Taxes for online shopping gaining support in Congress and Amazon

[tubemonkey]

Originally Posted by Gardenman

When this has been tried before the experts have told congress that it is impossible to write software to keep track of the thousands and thousands of different levels of taxes that would need to be collected. On just one transaction in your own state you might have to keep track of State sales tax, county sales tax, local sales tax and city sales tax. On top of this noone can keep track of when taxes change.

A lot of online business are mom and pop business run out of someones back bedroom. If software could be written to handle this it would cost too much for a small business to afford.

Make the states write the software and provide it free of charge. After all, they're the ones who want the revenue. Various local taxes can be averaged and used to come up with a compromise. As to changes, they'd be allowed one change annually.

[Gardenman]

murraypaul

I Agree with you - in the USA

a) our tax system is seriously screwed up
b) Mega-Companies can afford to hire an army of tax experts to take care of such things.

Just to show you how screwed up.

In my state if a business makes things and they bring in materials from another state to make something, they must pay use tax on those materials (because they did not pay state sales tax) even if what is made is sold out of state. Of course you have to pay state tax on the profits from the sale.

Another example. You are supposed to pay tax on barter. If I paint your house and you repair my car in exchange. Each of us is supposed to pay state tax on what it would cost to hire the work done.

[Apache]

Most states require the retailer to charge and collect sales tax if the person is physically in your store or is a resident of the state. If the person is from out of state and is buying from a phone or the Internet the onus falls upon the buyer to pay the sales tax in his or her state of residence.
Georgia recently passed a law requiring any non dealer, selling a vehicle, to collect sales tax. This was because most buyers were not voluntarily paying the sales tax as was required by law. There was a huge uproar from the public and the law was repealed.
So far Georgia does not tax labor. They are considering it though.
Apache

[ScotiaBurrell]

Originally Posted by Gardenman

Another example. You are supposed to pay tax on barter. If I paint your house and you repair my car in exchange. Each of us is supposed to pay state tax on what it would cost to hire the work done.

How enforce that??

[Gardenman]

Tube monkey is right about each state. A small business can handle the tax problem in its own state. They cannot keep with the tax laws from every state. That is what the states want done. No matter where you are located - collect taxes on sales made in each state.

[Gardenman]

ScotiaBurrell

They cannot enforce it. Just another example of the dumb laws states have passed.

[HarryT]

Originally Posted by Gardenman

When this has been tried before the experts have told congress that it is impossible to write software to keep track of the thousands and thousands of different levels of taxes that would need to be collected. On just one transaction in your own state you might have to keep track of State sales tax, county sales tax, local sales tax and city sales tax. On top of this noone can keep track of when taxes change.

This is clearly not the case, given that a company like, say, B&N, which has a retail presence in every state, and hence has to charge sales tax for online sales in every state, plainly uses such software.

[cjr72]

Originally Posted by Gardenman

ScotiaBurrell

They cannot enforce it. Just another example of the dumb laws states have passed.

Politicians also do not want to vigorously enforce the collection of use taxes on voters who can throw them out on election day which is why they want to put the onus on out of state retailers to do the work for them.

[sadievan]

Originally Posted by murraypaul

a) Then your tax system is seriously screwed up

BINGO!!!

Carol

[QuantumIguana]

Originally Posted by tubemonkey

Make the states write the software and provide it free of charge. After all, they're the ones who want the revenue. Various local taxes can be averaged and used to come up with a compromise. As to changes, they'd be allowed one change annually.

A web service could be created, where the software sends the purchase price and the zip code to the web service, and the tax amount is calculated and sent back to the software.

[Catlady]

Originally Posted by RDaneel54

I do. Probably a greater percentage than 1 of 10,000 do.

I do too. But I have no idea if I'm paying the proper amount, as I'm charged sales tax for a lot of online purchases (e.g., Amazon and most of the big box stores), and I don't keep track specifically unless a major purchase is involved.

I'm never charged sales tax at Amazon or BN for digital downloads.

[Hellmark]

Originally Posted by tubemonkey

My understanding was that sales tax was generally collected if the company you were buying from had a physical presence in your state - store, warehouse, headquarters. As usual, there were exceptions.

That is how I've always understood it to be.

Technically, when consumers shop online, they are supposed to pay sales tax by reporting it on their state tax returns. But as it turns out, Americans aren't always honest when it comes to paying their taxes.

I don't think it is a question of honesty. I think it is more of an issue of simply understanding the tax laws. Every state does things differently. I know when I've done my taxes, I've never seen anything mentioning sales tax from online or out of state purchases. Ignorance of the law is not an excuse, but at the same time ignorance is not malicious, and one cannot be expected to know about things when it is not made readily available. I've tried looking into this before, and I've yet to find suitable answers.

[HarryT]

Originally Posted by Hellmark

I don't think it is a question of honesty. I think it is more of an issue of simply understanding the tax laws. Every state does things differently. I know when I've done my taxes, I've never seen anything mentioning sales tax from online or out of state purchases. Ignorance of the law is not an excuse, but at the same time ignorance is not malicious, and one cannot be expected to know about things when it is not made readily available. I've tried looking into this before, and I've yet to find suitable answers.

It will probably be called "Use tax" on your tax form, rather than "Sales tax".

[MikeB1972]

Originally Posted by QuantumIguana

A web service could be created, where the software sends the purchase price and the zip code to the web service, and the tax amount is calculated and sent back to the software.

Afraid not, the tax is different for different types of item.

[cjr72]

Originally Posted by HarryT

It will probably be called "Use tax" on your tax form, rather than "Sales tax".

We don't have a state income tax in Texas. I'm guessing there is some form we have to pick up (or download) from somewhere.