Felix_dup1 Posted February 7, 2003 Share Posted February 7, 2003 Dangerous precedent set this week, as Wal-Mart, Target, and Toys'R'Us, among others, have started charging sales tax on online purchases based on the sales tax where the purchaser lives. One story about it here: http://www.msnbc.com/news/869557.asp?0dm=T13KT Is this the way things are going to go in the future, or should internet sales tax be banned, as is being proposed in Congress? Would you continue to buy gear online if you had to pay sales tax? Link to comment Share on other sites More sharing options...
Franknputer Posted February 7, 2003 Share Posted February 7, 2003 Sales tax isn't really the reason I buy online or not. Convenience, availability of certain items, and not having to deal with going to a store & either chasing off or trying to find a sales person. A higher cost would factor in to some degree, since you have to pay shipping too a lot of the time. But I don't mind, as long as my state gets the taxes. Link to comment Share on other sites More sharing options...
StoneKnife Posted February 7, 2003 Share Posted February 7, 2003 Those three have sucko fulfillment departments anyway for one thing, and everybody pretty much has at least one of those stores in their towns, so who needs 'em? Nobody here in the Seattle area! Now, if we were talking NewEgg or Mwave or Directron, man.... that'd be a serious hit! "We are the Federales... You know, the Mounted Police..." ---"If you're the police, where are your badges?" "Bodges?..." Link to comment Share on other sites More sharing options...
AlanThomas Posted February 7, 2003 Share Posted February 7, 2003 I'm not sure how well things like this can be enforced. What's to keep a retailer from hosting their web site in the Cayman Islands (for instance) to get around the laws? What's to keep buyers from spoofing their IP addresses to appear as though they're connecting from a state that doesn't have sales tax? Especially when the "ship-to" address isn't always the buyers address... Signatures can appear at the bottom of your posts. This option may be disabled by the message board administrators at any time, however. You may use UBB Code in your signature, but not HTML. UBB Code Images are permitted. Link to comment Share on other sites More sharing options...
videoeditor1 Posted February 7, 2003 Share Posted February 7, 2003 [quote]Originally posted by felix: [b]Dangerous precedent set this week, as Wal-Mart, Target, and Toys'R'Us, among others, have started charging sales tax on online purchases based on the sales tax where the purchaser lives. One story about it here: http://www.msnbc.com/news/869557.asp?0dm=T13KT Is this the way things are going to go in the future, or should internet sales tax be banned, as is being proposed in Congress? Would you continue to buy gear online if you had to pay sales tax?[/b][/quote]What do you mean? You are REQUIRED by law to submit sales tax on your purchases if your vendor didn't do so. That's the law - no matter what state you buy from. The reality, however, is admittedly very different. Some large multi state companies have always collected sales tax on all purchases - because they have a presence in that state. Link to comment Share on other sites More sharing options...
Felix_dup1 Posted February 7, 2003 Author Share Posted February 7, 2003 Up to now, many companies, including those with a brick-and-mortar presence across the country, have only charged sales tax in states where they had an internet presence. For instance, when I was at Marsmusic.com, we charged sales tax in Florida (corporate offices), Georgia (distribution center), Texas (call center), and New York (additional office space). Thus far, this has been the rule of thumb that has been followed by internet retailers. I don't think it's as easy as changing an IP address. When you're paying employees to work for your company in various locations in the U.S., it's pretty clear where your company really is. But now, with major retailers such as Wal-Mart and Target going the other direction (following more of the taxing model that catalogs have historically followed), it may not bode well for the proposed legislation to make the internet tax-free. I was interested to hear people's view on this, as I know many people here on these message boards order gear from places like Musician's Friend, Sweetwater, zZounds, and others via the internet - enjoying the luxury of no sales tax. At the simplest level, the "no internet sales tax" folks think that's what's needed to allow e-commerce to flourish. The opponents say that the states are missing out on valuable sales taxes. I see both sides - not sure which is more right. Link to comment Share on other sites More sharing options...
BrianT Posted February 8, 2003 Share Posted February 8, 2003 What about the local retailer, who [b]has[/b] to charge sales tax being in an unfair competitive postition? How many people use a local retailer to check out a product, then order online cheaper from somebody who doesn't have the expense of a showroom? That sux for the local retailer. I say, even the playing field. It's fair. Regards, Brian T Link to comment Share on other sites More sharing options...
whitefang Posted February 8, 2003 Share Posted February 8, 2003 I recall that back in the days when I was dumb enough to order stuff from outlets like Fingerhut, you were required to tally your due by adding so much for S&H, and the sales tax percentage of the state you live in. I see no reason this shoudn't apply to those buying online. I've only seen it as a form of catalog buying anyway. Whitefang I started out with NOTHING...and I still have most of it left! Link to comment Share on other sites More sharing options...
fantasticsound Posted February 8, 2003 Share Posted February 8, 2003 Drew is, of course, correct. No matter how you purchase an item, if your state has a sales tax on that item the law indicates you have to pay regardless of whether the retailer collects the tax for you and the state. A friend of mine is an award winning children's music writer/musician. My impression is he does not make huge sums of money, but music is his full time vocation. As a native New Yorker, he continued to purchase musical gear from retailers in New York with which he had long standing relationships. About 5 years ago, his name was passed on to the state of Tennessee IRS and he was charged back tax and fines for non-payment of sales tax on those purchases. It may be unlikely you'll be caught, but it does happen and the consequences are e-x-p-e-n-s-i-v-e. A side note. It is my understanding that the state of Illinois, among others, will tax you any additional percentage when you register your vehicle if the dealer is located in a county/city with less tax than the registered address. The City of Chicago has maintained they have the right to get their 1% (maybe more now) for [i]anything[/i] a Chicago resident purchases in Cook county or the surrounding counties where sales tax is lower than the city. Of course, this is virtually impossible for them to enforce on non-registered items. It's easiest to find me on Facebook. Neil Bergman Soundclick fntstcsnd Link to comment Share on other sites More sharing options...
techristian Posted February 8, 2003 Share Posted February 8, 2003 The probable reason that Walmart, Target etc. must collect taxes in most of the states, is because they have stores in all of the states. I don't think that it will effect small businesses operating out of a single facility. They are (in most cases) only required to collect local State or Provincial taxes for the state that they reside in. So, if you are dumping that piece of unwanted gear on Ebay, hopefully the feds won't come after you for taxes. Dan http://musicinit.com TEACHMEDRUMS.COM My Music Videos RED PILL Link to comment Share on other sites More sharing options...
kenglish Posted February 8, 2003 Share Posted February 8, 2003 So, what is the purpose of the Sales Tax? I always believed that taxes were a levy to pay for services rendered. What does a state do for the out-of-state on-line retailer? Will they supply him with police and fire protection? Do they provide water and sewage for his plant? Do they protect his employees on the way to work? NOT if the on-line store and the customer are in different states! I remember reading about this in a "Monitoring Times" (shortwave radio/electronics mag)article years ago. The courts had ruled that sales tax was for "services", not just "because we know someone spent some money and we want a piece of it". Could a state simply start collecting money from people in another state, "just 'cause we want it"? If anything, the Sales "tax" ought to go to the state where the on-line retailer is located....not to some free-loader of a state where people can't get a decent price on the product of their choice! Anyone who says that "Crime doesn't pay", obviously isn't doing it right. Link to comment Share on other sites More sharing options...
JES Posted February 8, 2003 Share Posted February 8, 2003 [quote]Originally posted by kenglish: [b]So, what is the purpose of the Sales Tax? I always believed that taxes were a levy to pay for services rendered. What does a state do for the out-of-state on-line retailer? Will they supply him with police and fire protection? Do they provide water and sewage for his plant? Do they protect his employees on the way to work? NOT if the on-line store and the customer are in different states! I remember reading about this in a "Monitoring Times" (shortwave radio/electronics mag)article years ago. The courts had ruled that sales tax was for "services", not just "because we know someone spent some money and we want a piece of it". Could a state simply start collecting money from people in another state, "just 'cause we want it"? If anything, the Sales "tax" ought to go to the state where the on-line retailer is located....not to some free-loader of a state where people can't get a decent price on the product of their choice![/b][/quote]Um, the state's not a freeloader if the person purchasing the item lives there. Seems like that person benefits from whatever (dwindling) services the state may offer. --JES Link to comment Share on other sites More sharing options...
fantasticsound Posted February 8, 2003 Share Posted February 8, 2003 [quote]Originally posted by kenglish: [b]...I always believed that taxes were a levy to pay for services rendered. What does a state do for the out-of-state on-line retailer? Will they supply him with police and fire protection? Do they provide water and sewage for his plant? Do they protect his employees on the way to work? NOT if the on-line store and the customer are in different states!... ...If anything, the Sales "tax" ought to go to the state where the on-line retailer is located....not to some free-loader of a state where people can't get a decent price on the product of their choice![/b][/quote]You misunderstand how the law applies to retail tax. I am not a tax attorney. I believe I can explain this to you, but consult a professional for legal advice on your rights and responsibilities regarding federal, state, and local taxes. End of disclaimer. :freak: I can't site the precedent, but retail sales through catalog, internet, or phone sales have been deemed to occur where the [i]customer[/i] resides. Generally, the ship-to address is considered the location of the sale. Any sales tax levied in that locality, state, etc. will apply. The exception is, as has been mentioned, when the retailer has a presence in the customer's state. This is where I am ignorant of the specifics of these laws. Felix stated that Marsmusiconline.com charged tax in only a few states, although they operated stores in Tennessee, Minnesota, Pennsylvania and several other states without collecting tax for those states. So I'm unsure whether the law requires a distrubution point or if brick & mortar retail outlets IN that state would require them to collect the tax. Can any tax professionals comment on this? It seems Wal-mart, et. al. are attempting to err on the side of caution, as they have multiple retail outlets in virtually every state in the U.S. Also, don't rule out the possibility they wish to keep business in their brick & mortar stores. How many of us would abandon them for shop-at-home, tax free, on the internet. (Even though we [i]would[/i] be required to pay the tax ourselves.) Back to your quote, kenglish; Taxes [i]on the retailer's purchases[/i] are supposed to pay for their local services. (Along with other business taxes.) Sales tax on the customer pays for the [i]customer's[/i] local services. The tax is being levied on the customer, not the retailer, and should be levied at the customer's state sales tax rate and paid to his/her state. Does this make more sense? It's easiest to find me on Facebook. Neil Bergman Soundclick fntstcsnd Link to comment Share on other sites More sharing options...
kenglish Posted February 9, 2003 Share Posted February 9, 2003 So, it's not a tax on a sale, it's just a tax on any transaction that the government wants money from?! Seems to me that governments feel they should just be able to take money from us for any reason they can think of. Problem is, most of us can't do that......we have to do something to EARN it, not just think we NEED it. Wish I could just tell my boss that "I know you have some money, and I really could use some of it, so HAND IT OVER!" :D Anyone who says that "Crime doesn't pay", obviously isn't doing it right. Link to comment Share on other sites More sharing options...
fantasticsound Posted February 9, 2003 Share Posted February 9, 2003 Don't get me wrong, I think taxation has gotten out of hand and, in the name of social progress, our state and federal governments often overstep their bounds. On the other hand, many of us would suffer at the hands of the richest 1%, [i]far more than we do now[/i], if the federal government had not been expanded to supply more than protection from foreign powers, it's original main purpose. As long as their have been governments there has been corruption. In our case, corruption has permeated the system evern since our beginnings as a country. A system that was supposed to have ample checks and balances has become a trust fund run by interests that pat each other's backs. If you saw the opening skit on SNL last night, you have a somewhat exaggerated idea of how those who govern can ignore important issues while blatantly wasting our money, and get away with it. Given the current tax situation, however, I believe they are attempting to implement the sales tax fairly. I'm not at all in agreement with the notion that Internet Service Providers should have to tax us on service or any attempt to tax downloads. That just stinks. It's time bueaurocrats learn to spend wisely before asking for another source of revenue. (read: OUR MONEY!) Slightly OT. The Nashville Scene reported this week that outgoing Gov. Don Sundquist was granted free greens fees for [i]life[/i] by one of his top aides. This is the governor who [i]closed state parks because of the current Tennessee budget fiasco![/i] (A move which saved little or no money, but was an attempt to scare citizens into supporting the creation of a state income tax.) So he ruined countless day trips and family vacations for his own agenda, and will forever screw the state out of $10,000 or more in greens fees over the rest of his life. You see why tax reform has a snowball's chance in hell of occuring? It's easiest to find me on Facebook. Neil Bergman Soundclick fntstcsnd Link to comment Share on other sites More sharing options...
loudist Posted February 9, 2003 Share Posted February 9, 2003 [quote] Don't get me wrong, I think taxation has gotten out of hand and, in the name of social progress, our state and federal governments often overstep their bounds. [/quote]This strikes a nerve. In Cali, a proposition was put on the ballot, a few years ago, that every pack of cigaretts were to have a 50 cent tax for... early child developement! It was passed by to good citizens of CA because they hate smokers. To financially target a group of people in order to fund your own pet project and also punish them because you don't like them, is a loose form of bigotry. The state willingly goes along with this, because much of the revenues are spirited away into the general fund. States are about putting a larger scoop into your cashflow, while spending money in an unbridled and irresponsible manner. The tobacco settlements are a good example of fiduciary mismanagement. The lottery profits for education is another. Why are the schools and education system on the ropes? Link to comment Share on other sites More sharing options...
Felix_dup1 Posted February 10, 2003 Author Share Posted February 10, 2003 Most companies have their dotcom as a "wholly-owned subsidiary" of the parent corporation. They run it as a separate business. This is why an online retailer like Wal-Mart (or Mars Music for that instance) may not have charged sales tax in all of the states where they had stores - but only in the states where the internet arm of their business had a presence. Does anyone know what Musician's Friend, zZounds, or Sweetwater's sales tax policy is? Link to comment Share on other sites More sharing options...
fantasticsound Posted February 10, 2003 Share Posted February 10, 2003 [quote]Originally posted by felix: [b]...Does anyone know what Musician's Friend, zZounds, or Sweetwater's sales tax policy is?[/b][/quote]Musician's Friend has a distribution warehouse in Memphis, and they charge sales tax on all Tennessee orders. (Later, I'm told, they opened a store in Knoxville. I don't know if that's true, however.) It's easiest to find me on Facebook. Neil Bergman Soundclick fntstcsnd Link to comment Share on other sites More sharing options...
Felix_dup1 Posted February 10, 2003 Author Share Posted February 10, 2003 Musician's Friend had some physical stores at one time, but they are strictly catalog/internet now. There's no sales tax in Oregon, where they're located, so obviously they don't charge sales tax there. Link to comment Share on other sites More sharing options...
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