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Thread: Proposed Intenet Sales Tax

  1. #1

    Proposed Intenet Sales Tax

    Well, the Supreme Court is set to hear and rule on the proposed Internet sales tax many are claiming will level the retail landscape, raise revenue for cash-strapped states and affect a multitude of businesses. Frankly, I think they will pass some sort of Internet sales tax, even if its reduced to say 4% of the purchase, to off set the added costs of shipping. What say you people?

    Marc

  2. #2
    I'd have honest and serious reservations that V could implement and properly track this. That aside, I think it will become an issue as large as Net Neutrality. I see both sides of it. It's good to collect taxes when they are used to provide services to people, but usually they aren't used correctly. (That's not the point today though). As a ecom merchant, we have an advantage to someone buying from us vs locally, because they often save the tax (even though that are supposed to report it on their own. It will created a level field, but will hurt many smaller businesses who are not able to implement the tools needed to track accurately (unless they make a "Global" tax rather than the state/county/muni level of current). The article I read said that taxes can be so granular in some areas that a product that has flour in it vs one that doesn't can be taxed differently, and I believe it will not be a clear and simple change for businesses to make.


    TL;DR
    Pros: More money for local/state gov't to help it's people with, level playing field for all legitimate businesses
    Cons: makes it harder to compete with a local business, adds complications to ecom sites

    Marc

  3. #3
    I do think tax for all is coming, some how and some way.

    I am hoping that it goes to Congress, where small business might have some voice in the final outcome of a method that is simple enough for the small businesses. Perhaps they could use Volusion software as a model. If V can do it, everyone can do it...

  4. #4
    Let's just switch to a 20% vat tax and remove the BS of expensing. This catches all the "cash" economy people, makes it fair for all companies to pay the same amounts.

  5. #5

  6. #6
    I am not in favor of a 20% VAT. It may work in Europe, but that would be a monumental change here in the states. It's hard to imagine congress passing a 20% VAT

  7. #7
    I agree. A 20% VAT sounds way too high. As I stated earlier, I can see the Court instituting a flat tax across all 50 states of say 4%. Not too high where it would kill e-commerce and just enough to satisfy most of the states, particularly if they currently are getting zilch.

    Marc

  8. #8
    Quote Originally Posted by Lightning2000 View Post
    I agree. A 20% VAT sounds way too high. As I stated earlier, I can see the Court instituting a flat tax across all 50 states of say 4%. Not too high where it would kill e-commerce and just enough to satisfy most of the states, particularly if they currently are getting zilch.

    Marc
    Why would that be? There would be, just like in AU when they did it about 10 years ago, a switch from part VAT, part income tax. Same tax for EVERYTHING - imported products (retail, e-packet), bricks, online, etc. This would do wonders to catch all the cash people.

  9. #9
    I think a flat internet sales tax for all states around 4% could be fair. The money to be administered by a national sales tax program and exclusively for those that have online (no retail) only presence. Whether VAT is good idea or not, Congress will never approve it in the near future.
    Christine
    Payments Expert
    Volusion User since 2007

  10. #10
    Well, its official. The US Supreme Court ruled in favor of having the states collect sales taxes from online sellers even if they do not have a physical location in every state. This is going to get interesting real fast.

    Marc

  11. #11

  12. #12
    Anyone investigated what services to use? Cost?

    So much for the old nexus rules.

  13. #13

  14. #14
    This was taken from the above PDF file. Does this hold true for all states?
    The Act covers onlysellers that, on an annual basis, deliver more than $100,000 of goodsor services into the State or engage in 200 or more separate transactionsfor the delivery of goods or services into the State.

  15. #15
    I didn't hear that part and frankly I think that would complicate things further particularly if taxes have to be collected on a quarterly basis like we do here in New York. For instance, if I sell to customers in California, and all year long I remain under the threshold, then get an order on December 31st which puts me over the top, does that make me delinquent for the prior three quarters? Conversely, why would I accept that last order if it knowingly puts me over the tax threshold?

    Marc

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