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Internet Sales Tax

edro

edro

Lifer
Most mail/catalog/TV ordering sales didn't collect sales tax, but I think those were fairly limited in years past.

Since the internet, there is a much higher percentage of total transactions that are not collecting sales tax.
The states must be losing millions in revenue.

Is this part of the reason more communities are in the red and enacting increases in local tax?
In Ohio, in the last 20 years, there has been a huge increase in the number of communities enacting income tax.
Almost all localities now charge at least 1% income tax and many upscale neighborhoods charge 2-3%.
 
I've always wondered how this works too. I think Newegg charged tax for purchases made here for a while (maybe they still do), but it's probably because there are NE warehouses in my state. Also, I thought that technically you are supposed to claim this on your taxes each year, but it's not enforced.

They have to be losing tons of revenue though, unless they make up for it in the taxes charged to the companies/shippers directly.
 
True, you are supposed to report all out of state transactions on your state tax return.
I am sure it is very tricky because each CITY has a different sales tax.
That should be easy to solve though... just have a standard % for all.
 
Locut0s said:
You mean retail sales tax varies by city? WTF that's complicated! Here it varies by province.
Click to expand...

Generally speaking it does here, too - well, by state, rather. But a few cities (Minneapolis, a couple in Ohio, etc.) tack on their own.

As do certain counties, to pay for certain infrastructure improvements. (Fuck You, Minnesota Twins. Fuck you long and hard. You needed that stadium like I need a hole in the head. Or wallet.)

Since it's all calculated by the cash register it's not like you need to do any math.
 
dave_the_nerd said:
Generally speaking it does here, too - well, by state, rather. But a few cities (Minneapolis, a couple in Ohio, etc.) tack on their own.

As do certain counties, to pay for certain infrastructure improvements. (Fuck You, Minnesota Twins. Fuck you long and hard. You needed that stadium like I need a hole in the head. Or wallet.)

Since it's all calculated by the cash register it's not like you need to do any math.
Click to expand...

Speaking of which why is it that the two of us Canada + US are one of the few countries that don't roll sales tax into the sticker price. That is we add it at the till.
 
edro said:
Is this part of the reason more communities are in the red and enacting increases in local tax?
Click to expand...

Lost sales tax is a small part of the problem.

The root of the problem lies in factories closing, moving to china, and the bulk of the tax base (property & school tax) shifting to homeowners.
 
Texashiker said:
Lost sales tax is a small part of the problem.

The root of the problem lies in factories closing, moving to china, and the bulk of the tax base (property & school tax) shifting to homeowners.
Click to expand...
Ah, good point. The communities used to get income tax from all employees at the factory, now they just get it from the residents.
 
Locut0s said:
Speaking of which why is it that the two of us Canada + US are one of the few countries that don't roll sales tax into the sticker price. That is we add it at the till.
Click to expand...

this is due to where the tax is owed.

Vehicles can be purchased in one location and used in another.

Tax is paid on the destination.

Same goes for most delivered items.
Buy $1K room of furniture and your sales tax will be based on your delivery address.
 
Amazon charges tax for items delivered to me in WA, since they have a business presence here. But for Child's Play items delivered to out of state hospitals where they don't have a business presence (such as a distribution center) = no tax.

That's why I do the donation matching to out-of-state hospitals, so an extra 9.x% goes to the hospital instead of to taxes.
 
Recently Illinois added a bit on the income tax return where you either can specify your online purchases and pay the sales tax then, or pay a standard amount depending on your income.

So (assuming you make online purchases) you can either bold face lie and say you spend $0, or (assuming you don't bother to keep exact track of all your non-taxed transactions) can just take the easy route and pay the amount based your income. Seeing as it was only like $40 for my income bracket, I figured it wasn't worth being audited 😛
I imagine many other people did the same too, so I bet they got a good chunk of money from that.
 
edro said:
Ah, good point. The communities used to get income tax from all employees at the factory, now they just get it from the residents.
Click to expand...

After factories are closed and demolished, the value of the property goes down, this means less tax dollars brought in through school and property taxes.

Trucks bringing supplies to factories buy fuel and other items at local stores.

When the news says that a factory is closing, the people do not realize the ripple effect that has through the community.

In Orange, Port Arthur and Beaumont Texas, there were several shipyards that shutdown in the early 1980s. Somewhere around 10,000 workers lost their jobs. Close to 5,000 of those people worked at one company.

30 years later, the area has yet to fully recover. In the early 1980s young people (early 20s) could go to work in a shipyard and make $13 and hour. These days that same age bracket works at best buy or wal-mart for $8 an hour.

Figure up how much money has been lost in the local economy over the past 30 years by going from $13, $14,,, $16 an hour to $8 an hour.

In 1999, the southeast Texas region had the second highest unemployment rate in Texas, El Paso was first place. Keep in mind, just 20 years earlier (1979), shipbuilding companies were begging people to come to work.

I think the lose of jobs since the 1980s is making cities, counties and states look for other ways to generate revenue.

There is more to free trade then meets the eye; its slowly destroying our wages, our cities, our schools,,,,, and our way of life.
 
It gets convoluted in that who would it be fair to GIVE the tax to?

The state that produced it, or the one that BOUGHT it?

I say both, but that is a hard argument.

What should be enacted is a broad base sharing on the taxes for these objects. Unless you are already paying the taxes because the company has a presence in your state, a % should be enacted on ALL sales, and split 50/50. Something innocuous. The fallacy of crushing the development of the internet sale no longer applies, but it is also not fully discredited. If the tax rates start going up to comparable B+M prices, you will see a definite shift away from online ordering...

Call it at 4% (2%/2%) and see what happens.
 
EagleKeeper said:
this is due to where the tax is owed.

Vehicles can be purchased in one location and used in another.

Tax is paid on the destination.

Same goes for most delivered items.
Buy $1K room of furniture and your sales tax will be based on your delivery address.
Click to expand...

Years ago, I bought a vehicle in Ohio. They did not collect sales tax because I was a resident of Texas. Brought it down to Texas, they wouldn't take my check for sales tax because I bought the vehicle in Ohio and drove it into Texas.

Oh, and to answer the OP's question on why they're collecting more and more income tax, it's because they are spending more and more.
 
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