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  1. #1
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    12.15.17 @ 04:05 AM
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    Default Tax-free Internet shopping jeopardized by bill

    WASHINGTON (AP) — Tax-free shopping on the Internet could be in jeopardy under a bill making its way through the Senate.
    The bill would empower 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 a shopper lives.
    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 Senate voted 74 to 20 Monday to take up 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.
    "While local, community-based stores and shops compete for customers on many levels, including service and selection, they cannot compete on sales tax," said Matthew Shay, president and CEO of the National Retail Federation. "Congress needs to address this disparity."
    And, he added, "Despite what the opponents say this is not a new tax."
    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," said Sen. Mike Enzi, R-Wyo., the bill's main sponsor.
    President Barack Obama supports the bill. His administration says it would help restore needed funding for education, police and firefighters, roads and bridges and health care.
    But the bill's 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.
    "It is going to make online businesses the tax collectors for the nation," said Sen. Kelly Ayotte, R-N.H. "It really tramples on the decision New Hampshire has made not to have a sales tax."
    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 a 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 issue is getting bigger for states as more people make purchases online. Last year, Internet sales in the U.S. totaled $226 billion, up nearly 16 percent from the previous year, according to Commerce Department estimates.
    The bill pits brick-and-mortar stores like Wal-Mart against online services such as eBay. Amazon.com, which initially fought efforts in some states to make it collect sales taxes, supports it too. Amazon and Best Buy have joined a group of retailers called the Marketplace Fairness Coalition to lobby on behalf of the bill.
    "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 Sens. Max Baucus, D-Mont., and Ron Wyden, D-Ore.
    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 ledger days," Durbin said. "Thanks to computers and thanks to software it is not that complex."
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  2. #2
    Atomic Punk edwardv's Avatar
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    12.14.17 @ 05:41 PM
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    Only a matter of time for this and what a great time to do it with all eyes on the terror attacks. Many states are broke and this is just another raid from your pocket to keep state employees and their pensions aka the voting base going strong.
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  3. #3
    Gird your loins Daisy Hill's Avatar
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    12.14.17 @ 05:44 PM
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    actually I don't think this is a terrible idea and I shop on the internet ALOT
    I don't have a problem with collection of sales tax, I have a problem with how my state spends the money once they receive it.

    because our town doesn't really have stores left anymore except for Walmart, I have bought all kinds of things over the internet....but I always try to buy local first

    It's hard enough for local retailers to keep up without having these large internet retailers to compete with

    They frequently use drop shipping so they have no expense in carrying an inventory like your local mom and pop does and they give their customers and automatic 6 to 8 percent discount for the waiver of sales tax

    bookstores are particularly vulnerable to the internet sales,

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  4. #4
    Atomic Punk bsbll4's Avatar
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    I know brick and mortar stores have struggled to deal with competing internet companies, but let's be honest, it's not because of the sales tax. Most sites charge you for any type of shipping, and often it's more than what the sales tax would be on the item, unless you are talking something extremely expensive but very light, like a diamond ring.

    You have to look at why people look to the internet to buy items compared to brick and mortar and vice versa. Internet shopping is done for convenience (not having to leave the house), to find items that aren't available in stores locally, and to buy something at a steep discount--which is only available because they don't have the overhead of the store fronts. Brick and mortar shopping is done for the experience, and often for the convenience of being able to get the item the same day.

    Both have their advantages, and collecting sales tax on internet sales will not change the balance of power there. Therefore, I hope people stop using that as the reason to collect these taxes. If you want to make an argument that the government is losing revenue, that's a completely different situation, but putting this in on the backs of "saving the little guy on Main Street" is disingenuous.
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  5. #5
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    all of my internet purchases have had tax charged on them. No reason why they shouldn't. Internet retailers already have a huge advantage over regular stores, they shouldn't also get a "no tax" advantage.

  6. #6
    Atomic Punk lovemachine97(Version 2)'s Avatar
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    Despite my stance on taxes, I also realize I live in a diverse country, so I am willing to compromise in the sense that I accept most people think an Internet sales tax is a good idea.

    I don't think this is the law to do it, however. There is a reason why Amazon and Walmart are large supporters of this particular law, as well as Best Buy, etc., and an entity that survives on smaller sellers, like EBay, is not.

    This law puts the threshold at $1 million in revenue, which is really nothing. I worked at a small local music store with 5 employees MAX (often only 3), including the owner, and we nearly hit the $1 million threshold a few times. eBay sellers often hit this too, and at a small margin are not cleaning up.

    The large stores support it because they can easily absorb this. Amazon, from what I understand, actually sells a merchant tax service to smaller stores. Any qualifying company would have to have a mechanism in place to satisfy the nearly 10,000 different sales tax rates in the US.

    But instead of creating a level playing field, this swings the pendulum in the other direction. Here in SoCal I'm 2:25 from Vegas by car. If I were to buy something in Vegas physically, I'd pay Nevada/Vegas sales tax. They don't have to ask me where I am from, collect CA/San Bernardino County/local sales tax, and then send it to the state quarterly. But if I stay at home and buy it online from there, they do have to do this.

    Here in CA, you're already responsible for paying taxes on anything out of state via Use Tax. But CA does not have a mechanism to track this, so no one does it. Almost every Californian is lying on their taxes, and CA knows it. Amazon created a business model that made each transaction more productive in the largest states because they didn't need to waste time and money calculating and collecting tax. The law put that burden on the state and consumer. A disadvantage is that without a physical presence, one can't see or manipulate what they are buying. But in saving the costs of brick and mortar, plus the tax issue, Amazon could then offer a better initial purchase price for customers.

    But because people are lying on taxes and states don't have a mechanism in place to deal with collecting Use Tax shouldn't mean we over burden digital stores by making them the collectors.
    Last edited by lovemachine97(Version 2); 04.23.13 at 12:17 PM.

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    Quote Originally Posted by lovemachine97(Version 2) View Post
    Despite my stance on taxes, I also realize I live in a diverse country, so I am willing to compromise in the sense that I accept most people think an Internet sales tax is a good idea.

    I don't think this is the law to do it, however. There is a reason why Amazon and Walmart are large supporters of this particular law, as well as Best Buy, etc., and an entity that survives on smaller sellers, like EBay, is not.

    This law puts the threshold at $1 million in revenue, which is really nothing. I worked at a small local music store with 5 employees MAX (often only 3), including the owner, and we nearly hit the $1 million threshold a few times. eBay sellers often hit this too, and at a small margin are not cleaning up.

    The large stores support it because they can easily absorb this. Amazon, from what I understand, actually sells a merchant tax service to smaller stores. Any qualifying company would have to have a mechanism in place to satisfy the nearly 10,000 different sales tax rates in the US.

    But instead of creating a level playing field, this swings the pendulum in the other direction. Here in SoCal I'm 2:25 from Vegas by car. If I were to buy something in Vegas physically, I'd pay Nevada/Vegas sales tax. They don't have to ask me where I am from, collect CA/San Bernardino County/local sales tax, and then send it to the state quarterly. But if I stay at home and buy it online from there, they do have to do this.

    Here in CA, you're already responsible for paying taxes on anything out of state via Use Tax. But CA does not have a mechanism to track this, so no one does it. Almost every Californian is lying on their taxes, and CA knows it. Amazon created a business model that made each transaction more productive in the largest states because they didn't need to waste time and money calculating and collecting tax. The law put that burden on the state and consumer. A disadvantage is that without a physical presence, one can't see or manipulate what they are buying. But in saving the costs of brick and mortar, plus the tax issue, Amazon could then offer a better initial purchase price for customers.

    But because people are lying on taxes and states don't have a mechanism in place to deal with collecting Use Tax shouldn't mean we over burden digital stores by making them the collectors.
    Same here in Arizona. My accountant actually wanted me to tally my internet purchases from the previous year. I told him I did, and it was zero. My feeling is, collect it at the time of the sale, or don't charge it. Preferably the latter.

  8. #8
    Atomic Punk lovemachine97(Version 2)'s Avatar
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    Quote Originally Posted by ToddE View Post
    Same here in Arizona. My accountant actually wanted me to tally my internet purchases from the previous year. I told him I did, and it was zero. My feeling is, collect it at the time of the sale, or don't charge it. Preferably the latter.
    This would be so much simpler if the law required that the sales tax of the state of origin (where the business is) was used. You'd need to know one set of tax laws as a business and it'd be a true level playing field.

    This law is insane.

  9. #9
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    Taxed Enough Already?

    This new tax increase – the internet sales tax – must be stopped in the House. The Senate just passed it, and many Senators want to justify their tax increase vote by claiming that it will somehow “level the playing field” for brick and mortar retailers. This isn’t legit.

    This is actually a boon to the big online powerhouses like Amazon who can afford the insane paperwork that comes with complying with government’s newest tax. The smaller mid-size online operations and smaller brick and mortar businesses, many family-owned with small staffs, who want to have larger online presences will be swamped with the regulatory paperwork of complying with the tax requirements for all these different states.

    This new internet tax is not only another barrier to entry for smaller online start-ups, it’s a disincentive to grow a company. This will hit these smaller companies right where their margin of profit is, which means that this will cost jobs because when businesses lose profitability, they lay off workers or shut down.

    Did Republicans who voted for this new tax on businesses forget that it will trickle down to consumers in this dangerously weak economic era? And when smaller and mid-size operations are pushed out of business, we have less competition and fewer choices in the marketplace.

    Here’s an example: say you want to order Runner’s World’s re-release of Dr. George Sheehan’s book “Running and Being.” I just ordered it. You could get it at Amazon, and they’d have no problem calculating the minutia of sales tax regulations for your state because they have a boatload of employees (and lobbyists) to deal with this burden, but their base price for the book might be higher than the smaller online business competing with them. But thanks to this new internet sales tax, that smaller business will now have a whole new burdensome level of stifling government bureaucracy over their heads as they scramble to comply with various states’ sales tax rules and rates. And when this smaller business goes out of business because they can no longer make a profit, someone will lose his or her job and you will be left with fewer options when you go shopping for a better price online. Amazon doesn’t sweat it – in fact they support it.

    Those “small government champions” of our middle class’s mom and pop businesses should ask themselves why they want to be any part of limiting the growth opportunities for smaller operations? More and more shopping is done online today, and every smart brick and mortar mom and pop wants to get in on that; and when they do, they should be allowed to produce by the sweat of their brow and ethically grow beyond being just a small online operation without worrying about a massive regulatory burden if they gross more than $1 million in sales in a year.

    Bottom line: These anti-small business measures disincentivize the start-ups we need, and any measure to stick it to the consumer by increasing taxes for government growth is not what Republicans are supposed to fight for. I bet that once the tax increase is explained, your constituents won’t want you to contribute to government growth via increased internet taxes. And that’s what this is all about. House GOP, read your constituent’s lips: No New Taxes.

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    P.S. I see that some are saying that a “positive” measure in this bill that the GOP Senators who voted for it liked is that it requires the government to provide “free” sales tax calculating software to all companies for compliance. Here’s a little newsflash: when it’s from the government, it’s not “free”! It’s being paid for by the very same people this new tax will hit in the pocketbook. That would be “We the People.”
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  10. #10
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    Not paying tax for online purchases is stupid and a nice way to bury local stores. Its hard enough to compete with an online warehouse as it is.

  11. #11
    Atomic Punk lovemachine97(Version 2)'s Avatar
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    Yes, but this actually makes it more difficult for internet sales. One brick and mortar location needs to know one set of taxes. With this, one internet company will need to know more than 10,000. The point of sale needs to be taxed, not where the person resides. That's not how brick and mortar works.

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    Quote Originally Posted by lovemachine97(Version 2) View Post
    Yes, but this actually makes it more difficult for internet sales. One brick and mortar location needs to know one set of taxes. With this, one internet company will need to know more than 10,000. The point of sale needs to be taxed, not where the person resides. That's not how brick and mortar works.
    You might know the answer. I don't. But if the law becomes tax at point-of-sale, is there anything stopping the big boys from running "sales" through some server in India?

  13. #13
    Forum Frontman It's Mike's Avatar
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    Quote Originally Posted by lovemachine97(Version 2) View Post
    Yes, but this actually makes it more difficult for internet sales. One brick and mortar location needs to know one set of taxes. With this, one internet company will need to know more than 10,000. The point of sale needs to be taxed, not where the person resides. That's not how brick and mortar works.

    And that's the cost of doing business, they need to know. Or else you'll get tax free districts basically stealing sales from everywhere. The point of sale is where the person resides with internet shopping. When I bought my ipad the point of sale wasn't china (where the product was located) it was my house in woodbridge, ontario canada. And I paid ontario sales tax on the purchase. If I didn't have to then you might as well just close every apple store in the province. They wouldn't sell a thing.

    If the point of sale isn't the location of the buyer think of how stupid this will get. Why would a car dealer ever sell a car and charge tax? When I bought my Honda Odyssey I must have paid 5 grand in tax on it. Why wouldn't the sales guy just tell me to purchase the car online and then come pick it up at the lot and save all that unneeded silly tax stuff? Honda would locate their internet server on some tax free island and voila - no sales taxes.

    This isn't about being taxed "more" - it's about being taxed for the same stuff you've always been taxed on. The govt (for once) is 100% right on closing this loophole and they better got on it fast. Some people are focusing on the micro problem of small internet retailers and missing the giant macro problem that will happen if this is not fixed.
    Last edited by It's Mike; 05.08.13 at 02:40 AM.

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    Atomic Punk lovemachine97(Version 2)'s Avatar
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    Quote Originally Posted by ToddE View Post
    You might know the answer. I don't. But if the law becomes tax at point-of-sale, is there anything stopping the big boys from running "sales" through some server in India?
    Quote Originally Posted by It's Mike View Post
    And that's the cost of doing business, they need to know. Or else you'll get tax free districts basically stealing sales from everywhere. The point of sale is where the person resides with internet shopping. When I bought my ipad the point of sale wasn't china (where the product was located) it was my house in woodbridge, ontario canada. And I paid ontario sales tax on the purchase. If I didn't have to then you might as well just close every apple store in the province. They wouldn't sell a thing.

    If the point of sale isn't the location of the buyer think of how stupid this will get. Why would a car dealer ever sell a car and charge tax? When I bought my Honda Odyssey I must have paid 5 grand in tax on it. Why wouldn't the sales guy just tell me to purchase the car online and then come pick it up at the lot and save all that unneeded silly tax stuff? Honda would locate their internet server on some tax free island and voila - no sales taxes. This is all of a sudden a "cost of doing business"? Says who? They're legal now. They found a way to let customers choose.

    This isn't about being taxed "more" - it's about being taxed for the same stuff you've always been taxed on. The govt (for once) is 100% right on closing this loophole and they better got on it fast. Some people are focusing on the micro problem of small internet retailers and missing the giant macro problem that will happen if this is not fixed.
    Brick and mortar stores have more of an impact on the environments in which they reside, including traffic, road upkeep and maintenance, sewers, proximity to schools, etc., that justify the tax money being confiscated from the local point of sale. This is true whether I shop at the Target across the street from me in SoCal or the Wynn gift shop in Las Vegas, NV. I have California's first Super Target less than a mile from my house. It's had a large impact on the area, including traffic, road wear, and that it is across the street from a K-8 school. Does Amazon, who is not in my area in any capacity, have a similar impact that justifies the tax money? I don't see how.

    Again, why should a brick and mortar store know only one tax code, and an internet store know 10,000+? I read in CNET, for example, that "in New Jersey, for instance, bottled water and cookies are exempt from sales tax, but bottled soda and candy are taxable. In Rhode Island, buying a mink handbag is taxed, but a mink fur coat is not." An online retailer must know every single idiosyncrasy of every tax system in the entire United States, which complicates the 10,000 different tax areas exponentially.

    It's also not as if brick & mortar stores don't have their own advantages. If I order a CD on Amazon, I'm waiting 2 days minimum unless I give up the price advantage with extra shipping costs. I can drive to Target tonight and get something if I know they have it. There is a real advantage there. These places also have displays, actual things I can touch, and people that can help me. It's up to these companies to figure out how to use these things as an advantage over the increased productivity of warehouses for a website; it's not the responsibility of the government to change tax laws to try to make things "fair".

    Consumers make market decisions all the time. I don't see why taxes should be any different. I already make the decision to pay local taxes to buy some local things. In other situations, I buy online. I make the decision each time based on advantages and disadvantages of both. If this means companies start moving to states with no sales tax, then great. That's the market working.

    Think of it this way. California, who happens to have a large tax burden on its citizens, is losing lots of film/TV production to states with lower burdens or beaks, like Georgia, among other states. Should California, since it's where the studio originates from, collect the tax money from the productions in Georgia? No. The impact, both positive and negative, occurs in Georgia. The studios, then, get to choose, and there is healthy competition, even with taxation.

    When I make a decision based on convenience and buy locally, the tax money comes back here. If I make a decision based on price and buy online outside of my local area, the area where that entity has an impact should get the tax money, but I am also freeing up more capital, because of the lower price, to spend elsewhere, often times for restaurants, movies, etc. That money stays local as well. If we're going to get rid of my option for making a purchase based on price simply because we feel the government is entitled to the maximum amount of my money, then we have to realize that savings that would otherwise have been spent locally will also disappear.
    Last edited by lovemachine97(Version 2); 05.08.13 at 11:43 AM.

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    Quote Originally Posted by lovemachine97(Version 2) View Post
    Brick and mortar stores have more of an impact on the environments in which they reside, including traffic, road upkeep and maintenance, sewers, proximity to schools, etc., that justify the tax money being confiscated from the local point of sale. This is true whether I shop at the Target across the street from me in SoCal or the Wynn gift shop in Las Vegas, NV. I have California's first Super Target less than a mile from my house. It's had a large impact on the area, including traffic, road wear, and that it is across the street from a K-8 school. Does Amazon, who is not in my area in any capacity, have a similar impact that justifies the tax money? I don't see how.

    Again, why should a brick and mortar store know only one tax code, and an internet store know 10,000+? I read in CNET, for example, that "in New Jersey, for instance, bottled water and cookies are exempt from sales tax, but bottled soda and candy are taxable. In Rhode Island, buying a mink handbag is taxed, but a mink fur coat is not." An online retailer must know every single idiosyncrasy of every tax system in the entire United States, which complicates the 10,000 different tax areas exponentially.

    It's also not as if brick & mortar stores don't have their own advantages. If I order a CD on Amazon, I'm waiting 2 days minimum unless I give up the price advantage with extra shipping costs. I can drive to Target tonight and get something if I know they have it. There is a real advantage there. These places also have displays, actual things I can touch, and people that can help me. It's up to these companies to figure out how to use these things as an advantage over the increased productivity of warehouses for a website; it's not the responsibility of the government to change tax laws to try to make things "fair".

    Consumers make market decisions all the time. I don't see why taxes should be any different. I already make the decision to pay local taxes to buy some local things. In other situations, I buy online. I make the decision each time based on advantages and disadvantages of both. If this means companies start moving to states with no sales tax, then great. That's the market working.

    Think of it this way. California, who happens to have a large tax burden on its citizens, is losing lots of film/TV production to states with lower burdens or beaks, like Georgia, among other states. Should California, since it's where the studio originates from, collect the tax money from the productions in Georgia? No. The impact, both positive and negative, occurs in Georgia. The studios, then, get to choose, and there is healthy competition, even with taxation.

    When I make a decision based on convenience and buy locally, the tax money comes back here. If I make a decision based on price and buy online outside of my local area, the area where that entity has an impact should get the tax money, but I am also freeing up more capital, because of the lower price, to spend elsewhere, often times for restaurants, movies, etc. That money stays local as well. If we're going to get rid of my option for making a purchase based on price simply because we feel the government is entitled to the maximum amount of my money, then we have to realize that savings that would otherwise have been spent locally will also disappear.
    To answer your question, because that's the business they've chosen to get into. If they want to market their goods to people in several districts then they need to know the tax implications of those districts. If they aren't capable of figuring that out then they can't do business in all of those places. You cannot allow these internet companies to ignore the laws of the markets that they are selling into. It is a recipe for complete chaos and the breakdown of the retail market of wherever you live. This cannot be allowed. Super Target in your area does cause traffic, you know what else it does? Employ people in your area. That's kinda important.

    The example of film shoots in other states that you made is completely ridiculous. In that case everyone is picking up and moving to another state to work. In this case the customer is making their purchase from their home. And that purchase needs to be taxed at the rate in THAT STATE.

    If this law is not passed, what's to stop every retailer in the United States from opening up their internet head office on a tax free island (or an Indian reserve for that matter) and basically not charging tax on any item that is purchased through their website? The retail customer in you might think "great idea, i pay less tax" but you don't. You'll just see your income taxes go through the roof due to all the tax evasion. What great progress.

    PS - if you guys don't watch yourselves you're gonna make a great case for a national sales tax to "fix" all of these problems. Want to sell in any state? fine there's a 15% national sales tax. Nice and easy. Happy?
    Last edited by It's Mike; 05.08.13 at 12:54 PM.

 

 

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