posted on November 13, 2002 12:33:24 AM new
If they enact an internet sales tax, then I'm out! Rising shipping costs already took a big chunk out of my profits (lower bids to offset shipping costs) and a hefty internet sales tax will hurt sales and profits even more.
Ebay should be fighting the internet sales tax tooth and nail but they probably aren't.
It was fun while it lasted, but it's probably about time to get a real job!
posted on November 13, 2002 02:32:10 AM new
Why has a new law been enacted, or about to be brought to discussion, or IRS just found out about some of us who don't pay taxes on our income from our internet sales, and they are now going to come down on those who don't pay?
Stay tuned...
posted on November 13, 2002 04:22:06 AM new
This isn't about income tax, it's about sales tax. Tax, tax, tax.... Income tax is one thing, having to deal with sales tax is another. I'm out, too, if that happens. I'll take my things to our local vintage consignment shop where they deal with all the sales tax issues. Their fees turn out to be around the same as those for Ebay and Paypal and Auctionwatch put together. Right now I enjoy selling. The states are crying the blues because this is one thing they don't have their hands in. Here in Cleveland we have a tax called a SIN tax on top of the regular sales tax (on cigarettes) to pay for the baseball stadium. And you can't even smoke in the stadium. Well, you can if you go outside the stands and stand behind a yellow line. I guess smoke knows not to travel past that yellow line. I agree, Ebay with all their money should be fighting this hard. I suppose the tax will help to raise the salaries of our state reps. I certainly don't see it going to schools. Yes, this is a sore subject.
posted on November 13, 2002 05:36:37 AM new
A sales tax would come out of the customers pocket not the sellers. If your state has a sales tax, then by law, All businesses including online sellers are required to collect that tax from all sales within their own states. Sales tax does not cross state boundries yet.
posted on November 13, 2002 07:27:08 AM new
I think the states will also be capturing taxes on sales that never before had a sales tax, that is a tax on garage sale items.
I doubt flea market vendors pay sales taxes either.
posted on November 13, 2002 08:35:28 AM new
(Reamond) I beg to differ with you in Arizona they are collecting sales tax on flea market and swapmeet vendors and have been for years I say if you want to be in business and reap the rewards then pay the dues.
posted on November 13, 2002 08:38:14 AM new
There is no national effort to get an internet sales tax going at this time. The last time it came up Congress squashed it like a bug.
BTW, on the North Carolina income tax form all citizens are required to pay an extra percentage of their income that is supposed to capture sales tax from what they figure the average person owes from internet purchases. What do you think of that? Are there any other states that are finding ways to get this money?
posted on November 13, 2002 09:11:17 AM new
While states may impose sales taxes on flea markets and swap meets, imposing and collecting are two different things. People selling used items do not leave a paper trail regarding how much the item sold for or even if the item sold. B&Ms usually have to also file inventory statements with the state and therefore the sales can be tracked and accounted for. I don't know how a state could enforce the sales taxes on mobile vendors that come and go at flea markets and swap markets.
The only reason there appears to be no "national" interest in an internet sales tax is because a "national" sales tax with proceeds going to Washington is not the issue.
The Feds could care less about states capturing sales taxes. Congress doesn't have a dog in the fight, and the states will have to have an amendment to the Constitution to force sellers with no physical presence in their states to collect sales taxes for them.
posted on November 13, 2002 09:49:31 AM new
A moratorium is presently in place regarding internet tax collection. Anyone recall when it expires? I believe we still have a few years left.
It is going to take a cooperative effort on the part of all States to institute an internet State sales tax system. The States will have to decide how funds are collected and split and it will probably take years for this to be figured out. If inacted, collection and payment will be a nighmare for sellers, as it could amount to the necessity to file 50 individual Sales Tax filings. A paperwork nightmare and also a costly expense for outside accounting.
In addition, it will take a very sophisticated software system to track and report these transactions. I doubt any software of this kind currently exists, especially one that can handle 50 states with 50 different tax collecting rates, rules and exclusions.
I hope the issue becomes to complicated to figure out because if this system is enacted the sole weight of the program will fall at the time expense and cost of us retailers.
posted on November 13, 2002 09:58:08 AM new
The states are banding together to overcome the jurisdictional and patchwork sales tax situation. They are attempting to make sales taxes uniform.
"This is a 21st century system that will dramatically improve the morass that currently exists," Utah Gov. Michael Leavitt said in a statement after 32 states approved model legislation snipping reams of red tape that has kept state and local governments from collecting tax on Internet sales.
The agreement--representing years of painstaking work by state delegates--sets out unified definitions of products from orange juice to salted peanuts that previously varied from area to area and created bureaucratic nightmares for businesses.
It would also require participating state and local governments to have only one statewide tax rate for each type of product from 2006. Currently different cities and states can set their own tax rate on products."
When money is involved, the states can change and get their ducks in order to capture the revenue. States do it all the time to get Federal funding.
I wouldn't have expected that they had come this far this fast.
posted on November 13, 2002 10:14:05 AM new
I live in CA & have a "Sellers Permit" which means I have to charge CA residents sales tax. The advantage for me is I can buy mdse for resale without paying sales tax. This includes packing material as this is considered part of the retail cost of the sale. I sell very little in the state of CA, & don't charge sales tax yet. I keep track of he sales in CA & because of the amount only have to file once a year. Last year it was less than $25.00. I was in retail for years & it doesn't bother me at all. I'll keep on selling as I always have.
posted on November 13, 2002 12:17:22 PM new
"A moratorium is presently in place regarding internet tax collection. Anyone recall when it expires? I believe we still have a few years left."
The original moratorium has expired, but an extension was granted that won't expire until November 2003. What I gathered from the articles I have read is that it is more of when, not if, the taxing of internet sales will happen. Curiously enough, six months ago I started stating in my ad TOS that sales tax would be collected on all purchases made from buyers in my state. I haven't had a single in state sale since.
posted on November 13, 2002 02:09:26 PM new
There are two issues being mixed here. 1)The moratorium was on "the taxing of access to, and use of the internet". 2)The other issue is the sales tax issue and there has been no moratorium or other regulation concerning the collecting of sales tax on goods sold on the internet. If a seller holds a state resale certificate, he/she is usually obligated to collect, and submit to the state, sales tax on anything sold within his state. If he doesn't collect it, it is still required to be submitted to the state. Because many states are suffering big revenue losses, they will continue to try to put some type of collection in place for internet sales.
[ edited by rgrem on Nov 13, 2002 03:04 PM ]
posted on November 13, 2002 02:22:47 PM new
An internet sales tax would have to be a national tax, not a state level tax. The amount of paperwork makes it unfeasable, and enforcement would be pretty impossible. You might see certain segments of the online industry subject to scrutiny (like cigarette sales across state lines from states that charge minimal or no taxes) but I doubt you will see any serious talk about an internet sales tax. You will hear talk, but no serious talk.
posted on November 13, 2002 02:37:44 PM new
rgrem: In CA you collect sales tax only goods sold within the state, not to buyers from other states. Having a resale permit has saved me hundreds if not thousands of dollars as I ship several thousands of dollars per year to china replacement cos. besides what I sell on eBay.
posted on November 13, 2002 11:28:21 PM new
sorry folks but we are wee folks compared to Sears,Sony and other large corporations that love internet sales. Internet sales are really up from last year people are looking for the deals and they would rather stay away from malls due to 911
posted on November 13, 2002 11:52:04 PM new
I don't know what the big problem is. Declare every item you sale as a gift and mark the value at $10.00. The international bidders have this game down to a science.
The light at the end of the tunnel will turn out to be an oncoming train.
posted on November 14, 2002 09:40:17 AM new
If there is no tax on the Internet, can I file my income tax form electronically and pay nothing?
The sales tax problem is not an internet issue.
Years ago when I incorporated and started collecting NY sales tax, I kept running into a problem where NY kept sending me dunning notices for tax I had already paid, along with interest and penalties. I wrote to the Tax Commissioner, the Mayor and others and only got what were basically form letters that didn't address the issue. I finally wrote a letter to the Commissioner in which I said that I was trying to run an honest business but the incompetence of his department was forcing me underground. I told him I was making a deal with a dealer in NJ. I would send him my NY customers and he would send me his NJ customers and that way neither of us would have to collect tax. The letter got someone's attention because I received a phone call from an actual person who handled the problem.
I was also told that though a vendor only has to collect taxes from the state in which he does business, the customer is obligated to send in tax on purchases made out of state. A large computer dealer once had State Tax investigators come in and examine the books. The customers from other states were then billed for the sales tax plus interest and penalties.
The problem behind sales tax is greed. Each state wants to regulate its own. When NJ stopped charging sales tax on clothing, NY was too greedy to do the same. So thousands of people went to NJ to buy clothes and NY stores screamed. Evenutally NY lowered its clothing tax and had a few tax-free periods.
The Internet didn't cause this problem, it's only making it more apparent. If the states had any common sense, they would all band together, come up with one figure and say that ALL sales must be charged this amount and it should be sent to some central department which would divide it among all the states or ALL sales are charged tax which is sent to the state where the sale took place. If I walk into a jewelry store in Chicago and buy something worth $5000, I pay tax. I can show my NY driver's license and claim I am taking it to NY, but I am still charged tax. If I give the store $10 and tell them to ship it to NY, suddenly I save the tax, which could amount to $400. This makes no sense to me. There was a scandal in NY a few years back when jewelry stores were caught shipping empty boxes to other states so they could claim the sales were made to out-of-towners.
As long as the states are being stupid or greedy, they leave this big loophole that Internet vendors can exploit to be cheaper than local stores. At least until shipping rates become higher than sales tax.
posted on November 14, 2002 09:51:48 AM new
If there were an internet sales tax, my guess is that MANY would simply go underground and stop collecting all sorts of taxes, and possibly that includes paying income tax. Fortunately, I live in a tax free state, so I don't even have to worry about collecting any sales tax now. I moved here from California over a year ago, and I have noticed a LOT more California customers - I believe having to collect tax from them when I was in California made me a lot less competitive. I still don't think an internet tax is anything to worry about (yet)
