Streamlined Sales Tax and Wire orders

[RWK]

There is a item that is on several states government agendas called the SSTP ( Streamlined Sales Tax Plan)

Some of you may or may not be aware of this.....What this is attempting to do is to regulate and streamline the amounts of sales tax. How this affects us as florists is that we would not only need to collect our own states sales tax on a wire order that we sell, but also the sales tax of the state we are sending the order to.

According to a news brief I got earlier today from my Teleflora Rep....This does not yet apply to us for another two years.

From what information I have gleaned.......This would apply to us whether we were members of a wire service or not.

Get with your local representatives,,,,explain the situations, and fight like hell to keep us exempt from this.

If you need a numbers example to understand this concept...I have added one to this posting.....using a $20.00 retail product, 10.00. delivery fee, 5.00 transmission fee, and a 5 percent sales tax. The state we are sending the order to has a 6 percent tax.

We have a 36.75 total amount. Under the SSTP this figure would be 38.96.

We would have to somehow send to that recieving state the amount of the 6 percent tax.

it is going to create a huge accounting mess.

FIGHT THIS THING.

 

[BOSS]

BOSS's Quote of the day!!

Get with your local representatives,,,,explain the situations, and fight like hell to keep us exempt from this.

it is going to create a huge accounting mess.

FIGHT THIS THING.

This thing will create a nightmare for every florist in the country, not to mention the taxing authorities.

I wonder how it'll be for the online guys that do not collect tax? Another good thing to bring up to your reps.

 

[hcflorist]

My guess is that, if actually enacted, it will be impossible to enforce. Especially on internet sales. And that complete inability to fairly enforce sales tax laws on everyone just might force states to abandon state sales taxes as a source of revenues.

Might be that it's an ill advised attempt to fix what states don't want to admit but already know. And that is that there are billions of dollars that the states are losing in sales tax revenues due to cyberspace commerce and they don't have a clue as to how to bring that under control. And there probably is no way to bring it under control.

 

[steve]

This law became effective in Vermont January 1st of this year. Basicly if a delivery location has a local sales tax on top of our state sales tax we must collect that extra tax. Also if we were on a boarder with another state that had a sales tax and we made deliveries into that state we would have to collect that states sales tax. ( that state must be a memeber of the streamline sales tax group ) ie N.Y. has a sales tax but is not memeber of the group so we are not required to collect their sales tax. But wire service orders are exempt from this streamline sales tax issue.

 

[steve]

The purpose of this law was to go after large catalog companies that ship products into states yet do not pay sales tax to those state I personally believe this law will hurt Vermont more then it helps hoepfully they will release figures on the impact of this law soon>

On a positive note if a direct from the farm shipper like Pro Flowers is located in a state that belongs to this group then they would have to start collecting sales tax on all the products they ship into member states and it would take away a sales advantage they have.

 

[hcflorist]

The purpose of this law was to go after large catalog companies that ship products into states yet do not pay sales tax to those state I personally believe this law will hurt Vermont more then it helps hoepfully they will release figures on the impact of this law soon>

On a positive note if a direct from the farm shipper like Pro Flowers is located in a state that belongs to this group then they would have to start collecting sales tax on all the products they ship into member states and it would take away a sales advantage they have.

I doubt if it will have much effect on the biggies. They'll just pull a "halliburton" and move their headquarters to an exempt state. Or more likely offshore so as to be even more unreachable by the enforcers. They can afford to do this. And, given the amount of money probably involved with the biggies, they can hardly afford not to.

 

[divine-designs]

Streamlined Sales Tax Plan....

This is all about 'sourcing' sales tax

http://streamlinedsalestax.org/

It is fair and equitable, and will offer you many atvantages when your state signs up, assuming all 50 states sign up...

 

[carol]

Coming from a state that has no sales tax and no income tax I don't think our state would sign on.. and I just don't understand how this would be administered?? How and why do I look up to see what a certain state has for taxes.. and if I do collect them how do I forward this money..must I make out 50 separate checks and mail them or do I mail one check to some sort of clearing house which then takes a cut of the $$ and somehow tell them which states get what amount of money.. and who pays for all my time and technology to do this?? in the end I think most small businesses and lots of big businesses will just forget about it.
there is no motivation for me to do any of this work.. I will not benefit, my state will not benefit..
In Canada each flower shop and I guess other businesses must collect this kind of tax for the province it is to be delivered in.. and at least in the flower business this tax is collected by and distributed by the wire services.. separate line items on the wire service statement each month. Having taught florists how to administer and reconcile this tax up in the great North..it is not easy and Canadians are way more sophisticated about these things than us..and there are far fewer provinces than we have states. I know many if not most florists do not do this or do not do this right.. I have seen reps try to explain it and the eyes just glaze over.
In Canada the tax is collected only once.. at the sale.. and the sending florist charges tax on his services only, not the product , for his province and then charges the correct receiving province tax on the product and any delivery fees used in that province..
So does this so-called stream=lined tax do this also or does it charge taxed on the total bill twice.. once for each state involved?? and then what happens when the clearing houses get involved?? they offered a service (in Ill and Ca and NY for the big 3) so is this service than taxed by their states and when is this tax assessed? with our luck as florists it will be after the fact and on our bills long after the customer has gone so it basically will be a tax we can not pass along...
I just don't see how this will work and why it is not discrimating against our business.. just another way for the taxman to pick our pockets for no return to us
Sorry for the rant..but remember I started out saying I was from a state that doesn't tax this way.. and we try not to send too much money to the statehouse because they just make up more ways to spend it.. we like to keep it all at town meeting and vote on stuff that affects us andwhat we care about and nutz to the bureaucrats

 

[prestonway]

In Canada the tax is collected only once.. at the sale.. and the sending florist charges tax on his services only, not the product , for his province and then charges the correct receiving province tax on the product and any delivery fees used in that province..

Almost, Carol. Your forgiven...after all it's been 4 years since you installed Advantage for us!

Federally, we have the GST, which stands for the Goods & Services Tax. As stated, this tax must be charged on both the product AND the delivery on ALL sales within Canada. It is also charged on any service charges, if applicable.

Provincially, it all depends on where you're located & where it is going!

We are located in British Columbia, so we charge the provincial tax on product & delivery on orders to be delivered in B.C.

If the order is going to Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Prince Edward Island, the Yukon, & the North West Territories, there is no provincial tax charged.

If the order is going to a province beginning with the letter "N" (Newfoundland, Nova Scotia, & New Brunswick), there is a Harmonized Sales Tax (HST) of 14% charged on the product & delivery.

If we have an outgoing order to the U.S. or internationally, we don't charge any tax on the product or delivery, but we must charge the GST on any service charge.

Every 3 months we have to remit to the feds the difference between any GST we have collected & the GST paid. We receive no commission for providing this service to the feds.

Every month, we have to remit any provincial tax collected, but we don't get to claim any provincial tax paid. We do receive a commission of 3.3% of the tax collected.

And this is why we have a POS system so we don't have to think this through every time!!!

Simple, don't ya think???

 

[carol]

See what I mean about the Canadians being more sophisticated than us (read smarter here)... just imagine if we in the USA had to do all this..
talk about a tax rebellion... there would be more than spilt tea floating in the harbor!!!!

 

[RWK]

Streamlined Sales Tax Plan....

This is all about 'sourcing' sales tax

http://streamlinedsalestax.org/

It is fair and equitable, and will offer you many atvantages when your state signs up, assuming all 50 states sign up...

How can such a thing be an advantage to us and to our customers?

I am assuming you are a retail florist who sends and recieves wire orders. If not, then you need to understand how the sending and recieving of orders work.

 

[BOSS]

How can such a thing be an advantage to us and to our customers?

I am assuming you are a retail florist who sends and recieves wire orders. If not, then you need to understand how the sending and recieving of orders work.

No matter ***HOW*** this thing is set up, it *****WILL***** be a nightmare to handle...

I might just have to move back underground....set up another company in QB and go covert

 

[Connie]

Groan........more headaches, more paperwork! I feel ill...

 

[Rhonda]

Maine is listed as the 48th worst state to do business...

and I so believe it. We have had a "use tax" on our forms for sales tax. We are supposed to add internet purchases or out of state purchases from those entities who don't pay sales tax to the state. They even went as much as to send out notices of "amnesty" to those who wanted to pay "back sales taxes" for about 5 years, I believe. As a business with a sales tax number, I don't purchase and pay tax for use in my shop, yet my state hounded me with reminders to pay the use tax to avoid penalties. Penalties??? Amnesty??
I'm sure that Maine either is a member or will certainly become a member so they can spend more money on garbage programs.

 

[divine-designs]

How can such a thing be an advantage to us and to our customers?

....Rick King

It can give YOU an advantage in YOUR marketplace...

For instance...

This company in the twin cities follows the streamlined tax guide and MN tax law to the letter of the law...

http://bachmans.com/ -

try to order for flowers out of MN no sales tax - good for customer - good for them - last time I looked at dunn and bradstreet they were reporting 21 million in floral sales... ( a few years ago... )

now to a corporatly run group of twincities shops that are not following the law - needlessly and possibley illegally - collecting this tax, robbing their clients on every out of the state of MN order (free money for mn dept of revenue more work for the front office) http://stemsandvines.com/ - of course this is a tf site - what else should they expect

Deliver on 7/17/2007 to:Mr bob smith 1234 robert street los angeles, CA 90210United States218-555-5555 Occasion:Sympathy Message:re2rewqrewre rerewqrereqwreqwrewq ItemSummer Salsa - As Shown: $99.95 Delivery Charge: $13.00 Tax: $7.91Subtotal: $120.86

 

[David]

Online Sales Tax- Boston Globe Article

Online sales tax a priority for states
Simpler rules could expedite collections

By Hiawatha Bray, Globe Staff | July 16, 2007

Every year, Americans save billions in sales taxes by buying merchandise on the Internet rather than at retail stores. But state and federal legislators are working together to close the loophole and generate billions in new revenues for state coffers.

GOP Senator Mike Enzi of Wyoming has proposed legislation that would encourage states to adopt a simplified sales tax code drawn up by a consortium of 45 state governments.

Under the Enzi bill, states that embrace the simplified code could compel out-of-state companies to collect sales taxes when they sell to residents within their borders. This would let states cash in on taxes they often miss when a citizen buys an item by phone, through a catalog, or over the Internet.

According to a 2004 study from the University of Tennessee, between $21.5 billion and $33.7 billion in sales tax revenue will be lost to the states in 2008 if they don't collect taxes from online sales.

"States are being harmed by missing out on this revenue," said Enzi's spokeswoman, Elly Pickett -- especially a state like Wyoming, which has no income tax and relies mainly on sales taxes for revenue.

A resident of Massachusetts who buys a computer from a local retailer is charged the state sales tax of 5 percent, or $50 on a $1,000 computer. If the consumer buys the machine online from an out-of-state company, he's still legally obligated to pay the tax. But hardly any citizen pays unless the retailer collects, and most out-of-state retailers don't, thanks to a pair of US Supreme Court rulings.

The high court held that states can't demand sales taxes from out-of-state retailers who sell through printed catalogs, by phone, or over Internet unless the retailer has a physical presence in the state. The court also said Congress could pass legislation to require out-of-state sellers to collect the taxes.

There are about 7,500 state and local bodies that charge sales taxes, spread across 45 states; five others do not charge sales taxes. Not only do these taxing bodies set different rates, but many states have complex rules about which items are taxable. For instance, in Massachusetts band uniforms are tax-exempt, but football uniforms are not. Similar distinctions exist throughout the country. A law ordering retailers to comply with so many different rules would result in a bookkeeping nightmare.

But state governments want to start collecting the revenue they're losing. So for the past seven years, state tax officials have worked to draw up a simplified sales tax system. Twenty-two states have committed to adopting the system, and 15 have already changed their tax laws to comply with it.

Under Enzi's bill, any state that has adopted the simplified system could order Internet retailers to collect sales taxes when they sell to consumers in those states.

Massachusetts State Senator Richard Moore, a Worcester Democrat, has proposed legislation that would begin the process of moving Massachusetts to the simplified system. If Massachusetts joins that system, and Enzi's bill passes in Washington, Moore estimates that the state's sales tax revenues would increase in 2008 by about $350 million.

Moore said the current system puts brick-and-mortar retail stores at an unfair disadvantage. Customers often shop at a store, but make their purchases online to avoid the sales tax. "The business has spent all the time and energy on the sale, and then [they] don't get the sale," Moore said.

But opponents say collecting sales taxes on the Internet could stifle the growth of online commerce and weaken the economy.

"We would view it as a real burden on the growth of companies and of the Internet," said Mark Micali, vice president of government affairs at the Direct Marketing Association in Washington.

Hiawatha Bray can be reached at [email protected].