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The thing to keep in mind is that internet retails will have to keep track of and pay out to more than just the 50 state-level tax jurisdictions. Many counties

The thing to keep in mind is that internet retails will have to keep track of and pay out to more than just the 50 state-level tax jurisdictions. Many counties and municipalities impose their own sales tax rules, which are often more complicated than just a blanket X% of sales. For example, some states exempt clothing and basic food items from sales tax, and some have periodic tax holidays. I understand the desire to eliminate the tax advantage internet retailers currently have, but I think it would be better solved by a federal sales tax (either directly or indirectly disbursed to states) than by forcing retailers to hire a team of tax accountants to keep up with thousands of sets of sales tax laws.

IanDrake 15y ago
The frequent and dangerous assumption here is that a federal sales tax means the end to state sales tax. Obviously that didn't work for income tax, and I would go even further to argue the feds should not be paid one bit of direct tax. When the feds collect money and disperse it to the states, the states become enslaved to the federal government and loose their sovereignty. More importantly, without this sovereignty there is no competition or experimentation amongst the states.
- deleted 15y ago
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- deleted 15y ago
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- drats 15y ago
  I saw someone had downvoted you and went to upvote and gave you another downvote by accident, sorry.[1] I think you are entirely correct, state competition and experimentation is a good thing, as is decentralisation. Even if someone disagrees with your points, I don't see the need to downvote them. I like the idea elsewhere on the thread of standardizing a database to enable the calculation to be readily done by the seller (and those places with systems so complex that they can't be represented with a couple of fields - state, tax level, exceptions - can just lose out). [1] pg can we please have some more space between the up and down vote buttons for touch screens?
  - mkr-hn 15y ago
    I downvoted because of the inflammatory language.
    - IanDrake 15y ago
      Sorry, sometimes my writing style just comes out that way. To make my point differently and maybe to make it more tech specific: I would rather pay individual companies for software I want to run on my PC than to pay Microsoft a lump sum and have them give me a bunch of software they think I need (and then distribute the funds to the creators how they see fit). It could be argued that it would be easier for consumers to pay only Microsoft, saving them the headache of creating relationships with multiple vendors. Or it could be argued that the chaos of the market is worth the competition that ultimately benefits the consumer. I like the bottom up approach because it creates competition and choice.
- _delirium 15y ago
  Even a very 18th-c conception of the federal government doesn't have it receiving no direct tax. In fact it was considered necessary that it have its own direct source of revenue, since its financial dependence on the states was one of the things crippling the Articles of Confederation government. Import tariffs were long the main tax. In that case, the Constitution does make sure that federal taxation means no state taxation, because states are prohibited from enacting tariffs. The other traditional main source of federal revenue was income from federal lands (mining, forestry, etc.).
  - IanDrake 15y ago
    Yes, I should have been more clear. I don't think individuals should pay direct taxes to the Federal government. I prefer the pre-16th amendment scheme of apportioning amongst the states. Regardless of today's law, I am currently of the opinion that direct taxes should be collected at the most local level possible with each community paying it's parent an apportioned amount for the service, privileged, and protection it provides.
- redthrowaway 15y ago
  That's a very American attitude, one that, as a Canadian, I simply can't understand. It always strikes me as odd that Americans prefer a system in which each state has almost total control, up to and including its own constitution. You're left with things like California being insolvent and practically unsalvageable, Arizona mandating racial profiling and giving retarded cowboys like Arpaio free reign, Kansas banning science, most everywhere banning gay marriage... it's just a very strange and haphazard system. My best friend in high school was from San Francisco and his father hated our system, saying we had ceded all our freedom to the federal government, were socialists, and all manner of other invectives. Given how messed up everything is down there, I wouldn't really be complaining.
  - IanDrake 15y ago
    >most everywhere banning gay marriage... And thus my point. I live in MA, where it's legal, and the world didn't end and God didn't smite us. This "experiment", if done at the federal level, wouldn't have happened for another decade because the country is still split. Now people can point to MA and say, see this works. Gay marriage laws are literally spreading from MA outward. So, if you're gay move to MA, if you're appalled by the idea move out. If you're of Hispanic decent move away from Arizona. If you don't like super irresponsible government spending, move out of California. Either way, you're still an American and you have choice.
mkr-hn 15y ago
What we need is a common database for cities, counties, and states to add their taxes for different things to so the burden of tracking isn't on retailers. A site could pull the appropriate tax amount with a single API. I think it's good to let the individual places set their own tax rates as long as there's a way to take the burden off web retailers. For example, a city might have a tax on tire sales to help fund road upgrades. Online tire retailers shouldn't be able to skip out on the tax since the tires are going to be used on the roads the city is upgrading.
- BillSaysThis 15y ago
  LOLz, I wrote my comment at the same time as you. Want to co-found this project?
dman 15y ago
Maybe this can lead to a homogenization in the sales tax across states ? Or is that too optimistic?
- jmaygarden 15y ago
  Not all states use the same methods for generating revenue. My home state of Florida does not collect income tax. Instead we tax sales and hotel rooms to better capture tourist dollars. Florida and say North Dakota would find it difficult to agree on a unified state tax code.
- martingordon 15y ago
  It would be nice to force adoption of harmonized tax laws as a prerequisite for being eligible to receive internet taxes, but it would be difficult to come up with a set of laws that appealed to everyone. States with lower tax rates would be unlikely to want to raise the rates on their citizens, where states with higher rates may not be able to afford dropping down to a lower rate (although the lower overall rate may be offset by the larger number of taxable transactions). Multiply this 50-way negotiation by the number of actual tax rules and you can see how feasible harmonization would really be. Don't get me wrong, I would love to see something like this come to pass, so you'll have to excuse my cynicism (no doubt brought on by current events).
r00fus 15y ago
From a comment in the article, someone mentioned Taxcloud.com which tracks the sales tax percentage. I'm sure that it's completely possible to track all the tax-specific details that you mention, and I know it's already being done (Amazon ran Target.com which has full 50-state coverage and did collect sales taxes everywhere). If it's mandated, there will be an opportunity to sell this service to retailers... though I do agree that a single federal % number would be more feasible, it will never happen.
- lotu 15y ago
  That is still a significant burden to implement especially for a small business that is not tech related. Sure it's a benefit for the people who will sell the service but you could make the same argument about mandating all websites display new logos everyday like google does, it will benefit artistes who provide the service but is it really good for society? Also, what about foreign companies? We already know that sales tax has kept digital companies out of states with sales tax could this encourage such companies to move to Canada or Mexico? Next when I buy a purely digital good this work? Do you use my current location or my billing address?

IanDrake 15y ago

The frequent and dangerous assumption here is that a federal sales tax means the end to state sales tax. Obviously that didn't work for income tax, and I would go even further to argue the feds should not be paid one bit of direct tax. When the feds collect money and disperse it to the states, the states become enslaved to the federal government and loose their sovereignty. More importantly, without this sovereignty there is no competition or experimentation amongst the states.

deleted 15y ago
[deleted]
deleted 15y ago
[deleted]
drats 15y ago
I saw someone had downvoted you and went to upvote and gave you another downvote by accident, sorry.[1] I think you are entirely correct, state competition and experimentation is a good thing, as is decentralisation. Even if someone disagrees with your points, I don't see the need to downvote them. I like the idea elsewhere on the thread of standardizing a database to enable the calculation to be readily done by the seller (and those places with systems so complex that they can't be represented with a couple of fields - state, tax level, exceptions - can just lose out). [1] pg can we please have some more space between the up and down vote buttons for touch screens?
- mkr-hn 15y ago
  I downvoted because of the inflammatory language.
  - IanDrake 15y ago
    Sorry, sometimes my writing style just comes out that way. To make my point differently and maybe to make it more tech specific: I would rather pay individual companies for software I want to run on my PC than to pay Microsoft a lump sum and have them give me a bunch of software they think I need (and then distribute the funds to the creators how they see fit). It could be argued that it would be easier for consumers to pay only Microsoft, saving them the headache of creating relationships with multiple vendors. Or it could be argued that the chaos of the market is worth the competition that ultimately benefits the consumer. I like the bottom up approach because it creates competition and choice.
_delirium 15y ago
Even a very 18th-c conception of the federal government doesn't have it receiving no direct tax. In fact it was considered necessary that it have its own direct source of revenue, since its financial dependence on the states was one of the things crippling the Articles of Confederation government. Import tariffs were long the main tax. In that case, the Constitution does make sure that federal taxation means no state taxation, because states are prohibited from enacting tariffs. The other traditional main source of federal revenue was income from federal lands (mining, forestry, etc.).
- IanDrake 15y ago
  Yes, I should have been more clear. I don't think individuals should pay direct taxes to the Federal government. I prefer the pre-16th amendment scheme of apportioning amongst the states. Regardless of today's law, I am currently of the opinion that direct taxes should be collected at the most local level possible with each community paying it's parent an apportioned amount for the service, privileged, and protection it provides.
redthrowaway 15y ago
That's a very American attitude, one that, as a Canadian, I simply can't understand. It always strikes me as odd that Americans prefer a system in which each state has almost total control, up to and including its own constitution. You're left with things like California being insolvent and practically unsalvageable, Arizona mandating racial profiling and giving retarded cowboys like Arpaio free reign, Kansas banning science, most everywhere banning gay marriage... it's just a very strange and haphazard system. My best friend in high school was from San Francisco and his father hated our system, saying we had ceded all our freedom to the federal government, were socialists, and all manner of other invectives. Given how messed up everything is down there, I wouldn't really be complaining.
- IanDrake 15y ago
  >most everywhere banning gay marriage... And thus my point. I live in MA, where it's legal, and the world didn't end and God didn't smite us. This "experiment", if done at the federal level, wouldn't have happened for another decade because the country is still split. Now people can point to MA and say, see this works. Gay marriage laws are literally spreading from MA outward. So, if you're gay move to MA, if you're appalled by the idea move out. If you're of Hispanic decent move away from Arizona. If you don't like super irresponsible government spending, move out of California. Either way, you're still an American and you have choice.

mkr-hn 15y ago

What we need is a common database for cities, counties, and states to add their taxes for different things to so the burden of tracking isn't on retailers. A site could pull the appropriate tax amount with a single API. I think it's good to let the individual places set their own tax rates as long as there's a way to take the burden off web retailers. For example, a city might have a tax on tire sales to help fund road upgrades. Online tire retailers shouldn't be able to skip out on the tax since the tires are going to be used on the roads the city is upgrading.

BillSaysThis 15y ago
LOLz, I wrote my comment at the same time as you. Want to co-found this project?

dman 15y ago

Maybe this can lead to a homogenization in the sales tax across states ? Or is that too optimistic?

jmaygarden 15y ago
Not all states use the same methods for generating revenue. My home state of Florida does not collect income tax. Instead we tax sales and hotel rooms to better capture tourist dollars. Florida and say North Dakota would find it difficult to agree on a unified state tax code.
martingordon 15y ago
It would be nice to force adoption of harmonized tax laws as a prerequisite for being eligible to receive internet taxes, but it would be difficult to come up with a set of laws that appealed to everyone. States with lower tax rates would be unlikely to want to raise the rates on their citizens, where states with higher rates may not be able to afford dropping down to a lower rate (although the lower overall rate may be offset by the larger number of taxable transactions). Multiply this 50-way negotiation by the number of actual tax rules and you can see how feasible harmonization would really be. Don't get me wrong, I would love to see something like this come to pass, so you'll have to excuse my cynicism (no doubt brought on by current events).

r00fus 15y ago

From a comment in the article, someone mentioned Taxcloud.com which tracks the sales tax percentage. I'm sure that it's completely possible to track all the tax-specific details that you mention, and I know it's already being done (Amazon ran Target.com which has full 50-state coverage and did collect sales taxes everywhere). If it's mandated, there will be an opportunity to sell this service to retailers... though I do agree that a single federal % number would be more feasible, it will never happen.

lotu 15y ago
That is still a significant burden to implement especially for a small business that is not tech related. Sure it's a benefit for the people who will sell the service but you could make the same argument about mandating all websites display new logos everyday like google does, it will benefit artistes who provide the service but is it really good for society? Also, what about foreign companies? We already know that sales tax has kept digital companies out of states with sales tax could this encourage such companies to move to Canada or Mexico? Next when I buy a purely digital good this work? Do you use my current location or my billing address?