It may be your prices are competitive. Data point of one: I have NEVER seen a better price in person than online for expensive items. I would rather buy merchandise in person and don’t mind paying a little more. But if I’m paying 50$ or more at a store than I would online, I’ll shop online.
Amazon has been out in front of this for a number of years. They realized it was better to negotiate a sales tax collection agreement with a state (even where they don't have a physical presence) rather than have it imposed, likely at a higher rate. To date, Amazon has negotiated sales tax collection agreements with 36 states. Five states have no sales tax, so that leaves only 9 states where Amazon has no agreement in place.
Amazon came to an agreement with AZ several years ago. The rate they collect under the agreement is 6.5%, which is a good bit less than local purchases here would incur, depending on location. Some locations approach or exceed 10%. One thing I've noticed is if the merchandise is offered/sold/shipped by Amazon, the tax is added. Oftentimes, for third party merchants on Amazon, no tax is collected.
It's not just Amazon, I buy from a lot of different places and I really don't remember the last one I bought from that didn't charge state tax - I know it's been more than 2 or 3 years ago. I never even look at it because it's not the reason I buy stuff online.
And Amazon entered into agreements with most states 'voluntarily' in order to avoid lawsuits - they started collecting it in TN in 2014 (if memory serves).
“Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passions, they cannot alter the state of facts and evidence.”
- John Adams
Trust me, collecting sales taxes from online retailers will not be a panacea for the local retail industry. The primary reason folks buy online is they can quickly locate, order and have an item delivered.
I'm all for buying local. But buying local frequently does not work out for me since I can not find what I'm looking for.
Finding new sources of previously uncollected taxes only allows government to continue to be bloated and refuse to reform the way it spends money.
|Just because you can, |
doesn't mean you should
You pretty much hit all the issues for me.
The last one is a big problem for us small sellers. In theory, you will have to register and pay sales tax to each state and sometimes county and city in the country, where you sell something.
This will be the end of online sales by anyone other than the Amazon size merchants without a central taxing authority. Now you know why they were so willing to follow along.
|safe & sound|
It's not a new source of previously uncollected taxes. The source was local stores, and the taxes were collected there prior to the advent of the internet.
I'm all about paying zero taxes....if everybody pays zero taxes. The problem is that if somebody shops locally the taxes are added at the register, and if somebody shops online they believe it's a "loophole" to simply not report the purchases and submit the tax on their own as is required by law. This creates an unlevel playing field for all involved. It's not fair to businesses, and it's not fair to consumers.
If it's true that much of this tax has technically already been owned through unpaid use taxes, then yes, a ruling requiring it to now be collected by internet sellers would be a new source of previously uncollected taxes.
I also agree with those saying that even adding tax to internet sales will not slow the trend away from brick mortar retail to online shopping. The convenience factor alone is a bell that can't be unrung.
|safe & sound|
The retailer is not the source. The buyer is the source. The retailer does not owe the tax, it is collected on behalf of of the government as a condition of being allowed to operate a business.
You, the buyer, owe the tax. You, the buyer, are the source of the tax. You, the buyer, are responsible for remitting the tax. The only difference is that when you walk into a store they forward it to the state for you. When you buy online, you're supposed to include it on your tax returns and include a check.
I understand that. but now the source is the online retailer. Sure, they are just passing through tax collected from the buyer, that's no different that local retail, but the seller is now on the hook to collect, report and pay the tax to the state, not the buyer. That is a different source IMO.
This will make my bookkeeping easier for me. As it is now, I have to keep track of all my purchase confirmation emails in two different folders for each year: "2018 sales taxes paid", and "2018 sales taxes owed". I have to do this, because I make an honest effort to pay all the use tax I owe.
It *could* make bookkeeping easier for the seller, if the tax was owed to the state within which the product is sold rather than the state within which it is bought.
I would like to apologize to anyone I have *not* offended. Please be patient. I will get to you shortly.
This could make audits interesting. Would any local or state taxing authority be able to audit any online seller that has sold merchandise to their residents? That could get really expensive really fast for online sellers. Defending multiple audits from multiple taxing authorities does not sound like an easy thing to do for small time sellers.
Most companies I've ordered from that aren't even in my state have been charging it for around the past 5 years.
|safe & sound|
Here's why it would actually make it a larger nightmare. I'll use car sales and my state of Missouri as an example.
Some states collect sales tax on your car purchase at the point of sale. Others, like Missouri, collect it at the DMV when you go in to title and license it.
Let's say I buy a car from a state that collects it at the point of sale, and it's 10%. In Missouri it might be 7%. When I go in to apply for title they'll see that I paid the 10% out of state, and I will owe no sales tax to Missouri. Even though I "overpaid" there is no credit or refund.
Now let's say we buy it from a state with a lower sales tax than Missouri. They collect 5% at the point of sale. When I show up to the DMV, I'll owe the 2% difference.
Even though I believe making the seller collect it in their state is the easiest solution, I believe it will also cause all of the states with higher rates to continue to demand that you pay the difference via use tax.
This is made even more complex when states like mine have a million different tax rates. The state has their rate, then the county, then the city. My zip code has two different tax rates.
|Telling cops where to go for over 25 years|
Not always about price. I am ok with paying a little more in a local store for convenience or no delay in getting the item. With big ticket items, I also like to see an item in person and put my hands on it, like with a $400 printer purchase.
Example, I was all set to buy a color laser printer just this morning at the local Staples store. They have it on sale and with sales tax it would only be about $20 more than buying online with no tax from BHPhoto or $10 more than from Amazon (with sales tax).
Their website said it was available in store and in stock at my location, so I drive the two miles only to find they are actually not in stock. Seems when they say “1 available” the count includes the display model. Store won’t sell the display, so not really “available” now is it?
Staples guy tells me “No worries, we can order it online and ship it to you”. No shit, really? So can Amazon, BH Photo, Adorama, and a hundred other places that will do the same and do it for less.
Ended up ordering from Amazon as I will have it Wednesday whereas it wouldn’t be until Friday from BH.
As of Jan 1 Amazon now collects sales tax for my state even for sales from out of state sellers. It will certainly cause me to spend less on Amazon and large ticket items will be bought direct from third parties.
As for trotting down to state dept of revenue and self reporting, nope not gonna do it. It may be “the law” and all, but clearly the government gets to pick and choose what laws they will enforce so I have no qualms with selectively following others. My guess is that an extremely small percentage of people do so, if any at all.
WA has some of, if not the highest liquor, gas, and sales taxes in the country. They are always looking for a way to raise or get more. Services and infrastructure seem to continually get worse though as we pay more. If they are concerned about WA businesses losing out to online retailers, maybe they should rethink the double digit sales tax rates that is partly to blame for driving business away from brick and mortar stores.
As another post said, I don’t see any legitimate reason other than greed for a state to collect a tax on an item for a transaction when there is nothing the state has to do with or provides for in the transaction. Just fleecing the citizens to continue to line the coffers and as far as I am concerned any fool who dutifully reports and pays such use tax is merely enabling the poor fiscal policies of the state.
WA, while not yet to the level of CA, is definitely driving it citizens away and too stupid to realize it. Retirement is on the horizon for me in the next 5-7 years and once it arrives I will be heading out as so many others are.
"Where MY free shit?!"
What part of "...Shall not be infringed" don't you understand???
There are quite a few places that don't collect sales tax unless you live in the state they are in. For example, no sales tax: B&H Photo, Duluth Trading, RockAuto, newegg, and eBay unless a regular retailer and in your state.
|I Am The Walrus|
I think the worst are cars. No matter how old and how many times the tax has already been paid, they still tax it. New car? It's taxed. Used car? Taxed.
|Sound and Fury|
I bought a safe from you. I assume I am not the only out-of-state sale you've made or will make. Would the necessity to file a sales-tax return in 50 states not dampen your desire and ability to sell to out of state buyers?
"I've spoken of the shining city all my political life, but I don't know if I ever quite communicated what I saw when I said it. But in my mind it was a tall proud city built on rocks stronger than oceans, wind-swept, God-blessed, and teeming with people of all kinds living in harmony and peace, a city with free ports that hummed with commerce and creativity, and if there had to be city walls, the walls had doors and the doors were open to anyone with the will and the heart to get here." -- Ronald Reagan, Farewell Address, Jan. 11, 1989
Si vis pacem para bellum
There are none so blind as those who refuse to see.
Feeding Trolls Since 1995
|Armed and Gregarious|
It's not a "new" tax. Most, if not all states, that have a sales tax, require a use tax, equivalent to sales tax, to be paid on purchases made out of state, but brought into the state for use. Hence, the name.
For example, you claim to live in Phoenix, AZ.
By law you are required to report all out of state purchases, and pay a use tax:
The problem is most people don't pay the tax, and enforcement is extremely difficult.
So if you haven't been paying it, it's not because the tax doesn't exist, it's because you've been breaking the law.
"He was never hindered by any dogma, except the Constitution." - Ty Ross speaking of his grandfather General Barry Goldwater
"War is the remedy that our enemies have chosen, and I say let us give them all they want." - William Tecumseh Sherman
More taxes - yes, great thing !!
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