Internet Sales Tax Exempts Online Businesses with Less Than $1 Million In Annual Revenue

[fearthereaperx]

http://hosted.ap.org/dynamic/stories/U/US_BUDGET_BATTLE_INTERNET_SALES_TAX?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2013-03-22-20-13-33

Part of what is at stake is potential revenue for cash-starved state governments across the country. An estimated $20 billion in sales taxes go uncollected annually by out-of-state online merchants.

Supporters also argue that not collecting the levies is a competitive disadvantage for retail stores, which must collect local sales taxes.

One sponsor, Sen. Richard Durbin, D-Ill., said Internet sales taxes should be collected "so those local businesses will have a fighting chance."

Sens. Mike Enzi, R-Wyo., and Lamar Alexander, R-Tenn., were other chief sponsors.

Opponents said the plan would be unworkably complicated, would pressure states without sales taxes to adopt them and would encourage companies to move overseas, where they said sales taxes could not be enforced.

"It tramples on states' rights," said Sen. Kelly Ayotte, R-N.H.

Online businesses with less than $1 million in annual sales would be exempted from having to collect the levies.

 

[itshappening]

Pathetic.

 

[fearthereaperx]

Pathetic.

Everything about this Act is bad, but there's at least one positive kernel pushed into the legislation to look forward to assuming it does pass.

 

[ctiger2]

I saw this quote on Armstrong's site:

“With Congress, every time they make a joke it’s a law, and every time they make a law it’s a joke.”

Will Rogers (1879–1935)

 

[Matt Collins]

A friend of mine had a computer business, and most of his customers were out of state. He would do maybe $3-4 million worth of sales, and by the time all the dust settled, and split with his partner, he brought home about $60k/yr.

 

[muh_roads]

A friend of mine had a computer business, and most of his customers were out of state. He would do maybe $3-4 million worth of sales, and by the time all the dust settled, and split with his partner, he brought home about $60k/yr.

$60K is too much to allow the mundanes to have.

 

[Dr.3D]

So those business with more than $1 million in annual revenue with have to become two or more businesses to avoid the taxation.

 

[muh_roads]

...

 

[muh_roads]

So those business with more than $1 million in annual revenue with have to become two or more businesses to avoid the taxation.

With all the licensing fees that come with doing that, you might as well just pay the sales tax. Maybe not for all industries...but for many.

 

[Ranger29860]

How in the world would they even enforce this? I mean just doing companies in the states would be a nightmare but good god imagine trying to enforce imports. Would they block any packages at customs if they are from a company that does not follow the rules?

 

[HOLLYWOOD]

http://hosted.ap.org/dynamic/storie...ME&TEMPLATE=DEFAULT&CTIME=2013-03-22-20-13-33

Part of what is at stake is potential revenue for cash-starved state governments across the country. An estimated $20 billion in sales taxes go uncollected annually by out-of-state online merchants.

Everytime I hear this "$20 Billion in uncollected"... this ALSO reminds me of the 2005 Bankruptcy Act, when W Bush's propaganda speech of collecting $20 Billion more for corporations/businesses, on top of giving the federal government supreme control in anything that may be owed to them as well. Which of course was a direct attack on the individual and hit the poorer classes the most.

Thomas Jefferson warnings keep arising, ...they(.GOV) will eventually steal everything from the citizen over time.

 

[fearthereaperx]

A friend of mine had a computer business, and most of his customers were out of state. He would do maybe $3-4 million worth of sales, and by the time all the dust settled, and split with his partner, he brought home about $60k/yr.

3.4% profit margin(on $3.5 million sales) for an online business?

 

[Ranger29860]

3.4% profit margin(on $3.5 million sales) for an online business?

O thank god I was not the only one to notice that lol. That must be ton of overhead.

 

[fearthereaperx]

O thank god I was not the only one to notice that lol. That must be ton of overhead.

Highly saturated Computers/electronics market +Ebay fees could get you close to that number, though. It's all about volume even though these are grocery store margin numbers lol.

 

[AGRP]

Whats the difference if online business does more or less than $1 mil? Are there physical roads in cyber space that need to be repaved?

 

[Zippyjuan]

How would it be constructed (the internet tax system)? What rate or rates would be charged? Would a business say in New York simply assess New York sales taxes for all online purchases (states like California- where say the customer lives would still be losing money the person would have spent in- state)- which would encourage all busnessses to move to lowest sales tax states to set up shop. The other option puts huge costs on businesses- they would have to know the state sales tax of all 50 states and have a separate calculation of sales tax to that state (not that hard with computers- entering the shippling ZIP code would tell them where and the software does the tax calculation) and then they would also have to tally the money for each state and send that money to the respective states (monthly?).

 

[MoneyWhereMyMouthIs2]

A company with 1 million in annual sales may not be making much at all. What if they employ 10 people? What about their materials costs? I mean... your could have one million in revenue and 1.1 million in costs. You company could be losing money every year and still subject to this nonsense.

 

[fearthereaperx]

A company with 1 million in annual sales may not be making much at all. What if they employ 10 people? What about their materials costs? I mean... your could have one million in revenue and 1.1 million in costs. You company could be losing money every year and still subject to this nonsense.

It's obviously a "dangling carrot" to appease those arguing that it's a small business/start-up killer.

 

[Ranger29860]

Whats the difference if online business does more or less than $1 mil? Are there physical roads in cyber space that need to be repaved?

I don't know if that is all that strong of an argument used to oppose this. One could easily counter with the fact that if you buy something online it has to be shipped to you so that means more travel for UPS/FEDEX/USPS so that leads to road wear.

Now the selling of digital goods is a whole other issue. Say if I buy a game online and download it then does this bill say I have to pay taxes on that as well? Since there is no wear and tear on the roads for that sold item then I would not see how that argument can be used.

But lets be honest here this whole thing is a cash grab for the federal and state governments. It has nothing to do with anything these businesses may impact. Gas tax already pays for roads so what else could they possibly justify the tax for? I am a stern believer in indirect taxes that only tax things that directly impact services that are needed (aka gas tax for roads)

 

[Zippyjuan]

Noting also that this was a non- binding amendment to a non- binding spending bill.