4 ms·

a) Silicon Valley doesn't have "its own senators" b) Why should internet retailers get special privileges? Complexity sucks but that's life, and the law does r

by jvm 13y ago

a) Silicon Valley doesn't have "its own senators" b) Why should internet retailers get special privileges? Complexity sucks but that's life, and the law does require states to simplify the collection process.

barry-cotter 13y ago
a) Hollywood does, why doesn't Silicon Valley?
dangrossman 13y ago
b) This actually creates a burden on internet retailers that brick-and-mortar stores don't have; it makes things unfair rather than fair. A single retail store has to worry about only the taxes of the locale it resides in. At most, they are filing 3 sales tax returns and could potentially have their books audited by 3 entities. An internet retailer now has to comply with 50 separate sales tax rules, file 50 separate returns, and potentially be audited 50 times a year. For an individual making $30k/year (3% net on $1m in gross), is that really levelling the playing field? How many of your aunts and uncles do you think have the time and the skill to locate, understand and properly comply with 50 states' separate tax codes? Contrast that to opening a brick-and-mortar shop on main street in their town, where if they need help, they can walk up to the town hall and ask the tax administrator in person, or hire a local accountant who already knows all the local rules. That's feasible, where getting assistance from 50 accountants to start a business is not.
- jvm 13y ago
  This argument is ludicrous. You are saying that you shouldn't have to pay the taxes you legally owe because it's hard for you to do the accounting? It's much harder to file taxes if you have to itemize returns, should that make you exempt from paying taxes? You could avoid them entirely by only selling to the five states that don't have sales taxes, that's a vastly larger market than the area around a single mom & pop store. I'd be all for some sort of scheme for streamlining tax collection for online purchases, but paying nothing at all is just rent-seeking. > For an individual making $30k/year (3% net on $1m in gross), is that really levelling the playing field? If they're making that $30k/year because they're dodging state taxes, then yeah, it's leveling the playing field.
  - dangrossman 13y ago
    Huh? Right now, internet retailers do not legally owe any sales tax to any state they don't have nexus in. The retailers aren't evading any taxes for any reason. This creates a new collection burden that didn't exist, and does not exist for brick-and-mortar, even if they have customers from all 50 states come by and make a purchase. Someone that opens a shop in their town does not have to file 51 returns a year and potentially be audited 51 times, while under this bill, someone opening the same store at the same place with a website does. I didn't say there could or should be no tax, I said that this bill creates an uneven burden. How is that a ridiculous statement?
    - jvm 13y ago
      I wasn't talking about what's legal, I was talking about what's ethical and/or economically efficient. States didn't tax online sales because there was no legal framework for doing so, so online retailers were able to gain an edge over local businesses by locating outside the states, avoiding the taxes. That is inefficient because it means firms are taxed differently based on an arbitrary aspect of how their business is run. You're claiming that' it's somehow treating them differently, but I call bullshit. Building an online retail site and marketing nationally is comparable to Best Buy building stores in all states, and of course one expense of doing that is having to pay sales taxes in all the states. > even if they have customers from all 50 states come by and make a purchase That is an edge case that is rare in practice and is difficult to exploit. If it was a huge problem then yeah I'd agree they should make a special tax setup for it (and this DOES exist: if you live in Washington and buy a car in Oregon, they will come for the sales tax: http://askville.amazon.com/Washington-State-resident-buy-car-Oregon-skip-sales-taxes/AnswerViewer.do?requestId=96403 http://askville.amazon.com/Washington-State-resident-buy-car...). I would certainly agree that if they are delivering products to all the states then yes, they should have to pay sales taxes to all the states that they delivered to, and if this law doesn't handle that case then yeah, I think it should.
    - jvm 13y ago
      I realized I should have clarified > internet retailers do not legally owe any sales tax to any state they don't have nexus in This is technically true but highly misleading. In almost all states, the receiving party is required to pay tax on out-of-state mail order. The problem is that the law is unenforceable because the states can't force the retailers to document and collect it. This law closes that loophole.

by jvm 13y ago

barry-cotter 13y ago

a) Hollywood does, why doesn't Silicon Valley?

dangrossman 13y ago

b) This actually creates a burden on internet retailers that brick-and-mortar stores don't have; it makes things unfair rather than fair. A single retail store has to worry about only the taxes of the locale it resides in. At most, they are filing 3 sales tax returns and could potentially have their books audited by 3 entities. An internet retailer now has to comply with 50 separate sales tax rules, file 50 separate returns, and potentially be audited 50 times a year. For an individual making $30k/year (3% net on $1m in gross), is that really levelling the playing field? How many of your aunts and uncles do you think have the time and the skill to locate, understand and properly comply with 50 states' separate tax codes? Contrast that to opening a brick-and-mortar shop on main street in their town, where if they need help, they can walk up to the town hall and ask the tax administrator in person, or hire a local accountant who already knows all the local rules. That's feasible, where getting assistance from 50 accountants to start a business is not.

jvm 13y ago
This argument is ludicrous. You are saying that you shouldn't have to pay the taxes you legally owe because it's hard for you to do the accounting? It's much harder to file taxes if you have to itemize returns, should that make you exempt from paying taxes? You could avoid them entirely by only selling to the five states that don't have sales taxes, that's a vastly larger market than the area around a single mom & pop store. I'd be all for some sort of scheme for streamlining tax collection for online purchases, but paying nothing at all is just rent-seeking. > For an individual making $30k/year (3% net on $1m in gross), is that really levelling the playing field? If they're making that $30k/year because they're dodging state taxes, then yeah, it's leveling the playing field.
- dangrossman 13y ago
  Huh? Right now, internet retailers do not legally owe any sales tax to any state they don't have nexus in. The retailers aren't evading any taxes for any reason. This creates a new collection burden that didn't exist, and does not exist for brick-and-mortar, even if they have customers from all 50 states come by and make a purchase. Someone that opens a shop in their town does not have to file 51 returns a year and potentially be audited 51 times, while under this bill, someone opening the same store at the same place with a website does. I didn't say there could or should be no tax, I said that this bill creates an uneven burden. How is that a ridiculous statement?
  - jvm 13y ago
    I wasn't talking about what's legal, I was talking about what's ethical and/or economically efficient. States didn't tax online sales because there was no legal framework for doing so, so online retailers were able to gain an edge over local businesses by locating outside the states, avoiding the taxes. That is inefficient because it means firms are taxed differently based on an arbitrary aspect of how their business is run. You're claiming that' it's somehow treating them differently, but I call bullshit. Building an online retail site and marketing nationally is comparable to Best Buy building stores in all states, and of course one expense of doing that is having to pay sales taxes in all the states. > even if they have customers from all 50 states come by and make a purchase That is an edge case that is rare in practice and is difficult to exploit. If it was a huge problem then yeah I'd agree they should make a special tax setup for it (and this DOES exist: if you live in Washington and buy a car in Oregon, they will come for the sales tax: http://askville.amazon.com/Washington-State-resident-buy-car-Oregon-skip-sales-taxes/AnswerViewer.do?requestId=96403 http://askville.amazon.com/Washington-State-resident-buy-car...). I would certainly agree that if they are delivering products to all the states then yes, they should have to pay sales taxes to all the states that they delivered to, and if this law doesn't handle that case then yeah, I think it should.
  - jvm 13y ago
    I realized I should have clarified > internet retailers do not legally owe any sales tax to any state they don't have nexus in This is technically true but highly misleading. In almost all states, the receiving party is required to pay tax on out-of-state mail order. The problem is that the law is unenforceable because the states can't force the retailers to document and collect it. This law closes that loophole.