Market Place Fairness Act

[McGeesEquip]

If you are a internet shopper, and like to purchase items from other businesses outside your state. You will want to research this "Market Place Fairness Act". This is a bill that has already been passed by congress and is now being presented to house members. The bill will require any business selling on the internet to collect sales taxes on purchases from customer even if the customers are not in their selling state. If internet users do not want to start getting charged a sales taxes on all there internet purchase time to contact your house members.

I have been asked to go to DC with a big lobbying group to support the independent business group, but I feel that I am only 1 person.

Thank You

 

[3930dave]

Thanks for posting.

Marketplace Fairness Act - Wikipedia, the free encyclopedia

Rgds, D.

 

[GManBart]

If internet users do not want to start getting charged a sales taxes on all there internet purchase time to contact your house members.

There are two slightly differing interests here. One, online retailers don't want to deal with the hassle of making sales tax payments to all 50 states, because it would be an administrative nightmare. Two, consumers want to continue buying things online, without paying the tax that they are already legally required to pay (differing terms, but it's usually called a "use tax"). The fact that the law is hard to enforce, and rarely pursued makes people forget it's still a legal obligation. It just so happens that both retailers and consumers generally agree they don't want the law to change, or to be enforced, but for different reasons.

I'd be willing to bet a paycheck that if they changed the proposed legislation so that online retailers got to keep 1% of the sales tax collected, as an incentive for helping out the states, it would have already been pushed through both houses of Congress.

 

[Tkblacktail]

"Market Place Fairness Act" I have heard about this "moving through". I wonder what else is "moving through" amidst all the scandals....

I think this tax will run more jobs and companies out of the USA; we must have too many....:ashamed:

Fairness to who?

The local businesses who loose revenue because their state has a sales tax and locals shop elsewhere? Maybe.

The Shoppers? Perhaps the local shoppers who like to pay taxes (via acquiescence) and think we should submit? Maybe.

The government(s)? Yes, Yes, and Yes! Fairness to the government; they work hard for the tax revenue(s).

This tax issue looks a lot like the conflicts between the main-street shops and the suburban super-stores; I wonder which state(s) are behind this act.

Since I have NO faith in Oregon's legislators at the national level (telling them what is wrong with this act is actually supporting the act to them; positive feedback per se), I'll stop buying online before I pay online taxes.

Robbery!

 

[RBA50]

Traskblacktail-
This will not affect you in any way, unless you are operating an internet sales company that sells outside of Oregon. You live in Oregon, Oregon has no sales tax. This just means that I, and everyone who lives in a state that has sales tax, will have to pay sales tax on every online purchase at the time of purchase, rather than our state government trusting us to pay it as "Use Tax".

As to which states are behind it, all the states with sales tax.

The time for you to worry will be when the federal government decides to start charging sales tax, or "value added tax", or some other type of tax on the sale of goods. But then, it will apply to all sales, not just internet.

 

[RBA50]

Not that I agree with this bill, but legally, if you live in a sales tax state, you are supposed to be paying the sales tax even if the seller doesn't collect it. This bill will force the seller to collect it for the state, just as the brick and mortar stores within that state do. It will be a major PITA for the small internet seller to deal with the differing sales tax laws of the over 40 states that have sales tax, which may cause some of them to stop doing business out of state, or altogether. I haven't read the bill, but I think I heard there may be some exemption for the smallest businesses, say those that do less than X amount of dollars per year. On top of the state sales tax, many states allow counties, and in some cases cities, to also collect sales tax. This will add whole other complications for the seller to determine the correct rate to charge,and then to report.

I used to operate a business in NY. I didn't do internet sales, but did sell out of county, and also on occasion in PA. I was required to report (and submit) the amount for each county, and also to file in PA if I had sales there during any quarter.

Once this passes, some software company is going to make a bundle selling sales tax software which will be capable of dealing with all this based on shipping address. I'm betting it's already being written, since Amazon and several other big retailers already have been forced to do this by many states.

 

[Tkblacktail]

Traskblacktail-
This will not affect you in any way, unless you are operating an internet sales company that sells outside of Oregon. You live in Oregon, Oregon has no sales tax. This just means that I, and everyone who lives in a state that has sales tax, will have to pay sales tax on every online purchase at the time of purchase, rather than our state government trusting us to pay it as "Use Tax".

As to which states are behind it, all the states with sales tax.

The time for you to worry will be when the federal government decides to start charging sales tax, or "value added tax", or some other type of tax on the sale of goods.

10-4 on Oregon's sales tax and not worrying but we all suffer-more at the hands of the aggressive State and Federal Enterprise Architecture Programs (S/FEAPs).

Rant Alert: I love it here but we have to order nearly everything at this end of the Oregon Trail. We pay for the shipping because much of the "dirty" manufacturing-base has been "taxed" away to the other corners of the country (NIMBY). Oregon exempts businesses (like Intel & Nike) from certain taxation(s) when they sell their goods "out of state", but they "hammer" the businesses who sell locally (taxes on property & gross income), and they do not support/protect local businesses from neighboring states (with sales tax) who come after them for not charging non-resident customers & paying taxes to the neighboring states.

Something has to moderate this aggressive government cycle.

 

[Midniteoyl]

Traskblacktail-
This will not affect you in any way, unless you are operating an internet sales company that sells outside of Oregon. You live in Oregon, Oregon has no sales tax. This just means that I, and everyone who lives in a state that has sales tax, will have to pay sales tax on every online purchase at the time of purchase, rather than our state government trusting us to pay it as "Use Tax".

As to which states are behind it, all the states with sales tax.

The time for you to worry will be when the federal government decides to start charging sales tax, or "value added tax", or some other type of tax on the sale of goods. But then, it will apply to all sales, not just internet.

When did Oregon not have a sales tax? I remember in the late '90s I had to charge a .5% 'sales tax' to anyone ordering from and shipping to Oregon.. Course, I didnt sale to there then

 

[Bird]

On top of the state sales tax, many states allow counties, and in some cases cities, to also collect sales tax. This will add whole other complications for the seller to determine the correct rate to charge,and then to report.

When my brother was a Matco Tool Distributor with a relatively small area to cover, he had EIGHT different city sales tax locations in addition to the state to collect and report. I think, (certainly don't know for sure) that the law currently being considered would only be for state sales taxes and not include the city taxes, but if it includes city taxes, there would definitely be a need for software that would rival TurboTax income tax software in complexity.

 

[300UGUY]

When my brother was a Matco Tool Distributor with a relatively small area to cover, he had EIGHT different city sales tax locations in addition to the state to collect and report. I think, (certainly don't know for sure) that the law currently being considered would only be for state sales taxes and not include the city taxes, but if it includes city taxes, there would definitely be a need for software that would rival TurboTax income tax software in complexity.

I really don't see that as a big hurdle for the software folks. I think TurboTax is much more complicated than that already. I guess it really comes down to the brick and mortar question? In my case I am not shopping on the net to avoid taxes, but for convienince, I really like not having to drive all over to get stuff!

 

[Midniteoyl]

I really don't see that as a big hurdle for the software folks. I think TurboTax is much more complicated than that already. I guess it really comes down to the brick and mortar question? In my case I am not shopping on the net to avoid taxes, but for convienince, I really like not having to drive all over to get stuff!

Ditto.. that and usually cheaper. Even if taxes are added in.

 

[quicksandfarmer]

I really don't see that as a big hurdle for the software folks. I think TurboTax is much more complicated than that already. I guess it really comes down to the brick and mortar question? In my case I am not shopping on the net to avoid taxes, but for convienince, I really like not having to drive all over to get stuff!

There are something like 15,000 jurisdictions in the US that charge sales tax. Not only does each one have its own rates, they each tax different things. An extreme example: Montgomery County Maryland charges a five cent tax on bags. There are some exceptions:

Retailers are not required to charge for the following types of carryout bags:

Bags used to hold prescription drug(s)
Bags which are sold for initial use as yard waste bags, pet waste bags, garbage bags, dry cleaning bags, or newspaper bags
Bags provided by a seasonal stand or street fair stall such as a farmer痴 market, yard sale or 登ccasional retailer (defined in the law as "...a retail establishment that engages in the retail sale of goods no more than 6 days in a year.")
Bags used to package a bulk item or to contain or wrap a perishable item
A paper bag that a restaurant provides to a customer to carry prepared or leftover food or drink from the restaurant

(Details are here: FAQ for Retail - Bring Your Bag)

Note that the tax is based both on the item's type and its intended use.

So not only do you have to know all 15,000 tax jurisdictions in the country, you have to know how the tax rules in each change depending on what you're selling, and in this case, what its intended use is. A "turbo-tax" type program would have to know about every conceivable good or service that could possibly be sold. It's a huge problem.

 

[McGeesEquip]

Joe (A) goes to web site (B) to purchase an item from Bob (c) that is listed on web site (B). Joe (A) pays Bob (C) for the product and also pays Bob (C) an internet sales tax (Example 6%) for the product. Bob (C) now has to pay the web site service company (B) a 6% tax for the service of selling the item on web site (B). Bob also has to pay to the state that the purchaser lived in the 6% sales tax.

 

[Bird]

In my case I am not shopping on the net to avoid taxes, but for convienince, I really like not having to drive all over to get stuff!

I only buy online when it's something I cannot find locally or, on very rare occasions, something is considerably cheaper online. Whether or not I am charged sales tax doesn't enter into my decision at all.

I don't guess any of us likes to pay taxes, but is it fair for your local store to have to collect sales tax while an online retailer does not?

 

[BXpanded]

So not only do you have to know all 15,000 tax jurisdictions in the country, you have to know how the tax rules in each change depending on what you're selling, and in this case, what its intended use is. A "turbo-tax" type program would have to know about every conceivable good or service that could possibly be sold. It's a huge problem.

I understand the states desire to collect the revenue. I think that if it has to happen, a single flat rate tax on internet sales would be more realistic. At most, remit to the Feds and let them distribute to the states. The state could then distribute to the counties, cities, etc.
If you purchase something from your local Sears Store, the clerk jut rings up the amount and the appropriate sales tax is added. They are always taxing at the same location, so it's quite easy. With the above mentioned 15,000 jurisdictions, it would be a much more difficult proposition and could really slow the process of just finding the "out the door" price.

If a jurisdiction in California, for instance, decided that a North Carolina company wasn't remitting all that is owed, the company would have to send a representative to California to attend a hearing. Lawyers would necessary be involved and we know how that cost spirals. That could happen dozens of times in different jurisdictions. Businesses can't handle that cost without price increases. Additional costs would be encountered for some regulatory groups to do audits and enforcement. As the proposed law is now, the consumer would be picking up the tab for the taxes, the cost of the software and maintenance, and the cost of at least, an additional employee to do the actual data entry and pay the bills.

 

[TCJatko]

As a general rule of thumb, I find that any congressional act generally results in the opposite effect, that is, the "Market Place Fairness Act" would result in LESS fairness in the marketplace (see Affordable Care Act).

 

[TerryR]

In theory I totally agree with the move to force sales tax collection for Internet sales. It makes no sense that buyers can evade legally owed taxes because the happen to buy it from someone who has no "physical presence" in the state, but do when they buy from someone who happens to have a warehouse in state, or actually maintains a store there and employs people there.

The details however are much more difficult. I have self-published a book that I sell on Amazon, selling $200-$300 worth a month across the country. I do pay sales tax for sales in my home state, which is a total pain because I have to figure out which city or county the buyer is in to get the tax right. What if I had to do that across the other 49 states? And deal with exceptions for certain items, tax holidays, etc. that differ by state?

Then it gets worse - I'd have to register as seller in each state where I might have a buyer. And the rules for that differ by state, and are ridiculous for a small seller. Like having to file quarterly reports, even when there are no sales in the state (in 50 states every quarter??). Some require deposits - I'd have to deposit $50 or $100 in some states to insure I'd actually pay the $2 or $3 I'd owe every two or three years when I had a sale in that state.

I'm all for forcing collection of sales tax, but there has to be some reasonable way to do that first.

Terry

 

[quicksandfarmer]

If a jurisdiction in California, for instance, decided that a North Carolina company wasn't remitting all that is owed, the company would have to send a representative to California to attend a hearing. Lawyers would necessary be involved and we know how that cost spirals. That could happen dozens of times in different jurisdictions. Businesses can't handle that cost without price increases. Additional costs would be encountered for some regulatory groups to do audits and enforcement. As the proposed law is now, the consumer would be picking up the tab for the taxes, the cost of the software and maintenance, and the cost of at least, an additional employee to do the actual data entry and pay the bills.

Having been in business, I can tell you it's even worse than that. If a jurisdiction has the right to tax you, they have the right to audit your books. The tax auditors will show up at your place of business to go on a fishing expedition. I once had an auditor show up, he had just finished auditing a customer, saw an invoice from us and thought he'd come over and check our books too. I once had a tax authority seize money in our bank account because we had a balance that wasn't due yet but they wanted to get paid early because they were in a budget crisis. These are not nice people. There is a reason the taxman is the second most reviled figure in western civilization after Judas.

If you run a brick and mortar business, every time you decide to operate in a new jurisdiction you open up your entire operation to audit by a new tax authority -- or in many places, several authorities, at the state, county, city, town, region, and tax district level. When you operate on line, you're taking on the full 15,000 at once.