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Is anyone else a little unclear on why it should work this way? If I live in California, fly to New York, and then go on a shopping spree, I'm going to pay the

by ohazi 14y ago

Is anyone else a little unclear on why it should work this way? If I live in California, fly to New York, and then go on a shopping spree, I'm going to pay the New York tax rates that will end up going to New York. The store doesn't ask me where I'm from, charge me California tax rates, and then send the money to California. That would be absurd. I also can't claim that, since I live in California, I shouldn't pay any New York sales taxes. I'd be laughed out of the store ("interstate commerce" be damned). Wouldn't it make more sense for an online retailer to charge their local sales tax rate for everyone? Why is this the only option that isn't being seriously entertained?

danielweber 14y ago
In theory you should be paying use taxes to California, with a credit for the New York state taxes you pay, right now. In practice that is too hard to care about, but if you try to do it with something like a car or a $10,000 piece of jewelry the state will care. Charging their local sales tax could be an excellent baby step towards the ideal. (I am not a tax attorney, nor any kind of lawyer.)
deleted 14y ago
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jarrett 14y ago
I have one theory as to why: It would penalize online retailers that happen to be based in a high-tax location. As a Chicagoan, for example, I would have a really hard time starting an online retailer if my customers all had to pay the 9.25% Chicago sales tax. It seems like bad policy to discourage tech companies from locating in big cities, which often have higher sales tax. Also, it would be hugely unfair to companies that predate the bill and are based in big cities--are they supposed to pick up and move? Another reason: The idea of the business's local tax rate is less coherent for larger companies that have multiple bases of operation. Suppose I have several offices throughout the country, plus a bunch of warehouses. Which of these would count as my home base for tax purposes?

by ohazi 14y ago

danielweber 14y ago

In theory you should be paying use taxes to California, with a credit for the New York state taxes you pay, right now. In practice that is too hard to care about, but if you try to do it with something like a car or a $10,000 piece of jewelry the state will care. Charging their local sales tax could be an excellent baby step towards the ideal. (I am not a tax attorney, nor any kind of lawyer.)

deleted 14y ago

[deleted]

jarrett 14y ago

I have one theory as to why: It would penalize online retailers that happen to be based in a high-tax location. As a Chicagoan, for example, I would have a really hard time starting an online retailer if my customers all had to pay the 9.25% Chicago sales tax. It seems like bad policy to discourage tech companies from locating in big cities, which often have higher sales tax. Also, it would be hugely unfair to companies that predate the bill and are based in big cities--are they supposed to pick up and move? Another reason: The idea of the business's local tax rate is less coherent for larger companies that have multiple bases of operation. Suppose I have several offices throughout the country, plus a bunch of warehouses. Which of these would count as my home base for tax purposes?