Internet Sales Tax Progress Report

[Tom Carlson]

There is GOOD NEWS TODAY

As a Director of Independent Florist Association, I have been involved with the Independent Business Forum to try and establish a level playing field by getting sales taxes collected from Internet sales.

BELOW IS A COPY OF A POSITIVE REPORT THAT CAME IN TODAY.

**QUOTE**
Victory in New York State!
Final Budget Includes Internet Sales Tax Provision
On Wednesday, April 9, booksellers and independent retailers in New York State received great news -- New York State's final budget includes the Internet Sales Tax provision. With the budget passing the Legislature late yesterday afternoon, it means that out-of-state online retailers now will be required to comply with New York State law and collect and remit sales tax on sales to state residents.

With the passage of the budget, New York State takes a significant step in establishing a level playing field for the state's retailers, a policy decision that is likely to be closely watched in other state capitols.

The victory is the culmination of months of intense lobbying by New York's independent booksellers and the American Booksellers Association, a campaign that included letters, e-mails, phone calls, and personal visits to legislators in Albany, the state capital. ABA's efforts included coordinating lobbying activities with other associations representing independent retailers in New York and working closely with the New Atlantic Independent Booksellers Association (NAIBA) and the Retail Council of New York State, which played a crucial role in face-to-face discussions with key elected officials in Albany.

"Independent booksellers -- indeed all independent retailers -- in New York are elated to hear that the new budget makes clear that equity and fairness are the guiding principles for the state," said Oren Teicher, ABA COO. "From the beginning, all we have asked for is an even playing field so that all retailers get the same treatment from New York. This has never been a case of enacting a new tax; rather, we have simply called for the equitable enforcement of existing tax law."

Teicher added, "New York booksellers should be immensely proud of what they have helped accomplish. Together with NAIBA and other independent retailers and with our friends at the Retail Council of New York State, we helped change the context of the debate and convince both the governor and the assembly to support our position. Further, we know that other states have been watching the debate in New York. The victory here will bolster the fight for e-fairness elsewhere, as we continue to work with booksellers and allies in other states." **END QUOTE**

 

[Mikey the Flower Guy]

may I ask, how it IS, that "enforcing" out of state online sales of printed material, is going to solidify the online perishable marketplace.
IF an online floral vendor, requests a "fruit basket" or "food basket" which is usually non-taxable, how will ANY system be able to "decipher" the differences?
I congratulate the efforts...it's an overwhelming victory, however, even an OREGON based business, with NO sales tax, cannot be expected to collect taxes for another state for it's sales, if it's NOT legal to do so, in that state!!

 

[bloomz]

Sorry but I don't see that as good news at all.

We like very much having no sales tax, thank you.

If you see having sales tax or not as an unfair advantage, trust me, we pay it elsewhere.

Or you can move to Oregon

Or change your state law to get rid of it.

It's like, yeah, just what we need in American, another new tax.

Like a(nother) hole in the head

 

[Tom Carlson]

Look at the big picture

This issue is about leveling the playing field between Internet Retailers and local Independent Retailers. If Order Gatherers are required to collect Sales Taxes for all other states they send orders to, I'd bet a lot of them would drop of out of the Order Gathering business.

This is not about flower sales. Florists are brothers/sisters with all other independent retailers. Independent Retailers have to start working together. The Internet Retailers are our competitors, BIG TIME.

This is not a new tax. It is collecting a tax that has always existed since Sales Taxes became a source of revenue for governments. It is collecting a tax that is being evaded. Tax evasion borders on dishonesty.

My store is less than 20 miles from Illinois. When a consumer from Illinois makes a purchase in Wisconsin and takes it with them, they pay Wisconsin sales tax. If I deliver the product into Illinois, neither the Wisconsin or Illinois Sales Tax is collected. Instead the Illinois consumer is supposed to report his out-of-state purchases on his Illinois State Income Tax and then pay the Sales Tax to the State of Illinois. That's a laugh.

Here is another viewpoint. When a consumer buys roses at my store, they pay the sales tax. When they buy roses sold by the Lions Club, they pay no sales tax. On top of that, the Lions Club is now a competitor to Independent Retailers. Incidental, the Lions Club is the largest rose seller in our city. The Salvation Army is the largest Geranium seller. But that is not what this post is about. This post is about a level playing field between retailers.

Here are the facts. The IRS estimates that Cause Marketing is 6 to 7% of GNP [Lions Club selling roses is an example of "cause marketing"]. THAT IS A HUGE AMOUNT OF SALES TAXES NOT BEING COLLECTED strictly because the playing field is tilted greatly to the Internet Retailers advantage.

How can any retailer be against having a level playing field?

 

[bloomz]

This issue is about leveling the playing field between Internet Retailers and local Independent Retailers. If Order Gatherers are required to collect Sales Taxes for all other states they send orders to, I'd bet a lot of them would drop of out of the Order Gathering business.

I bet they wouldn't.

Sorry Tom but you're dreaming. All the big order gathers are in states that already charge sales tax.

I'm just a little order gatherer, and I think the only one I know of that is in a no sales tax state.

But it might affect me.

I'd like to not see that happen. :headbang:

imagine that

strictly because the playing field is tilted greatly to the Internet Retailers advantage.

Sorry again but that sounds like sour grapes Tom - the beauty of the internet is you can be one too.

 

[Mikey the Flower Guy]

Here are the facts. The IRS estimates that Cause Marketing is 6 to 7% of GNP [Lions Club selling roses is an example of "cause marketing"]. THAT IS A HUGE AMOUNT OF SALES TAXES NOT BEING COLLECTED strictly because the playing field is tilted greatly to the Internet Retailers advantage.

How can any retailer be against having a level playing field?

NO retailer would be "against" a level playing field, however, I would NOT want to be the retailer, "identified" in laying the groundwork AGAINST the likes of the Lions Club, and "exposing" the organization as the "malaria" of retail business, in spite of it's "cause marketing" mantra!

 

[hcflorist]

If applied to the floral industry, I'd think it's got more potential to be a nightmare than a playing field leveler..

Assume you're in State A. You get an order from State B for delivery to State C. If the "Monkey See--Monkey Doo" thing comes to pass, as it always does, you're probably gonna have three different states wanting to collect tax on that one order. And the two that didn't get the tax on the first round are gonna want to add penalties and interest on top of that. It'll be up to the poor florist to either spend the money to fight or just pay up. And you know how that usually turns out.

Because most bureaucrats are rather uninspired types who are bureaucrats solely because they couldn't survive in the real world, guess who they're going to go after with their tax audits. So long as they can stay busy taking little guys to the cleaners, the big guys who can afford the big law firms won't get touched. I don't want auditors from 50 different states feeling like they have the right to walk in my door with assessments in hand any time they feel like it. Do you?

States can't level the playing field on internet sales. All they can do is muddy up the water. I'd think that if this thinking and strategy is applied to mom and pop florists, it could put more out of business than it would help.

We don't need more regulations and government. We need less.

 

[flower lady]

We collect sales tax on all orders we receive except from non profits and wire ins. We then pay that 6% monthly to the state of Florida. If your state has sales tax you should collect it and pay it to your state and if your state doesn't have sales tax than you don't have to collect or pay it. Very simple. The state in which the OG or internet business has there business would therefore be the recipient of any sales tax collected. I for one don't want to have to pay tax to any state but my own.

 

[CHR]

I found this concise summary of how NY crafted its law to embrace the nexus issue:

Apr. 11, 2008
New York Requires Amazon.com to Collect Sales Tax


Included in the state budget passed this week by the New York legislature is a provision that requires online retailers, including Amazon.com, to collect state and local sales taxes.

Independent booksellers and other retailers fought hard for the measure's passage, which eliminates a long-standing bias in tax policy. For more than a decade, local retailers have had to tack an extra 8 percent on to every sale while competing against a formidable rival—Amazon.com—that did not have to collect this tax.

"From the beginning, all we have asked for is an even playing field so that all retailers get the same treatment from New York," said Oren Teicher of the American Booksellers Association (ABA). "This has never been a case of enacting a new tax; rather, we have simply called for the equitable enforcement of existing tax law."

The provision's passage is the culmination of months of intense lobbying by the American Booksellers Association and its member bookstores, along with many other independent retailers and their trade associations, who wrote letters, made phone calls, and visited lawmakers at the state capital.
New York is the first state to require out-of-state internet companies to comply with its sales tax law. The change is being closely watched by lawmakers in the other 44 states that have a sales tax.

Under a 1992 Supreme Court decision, states are not allowed to require an out-of-state company to collect sales taxes unless that company has a physical presence, such as a store or warehouse, in the state. This physical presence is referred to as "nexus."

New York has now changed its tax regulations to say that a retailer with more than $10,000 a year in revenue has nexus if it has sales affiliates in the state. Sales affiliates are companies that receive a commission for promoting Amazon.com's products and driving customer traffic to its site. The company has thousands of sales affiliates nationwide.

Amazon.com may challenge the law in court and seek an injunction to prevent its enforcement. Echoing the reasoning employed by the Supreme Court in 1992, the company has argued that having to comply with 7,500 local taxing jurisdictions across the country constitutes an undue burden on interstate commerce.

But the Supreme Court issued its ruling in the context of mail order catalog sales several years before the dot-com revolution. Software now makes it relatively simple for retailers to collect state and local sales taxes. Most national retailers, including Wal-Mart.com and Target.com, do.

Indeed, Target's online operation, which complies with sales tax laws nationwide, is actually run by Amazon.com.

Last year, Amazon had sales of $10.7 billion and reported a profit of $190 million, or just under 2 percent. Sales taxes in most states range from about 4 to 9 percent.

The change to New York's sales tax policy is expected to boost state revenue by $47 million.

Affiliate marketing creates a nexus! Love it! (Of course, the Supreme Court may think otherwise.... Count on this one to be litigated for a long time.)