internet shopping tax?

[rboat]

I am not sure how this new tax law is going to affect shopping on flea bay. I hope it doesn't. It was always kind of fun finding a good deal on a fishing lure. If John Doe bought a lure, then sales tax was already collected on that. If he decides to sell it, why should they collect taxes on it again? That seems illegal, immoral, and just plain wrong. I think uncle sam already gets more than his fair shair through income tax, property tax, and sales tax. Didn't we fight and win a war a couple hundred years ago about too much taxes? Sorrry mods if this rant is deemed too political, you can delete it. I just do not want them messing with my lure addiction and the pleasure of getting a good deal. Any thoughts?

[Junger]

Here are some thoughts: 

 

* It's not Uncle Sam's fight, it's the states that are trying to charge internet product sales from out of state sellers. Uncle Sam also does not get any share of property and sales taxes, these are purely levied by your state and local authorities. Brick & Mortar stores are also fighting for this because they feel internet retailers have an unfair advantage by not having to charge sales tax (where they do not have a physical presence).

* If John Doe Internet Co bought a lure for resale, they don't pay sales tax on it. They file a sales tax exemption form and provide it to the wholesaler or distributor. John Doe Internet Co selles the lure to the end user (you and me) and THEN charge sales tax on the retail sale which is then remitted to the state or local agency.

* The burden of sales and use tax compliance is complicated, in some states there are 2-3 layers of sales tax (state, city, county). Small internet retailers who have to file a monthly sales tax form for lots of different jurisdictions for minimal internet sales are going to get crushed by the compliance.

[Log Catcher]

While this seems like a good idea it is my understanding that governments will not accept electronic petitions. They have to be paper petitions to to verify names and addresses.

[NHBull]

A similar things g has been going on in the cigar industry.  Many of the bigger retailers are established in non-tax states and states with sales tax, have been trying to get them to collect said tax. 99%of the time it doesn't  happen, but I do know a guy who was sent an invoice for tax do the state he resided in.  

 

The hard part for compliance are the brick n mortor stores that also have an online presence.

 

Going to get ugly

 

NH......No sales tax

[Junger]

3 minutes ago, NHBull said:

Going to get ugly

It will be very interesting to see who wins this tug of war in practice.

 

On the one hand, small mom and pop shop internet retailers, and the other, big brick and mortar stores or internet retailers that have the resources to comply.

 

[MassYak85]

3 hours ago, Junger said:

Here are some thoughts: 

 

* It's not Uncle Sam's fight, it's the states that are trying to charge internet product sales from out of state sellers. Uncle Sam also does not get any share of property and sales taxes, these are purely levied by your state and local authorities. Brick & Mortar stores are also fighting for this because they feel internet retailers have an unfair advantage by not having to charge sales tax (where they do not have a physical presence).

* If John Doe Internet Co bought a lure for resale, they don't pay sales tax on it. They file a sales tax exemption form and provide it to the wholesaler or distributor. John Doe Internet Co selles the lure to the end user (you and me) and THEN charge sales tax on the retail sale which is then remitted to the state or local agency.

* The burden of sales and use tax compliance is complicated, in some states there are 2-3 layers of sales tax (state, city, county). Small internet retailers who have to file a monthly sales tax form for lots of different jurisdictions for minimal internet sales are going to get crushed by the compliance.

This is what I think is most damaging. Small businesses that do a lot of online selling are going to get absolutely hosed trying to stay in line with this law. 

 

Also, does anyone know if this affects ALL online transactions or only purchases made through a retailer? Like for example, garage bait shops where it's literally one dude working 40 extra hours a week on top of a full time job to make baits....are they getting royally screwed by this? 

[Junger]

30 minutes ago, MassYak85 said:

Also, does anyone know if this affects ALL online transactions or only purchases made through a retailer? Like for example, garage bait shops where it's literally one dude working 40 extra hours a week on top of a full time job to make baits....are they getting royally screwed by this? 

This is the problem, sales tax laws vary in so many different jurisdictions. There may be a $100 de minimis exemption in Little Rock, or there may be a $5,000 exemption in Austin. Those exceptions may be for all types of sales of tangible products, or it may just apply to certain types of products, and maybe even services. There is no catchall rule that will cover all sales transactions, and small shops will not be even close to 100% compliant, because they simply don't have the resources to, unless they pay for outside third party compliance which is not cheap and will cut into already thin margins. They should not have broke what what didn't need a fix. Brick and Mortar stores finally caught up to internet vendors by MATCHING their prices, which was easy enough to do in the first place, they were just stubborn to do it.

[A-Jay]

Whatever happens, if in the end my state & local governments end up with more revenue to work with,

I really hope they repair some of these roads . . . . . . 

A-Jay

[Arcs&sparks]

17 minutes ago, A-Jay said:

Whatever happens, if in the end my state & local governments end up with more revenue to work with,

I really hope they repair some of these roads . . . . . . 

A-Jay

Or at least invest in some cones?

[Chance_Taker4]

its not nearly as difficult or expensive to code the taxes into your website. Walmart, Amazon, Target to name a few already charge online sales tax. When you put in your shipping info the site is coded to know exactly how much to charge in tax based on city and state. They do not charge county tax.

[Junger]

2 hours ago, Chance_Taker4 said:

its not nearly as difficult or expensive to code the taxes into your website. Walmart, Amazon, Target to name a few already charge online sales tax. When you put in your shipping info the site is coded to know exactly how much to charge in tax based on city and state. They do not charge county tax.

The big vendors have large in-house tax compliance teams to handle that, as well as the resources to implement advanced SUT compliance software, such as Vertex (which is not cheap) to manage all the thousands of different tax jurisdictions and rates which they integrate directly on the front end of the site to the back end financials, such as Oracle, or SAP, also very very expensive. Then they also have the manpower to file all those SUT returns, monthly, quarterly, and annually. I was the Director of Tax for a publicly traded software company, we had just over 900 compliance forms to file every year between 20-25 people. It's a lot of manpower to be compliant in the 48 continuous states.

 

Small and medium size shops are going to have to deal with the process of figuring out solutions, and that may mean upgrading their GL system to something more robust, such as Sage, and that will also be costly.

 

This will get messy, Congress won't act because state reps and senators will be looking out for their own state's best interests, i.e. sales tax revenue.

[rboat]

What I mean't was city, state, or federal, it doesn't really matter. It simply adds up to too much already. To tax internet sales is taking things a bit too far. The small internet business is crushed and once again the consumer loses. If they took our taxes and spent them wisely it would not be that big of a deal. All members of government have to stick their hand out for more money to support their bad habits. 

[Log Catcher]

If Ajay gets his roads fixed and they use it keep my retirement system funded we will both win.

[JustJames]

I guess this might not be matter much for CA, since I have to state what I bought last year online without tax when doing a tax return. I declared only about 1000 dollars just to be on a safe side. 

[Deleted account]

Retailers don't "charge" sales tax, they collect it. While state and municipal laws vary, most retail sales are subject to sales tax. The fact that they haven't been collected or reported in the past does not change that. The free ride is coming to and end, as it had to eventually.

[Steve1357]

So items from sellers in China on ebay just got "cheaper" ?

[thinkingredneck]

Some solutions will come.  The marketplace will develop an affordable online solution, probably similar to turbo tax that will keep up with it and generate electronic filing.  Or, mom and pop stores will have to join a digital marketplace that will do this for a fee per transaction. There will be the inevitable scams and data breaches.  I hope they keep it level by making any company doing retail here charge this, such as Chinese companies. Face it, the internet sales are huge, times have changed, and states that rely on sales tax need the money.  I live in a poor state and we need bridges and education money.  I hate paying taxes, but this was inevitable.

[Deleted account]

On 6/23/2018 at 7:20 PM, Steve1357 said:

So items from sellers in China on ebay just got "cheaper" ?

No, the cost is offset by the steel tariffs on the split rings, hooks and rattles....

 

[Koz]

On 6/22/2018 at 10:34 PM, A-Jay said:

Whatever happens, if in the end my state & local governments end up with more revenue to work with,

I really hope they repair some of these roads . . . . . . 

A-Jay

 

Call Dominos Pizza.

 

https://jalopnik.com/dominos-is-fixing-americas-crappy-roads-for-pizza-safet-1826736405

 

[NHBull]

Truth be told, a sales tax and business tax are the same to the end user in this case. A tax to a business is just factured into the cost of doing business, like the electric bill. In this case a separate accounting program has to be implemented for the mom and pop business which will make prices increase or profits decrease. In the end, this stifles competition.

 

And don't think for a moment that roads are going to improve. Over the last 8 yrs, over a trillion dollars was earmarked and never made it........just sayimg

[Deleted account]

2 hours ago, NHBull said:

Truth be told, a sales tax and business tax are the same to the end user in this case. A tax to a business is just factured into the cost of doing business, like the electric bill. In this case a separate accounting program has to be implemented for the mom and pop business which will make prices increase or profits decrease. In the end, this stifles competition.

 

And don't think for a moment that roads are going to improve. Over the last 8 yrs, over a trillion dollars was earmarked and never made it........just sayimg

It works out that way in most cases, but not actually the case. A tax levied on a business, as you state is a cost of doing business. Sales tax is levied on the consumer, not the retailer. The retailer in most places is burdened with the requirement to collect and remit sales tax collected to the appropriate agency. We cut a check to the gov for $100-150K every quarter, and if it's late we are liable for interest and fees.

 

[Mr. Bassin II]

On 6/22/2018 at 3:53 PM, rboat said:

I am not sure how this new tax law is going to affect shopping on flea bay. I hope it doesn't. It was always kind of fun finding a good deal on a fishing lure. If John Doe bought a lure, then sales tax was already collected on that. If he decides to sell it, why should they collect taxes on it again? That seems illegal, immoral, and just plain wrong. I think uncle sam already gets more than his fair shair through income tax, property tax, and sales tax. Didn't we fight and win a war a couple hundred years ago about too much taxes? Sorrry mods if this rant is deemed too political, you can delete it. I just do not want them messing with my lure addiction and the pleasure of getting a good deal. Any thoughts?

If the item was taxed at time of original purchase and later sold for a value less than or equal to original price then no tax consequence will be recognized.  Only when an item is sold for more than it was purchased for, and taxed at that value,  will there be a need to pay additional sales tax by the purchaser. 

 

The amount to be taxed is the difference between the new price and original price.  In effect the second purchaser gets "credit" for the original sales tax paid.  Bear in mind that the seller is also required to report the profit on the item and be taxed accordingly.

 

There is nothing easy nor fast about tax compliance.

[NHBull]

6 hours ago, reason said:

It works out that way in most cases, but not actually the case. A tax levied on a business, as you state is a cost of doing business. Sales tax is levied on the consumer, not the retailer. The retailer in most places is burdened with the requirement to collect and remit sales tax collected to the appropriate agency. We cut a check to the gov for $100-150K every quarter, and if it's late we are liable for interest and fees.

 

Bingo and as well stated, most folks will see the tax at point of service.  On a side note, bit coin and other electronic currencies see this as a positive for them