but I prefer to go to the B&M and see the pipe, inspect it, get a good look before buying.
**The last B&M in this area went out of business in the late 1980's. He just didn't have enough business to stay open. The Next closest shop is in either Detroit or Flint. It's now RYO/cigar/head/porn shops around here.***

3.- If there is an increased tax revenue from tobacco products, wouldn't the government be less likely to whine?
** We are talking about the government aren't we?  They already feel that we need to pay more to 'balance their budget" so they can afford to pay for police, teachers, fire fighters, road repair...all of the stuff that taxes were originally designed to pay for but the money just sort of disappeared.**

Another think to keep in mind is that a good portion of this issue is coming from "mislabeled" pipe tobacco. The government knows that a lot of the "menthol pipe tobacco" out there is not meant for a pipe, and as a result there is a big push to tax all tobacco products the same.
**There used to be "pipe & cigarette" tobacco.  Then the government changed the cigarette tobacco tax from ~$2.56/lb to $26.00/lb.  The companies that didn't rename their product are out of business.  Now the government wants to tax all loose tobacco at the $26.00/lb rate.  It is not because they want to protect our health or "for the children", it's for the money.  The Feds wanted to double their tax per pack to $2.00 to "fund pre-school".  WTF?  Now they want to make pre kindergarten mandatory?**
This is a complex issue, too many variables. Personally, I blame some manufacturers and retailers for selling "menthol pipe tobacco," but this is just an opinion.
Comments in line from this pessimistic, cranky, disillusioned old guy!
Good comments, and I have to say I agree with most of them. The whole pipe shop closing in your area during the 80's all I have to say is that it depends on where you live. In the last 8 years my area went from 2 B&M shops to 7.
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puff the magic dragon

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PostSubject: Re: Internet Sales Tax One Step Closer to Reality   Sun Apr 06, 2014 12:13 pm

Personally, I buy everything on everything on line, I don't have a car and a lot of stores don't the selection
I want. I think that government wastes our tax money not to mention the government taxes everything it
thinks you should not do. It taxes at higher rates depending on how unpopular your habit is. Personally
I don't think it's the federal governments business to regulate the habits of it's citizens.  Evil or Very Mad
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