New Zealand adds 15% GST to (some) ebooks from today

[frahse]

Originally Posted by pwalker8

Here in the US, online sellers are only required to collect taxes if they have a physical presence in the state where the buyer lives.

The collection especially at Amazon is very uneven or sporadic depending on how you look at it.

[frahse]

Originally Posted by HarryT

How many independent authors do you think sell more than NZ$60,000 (about US$43,000) worth of books to New Zealand in a year? I suspect the number is very small. Probably zero.

Well, not me for sure.

Does any non New Zealand independent author?

[Cinisajoy]

Originally Posted by HarryT

Because the law says that you have to? Most states have a "use tax" under which, if you buy something out of state and hence pay no sales tax, you have to pay the equivalent of what you would have paid in sales tax if the product is used or consumed in your state. This is what I was referring to when I said that there is tax evasion on a massive scale: many people fail to declare or pay use tax.

If I buy something in New Mexico, I pay their sales tax. Texas does not collect sales tax for things bought in other states. If a New Mexican buys in Texas, they have to pay our sales tax. Same with Oklahoma and Arkansas.

Now the other day, I placed 3 orders at Amazon.
The first one had sales tax. It was sold and shipped from Amazon to a Texas address.
The second had no tax because it went to a different state.
The last one was sold by a 3rd party and fulfilled by Amazon. No tax but going to a Texas residence.

[pwalker8]

Originally Posted by HarryT

Because the law says that you have to? Most states have a "use tax" under which, if you buy something out of state and hence pay no sales tax, you have to pay the equivalent of what you would have paid in sales tax if the product is used or consumed in your state. This is what I was referring to when I said that there is tax evasion on a massive scale: many people fail to declare or pay use tax.

I've never been one to accept the "Because I said so" answer. One of the great truths is that bad laws tend to be mostly ignored, especially when the citizens see it as a pure money grab. In many countries, avoiding taxes is a way of life. In the US, people ignore speeding laws in much the same manner, mostly because people see speeding laws as a pure money grab rather than a safety issue. The funny thing is that over time, the speeders are winning the battle. Speed limits are being raised all over the US, to match the safety conditions rather than the desire for revenue. Some said that people would continue to drive over the speed limit, but a funny thing happened. People started driving at a speed they felt was safe. The average speed locally didn't change much, even though the speed limit went from 55 to 70+.

Unless the company involved has a physical presence in New Zealand, New Zealand will have a great deal of trouble trying to enforce the new law. There is very little they can do to some Mom and Pop store selling over the internet.

[Cinisajoy]

Originally Posted by pwalker8

I've never been one to accept the "Because I said so" answer. One of the great truths is that bad laws tend to be mostly ignored, especially when the citizens see it as a pure money grab. In many countries, avoiding taxes is a way of life. In the US, people ignore speeding laws in much the same manner, mostly because people see speeding laws as a pure money grab rather than a safety issue. The funny thing is that over time, the speeders are winning the battle. Speed limits are being raised all over the US, to match the safety conditions rather than the desire for revenue. Some said that people would continue to drive over the speed limit, but a funny thing happened. People started driving at a speed they felt was safe. The average speed locally didn't change much, even though the speed limit went from 55 to 70+.

Unless the company involved has a physical presence in New Zealand, New Zealand will have a great deal of trouble trying to enforce the new law. There is very little they can do to some Mom and Pop store selling over the internet.

On speed limits, our area went to 75 but since there are too many exits on the Interstate they dropped it back to 65. Now Martin County due to construction is 55 on the interstate.
30 miles from us the speed limit is 80.

[AnotherCat]

Originally Posted by HarryT

If you, as a retailer, choose to do business with a particular country, you have an obligation to follow the laws of that country...

Now there is a progressive idea, let a us all pay the tax we feel obliged to pay (as well as the tax we are required to pay).

Of course we will all have differing ideas as to what those obligations that we may feel are. I take from the tone of your post that everyone should accept your interpretation as to what any such voluntary obligation is rather than their own; if that is not your intention then your concept is completely at large.

[Dopedangel]

Originally Posted by GeoffR

Paper books were already taxed at 15%, however there are complications because tax on purchases from foreign companies is only collected at the border if the package is worth $400 or more.

In practice I guess most book purchases would be under $400, so most paper books bought from overseas retailers will still be effectively tax-free, while the same books bought from a New Zealand retailer or bought as ebooks will be taxed.

They have a similar law in Singapore well actually the law is that you have to pay 7% tax if your foreign purchases are more than $300 in a year. But what actually happens is that they can't tell if you have crossed $300 so if your package cost more than $300 then only you are charged.
But according to the law an individual is supposed to calculate and find out what sales tax is owed and pay it but no one does.

[HarryT]

Originally Posted by Cinisajoy

If I buy something in New Mexico, I pay their sales tax. Texas does not collect sales tax for things bought in other states. If a New Mexican buys in Texas, they have to pay our sales tax. Same with Oklahoma and Arkansas.

Now the other day, I placed 3 orders at Amazon.
The first one had sales tax. It was sold and shipped from Amazon to a Texas address.
The second had no tax because it went to a different state.
The last one was sold by a 3rd party and fulfilled by Amazon. No tax but going to a Texas residence.

I was not referring to sales tax, but to "use tax": the tax that is due if you purchase something online (or by some other method) that you don't pay sales tax on. In such circumstances, you have to pay a use tax that is equivalent to the amount of sales tax that you would have paid had you purchased the item in Texas.

ie as specified here:

https://www.comptroller.texas.gov/ta...es/use-tax.php

There is massive fraud with use tax; a huge number of people don't pay it. In the example you cite above, you owe use tax on the third order, because no sales tax was paid on it, and the product is being used or consumed in Texas.

[MikeB1972]

Originally Posted by pwalker8

Unless the company involved has a physical presence in New Zealand, New Zealand will have a great deal of trouble trying to enforce the new law. There is very little they can do to some Mom and Pop store selling over the internet.

They aren't after the mom & pop stores (Hence the 60,000 threshold) these are the same tax laws being brought in everywhere to try to counter multinationals who pay very little tax anywhere.

I'm not sure why you think local business should be put at a disadvantage to foreign business & multinationals.

[darryl]

I find myself in the position of agreeing totally with pwalker8. Not all that frequent, but welcome Are there no governments in this world that consider the practicality of collecting a tax when they legislate for it? Let's face it, Harry. Use tax is ridiculous because it is unenforceable, if not literally then because it would cost far more to administer properly and collect than the revenue it produces. Human nature is what it is. And bad laws, including practically unenforceable ones tend to bring the law and the legistlature itself into contempt. I suspect that there are very few taxpayers in the states concerned who do not ignore it. And if the tax administrations concerned are sensible they probably don't throw away too much money trying to collect. Nor would i suspect many successful prosecutions for evading it, though I'm sure there is an occasional conviction with huge publicity to encourage "voluntary" compliance.

It is regrettable that local businesses are placed at a disadvantage. The best solution is for governments is to relieve local businesses of the burden and raise their revenue elsewhere. Or better still in most cases, cut some unnecessary expenditure and do without. Certainly a token use tax which is widely ignored simply gives the appearance of having solved the problem without doing so. While separate jurisdictions exist and levy their own taxes this type of problem will continue to occur.

[HarryT]

Originally Posted by darryl

Let's face it, Harry. Use tax is ridiculous because it is unenforceable, if not literally then because it would cost far more to administer properly and collect than the revenue it produces.

Oh, I completely agree with you. I was merely using it as a counter-example to pwalker's suggestion that tax evasion is not widespread in the US. There is massive tax evasion with use tax, hence I would certainly not hold it up as a shining example of a good way to collect taxes on sales. The only sensible way to collect sales taxes it to do it at the point of sale. Any taxation system that relies on people voluntarily paying it is doomed to failure.

[John F]

Originally Posted by HarryT

Oh, I completely agree with you. I was merely using it as a counter-example to pwalker's suggestion that tax evasion is not widespread in the US. There is massive tax evasion with use tax, hence I would certainly not hold it up as a shining example of a good way to collect taxes on sales. The only sensible way to collect sales taxes it to do it at the point of sale. Any taxation system that relies on people voluntarily paying it is doomed to failure.

Isn't traveling to other countries and having to "declare" what you buy considered voluntarily?

[HarryT]

Originally Posted by John F

Isn't traveling to other countries and having to "declare" what you buy considered voluntarily?

Yep, and how many people walk through the "green" customs channel rather than declaring their purchases? Doesn't make it legal to do so.

There is, though, a difference between that and the sales tax/use tax situation. Unless you're going to have mandatory searches of everyone's luggage as they enter a country, the current system of relying on voluntary declaration backed up by random searches is probably the only practical way to do it. The US system of relying on voluntary payment of use tax, on the other hand, could easily be changed to a system whereby all retailers charge sales tax for online purchases, instead of the current rather odd system of only charging sales tax if the retailer has a physical presence in a state.

[John F]

Originally Posted by HarryT

Yep, and how many people walk through the "green" customs channel rather than declaring their purchases? Doesn't make it legal to do so. ...

I don't believe people are saying it makes it legal. You said:

... Any taxation system that relies on people voluntarily paying it is doomed to failure.

Hasn't this declaration been around for decades/centuries. Seems like a rather slow doom rate.

... There is, though, a difference between that and the sales tax/use tax situation. Unless you're going to have mandatory searches of everyone's luggage as they enter a country, the current system of relying on voluntary declaration backed up by random searches is probably the only practical way to do it. The US system of relying on voluntary payment of use tax, on the other hand, could easily be changed to a system whereby all retailers charge sales tax for online purchases, instead of the current rather odd system of only charging sales tax if the retailer has a physical presence in a state.

And people are arguing since there are so many variations of sales taxes, it isn't feasible; just like mandatory searches of people's luggage.

[HarryT]

Originally Posted by John F

And people are arguing since there are so many variations of sales taxes, it isn't feasible; just like mandatory searches of people's luggage.

Given that retailers who do have a physical presence in a state already have to do it, clearly it is feasible to do.