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Update:

By Associated Press,

Monday, April 22, 8:19 PM

WASHINGTON ? States could force Internet retailers to collect sales taxes under a bill that overwhelmingly passed a test vote in the Senate Monday.

Under current law, states can only require stores to collect sales taxes if the store has a physical presence in the state. As a result, many online sales are essentially tax-free, giving Internet retailers a big advantage over brick-and-mortar stores.

The bill would allow states to require online retailers to collect state and local sales taxes for purchases made over the Internet. The sales taxes would be sent to the states where shoppers live.

The Senate voted 74 to 20 to begin debating the bill. If that level of support continues, the Senate could pass the bill as early as this week.

Supporters say the bill is about fairness for businesses and lost revenue for states. Opponents say it would impose complicated regulations on retailers and doesn?t have enough protections for small businesses. Businesses with less than $1 million a year in online sales would be exempt.

?I believe it is important to level the playing field for all retailers,? said Sen. Mike Enzi, R-Wyo., the bill?s main sponsor. ?We should not be subsidizing some taxpayers at the expense of others.?

In many states, shoppers are required to pay unpaid sales tax when they file their state income tax returns. However, states complain that few people comply.

?I do know about three people that comply with that,? Enzi said.

President Barack Obama supports the bill, but its fate is uncertain in the House, where some Republicans regard it as a tax increase. Heritage Action for America, the activist arm of the conservative Heritage Foundation, opposes the bill and will count the vote in its legislative scorecard.

Many of the nation?s governors ? Republicans and Democrats ? have been lobbying the federal government for years for the authority to collect sales taxes from online sales, said Dan Crippen, executive director of the National Governors Association. Those efforts intensified when state tax revenues took hit from the recession and the slow economic recovery.

?It?s a matter of equity for businesses,? Crippen said. ?It?s a matter of revenue for states.?

The bill pits brick-and-mortar stores like Wal-Mart against online services such as eBay. The National Retail federation supports it. And Amazon.com, which initially fought efforts in some states to make it collect sales taxes, supports it, too.

?Amazon.com has long supported a simplified nationwide approach that is evenhandedly applied and applicable to all but the smallest volume sellers,? Paul Misener, Amazon?s vice president of global public policy said in a recent letter to senators.

On the other side, eBay has been rallying customers to oppose the bill.

?I hope you agree that imposing unnecessary tax burdens on small online businesses is a bad idea,? eBay president and CEO John Donahoe said in a letter to customers. ?Join us in letting your Members of Congress know they should protect small online businesses, not potentially put them out of business.?

The bill is also opposed by senators from states that have no sales tax, including Sen. Max Baucus, D-Mont., and Sen. Kelly Ayotte, R-N.H.

?Supporters of this online sales tax bill are trying to muscle it through before senators find out how disastrous it would be for businesses in their states,? Ayotte said. ?I will fight this power grab every step of the way to protect small online businesses in New Hampshire and across the nation.?

Baucus said the bill would require relatively small Internet retailers to comply with sales tax laws in thousands of jurisdictions.

?This legislation doesn?t help businesses expand and grow and hire more employees,? Baucus said. ?Instead, it forces small businesses to hire expensive lawyers and accountants to deal with the burdensome paperwork and added complexity of tax rules and filings across multiple states.?

But Sen. Dick Durbin, D-Ill., said the bill requires participating states to make it relatively easy for Internet retailers to comply. States must provide free computer software to help retailers calculate sales taxes, based on where shoppers live. States must also establish a single entity to receive Internet sales tax revenue, so retailers don?t have to send them to individual counties or cities.

?We?re way beyond the quill pen and leger days,? Durbin said. ?Thanks to computers and thanks to software it is not that complex.?

http://www.washingto...c4b4_story.html

"Sen. Mike Enzi, R-Wyo., the bill?s main sponsor..."

A Republican? Raising our taxes? Damn those tax-and-spend conservatives!!! :angry:

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What happens if I start buying all my stuff from online merchants from outside of the US?

Same thing as always, they won't charge you a tax, as this only applies to USA based companies... but you would still owe your state taxes as you are REQUIRED to report them on your state taxes if your state collects sales taxes

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Someone needs to stop this.

Why? Don't like paying a tax that you are required to tell the state about to start with?.... if your state collects sales tax and you don't pay it to the state at tax time, you are technically defrauding the state

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Why? Don't like paying a tax that you are required to tell the state about to start with?.... if your state collects sales tax and you don't pay it to the state at tax time, you are technically defrauding the state

My state has no sales tax. So what I take from this is that when I buy something from amazon, if the seller is in a state that does I will be charged with sales tax and that is stupid.

Would the tax to go my state or theirs? If theirs why should I have to pay a tax for a state I don't live in?

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Why? Don't like paying a tax that you are required to tell the state about to start with?.... if your state collects sales tax and you don't pay it to the state at tax time, you are technically defrauding the state

The state should not rely on individuals to voluntarily submit tax info on the purchases they make. It maybe "required" but there's no way of really knowing who bought what. Some websites already add sales tax on to the purchase, and that is what should happen instead of relying on the good faith of people to report their taxes, because lets face it here, im fairly certain most people do not report their use tax to their state of residence. I don't know anyone that loves to pay taxes.
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Why? Don't like paying a tax that you are required to tell the state about to start with?.... if your state collects sales tax and you don't pay it to the state at tax time, you are technically defrauding the state

No, because it will hurt online businesses.

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My state has no sales tax. So what I take from this is that when I buy something from amazon, if the seller is in a state that does I will be charged with sales tax and that is stupid.

Would the tax to go my state or theirs? If theirs why should I have to pay a tax for a state I don't live in?

no no no that is not how this works, if you have no sales tax in your state you pay nothing, the seller has to charge you your local sales tax then turn that over to the state you live in

No, because it will hurt online businesses.

and no taxes online hasn't hurt non-online businesses? it's a two way street... and the excuse "Brick and mortar stores cost more therefore it should hurt them" doesn't fly either

heck trust me, I thought no sales tax online was awesome for years, the more I see it hurt local towns, the more I am against it... especially when I see people ordering shampoo online because it "has no tax" yet they could of gotten the same stuff locally right now with no wait for a few cents more.... literally sometimes just a few cents more due to the tax

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I buy online for two main reasons...

  • They are usually significantly less expensive.
  • There are usually incentives for doing so. For example Amazon quite frequently does promotions on their video games (get $10-$20 credit for next purchase, get promotional item only available at Amazon, etc.)

I also like the convenience purchasing online provides. I live in NJ, in an area that is way to congested. Going to the mall, etc., is just a pain in the ass more often than it is not.

Not paying tax is one of the last things on my mind. Sure it is nice, but it is not the only reason I shop online. Not even close.

I would gladly go to a store and pick up my items if they did the above, hell in some cases I prefer to be able to pick stuff up, but until they come close to matching the better prices and incentives offered, I will continue to purchase online. Tax or No Tax.

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You know we could always just do this a way everyone would "love"...... jus go the value added tax route and let the IRS decide what states get what money... that couldn't fail, right?...... even nontaxed states would be taxed then.....

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Brick-and-mortar stores could always do Internet business also, so the argument that they're being treated unfairly is a bit off.

The question is less about fairness and more about whether having a brick-and-mortar end to your business should be penalized.

Like I said, the point of a sales tax is for LOCAL infrastructure support. So why should a company pay all that money to collect taxes for a government that doesn't actually do anything for them? For example, many areas charge extra sales tax as a way to help pay for a local stadium. Why should Amazon have to pay to keep track of the hundreds (or thousands) of different sales tax laws in order to help pay for a stadium or the roads around the stadium? It doesn't make sense.

Why do tariffs exist?

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no no no that is not how this works, if you have no sales tax in your state you pay nothing, the seller has to charge you your local sales tax then turn that over to the state you live in

I don't know if I agree with that, though. I just think there must be a better way.

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