ECONOMY: Internet sales tax

Beginning on September 1, 2004, a new tax code may mean online shoppers will begin to pay sales tax. 20 states have adopted a unified tax code to simplfy tax collecting or online stores. The new system is voluntary.

I firmly believe that online shopping is good for the economy. Some of these merchants will go out of business if forced to collect sales tax. We already pay shipping and handling charges. The additional charge may make consumers shop elsewhere.
It also puts the government one step closer to controlling the Internet.

Supporters of streamlining the nation�s sales tax codes say that if it is easier for out-of-state online and catalog businesses to collect, they will voluntarily send sale taxes to states where their products are shipped. Ten of the participating states came online this year and it�s too early to determine how well the system is working.

A series of U.S. Supreme Court cases have prevented states from requiring businesses without a presence in their state from collecting and remitting sale taxes. Online retailers and catalog operators have successfully argued that with 7,000 tax jurisdictions nationwide, collecting taxes is too complicated and costly. The courts agreed, saying it would be a barrier to interstate commerce.

If all or most states begin using the same tax codes, federal laws could be passed requiring vendors to collect taxes for the states.

While Lansing lawmakers are working to solve a $1 billion budget shortfall, collecting sales tax from online firms doesn�t appear to be a quick fix. The changes to the tax code also will mean more goods are exempted from sales tax. So while Michigan plans to collect an additional $26 million in sales tax, it will lose out on $18 million because of the changes. Next year�s total gain may only be $8 million, but treasury officials believe the tax code changes will mean more revenue in the future.

www.detnews.com...
www.bna.com...
news.com.com...

[edit on 23-8-2004 by DontTreadOnMe]

Hmm I dont thnk that there should be a tax on the internet shopping, cos at the end of the day, isnt internet shopping meant to reduce prices since, it requires less resources. Again like you said before internet shopping is good for the ecconomy, since people from all over the world buy from these sites. If people start to get changed then people will start to think about parting with their money.

Taxing is just a way of the government making more money of people who work hard to earn it.

Final Verdict: If taxing comes into play then the prices wil raise and soon money will be lost as less people will be willing to part with their money for the raise in prices.

The problem is that the states are hurting for revenue, just like everybody else. We were all living large in the 90s, until the bubble burst in 2000.

Since then, states have been scrambling to come up with more money. They see the internet as a lucrative, untapped source of wealth. Kinda reminds me of the states taking over the numbers racket and truning it into sate lotteries, .

I Know the governor of Michigan has tried to stop internet sales of cigarettes to Michigan residents. She actually called some of the online cigarette companies and told them they couldn't sell to MI citizens LOL.
I'm assuming that didn't work too well, and now 20 states have banded together to tax internet goods.
This is the stuff states think we would have bought in brick-and-mortar stores.

I think many if not most of internet sales are for items that cannot be easily gotten in real stores. So, I think the states have no right to these taxes. Many of these companies are quite small and the expense of hiring even one more employee to do the tax thing could put them out of business.

Internet shopping also gets rid of the middleman, allows you to comparison shop and get a much better selection and availability of goods and services.

[edit on 24-8-2004 by DontTreadOnMe]

I agree the stated AND the government need to keep their hands off the Internet. Why can not we as a people have ONE thing in our lives that are not taxed? I am of the opinion that they need to pass a bill Permanently keeping federal and state government out of the Internet tax Biz.

I can see why states would be eager to collect this, but I have a few questions:

How will this be enforced? If I pay sales tax on something I bought online how do I know that the company really is going to send it in as tax and not just keep it? I think honesty with this is going to be a big problem.

What about things like e-bay? If this ever becomes mandatory I see this kind of like trying to tax a garage sale. As a seller how do I know how much to tax? As a buyer how do I know they aren't just hiking the price? That just doesn't make sense to me.

What about the sea if paperwork that would be involved? Yes, for the larger companies it would probably be ok, but I think smaller ones would have trouble. Trying to keep track of regulations for fifty different states would be very hard.

I shop on the internet partially because it is often cheaper than in stores, even after shipping. But if sales tax is added it might not be such a good deal anymore.

This seems like it has the potential to kill small businesses on the internet. How are these problems being addessed?