Does anybody have information on the new Internet sales tax bill?

[napoleon_in_rags]

http://news.cnet.com/8301-13578_3-10220649-38.html

If a little-known but influential alliance of state politicians, large retailers, and tax collectors have their way, the days of tax-free Internet shopping may be nearly over.

A bill expected to be introduced in the U.S. Congress as early as Monday would rewrite the ground rules for mail order and Internet sales by eliminating what its supporters view as a "loophole" that, in many cases, allows Americans to shop over the Internet without paying sales taxes.

Currently, Americans who shop over the Internet from out-of-state vendors aren't always required to pay sales taxes at the time of purchase. Californians buying books from Amazon.com or cameras from Manhattan's B&H Photo, for example, won't pay sales taxes at checkout time that they would if shopping at a local mall.

"We will have the bill ready for introduction by next Monday," said Neal Osten of the National Conference of State Legislatures. "We finalized the language and now we're working out the remaining issues and adding some new provisions at the request of various stakeholders."

***

Do people here think this is going to make it through? I haven't heard a lot of discussion on it.

[Jkid]

1. Sales taxes? On MY Internet?

I'm opposed to sales taxes on the internet. Besides, no matter how much we spend on sales taxes, they seem to keep funding the same crap for corporations. I don't feel like a taxpayer.

[napoleon_in_rags]

2. That's my feeling somewhat....

If their going to do this, I just wish the federal government would set up their own credit card processing services, because many small businesses online already pay a percent for card merchant services. Call it the Paypal tax. When you mix that with a sales tax, its going to hurt...Not just because of the sales tax, but because of the combination. Its a double whammy.

[OmmmSweetOmmm]

3. Do you know that part of last year's housing bill had a provision that all sales and

purchases on the Internet be reported immediately to the US Govt? That was put through under the radar and this bill probably will be too.

BTW...thank Chris Dodd for our continuing march into being a big brother state.

[napoleon_in_rags]

5. No I didn't know that at all.

And I think this one here could shape things in things in weird ways. Per my response above, we're talking like 12% combined "tax" on micro-businesses, those who use Paypal or Google Checkout, or other online services for micro scale sellers. I see this as being enough to shape the market, pull us in a Craiglist type direction of local tax free transactions on a person to person basis. What then? How do they clamp that down?

I think its a losing proposition either way. Really, the government should be encouraging a vibrant above the table micro-economy, even helping create it. If they were to take a tiny piece of that pie, it would even be more profitable to them in the long term than pushing the pie underground.

[OmmmSweetOmmm]

6. This will kill small internet based business, my own included.

With the economy my business is down approximately 40% from last year.

[napoleon_in_rags]

9. I agree, and I think its a REMARKABLY bad thing if small/microbusinesses are damaged.

Small and micro-businesses are like the jungles of the business eco-system: its where the diversity is, where the experiments take place that lead to the next stages of evolution in the economy. If we're serious about change, we need to protect these ecosystems or else we're going to be stuck with giant dinosaur corporations living on taxpayer handouts with all their competition crushed.

[ejpoeta]

8. they should be encouraging... but all they care about is their pound of flesh

for themselves. and i am sure they will find a way to stop any local transactions if they can. gosh!! it's ridiculous!! i could see if the companies were doing business in the state, but really!!! how would they feel if the state the company was operating fought them for that sales tax, because THAT state could use it!!

[napoleon_in_rags]

10. I agree, it could end up being remarkably dysfunctional.

Its the "pound of flesh" thing I worry about. That's what could push things underground, when a vibrant above-the-table economy is really what we need. I'm thinking also of those women who were just killed by the "Craigslist Killer". The only reason we have no idea of who this guy is, is because prostitution is a market forced underground. If we would acknowledge that we have no business in what services are being provided in that hotel room, and keep the financial transaction above ground, we would have the guys credit card information right now. He would be in jail. Its just another example of what happens of how wanting too much control of something leads to a total lack of control.

[shraby]

4. That's really really a bright thing to do....

raise taxes in a deep economic downturn. Now the few sales being made will be fewer. Who elected those bozos anyway?

[ejpoeta]

7. we already have that in NYS. the sites like amazon have tried to fight it,

but have lost. so they collect sales tax when i buy things, even though they are not in our state. it kind of sucks. but in this state they will find any way to collect taxes. i don't know what state you are dealing with here, but in NY they seem to have been successful in making the internet sites collect the taxes.

[napoleon_in_rags]

11. Do you still purchase things online?

Is it still worth it to you?

[ejpoeta]

13. i do buy things. but i factor that in to the cost as with everything else.

i have always factored in shipping or whatever and thought about how much it would be in the store to buy something. if it's cheaper or the same as in the store... i may as well just go to the store. so, no it doesn't stop me. but it is just another cost to add to the total in my deciding.

[lunatica]

12. Here in California we pay a use tax for every single physical thing we purchase

At least when using a corporate credit card. In Alameda County which includes Oakland and Berkeley the use tax is 9.75%. We pay for purchases we make even on the internets. If we already pay taxes like when making purchases from amazon.com we make up the difference so that it comes to 9.75%. The only things we don't pay taxes for are internet web services and software licenses which are purchased then downloaded from the software companies. The rule of thumb is if it's a physical thing then it has a use tax added.

[napoleon_in_rags]

14. What do you think of that?

Is it an economic hindrance, or a good way of generating revenue?

[lunatica]

15. It's a little high but the SF Bay Area needs the taxes

Overall, the Bay Area consists of nine counties, 101 cities, and 7,000 square miles which are all connected with only a marker telling you where one city ends and another begins. The nine counties are Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano, and Sonoma. All the cities in each of these counties are connected by a massive network of roads, highways, railroads, bridges, tunnels, Shuttles and commuter rail. The combined urban area of San Francisco and San Jose is the 49th largest urban area in the world. There are millions of people who live and work here and we have 5 toll bridges spanning the Bay. We have two big league Football teams and two big league baseball teams. The most important single element in this area is the gargantuan freeway system and the bridges which have to be in top condition and which are constantly being improved and widened and extended and fixed due to earthquakes. And the Bay Area also has an extensive public park system around it which needs to be maintained.

When the earthquake put the Bay Bridge out of commission for a while as well as many parts of the freeway system to a close we were able to get around quite well, with bearable inconveniences by taking alternate routes. I think they should expand their bus system by doubling it at least, but what they have is adequate, although just barely.

This is an area where it's almost impossible to get to work or even to a supermarket without a car, so we are heavily dependent on the freeways.

Also the police departments and the fire departments are interdependent after there was such a bad fire in the Oakland hills in which hundreds of homes were lost due to a devastating fire. The cities all work together now.

And because we are so susceptible to really bad earthquakes and fires during droughts as well as the ensuing mudslides not too many people take our transportation system or our fire and police system for granted. Almost all the propositions having to do with infrastructure and transportation including high rail system pass.

[napoleon_in_rags]

16. That makes sense. I get the most value out of local taxes too.

Washington state provides my health insurance, through a great program, so I have no issue with local taxes when they are needed. Its more than I can say about the federal government!

That's why I'm not intrinsically ooposed to these sales taxes on Internet purchases, but I hope they structure it in a way that's smart enough to choke really small businesses and individuals that operate online. I really think special provisions should be made for individual sellers and micro-businesses, just to create an above the table system for transactions between individuals. I've written in two posts about the threat of forcing these small entities into the black market, as evidenced by the craiglist killer (prostitution related) and mentally ill at gunshows making parking lot deals for arms with no background checks. Excessive taxes on individuals and tiny businesses will surely create yet another black market, with its own risks.