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U.S. Senators Propose Internet Sales Tax Law

- By - Source : IT World

It's really just a con to undermine Federal taxes.

On Wednesday, four U.S. Senators proposed a law, dubbed The Marketplace Fairness Act, that as advertised would allow states to collect taxes on sales over the Internet even if the buyer does not live in the state in question. There's just one catch: In order to do so, states would need to have signed on to one of two 'simplified' tax plans.

The law's stated intent is to create a more competitive marketplace by allowing states to charge sales taxes on online transactions the same as for brick and mortar businesses. Currently, sales taxes on online transactions are mostly prohibited - it's a really large gray zone* - due to a 1992 U.S. Supreme Court decision, Quill Corp. v. North Dakota, which held that mail-order retailers are not required to collect use taxes due to the complexity of doing so. (Because of the way the U.S. Constitution delegates powers to individual states, there is no standard of sales tax collection. Businesses would have to drastically reconfigure their state-by-state sales records depending on a given customer's state's tax laws in order to comply).

One proposed solution, referenced in The Marketplace Fairness Act, is the Streamlined Sales and Use Tax Agreement. That agreement, proposed since 1999, similar to the National Popular Vote movement, aims to overcome certain systemic weaknesses in interstate commerce by encouraging states to voluntarily agree to make their tax systems compatible in order to simplify the collection of taxes from online and mail-order businesses and therefore collect sales taxes without running afoul of Quill. So far, 44 U.S. states have signed up, however as the agreement is non binding, it is still up to congress to approve legislation authorizing states to collect such taxes, hence The Marketplace Fairness Act. Prospects for the law are not good, however, as all prior attempts to pass such laws have failed.

*Amended to clarify the framework caused by Quill Corp. v. North Dakota

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ironmb 11/11/2011 3:21 PM
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anonymous32111 11/11/2011 3:21 PM
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-20+

So.. it seems like if this horrible plan were to be passed, certain areas would suffer greatly, being forced to charge up to 4-5% more than if people were to buy from a state with low sales tax.

Play it off as 'defense of brick and mortar' businesses, but really its just hurting business all around. laissez-faire or bust

igot1forya 11/11/2011 3:25 PM
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-19+

Yet another money grab in the name of being fair! Thanks for snuffing out online businesses! How about remove the brick and mortar sales tax if you want to be fair?

enkichild 11/11/2011 3:40 PM
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-20+

Let's make things more fair by finding new ways to make tax money.

mayne92 11/11/2011 3:47 PM
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-6+

While this may have some merit I highly doubt the initiative for this proposal is not about States being able to rake in the $$...

ramicio 11/11/2011 3:51 PM
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-19+

How would this lead to better competition? It's tax.

jvc21 11/11/2011 4:08 PM
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-10+

And the Monopoly's Uncle Penny says...NO!!!

ATIWOLF 11/11/2011 4:32 PM
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-1+

Quick, someone go let the republicans out of their cage! Sic em boys.

For the most part, I wouldn't mind. Some online shops (Barnes & Noble) allow for frequent cuponing that essentially take care of any taxes charged. I don't mind tax as long as it's used in a way we can approve of. Don't pass this until you establish a more efficient and responsible budget.

bak0n 11/11/2011 4:48 PM
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-8+

I buy stuff online because I can afford to. Tax it and maybe I'll choose to not afford to. If you want to see my spending after California upped taxes to nearly 10% vs. the years prior. You'll see this state lost money on tax revenues collected from my purchases. I'll gladly not buy stuff I don't need to avoid taxation.

SingeMagique 11/11/2011 4:50 PM
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guruofchem 11/11/2011 4:51 PM
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--1+

Big problem with sales taxes is that they are extremely regressive - they place a much larger tax burden on the poorer segments of the population than they do the wealthier ones. As such, the Republicans would likely support this, since tax breaks for the rich are a central plank of their agenda. I'm with ATIWOLF - they shouldn't get access to more tax revenue until they can demonstrate that what they already have is being spent responsibly.

dextermat 11/11/2011 5:04 PM
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-10+

Quote :There's just one catch: In order to do so, states would need to have signed on to one of two 'simplified' tax plans.


When simplified mean more complicated... morons: It's because of practice like that that the middle class people get screwed over.

We need a tax reform: too many disguised taxes. Get rid of some and keep sale tax and income. Then learn how to do a budget. That the way population lives every day

nebun 11/11/2011 5:24 PM
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-2+

here is a good one........what's up with these idiots? do they still receive full benefits after just one term? our government is so corrupt

shqtth 11/11/2011 5:36 PM
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-0+

Pay more tax, support more wars, bailout more currupt buisness, pay the fat cats in the goverment, they need you so they can spend you money !! Cone on, isn't it fun to pay tax so that people in goverment and their friend can be right? While the large corporations get all the breaks, the average consumer has to sell their sole.

shqtth 11/11/2011 5:38 PM
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--1+

****can be rich

gnookergi 11/11/2011 5:41 PM
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-4+

"Currently, sales taxes on online transactions are prohibited due to a 1992 U.S. Supreme Court decision, Quill Corp. v. North Dakota..."

I know for a fact that this isn't completely correct. I've been charged tax when ordering from major retail stores websites plenty of times. It may not be required, but it's definitely not prohibited.

Anonymous 11/11/2011 5:54 PM
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-3+

Always give me a warm, fuzzy feeling when I read about our law-makers trying to find ways around the laws. Can you say, hypocrites!

Camikazi 11/11/2011 5:54 PM
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gnookergi :
"Currently, sales taxes on online transactions are prohibited due to a 1992 U.S. Supreme Court decision, Quill Corp. v. North Dakota..."I know for a fact that this isn't completely correct. I've been charged tax when ordering from major retail stores websites plenty of times. It may not be required, but it's definitely not prohibited.


You are usually taxed when the online retailer has a warehouse in the state you are ordering from. If they don't have a warehouse you don't get taxed.

keyanf 11/11/2011 6:26 PM
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-1+

"There's just one catch: In order to do so, states would need to have signed on to one of two 'simplified' tax plans."


Ah, the drinking age increase all over again.

10th amendment? What's that?

Naxos 11/11/2011 6:43 PM
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-20+

Tax his land,
Tax his bed,
Tax the table,
At which he's fed.

Tax his tractor,
Tax his mule,
Teach him taxes
Are the rule.

Tax his work,
Tax his pay,
He works for
peanuts anyway!

Tax his cow,
Tax his goat,
Tax his pants,
Tax his coat.

Tax his ties,
Tax his shirt,
Tax his work,
Tax his dirt.

Tax his tobacco,
Tax his drink,
Tax him if he
Tries to think.

Tax his cigars,
Tax his beers,
If he cries
Tax his tears.

Tax his car,
Tax his gas,
Find other ways
To tax his ass.

Tax all he has
Then let him know
That you won't be done
Till he has no dough.

When he screams and hollers;
Then tax him some more,
Tax him till
He's good and sore.

Then tax his coffin,
Tax his grave,
Tax the sod in
Which he's laid...

Put these words
Upon his tomb,
'Taxes drove me
to my doom...'

When he's gone,
Do not relax,
Its time to apply
The inheritance tax.

Accounts Receivable Tax
Building Permit Tax
CDL license Tax
Cigarette Tax
Corporate Income Tax
Dog License Tax
Excise Taxes
Federal Income Tax
Federal Unemployment Tax (FUTA)
Fishing License Tax
Food License Tax
Fuel Permit Tax
Gasoline Tax (currently 44.75 cents per gallon)
Gross Receipts Tax
Hunting License Tax
Inheritance Tax
(Internet Sales Tax*)
Inventory Tax
IRS Interest Charges IRS Penalties (tax on top of tax)
Liquor Tax
Luxury Taxes
Marriage License Tax
Medicare Tax
Personal Property Tax
Property Tax
Real Estate Tax
Service Charge Tax
Social Security Tax
Road Usage Tax
Recreational Vehicle Tax
Sales Tax
School Tax
State Income Tax
State Unemployment Tax (SUTA)
Telephone Federal Excise Tax
Telephone Federal Universal Service Fee Tax
Telephone Federal, State and Local Surcharge Taxes
Telephone Minimum Usage Surcharge Tax
Telephone Recurring and Nonrecurring Charges Tax
Telephone State and Local Tax
Telephone Usage Charge Tax
Utility Taxes
Vehicle License Registration Tax
Vehicle Sales Tax
Watercraft Registration Tax
Well Permit Tax
Workers Compensation Tax


STILL THINK THIS IS FUNNY?
Not one of these taxes existed 100 years ago, & our nation was the most prosperous in the world.
We had absolutely no national debt, had the largest middle class in the world, and Mom, if agreed, stayed home to raise the kids.

Anonymous 11/11/2011 7:09 PM
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-1+

Ok folks i want you to vote in a tax code change so we can collect a possibly small sum of money from online sales (which would probably become smaller when user decide not to buy it cause of the added tax)

elbert 11/11/2011 7:12 PM
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-3+

U.S. Senators want costumers to play state tax from the sales site, pay shipping, and without question states not benefiting will force sales tax to the customer. This will destroy online sales and cripple shipping company's. This is a very bad ideal as currently online sales create taxable shipping jobs for all states, increase the sales of gas with huge taxes, and delivery vehicle sales. Without question this will incur a negative outcome for all involved.

AerieC 11/11/2011 7:22 PM
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SirGCal 11/11/2011 7:34 PM
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-2+

The US does have some of the lowest Tax rates in the modern world with all things considered... And I'm actually FOR a lot of taxes... Things have to be paid for... But we SHOULD also have more-say about where that money goes... Still, an Internet Tax is going too far... It's a store... It is ZERO difference then buying over the phone and shipping it. If you're local to the store, you should pay taxes as you do now. Otherwise you'll be doubling the taxation which in and of itself is illegal. We pay 'federal' taxes when we are paid by our employers (or win big sums of money, etc.). We pay 'state' taxes yearly and/or through sales taxes (often, states with higher sales tax rates don't have state tax collection annually, like Texas).

Any way you look at this; this one is bad... And that's even coming for someone who is usually pro taxes... This one isn't any good though and it should be laughed right out of consideration...

poxenium 11/11/2011 8:10 PM
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In Romania we have 24% VAT and also shipping costs when we buy from Romanian on-line stores. A 5% increase in price is not catastrophic for the USA, but once it's introduced, they can increase it easily and it's a slippery slope when the government needs money.
In my opinion all Internet-related taxes and costs should be constantly reduced, because the Internet is the only greatest technological advance of the last 20 years. It would be foolish to make internet operations less accessible to the masses. I don't think it's a good idea to force people back to physical stores, because it means wasted time and fuel.

kinggraves 11/11/2011 8:40 PM
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Dr. Ron, please take over this train before we all go off the cliff.

Martell1977 11/11/2011 8:43 PM
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-1+

Newegg collects sales taxes when I purchase from them because I live in CA and I have no problem with that. I order parts from them all the time due to common free shipping and better prices.

The main reason I don't buy parts from local shops is because they are horribly overpriced....period. I needed a DVD-burner and needed one fast. Local shops were all priced at $60 or more. I decided to find a way to wait and ordered the same brand and model from Newegg for $19. Due to where I live, the drive arrived the next day since I ordered before 3pm and my client was happy to save the $40.

When the "brick and mortar" stores stop trying to rip people off, I will return. I understand they have to pay overhead costs for the store, but how does that make it right to triple the price. I can understand charging a little more, but triple is beyond reasonable.

enewmen 11/11/2011 8:43 PM
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Living in Singapore there's 10% flat income tax and no sales tax. There is a luxury tax only for cars, cigarettes, alcohol, etc. Also you can have 20% of your income deducted for housing (same pool similar to Social Security) and that's matched 20%. So basically that means 100% of all take-home income (higher than what I made in California) I can spend freely - if I can live without a car..

bourgeoisdude 11/11/2011 8:44 PM
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-1+

Anytime you see the word "fairness" in a bill or proposition, be afraid.

WyomingKnott 11/11/2011 9:23 PM
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-0+

I'm missing the point of most of these messages. Sales tax is supposed to be collected and remitted to the state on sales in most areas of the United States. Period. With online transactions, this is mostly not happening. That's a violation of many, many laws.

The only thing that makes the situation complicated is that, technically, sales tax is supposed to be paid at the rate of, and to, the authority within which the purchased item is _used_. Witness New York State's actions against residents who used to drive to New Jersey to buy clothes with no sales tax. New York followed them and demanded that they pay New York sales taxes.

If I buy a car in Wyoming and drive it home to New York, the sales tax is due in New York. Really. Go look it up.

So these are not new taxes. The various levels of government try, over and over again, to collect taxes that have not been paid, in violation of the relevant laws. Internet tax is not a new tax. It's an attempt to enforce longstanding laws. Unfortunately, the enforcement of those laws becomes very, very complex and difficult when the rate and taxing authority depend on the physical location of the buyer. Imagine the poor online merchant who needs to keep track of how much sales tax he has collected that is due to each state, county, and city in the entire nation.

pazygozo 11/11/2011 9:53 PM
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-0+

I've paid sales tax while buying from florida like tigerdirect or amazon 3rd parties but the articles are being used in Venezuela! i just ship'em to my courier's office. oh and i pay taxes again here