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Originally Posted by Dulin's Books
or pass a law that says the transactions occur in the state in which the company resides. then companies could just be responsible for the sales tax owed to the state they reside in just like physical retailers. i would have to collect the Oregon state tax from whomever visited my store- be they from in state, out of state or even out of country- and consumers could decide where they want to shop.
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That's basically the way it works now. The rub is "where does the company reside". For example, Wal-Mart might be incorporated in a state that has no sales tax, so does that mean Wal-Mart shouldn't have to collect taxes at a store it has in Chicago? Or does having a physical retail location in Chicago now mean the company is residing in that state too, so it needs to collect the tax. Suppose it is just the state the company is incorporated that has to pay taxes. Then what happens if a company incorporates in NH where the company doesn't have to pay sales tax unless it has a physical presence, but then the company sets up its headquarters in Chicago. Should it now have to pay taxes to Chicago?
What about New York City where Wal-Mart has a warehouse along the docks for receiving overseas shipments, but it doesn't have any retail stores in the city. Should Wal-Mart be paying sales taxes to NYC for items bought outside of the city because of those warehouses?