Shopping on Amazon Could Soon Get Pricier as Sales-Tax Bill Advances

[Sherman A1]

Amazon rode into the ranks of the world’s biggest retailers on the back of its low, low prices. But it’s more likely than ever that those prices will rise for most Americans as the Senate prepares to vote on a nationwide internet sales tax bill.

Senators voted 74-20 late yesterday to let debate proceed on the so-called Marketplace Fairness Act, a measure that would require all online retailers with $1 million or more in annual out-of-state sales to collect sales taxes on behalf of every state where they sell. A final vote is expected shortly.

Currently only states in which online retailers have a physical presence can force those companies to collect sales tax. Otherwise, the burden falls to the customer to pay the required state sales tax on their online purchases, typically when they file their state income tax returns. Hardly anyone does, which has allowed Amazon, among others, to enjoy a huge price advantage over brick-and-mortar competitors.

Some states have pushed back against Amazon in particular, claiming that its vast network of affiliate sellers qualifies as having a physical presence. Large states such as California and New York have used that ambiguity as leverage to force Amazon to start collecting sales tax. Amazon today collects sales tax in nine states that together represent a little more than one-third of the U.S. population.

http://www.wired.com/business/2013/04/online-sales-tax-advances/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+wired%2Findex+%28Wired%3A+Top+Stories%29

[MadHound]

1. Good, it is time that online stores had to deal with the same costs as brick and mortar ones.

Amazon and other online stores have had an unfair advantage not having to collect sales tax.

[KurtNYC]

2. Another tax increase for the little people to pay

for wars and waste.

B Dalton ain't coming back and 4% to 8% sales taxes is not a "huge price advantage" when you add in shipping costs to the comaprison of online versus retail shopping. Surprising to see Wired make such an argument.

What is proposed here is to shift more tax burden on to working people.

[eShirl]

3. It's only an increase for those who aren't paying sales taxes owed to their respective states.

the burden falls to the customer to pay the required state sales tax on their online purchases, typically when they file their state income tax returns. Hardly anyone does,

[PeaceNikki]

5. Exactly. I always do. Amazon provides a handy report you can download that details your purchases.

I don't mind paying taxes that I owe. Stuff costs money and, unlike conservatives, I don't view taxes as evil.

I will admit it's a bitter pill to take after my state has been hijacked by teabaggers.

[dixiegrrrrl]

11. A lot of people do not file state income tax returns.

Our income is not taxable.
So we do not have to file a return.
I imagine there are many like us in this state, which would explain why "hardly anyone" files just to report taxes from online purchases.

[PeaceNikki]

6. What portion of your state sales tax goes to defense?

I don't mind paying my fair share towards education, social programs that help the poor and public employees like police and fire.

[LWolf]

4. That could certainly

send people to local stores instead of online stores, if they are paying tax AND shipping.

I heard this yesterday and wondered: which tax would be charged? The sales tax in the buyer's state, or the shipper's?

[Laelth]

7. I think all sales taxes should be abolished.

They're regressive, and they have a negative impact on the economy by slowing down consumption. Sales taxes are an inherently bad way to generate government revenue.

The income tax is far more progressive, as are inheritance taxes and luxury taxes. I'd prefer to see increases in those rather than more sales taxes.

-Laelth

[customerserviceguy]

8. Underlying this bill is a fallacy

Brick and mortar sellers think that they've lost business because of some perceived 5-10 percent difference in price due to no sales tax on the Internet. They ignore shipping costs that are significant, and they are completely oblivious to a fact:

They just don't have what people need any more. Yes, it probably doesn't pay to buy toilet paper on the Internet, but if you want a part for an item that you'd rather fix than throw away, you've GOT to go to the web to find it and get it, often times way cheaper than you'd pay if you could even find the damned thing in a local store, driving around like crazy to hunt it down.

Online sales are a way of connecting a person who has something with another person who wants that thing, with a minumum of expense. Brick and mortar stores are still operating on a centuries-old model, and it's clear that fewer and fewer things need to be sold that way.

Even if they get their sales tax bills passed, modern people will still know how to get the things they want at the best price overall by going online. The genie is out of the bottle.

[Sherman A1]

9. You may be correct

and I agree that the Web is often the best place to find specific items. I also agree that the Brick & Mortars Retail Model is long overdue for an overhaul. That said when you look at the "show rooming" effect that has been suffered by such stores as Best Buy, I believe there is some truth to the argument that online sales are having an affect. In many cases shipping is free to the consumer after meeting a specific threshold or criteria so combined with the savings of sales tax, I believe there is a justification for this bill on that basis.

I also agree with the poster that all sales taxes are regressive and should be eliminated (replaced by other revenue streams for the respective authorities). Doing so would instantly level the playing field on this issue for both the B&M and online components of consumer purchases.

I also know that as the elimination of sales taxes is not realistically going to happen and that states & local governments are in need of revenue, this may be the best alternative. It is hardly a perfect solution, but as we know there rarely is a perfect solution. It is a complex issue.

The points you make are very valid, thanks for adding to the discussion.

[customerserviceguy]

12. You're welcome

Yes, sales taxes are regressive. But there are really only three things that can be taxed, income (as measured by the amount gained in a specific time period), transactions, and wealth. I argue that the latter is the easiest to tax, especially if it involves property that cannot get up and move, like real estate taxes seek to gain revenue from.

Show rooming is going to happen whether or not there are state sales taxes assessed on a purchase, one can almost always find cheaper prices on the Internet than anything but a local store's close-outs. I suppose the answer is for some brick and mortar stores to have more aggressive sales staff, to try to get that customer to commit while he or she is still in the store.

[Union Scribe]

10. Here's a message I got from a small online business I shop with

https://secure.campaigner.com/csb/public/archive.aspx?args=NDU4MzE4Mw%3d%3d

The gist I get is that they'll actually have to manually remit the taxes they take from orders, potentially crippling their operations by monopolizing their time.

(This is a place that sells USA-made goods, which are often--sadly--not readily available in retail stores locally. Best Buy and Walmart aren't going to pick up customers taxing a shop like that.)