onwebcam

45 states charge different sales taxes.

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tony286

I read if the biz makes less than a million a year youre exempt.

potter

onwebcam doesn't understand the U.S. income tax system...

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kane

Right, but lets say I live in Washington State and I order something online. Right now I may not pay a sales tax on it even though my state has a sales tax. With this new law I would have to pay the Washington State sales tax correct?

So I can see how it might be a slight burden for a site because they have to set up their site to bill people from 45 different states a different amount of sales tax, but this isn't hitting one person with 45 different taxes.

onwebcam

The majority of the discussion has not been about paying as a consumer but as a retailer. Setting up your site to collect those taxes is the easy part. The accounting thereafter is what's going to be costly and time consuming.

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onwebcam

How so? Enlighten me.

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SuckOnThis

Why are you inaccurately quoting Thomas Jefferson?

onwebcam

I don't care who said it. Do you? Really?

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SuckOnThis

You don't care that you are misrepresenting what a founding father said? Really?

kane

How so?

You set up your software so that it charges customers the correct amount of sales tax for the state they live in. The software then keeps track of how much sales tax you brought in from each state and you cut the check to each state.

Sure, it more of a pain in the ass than if it weren't there and I am not a pro-tax advocate, but I don't know that this is going to be a costly and time consuming thing. Most of it will be automated.

BlackCrayon

this seems to be a pretty common thing these days. there are all kinds of quotes out there attributed to the founding fathers that they never said or that have been changed to mean something else. its an attempt to be able to say something without question because a 'founding father' said it, so its like gospel.

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Emil

I pay hoarder income tax.

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onwebcam

Fixed it for ya, feel better now? Did you get your check and meds this month?

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sarettah

It is potentially a tad more complex then that unfortunately. In Missouri alone there are 2168 different sales tax amounts depending on the county and city that the sale takes place in. http://dor.mo.gov/business/sales/rates/2013/. Those rates change at various times throughout the year depending on local legislation.

So, what rate will we be responsible for charging who? Willl it strictly be state sales tax or will we be having to deal with localities?

Instead of the states trying to shift the burden of tax collection on to us they should instead enforce their existing use tax laws that make the consumer responsible for paying taxes on items purchased outside of their locality. But they have found it impossible to do that and that is why they want to shift it on to us.

.

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SuckOnThis

Yes I did, along with my Obama phone, food stamps, Escalade, and my 6 bedroom house. Thanks bro!

Rochard

Why do we blame this on the President? It doesn't matter who is in office, people will say "This is typical of the President being against X" when it's really Congress who has the power and makes the decisions.

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onwebcam

Yes again this is bipartisan but who is it that has veto power and will sign it into law? Constitutional lawyer President Obama.

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purecane

instead of bitching and arguing over how things were or are now, why don't you focus on how things are GOING to be? this is the foundation for the one currency agenda. one economy, one government, one tax rate GLOBALLY. if the new world order wins, we'll all have the same tax burden, my guess is it will be somewhere around forty percent.

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kane

I am curious.

Do you feel that people who live in a state that has a sales tax should not have to pay that sales tax on goods that they buy online? I'm not talking about digital items that they can't buy at local stores, but actual physical goods.

If you do feel that they shouldn't have to pay a sales tax do you not feel that this gives the online retail a government manufactured advantage over the physical retailers?

sarettah

As far as I know, in most states that have sales tax, if you (the consumer) buy something out of state you are supposed to file a use tax on it. It usually credits you something for the sales tax that you did pay out of state and then collects any difference.

So, if you are buying stuff on-line and not paying a sales tax, and not filing a use tax then you are in violation of the law.

Most states do not enforce their use tax laws effectively except when it comes to big ticket items like boats and cars.

The failure of the government to adequately enforce the laws in their own state should NOT shift that burden on to me.

If the state of Missouri (where I reside and do business) required me to collect Missouri state sales tax on all sales I do (instead of just sales to people inside the state of Missouri) I could go for that. That is not the same thing as another state, where I have no representation, and who has absolutely no jurisdiction over me, requiring me to collect their taxes for them.

.

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onwebcam

Maybe this will wake a few of you up. I knew they were up to something fishy. I'm sure this is just a small part of their new tax scheme.

Internet tax bill targets all digital downloads

The U.S. Senate is set to vote Monday on a tax bill that would levy new fees on people who download digital products including movies, music, apps, and even WordPress themes.

In an unusual twist, companies in the tech centers of California, New York, Maryland, Massachusetts, and Illinois, will be the hardest-hit if S.743, also known as the Marketplace Fairness Act, is enacted.

That's because those states treat digital goods as non-taxable, meaning startups, individuals, or companies with offices only in those states don't need to worry about collecting sales tax. But if S.743 becomes law, any business of a reasonable size selling digital goods to the 24 states that have decided to tax them must collect sales taxes and comply with audits from up to 600 taxing jurisdictions.

http://news.cnet.com/8301-13578_3-57...tal-downloads/

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kane

This actually puts it in a way that clears some things up for me. I can understand what you are saying and it seems to me if, for example you live, work and operate your website from Missouri and the state of California wants you to do the work collecting their sales tax from buyers from their state they should, at the very least, come up with a system where they compensate you for your time or cover the cost/expense of doing so otherwise you are basically just working for them for free.

BlackCrayon

now that really blows. i can see paying tax for physical things you can buy in store but not digital items.

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sarettah

You can buy digital goods in the stores. They are stored on dvds, cds, etc. They are identical to the versions that you can buy for download. So, if we are gonna tax stuff why should digital goods be exempt?

.

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BlackCrayon

can you buy a domain in a store? how about a script?

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sarettah

A script is a program so yeah there are various programs you can buy on disk. A domain is another story. That one is hard to categorize because it does not actually exist, even digitally. It is merely an address.

Still, it is the sale that is being taxed, not necessarily the item being sold. So, if money passes hands there is an opportunity to tax it.

I am in no way for this bill btw. I was merely playing devil's advocate.

.

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BlackCrayon

i own many domains and if i am going to be taxed on these, its going to cause some major problems for me. especially being taxed for a country i don't even live in.

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sarettah

If you are overseas (edited in: or in Canada since I see your location says Ottawa) then you would not be taxed from what I have read. The bill merely makes it so US businesses have to tax cross state sales. I have read through the thing and did NOT see anything dealing with international. Doesn't mean that there isn't something hidden in there but I did not see it.

However, even here in the states, if the product is bought as a business supply by an entity with a valid sales tax id, it is exempt from sales taxes. Wonder how GoDaddy and such would deal with that.

.

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onwebcam

"A bipartisan coalition in the Senate easily passed legislation Monday to force Internet retailers to collect sales taxes for state and local governments, sending the issue to the House, where antitax forces have vowed to kill it.

But the 69-to-27 vote in the Senate will give the measure significant momentum. Hundreds of retailers are flying to Washington this week to pressure House lawmakers and counter the arguments of a slew of small-government groups, including Grover Norquist?s Americans for Tax Reform, which wields great influence in the House. "

http://www.nytimes.com/2013/05/07/bu...tion.html?_r=0

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Sunny Day

Alright, this is the web post I swore I wouldn?t write. The quote, ?never wise up a chump.? I?m giving you what as a consultant I should charge for.

I worked for a Fortune 750 company in their tax department. Most tax departments are seen as a Cost Center. We viewed ours as a Profit Center. Every $1,000,000 we saved in taxes was $1,000,000 in net profits. I personally helped on 2 projects of $30 million & $5 million and led $1 million & $.5 million recoveries.
I also know sales tax. I worked on creating a sales tax program for 5 years and gave up, as I couldn?t find a programmer. The biggest sales tax program in the country can?t make their program work and I bet I can spot errors in their rates. They charge over $10,000 a year for their program that doesn?t work right. It works, you just have to modify it for your specific business.

LPink is correct, posters here confuse income tax with sales tax. However if Interstate Sales Tax becomes the law of the land, and you pay a hefty sales tax in an area, the income tax man will come looking for his cut of income taxes. Since I thought LPink is in Kentucky, I?m going to him use as my example.

1st you have to understand terms like ?Nexus.? Nexus means LPink has a physical presence in a taxable area in KY. Having a store in an area is Nexus. Having a salesman based in CA or attends trade shows in LA where he sells product, (conventions don?t count if he isn?t selling) is Nexus in CA.

Next terms are tangible and non-tangible products. Tangible products are anything you can feel or touch. Buying a burger is a tangible product. Priceline getting you a room discount is a non-tangible product. It?s called a service. Since most of you aren?t in construction or a repair business, I?ll skip that, as it?s a complete new set of rules. In some states repairing a furnace is taxable, some not. Some the parts are, some not. But tangibles and non-tangibles can be charged different rates.

The myth is there are 50 states collecting 50 taxes. There are over 40,000 separate sales tax rates in the U.S. and if Lpink had to pay every jurisdiction, he would probably have to file close to at least 500 separate quarterly or yearly sales tax returns. Some states collect all the taxes. Some states allow locals to collect.

LPink, in Kentucky there is a flat rate of 6% of all Kentucky sales. A very simple form to fill out & pay..

If LPink was to start a business in several states, there is no sales tax. Period. End of story.
However, Alaska has no state sales tax, but there are local sales taxes. Some Boroughs (counties) and or some cities collect joint or separate sales taxes. Many exempt Native Americans (Eskimos) from the tax. I haven?t checked the rates lately, but Maryland and Oklahoma exempt ALL veterans from ANY sales tax. If memory recalls I think one or two places in Alaska have Vets exemptions. Many of the taxing districts only collect a sales tax March 1 to September 30. Right there you have about 50 separate filings. Church groups may be exempt from not only sales tax, but other taxes you?re required to collect.

Then many states exempt many different items and specifically tax certain items. Several East Coast states have taxable & non-taxable lists. Oh, did I mention many states have a ?Back to School? exemption on sales tax for ?school supplies?? This is just the tip of the iceberg.

Now let?s move to a really crazy state, Alabama.

Alabama collects a state sales tax. Alabama may or may not collect any county or city sales taxes. Each county or city decides if they let the state collect for them. Each county or city may collect their own sales tax or hire a private company to collect the sales tax. A sale may involve 1, 2 or 3 sales tax returns. To make it more fun. Sales tax rates on a local level may involve a county rate, a city rate and something called a ?Police Jurisdiction rate.? A ?Police Jurisdiction rate,? is the area the police patrol inside a city and SOME areas outside the city limits. Other than GEOCODING a specific property, you?ll never know if they are inside or outside. Hell, I don?t think the land owner knows half the time. He cousin, Bubba, the police chief always comes out for any crimes.

Getting the idea?

Here?s a couple of more. Kansas and other states are going to ?Delivered Address Tax.? LPink sells a sofa in his store and the buyer uses his pickup to haul away, Lpink uses the store rate. If LPink has to deliver the sofa, Lpink charges the tax rate where the buyer lives. Each tax district has an in store and delivered sales tax code. Making Kansas has over 850 sales tax rates you must line item. It?s all paid to the state, but you must line item the amount of sales collected in that jurisdiction.
Every county has a line code. Now if that sale is in a city or county There may be a tax. For either the city or county or both.
Now to spice things up. Kansas like many states now have special districts to collect a small percentage to offset bonds issued to pay off shops built. Raging Socialism, despite the beneficiaries claiming Capitalism at it?s best. WTF? In Kansas, the smallest, poorest county of 155 sq. miles v London at 607 sq. miles, v the Kansas City Metro area of over 2000 sq. miles. (In perspective, Luxembourg has 996 sq. miles & Holland has 2100 sq. miles). Wyandotte County, Kansas City, Kansas, manages to have 9 separate sales tax rates, line items to account for, in a 3 sq. mile area in or around the NASCAR track, Kansas Speedway, plus 3 other sales tax areas.


But Wait!! There?s MORE!! THERE?S LOUISIANA!!!

Louisiana collects the state sales tax and a few parishes (counties) allow the state to collect the sales tax. Fortunately local governments defer to the parishes. Now here is where the fun begins. There can be 1 to 6 line columns on a parish return. You might have to break down the collect by parish, school district, criminal/civil district or other district.

But Wait!! There?s MORE!! THERE?S TEXAS!!!
4 houses on street corners may have different codes/rates as being in separate library, school, hospital or fire districts. And the county, city and districts can set their own rate as long as the don?t exceed a maximum rate. So a store in the city may pay a lower fire rate than a store in the county, even than a in the same fire district if the city, which trumps the fire district claims all the tax. Actually, it?s easy in math, just hard to explain.

But Wait!! There?s MORE!! THERE?S New Mexico!!!

New Mexico has no ?sales tax.? It?s a Gross Receipts tax. But you get to deduct cost of the products you sold or returns. Gross receipts means if LPink adds on a ?sales tax?? he pays a Gr based on the total sale. Say $100. + 6% for $106. LPink pays New Mexico 6% on the $106. Pennies, but it adds up. Much as $.30 per $100.

But Wait!! There?s MORE!! THERE?S Hawaii!!!

Sort of like New Mexico, Hawaii is a ?Revenue? state. But crazier, you can?t add a sales tax or revenue tax on top of the purchase price. LPinks sells an ice cream cone on the beach, he can only collect a dollar if that?s his posted price [a separate issue ? TOTALLY]. LPink then has to use math to back out the sales tax amount. After backing out the tax, you can?t be charging more than a certain percentage. Also In Hawaii, you pay the tax on wholesales sales ½ of 1% last time I checked.

Then states allow you to collect a flat amount. Say a dollar for a product and you pay the sales tax out of the dollar. But some states require you to post a sign stating the sale sales tax is included. Other states, including the tax is illegal.

And don?t think of using zip codes. Zip Codes cross multiple county, city and any other district boundaries. Every state with more than one taxing code will have to provide geocoding for every address. However, that doesn?t work as the computers are set up to EXACT MATCH. If you live on Honey Lane and enter it as such but the computer uses the USPS of Honey LN it bounces back as no match. Or if LPink has a store and a warehouse next door and uses the warehouse address for deliveries it might bounce out as his store id the listed address for USPS.

There you have the short lesson in American sale tax. When you master the entire U.S. Income tax code you might be ready for Lesson One of the sales tax code. Actually, sales tax is nothing compared to knowing all the licenses and permits any business needs to know for any U.S. jurisdiction. There are millions of rules and regulations. Fortunately I only had to know those for 450 jurisdictions. Several states require a separate license to sell ice cream at a movie theatre. In Massachusetts if there are moviegoers under 16 a ?matron? is required to be on duty. In the old days they wore nurses? uniforms, now an usher can just wear a badge saying ?Matron.? Many states still require a separate Sunday license for many items.

Sunny Day

Part 2
I haven’t even started on Use Tax. Out of state consumer purchases or if you own a grocery store and use some of the cleaning products you sell to clean your store, use tax is due.

Then in New York, the super rich brag of diamond gifts for their “girlfriends,” the “girlfriends” get hit with the federal GIFT TAX. (gifts over $10,000).

The other states WILL NOT COMPENSATE YOU for time and effort to collect & report taxes. Do you get compensation to file your income taxes? NO!!

Digital is an intangible. Same as a fishing guide you hired for his services. He has to collect a sales tax for his services, if required. Each state is case by case.

Sales taxes are only collected at the retail level. Except Hawaii.
GoDaddy may have to tax you, unless as some states, exempt items used in the creation or resale of an item. If you have a domain for specifically selling online downloads (i.e. digital porn), that would be exempt in most states. Such as buying a welder to make go-carts.
But say for General Motors buys a domain just to show off their cars. GoDaddy would have to collect the tax, as the site is to advertise the product not specifically to deliver the product.

Believe me there are very rich accountants and lawyers who do nothing but this and many state employees who get state paid vacations to cool places so they can audit companies sales tax collections.

You guys may know how to make a buck in the porn biz, but like 99% of all businessmen clueless when it comes to taxes in general and sales taxes specifically.