Nebraskans Being Taxed For Kindle Purchases?

[hunnymonster]

Originally Posted by HarryT

It's so much easier in Europe, where countries have a single, nation-wide, tax rate!

Pedantry time - I don't think any European country has a single rate - in the UK for example there are rates of 0%, 5% & 20% - and there are plenty of anomalies depending on who is buying to what the rate is... other countries often have a "normal" (15%+), "reduced" (5-14.9%) and "super-reduced" (0-4.9%)rate in addition to zero (Denmark is the only country that doesn't have either a reduced or super-reduced rate).

Example: I go to buy safety boots for my own use, 0% VAT is levied. If my employer buy the same safety boots from the same supplier on my behalf, 20% VAT is levied.

They are all however nationally applied. Read more here (PDF) if you're suffering insomnia.

[ProfCrash]

Companies are not required to charge sales tax in states that it does not have brick and mortar operations. B&N has brick and mortar operations in, I think, all 50 US states and so must charge sales tax on internet purchases. Amazon has a brick and mortar operation in a few locations and charges sales tax in those locations.

[RDaneel54]

How much sense does it make to tax ebooks? Is this something that most of us can pop down to the local bookstore and purchase?

It's not like Ohio is losing tax money when I buy an ebook, expecially since many that I buy are not available as any kind of hardcopy.

If you're wondering, Ohio has a voluntary system for most internet sales. Barnes and Noble is one retailer that is meticulous about collecting local taxes from internet sales. I report my untaxed internet purchases on my annual income tax form. (This is known as being a "loser" by a lot of folks, I prefer to call it "honest".)

[Harry_Y]

Originally Posted by RDaneel54

How much sense does it make to tax ebooks? Is this something that most of us can pop down to the local bookstore and purchase?

It's not like Ohio is losing tax money when I buy an ebook, expecially since many that I buy are not available as any kind of hardcopy.

If you're wondering, Ohio has a voluntary system for most internet sales. Barnes and Noble is one retailer that is meticulous about collecting local taxes from internet sales. I report my untaxed internet purchases on my annual income tax form. (This is known as being a "loser" by a lot of folks, I prefer to call it "honest".)

You Gotta respect a man who lives his convictions

[TimW]

Originally Posted by HarryT

If you buy something on-line from a company like B&N, are you saying that the rate of sales tax they charge you is NOT the tax rate for your home address?

I was referring to their Brick and Mortar stores. They charge tax according to the store location.

[Lazybones]

California has a use tax requirement as well for online purchases from companies such as Amazon, but since it is calculated and paid by the purchaser to the state, few people pay it. I pay it, but my wife works for our state tax agency.

My state's fight with Amazon is over making Amazon collect the tax.

[HarryT]

Originally Posted by TimW

I was referring to their Brick and Mortar stores. They charge tax according to the store location.

Yes, I understand that. You seemed to be saying earlier, though, that it was a. complex problem for an on-line retailer to determine the correct rate of sales tax to charge you. I was using B&N as an example of a retailer who clearly have solved that problem, given that they must charge on-line customers the correct rate of tax, based on where they live.

[ProfCrash]

Deciding how much should be charged is easy enough, use the sales tax for the state the person lives in. The trickier part is getting the sales tax from places that don't have a brick and mortar store. We are suppose to include an estimate how how much money is spent online on our state taxes but the vast majority of folks ignore that line.

Since Amazon is selling books for the big five publishers and those publishers have brick and mortar locations in most of the states in the US, Amazon is required to collect the tax for those stores.

It is a sucky by product of the Agency system.

[TimW]

Originally Posted by HarryT

Yes, I understand that. You seemed to be saying earlier, though, that it was a. complex problem for an on-line retailer to determine the correct rate of sales tax to charge you. I was using B&N as an example of a retailer who clearly have solved that problem, given that they must charge on-line customers the correct rate of tax, based on where they live.

It can be done...not cheaply I'm sure. Perhaps Amazon feels that Congress will finally be pressured to pass legislation to simplify the process, therefore making it cheaper to implement. Amazon charges sales tax in my state because they have distribution facilities here. My state charges a flat 6% sales tax. If California had a simplified taxation rate, perhaps Amazon would not have taken the steps they did. Who knows?

[HarryT]

Speaking as an outsider, it seems very odd to me that an Internet purchase should be exempt from sales tax. Given the apparently wide-spread practice of tax-evasion relating to non-payment of use tax, perhaps the simple answer is to legislate that all on-line purchases should be taxed at source by the retailer?

[RDaneel54]

Originally Posted by HarryT

Speaking as an outsider, it seems very odd to me that an Internet purchase should be exempt from sales tax. Given the apparently wide-spread practice of tax-evasion relating to non-payment of use tax, perhaps the simple answer is to legislate that all on-line purchases should be taxed at source by the retailer?

I'm not sure if every state has a use tax for internet purchases. Also, the federal government mandating the collection of individual state taxes crosses a line I'd rather not see happen.

[ProfCrash]

Originally Posted by HarryT

Speaking as an outsider, it seems very odd to me that an Internet purchase should be exempt from sales tax. Given the apparently wide-spread practice of tax-evasion relating to non-payment of use tax, perhaps the simple answer is to legislate that all on-line purchases should be taxed at source by the retailer?

The Federal Government cannot dictate how State Sales Tax is generated and there is no Federal Sales Tax. States can only collect tax businesses that are physically located in their borders. Amazon is not physically present in most sStates which prevents the States from requiring Amazon to collect sales tax.

When California amended its sales tax policies to influence internet only businesses that reside in California, Amazon stopped allowing California based businesses from selling on Amazon as an affiliate in order to prevent California from being able to require Amazon charge sales tax.

The Constitution would have to be amended for the Federal Government to get involved and there is no way in hell that there is support for an Amendment that would give the Federal Government additional tax authorization.

[ProfCrash]

Originally Posted by RDaneel54

I'm not sure if every state has a use tax for internet purchases. Also, the federal government mandating the collection of individual state taxes crosses a line I'd rather not see happen.

I am pretty sure the vast majority do, the only ones who don't are the few that don't have sales tax.

[TimW]

Originally Posted by ProfCrash

The Federal Government cannot dictate how State Sales Tax is generated and there is no Federal Sales Tax. States can only collect tax businesses that are physically located in their borders. Amazon is not physically present in most sStates which prevents the States from requiring Amazon to collect sales tax.

When California amended its sales tax policies to influence internet only businesses that reside in California, Amazon stopped allowing California based businesses from selling on Amazon as an affiliate in order to prevent California from being able to require Amazon charge sales tax.

The Constitution would have to be amended for the Federal Government to get involved and there is no way in hell that there is support for an Amendment that would give the Federal Government additional tax authorization.

If you look at the 1992 Quill v. North Dakota SCOTUS decision, the court indicated Congress would have to pass legislation regulating interstate commerce since the Constitution bars the states from doing so (unless the business has a nexus in the state in question). Realistically, that won't happen anytime soon.