States Hope to Begin Taxing Online

[Judi Lynn]

States Hope to Begin Taxing Online
SalesCoalition of 18 States Forges Deal to Begin Collecting Sales Taxes on Internet Purchases
By MIKE GLOVER Associated Press Writer
The Associated Press

DES MOINES, Iowa Oct 4, 2005 — A coalition of 18 states representing about 20 percent of the nation's population has forged an agreement to begin collecting sales taxes on Internet purchases.

The group hopes to convince retailers but does not force them to begin collecting taxes and turning it over to state governments.

The agreement puts in place a procedure for businesses to collect sales taxes from Internet and catalog purchases, and puts in place an amnesty that protects them from being pursued for taxes not paid in the past.

After negotiations, which lasted for three years, the states including Iowa had agreed to definitions of taxable items and procedures for paying the taxes.
(snip/...)

http://abcnews.go.com/Technology/wireStory?id=1183033

[napi21]

1. Do you have any idea which 20 states signed this?

I reead the ABC article but it didn't say, other than Iowa.

I was a bit hopeful when I read the bottom line that said conservatives are opposed to this because they view broadening the sales tax is a tax increase.

[mcscajun]

7. Yet the sales tax isn't being broadened. Just the enforcement of

collecting already existing taxes.

Up until now, states that have sales taxes have been unable to enforce collection at the source (on Internet sales) and have been relying unsuccessfully on the honor of purchasers to willingly fork over the sales tax due on their purchases. The overwhelming majority of purchasers do not pay the tax; indeed, most don't even know that it is due.

This measure would not be affected by a ban on taxes unique to the Internet, also being considered by Congress. That's because the taxes involved are not new fees, the bill's supporters say--they're just not being collected now.

"The bill only enforces the collection of taxes that are already due," says Bill Duncan, a legislative aide to Rep. Ernest Istook Jr. (R-Oklahoma), a House sponsor.

http://www.pcworld.com/news/article/0,aid,112723,00.asp

We may not like it, but that's the deal. We've just been getting a break because the states couldn't enforce collection from sellers, and haven't been coming after us, the purchasers. Like many things on the 'Net, the days of the free ride are coming to and end.

[jwirr]

8. In Minnesota we do not have to pay sales tax on an item sold

over the internet to another state. When the sale is made to someone living in the state we owe taxes. Even then it is still a matter of faith in the retailer since they will need an army as big as the one in Iraq to police the sales.

[mcscajun]

11. Is that custom or statute?

In most cases, when you buy something on the Internet, the seller tells you they are not collecting sales tax if you don't live in a state where they have a store. So, if I buy something online from a site that doesn't do retail in NJ, I don't pay sales tax.

This does not mean I don't owe it. Your mileage may vary, but in most states, unless your state has specific statutory exemptions to sales tax for Internet sales, you still owe sales tax on that Internet purchase. The state just doesn't/can't make the website collect it, and the state can't be bothered to collect it from you if you don't pay.

[BurgherHoldtheLies]

2. List of states....

The 18 states signed on to the agreement are Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Nebraska, New Jersey, North Carolina, North Dakota, Oklahoma, South Dakota and West Virginia. Also Arkansas, Ohio, Tennessee, Utah and Wyoming. Nevada will become a member in January.

[Roland99]

3. Well, looks like I'm stuck.

[BurgherHoldtheLies]

4. PA is NOT on the list. We also have no sales tax on clothing/food

Which is great. Although, the Repubs. in the state legislature are trying to change it so we pay on clothes/food but eliminate property taxes. I HATE that idea, partly because I don't want the state capital having all the control over school district money and partly because I do like clothes shopping.

[mcscajun]

5. They're not on the list yet...they're busy working on it...

along with most of the other states that have ANY Sales tax. Only five states have None: Alaska, Delware, Montana, New Hampshire, and Oregon.

States with particularly complex sales tax laws, like California, and New York, are reluctant but are still looking into the situation.

You can expect that eventually every state that has a sales tax will be involved in this.

This measure would not be affected by a ban on taxes unique to the Internet, also being considered by Congress. That's because the taxes involved are not new fees, the bill's supporters say--they're just not being collected now.

"The bill only enforces the collection of taxes that are already due," says Bill Duncan, a legislative aide to Rep. Ernest Istook Jr. (R-Oklahoma), a House sponsor.

http://www.pcworld.com/news/article/0,aid,112723,00.asp

[Judi Lynn]

6. Thanks for adding the states. Very helpful. n/t

[msongs]

9. parasites and leeches in government - > vote them out if they

support this. If there is NO extra service given you for paying this tax, there should be NO extra tax.

local government is a giant extortion racket, setting fees that are merely for paying themselves to....collect the fees. parasites.

Msongs
www.msongs.com/political-shirts.htm

[mcscajun]

12. It's not an 'extra' tax. In most states, you're required to pay sales tax

on items subject to the tax, no matter where or how you purchased them.

If the state isn't enforcing collection, you're just lucky. When they enforce it, it's not extra.

See this post for more:
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x1826293#1826389

[PaulaFarrell]

15. Every internet or mail-order company should charge sales tax

in the state where they're based. That's my opinion. Do you know how much loss of revenue has occurred to states recently because of the boom in internet sales? A lot of states are in a budget crisis due to this. If you buy on the internet, then have you STOPPED using state/local services which are funded by sales tax?

What's more, shops that actually open their doors and provide service in your own community are having a hard ime competing with internet firms that just need a warehouse somewhere, and can give an immediate 6-12% discount. How many of us go into a bookstore to browse and then buy the book on Amazon? Well, those bookstores will close their doors eventually and then you won't be able to see what you're buying until it lands at the door.

Just to clarify, I know sales tax is regressive and unfair on poor people generally, I just think that where it's applied, it should be applied on everything other than food/medecine/etc.

[happyslug]

10. Citation for the FEDERAL proposed bill to implement this "reform".

http://www.theorator.com/bills108/hr3184.html

PDF paper on this proposed reform (From 2002) when the "Agreement" was first proposed:
http://www.pmstax.com/ftp/state/bull0211.pdf

Web site for the "Stream Lined Sales Tax":
http://www.streamlinedsalestax.org/

Here is the actual "Stream Lined Sales Tax Agreement" that each state has to pass to become eligible for this program (Warning PDF File):
http://www.streamlinedsalestax.org/Final%20Agreement%20As%20Amended%2004-16-05.pdf

[high density]

13. In Maine we're already supposed to be paying taxes on our 'net purchases

But it's generally under the honor system right now.

[napi21]

14. As far as I know, sales tax is due if the item is delivered and sold

in the same state, OR if the seller has nexus (a presence) in the purchasers state.

I sell on Ebay all the time, and I also have a sales tax # and remit any taxes due to the state. It's always a very small amount because I rarely have any sales in my state.

To the best of my knowledge, that law applies in every state.

If all these states are doing is enforcing this existing law, then that's fair. My experience has been that everybody I've ever dealt with has at least already been collecting the tax. I have to believe if they're taking the time to collect it, they're remitting it too!