Is the dam about to burst with sales tax being levied on Internet orders?

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Simon Says

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Apr 1, 2011
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Saw the below on Bloomberg -financial news website- about Amazon apparently reaching a tentative agreement with California state authorities that "...lets it hold off on collecting taxes on Internet purchases until 15th Sept 2012."

http://www.bloomberg.com/news/2011-09-08/amazon-reaches-tentative-ca-taxes-accord.html

IF Amazon does end up having to charge CA sales tax on Internet purchases going to CA, I imagine that all states with sales tax will start demanding that product purchases from Amazon for customers in their state pay the appropriate tax.

If that happens, surely, what is to stop states demanding sales tax revenue from all Internet sales, including from the likes of the WS and OGs.

Sounds as if it is potentially good news for florist B&M.

Wonder what will happen and will Amazon capitulate to California.
 
I think it is. Sales tax will be the new income stream, billions of dollars on there. When someone orders through our websites, we pay the sales tax. They will go biserk if that happens. B & M are already there, so we can sit back and just watch the changes come.
 
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And you can bet our State Association will be petitioning the State Sales Tax Division to make sure that corporate OG's are paying their sales tax to our state!! We're pretty sure they haven't been and we're investigating this further. They say they're collecting Maine Sales Tax, they better be paying it to the state.
 
This is a key point to raise with any representative you have contact with!!! Most, if not all B&M shops collect and pay sales tax on every purchase, Internet or otherwise.

Imagine the bookkeeping nightmare thus could create for OG's.

Remind your reps how much money your state is losing to these folks and it may hasten their demise.
 
This will be interesting to see, in the case of Amazon how will California audit what enters their state?

Will they expect Amazon to voluntarily submit numbers?
Will they expect the courier companies to report all incoming packages?
Will they ask banks to report out of state purchases?

What I can see coming out of this is one more level of bureaucracy, the last thing that a state like California that is financially out of control needs, in fact it will probably make good political spin with politicians quoting the number of jobs created (tax collectors, tax auditors, etc.). In fact the timing couldn't be better, after all now that US unemployment levels are at record highs doesn't it make sense to ensure that every possible penny is taken from the consumer in the form of taxes.

Forget the OG's and WS's for just a moment and think about the motive and the consequences here folks. As taxpayers (I assume everyone on this board is one) why on earth would you celebrate over the fact that the government has closed one more loophole and has found a way to grab even more of your cash. This grab of taxes would affect all levels of commerce (ie. bookselling, electronics) not just the miniscule amounts that are not paid by OG's and WS's, the net result would be to drive up inflation in an already fragile economy.

The good news is that as florists you all have access to sharp knives, that way it should be less painful when you cut off your nose to spite your face.
 
Amazon has had their fun long enough and to give them another year is bull @@@@. What do they need to hold off for? They can't figure out how to program their website?

Collect the fricken tax like everyone else does. It's not like it cost them anything except for leveling the play field with all the other real BM business out there.

They are probally goin to pull the crap that some of those online floral companies that didn't want to be labeled florist.

What a bunch crap.
 
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It's more complicated then just Amazon as a company programming their website. It's the small businesses that sell on Amazon collecting and filing taxes in states that they do not live in. Think about this. When a someone in Texas buys something from you and you deliver it to your town, you pay your local tax. Now Texas wants a piece of that because the original buyer lives in Texas and they want to raise money. Now you need to collect tax and pay tax to Texas... sure that's great, what is the sales tax in that town. How do you get the tax form, where do you send it to. Do you have enough that you need to send quarterly taxes, or can you just file something at the end of the year. This is what the small businesses that sell on Amazon and eBay will have to deal with. This is what we could all deal with based on some of these new regulations. It's not to that point yet, it's where the goods are being delivered that counts right now.. but just wait, if it continues it will also be where the sale takes place.

I am all for paying my fair share. I also want the big internet companies to pony up. We all pay taxes they should too. But before we rush in we need to take a look at how this may one day effect us.
 
My business is in one state and I live in another state. I deliver a good bit to the state I live in but collect the tax in the state where the sale was made, shouldn't really matter where it's going, you should collect tax where the sale occurs or where your license is registered. If you are running a business on the Internet, whether its OG's or EBay, they should have to pay taxes. If you have a business license which is state issued, then that's where you should pay your taxes.
 
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That negates the Order Gatherers from owing sales tax to the individual states. That would mean if they are based out of say India then they would not have to pay sales tax ever. See it's a tricky thing this internet.
 
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We're all tax payers in some form or other and we're all definitely consumers.

If there is tax on Internet (or print catalog) orders in the future where there hasn't been in the past, yes, it will hurt us as individuals. However, it may also get us, as the public, to re-evaluate aspects of our life style and choices. Maybe the public will be more inclined to shop locally at B&Ms - and B&Ms can include your local florist through to the big boxes - after the proverbial attempt at levelling the playing field.

I shed not a single tear for the WS, OGs or any other entity that has exploited, to any degree, this taxation loop-hole that appears as if it will be closed. As a florist, we collect our state sales tax if sending out of state, so why shouldn't, for example, TF if taking the money for an Internet sale on their website that involves out of state, for them, sale? And, if you as a consumer don't like this more equitable and judicial approach, then you can either learn to live with it or lump it.
 
flowersofkw said:
Where do I get accurate figures on what my state is loosing to OG?
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I don't think you can, they have the numbers but won't release them and I really don't think they track by state. My angle next year will be the total number of orders (collectively) and then total dollars figure (my estimate is 3 - 5 billion) are either dropped shipped or internet sales. So 6% of that number (even divided 50 ways) make any politician excited........
 
I find this subject fascinating as we over here pay to our central government. Yes we are a tiny country in comparison to the US but I find it amazing that every state to some degree is almost like a country in it's own right. With different sales tax rates , different laws and so on. When our taxes (of every kind) are paid the central government hands out money to each region on a number of different factors so the local council has funds for their area. Whether you are an internet based company or not, if your gross turnover is over a certain amount each year you pay regardless of being BM or not. You cound work from home and still have to pay if your businesses turnover reaches that level. that threshold.
 
In all honesty I would love if our internet sales where done this way. Write one check to the fed and let them divvy it up between the states. What would be better if that was say a flat tax of 10 - 12% and it drove the customers back to B&M stores!!!! Our state tax here at our local level is 9% so it would not effect our sales as much I don't think. They would gladly pay an additional 1 - 3% for the convenience of ordering online. That would take away all of the fighting over who gets what, who pays what, and who doesn't have to pay. That would make it even across the board. But what do I know, I'm just a starving artist :)
 
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Amazon is doing the dance with our state legislators right now in Tennessee. They want to build a distribution center here in Chattanooga that would bring in about 600 full time jobs and up to 5000!! holiday jobs. Interestingly enough, it is our Republican leaders who are giving them trouble over the TN sales tax collection because our former Governor brokered the deal and he was a Democrat.

The US Supreme court has already ruled that it is unlawful for any state to attempt to claim tax on products delivered out of state, so that is not likely to change in the near future. The battles going on with Amazon won't affect the WS OG problem much IMO because, for example, FTD.com will only be compelled to collect sales tax on flowers delivered in Illinois. That won't stop them from marketing in my state. Actually, all of the OGs will probably just move their headquarters to Wyoming to minimize the problem. That's great news for all the florists in Wyoming.

BTW, as much as it would hurt my city to lose the new Amazon center, I am for closing the sales tax loopholes. Every year I see more check-cashing places and less legitimate businesses. We need to be responsible consumers and well as responsible merchants
 
FTD adds sales tax, I believe, for all states that collect it. This is, I imagine, something to do with their parent company and their "business presence" for want of a better term in all the states.

I imagine that if it appears a significant number of states are able to -or appear able to- tap the Internet and catalog transaction sales tax revenue stream, Congress will make a move to legislate to ensure that there is no judical appeal up to the US Supreme Court. This would -or is that should?- clarify the situation as to whether the tax is levied based upon the location of the recipient, sender or company taking the principle payment.
 
On the Illinois tax forms this year there was a question that went something like this ~ Did you purchase any items out of state for use in Illinois. If so how much was the combined purchase. WHAT THE.... So if I buy jeans on my shopping trip to St.Louis, I have to pay Illinois to wear them??? Sorry but that just does not jive with me. I am hoping this is not going to be a trend. I paid tax on them in MO when I purchased them, I should not have a 2nd tax to wear them. That is, I do believe, double taxation.
 
secretgarden said:
In all honesty I would love if our internet sales where done this way. Write one check to the fed and let them divvy it up between the states. What would be better if that was say a flat tax of 10 - 12% and it drove the customers back to B&M stores!!!! Our state tax here at our local level is 9% so it would not effect our sales as much I don't think. They would gladly pay an additional 1 - 3% for the convenience of ordering online. That would take away all of the fighting over who gets what, who pays what, and who doesn't have to pay. That would make it even across the board. But what do I know, I'm just a starving artist :)
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Maine has this, it is an "honor system" request that if you purchase on the internet and don't pay sales tax that you "pony up" to your state. BUT - if I purchase something and it does show State of Maine Sales Tax (most sites do) they @@@@ well better pay that to my state....
 
secretgarden said:
In all honesty I would love if our internet sales where done this way. Write one check to the fed and let them divvy it up between the states. What would be better if that was say a flat tax of 10 - 12% and it drove the customers back to B&M stores!!!! Our state tax here at our local level is 9% so it would not effect our sales as much I don't think. They would gladly pay an additional 1 - 3% for the convenience of ordering online. That would take away all of the fighting over who gets what, who pays what, and who doesn't have to pay. That would make it even across the board. But what do I know, I'm just a starving artist :)
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Here in Canada, we have a HST tax, that is collected at the point of sale and "flowed" through the various governments via federal tax system,and actually "benefits" (sic) small business in how it is handled, and it really does much more efficiently than multiple tax base system!
 
Maybe it is time for a national pool tax for internet purchases...maybe the feds should regulate a national sales tax and split the amount between all the states so that every state benefits from the internet sales...something has to be done before we all have no fire depatments, police, or schools...raods and bridges in working order etc...I think that having taxes paid to each and every state is silliness and will never be able to be governed or controlled, but a national sales tax can be..it would be one department controlling all companies with internet only sales and then split up among all the states, not sure how the split should occur but that sounds like a better plan that the impossible one of trying to have national companies pay 50 different sales tax bills...that is just plain stupidity our state tax system can't even keep up with individual iun state companies who aren't paying their sales tax nevermind virtual companies in the 100o's not paying individual sales taxes to each state..
 
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