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Should Taxes Be Collected on Amazon & Other Online Sales ?


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Initial post: Jul 30, 2011 5:28:53 PM PDT
shiloh sales says:
Many States are wanting to somehow collect taxes from online site including Amazon. I would not mind if states collected taxes fron online sales but I would rather see it as a use tax instead of a sales tax. I'd like to hear from both sellers and buyers their opinions on which they would choose if a tax had to be paid. If you are a buyer, use the word buyer as your first word of your reply. If you are a seller, use the word seller as your first word and lets see what happens.

Posted on Jul 30, 2011 5:35:30 PM PDT
shiloh sales says:
Seller. If individual states are so concerned about taxes from online sales I feel they should go after the buyer to collect use taxes instead of going after Amazon to collect a sales tax. Here in Arizona, starting next year there will be a line for use tax added to the state tax return we file. They will expect us to pay a use tax on items we purchase from out of state. If you had to pay a tax for online sales, would you rather pay a sales tax when you purchase the item or would you rather show it on the use tax line on yout states tax return?

Posted on Jul 30, 2011 5:46:59 PM PDT
Last edited by the author on Jul 30, 2011 6:03:24 PM PDT
shiloh sales says:
Seller. I live in Arizona and I report my sales tax collected monthly to the Arizona Department of Revenue (AZDOR). The state of Arizona has a sales tax of 6.6%, counties and cities can decide the amount and add their own sales tax. The maximum tax (state, county and city) can be as high as 10.6%, most cites are in the 2-3% range. When I send in my monthly TPT form I report the different counties etc that I collect the taxes in and send a check and the state distributes it to the counties and cities depending on what I show on the TPT. Some Cities like Mesa, Arizona for example collect their own sales tax from the sellers within the city so if I sell something in Mesa I only report the 6.6 state tax on my monthly TPT to the state and send the check for that and then I have to send a separate check to the city of Mesa for their 2 or 3%. How are online sellers expected to know what cities collect their own tax or to send the total % to the state. Things like that would have to be straightened out before anybody or agency thinks about charging sales tax for online sales.

Posted on Jul 30, 2011 6:00:29 PM PDT
Last edited by the author on Jul 30, 2011 6:01:29 PM PDT
shiloh sales says:
Seller. As I mentioned in another thread please go to www.azcentral.com and search for internet tax. Look down the list for 3 articles that appeard in out newspaper this month, they are titled:

Arizona Benefits as Internet Tax Debated from 7-10-2011.
Arizona's Status Grows as Distribution Center From 7-10-2011
Taxing News for us (but not for Amazon) from 7-22-2011

In reply to an earlier post on Jul 30, 2011 6:34:23 PM PDT
duckles says:
Most people don't want to pay the tax at all but my preference would be for the seller to collect it. The big companies at least could do it rather easily. It's just a computer program with all the rates loaded and would be part of their point of sale application. It probably would make it easier if there were a standardized rate for internet transactions or maybe someone could create an online app (in the cloud?) that any seller could access to determine sales tax due from any state and to any city. now, what about how they pay the tax. Maybe the states could get together and have one site where ALL the information and payments could be sent.

Posted on Jul 31, 2011 6:12:55 AM PDT
CarlGlas says:
Online vendors should not be required to act as tax collectors for taxing entities.

Posted on Jul 31, 2011 8:14:06 AM PDT
Buyer:
If they want to do any taxation, the taxes should be collected at the Sellers location at their rate for their municipality. In essence treat it like a normal store. This way the area where the business is located would benefit. Most Politicians put these proposals out as a quick revenue idea. Its unfair for them to get money simply because a buyer lives in their area. Its much more fair that the municipalities that serve the business get the revenue.

In reply to an earlier post on Jul 31, 2011 12:51:06 PM PDT
CarlGlas says:
If the politicians really wanted to make a lot of money they should legalize Marijuana and tax it.

In reply to an earlier post on Jul 31, 2011 2:46:37 PM PDT
Also Sport Betting.

In reply to an earlier post on Jul 31, 2011 3:02:46 PM PDT
Elizabeth says:
seller. Why are internet companies going to be paying these taxes? Taxes are supposedly paid for infrastructure and services supplied by the government. What service has Arizona supplied to my online store? Especially if I am located in another state. Brick and mortar stores pay taxes because their stores are using infrastructure such as roads, garbage collections, etc...

In reply to an earlier post on Jul 31, 2011 3:07:54 PM PDT
Ex Seller:

That is because states cannot control there own spending, and it is an easy way to collect some money.

In reply to an earlier post on Jul 31, 2011 5:33:26 PM PDT
duckles says:
The states want the internet sellers to collect it because their citizens always "forget" that they are supposed to pay sales tax on anything they purchase.
Thinking about it further a VAT as in Europe with the abolition a all state general sales taxes would eliminate almost all the problem.
Are there any big internet sellers in Europe? Does anyone Know? I sort of doubt it because the tax structure is not to their advantage.

In reply to an earlier post on Jul 31, 2011 5:40:03 PM PDT
Last edited by the author on Aug 6, 2011 12:44:34 PM PDT
duckles says:
Elizabeth, If your state has a sales tax I hope you are paying it on sales shipped to your state. The new reporting laws for payment providers will make it easier for the states to find the people who aren't. Sometime this fall Amazon will be asking all sellers for either a social Security number or a sellers tax id. I'm surprised they are taking as long as they are. My Credit card processor wanted that information last Fall.

Posted on Aug 5, 2011 10:26:42 AM PDT
D. Jenkins says:
Buyer/Seller. Sure I think we should pay taxes, because our local and state government buildings need new oil paintings and stone facades saying what city you are in.... give me a break. Taxation without representation comes to mind.

Does everyone realize that we are taxed more than what King of England was trying to impose on us, that is why among other reasons why this country was born... that led to the famous Tea Party revolt. The reason we are having so many government issues isn't because there isn't enough tax revenue, it's because somehow we have raised an entire group of people that are not productive, and think that it's the governments responsibility to tend to their needs rather than themselves.

The shipping companies pay taxes, which is what we pay for instead of taxes is shipping... so to say we need to pay taxes on online purchases is ridiculous.

In reply to an earlier post on Aug 5, 2011 12:20:46 PM PDT
duckles says:
Actually, if that local store ships a purchase to another state, they don't collect sales tax. In california if I ship it to another city/county I have to find out what that city/county's tax rate is so I can pay that to the state for the sale. If I charge the buyer for it or not is immaterial.

Posted on Aug 5, 2011 6:56:38 PM PDT
BUYER/SELLER

Regarding Internet sales tax ... just abide by the Golden Rule! NEVER pay state sales tax on internet sales! Such sales always should be Free of sales tax. And if the 'Internet Company' (HSN - for example) DOES charge sales tax for ALL STATES, I just don't do business with them. You always can find a smaller company which does not charge state sales tax. When/If Amazon begins charging state sales tax, I'll buy books, etc. elsewhere. Is this clear to everyone? The Rube

In reply to an earlier post on Aug 6, 2011 9:24:53 AM PDT
L. Whitcomb says:
[Customers don't think this post adds to the discussion. Show post anyway. Show all unhelpful posts.]

In reply to an earlier post on Aug 6, 2011 9:29:59 AM PDT
L. Whitcomb says:
[Customers don't think this post adds to the discussion. Show post anyway. Show all unhelpful posts.]

In reply to an earlier post on Aug 6, 2011 10:46:07 AM PDT
NO - Sales tax period is not a logical way to raise revenue

1.) Taxes the poor more than the rich in terms of percentage of revenue spent; ie spend all of your income - all is taxed; spend only 10% - only 10% is taxed; net effect is this way of generating revenue targets those who make less

2.) Money you spend has already been taxed

3.) Money you spend will be taxed again as income by the merchant; this makes sense

4.) Spending is not an indication of one's ability to pay taxes

5.) Is one way government plays the nut-n-shell game in how much you are paying in taxes; this reduces spending accountability because the public does not have a clear view of how it is being taxed

6.) Injuction with #4 is an assault free economy because the government is steering how you spend money; food not taxed, luxury tax deters spending on those items. IMO this is not the proper way to steer the economy

7.) The extent at which some states go resembles Mafia like practices. Take IL for example. If you buy something in another country and don't pay taxes on it, IL feels they should be able to tax you if you plan to use that item in IL. Seriously why does anyone think it makes sense to tax someone to use property THEY OWN! This is an assault on personal freedom showing an attitude the goverement feels they own you and your property. I can see a use tax making sense if it costs the people somehow where that cost wasn't recouped in some other fashion but certainly with the majority or products this is not the case.

Please don't get me wrong, this is not a statement that we pay too much in taxes; not at all. It is completely a statement that sales tax is the wrong way to do it. If the government needs this revenue there are more appropriate ways to do it such as through income tax. In fact think of all the infrastructure and administrative cost that would be saved by this simplification. All the money the government is spending now to collect sales tax, on the systems to do so, the programs, and other adminstration would be largely eliminated. Sure some additional spending may be required to increase the level of tax collection in other areas but no where near the level of having two completely separate systems.

In reply to an earlier post on Aug 6, 2011 10:56:30 AM PDT
Last edited by the author on Aug 6, 2011 11:21:41 AM PDT
Elizabeth, thanks for the thoughts and you hit upon a key issue often questioned with company profit taxes on foreign companies; sales tax however is actually a tax paid by a vendor on your behalf. It's a tax you pay. The government is taxing you for buying the product not to pay for infrastructure supplied to the business. Whether I'm right, you are, or a combination of the two, it certainly makes more sense for the business to pay costs on society for doing busines. In directly of course we pay anyway through the price of the product/service but simplying this by not passing on these costs in some sort of legislated fashion SAVES by eliminating further infrastructure costs and is also quite easier to audit.

Posted on Aug 6, 2011 11:18:07 AM PDT
L. Whitcomb SERIOUSLY!?!?! Your feedback here sounds sooooo brilliant and is certainly very insightful to the topic of the post. (Sarcasm) I suppose you think Stephen Hawking is an idiot because he has trouble talking.
We're not writing a novel or anything official here just providing some personal thought on an important issue. Whether you agree with his/her point-of-view, the person who inconsequentially used "there" instead of "their" at least was adding to the conversation. I'm still looking for where you posted anything of value on the discussion topic.

In reply to an earlier post on Aug 6, 2011 12:43:33 PM PDT
duckles says:
Sorry about that. I normally do proofread but I was in a hurry so I just posted it.

In reply to an earlier post on Aug 6, 2011 1:04:01 PM PDT
Last edited by the author on Aug 6, 2011 1:19:05 PM PDT
duckles says:
Just which taxes that the shipping companies pay are you referring to? If they are in your state they normally charge any state tax due. If they are out-of-state the current law does not require them to pay sales tax to your state if it has sales tax (still 5 states without a sales tax), and my state (California the tax hell) does not ask me to pay it to them. YOU on the other hand may be required by your state to pay those taxes. They often call it a "use Tax". The only reason online sellers do so well is that they are not required to pay your states sales tax and most buyers ignore the requirement to pay the tax. Regarding Amazon, if I get an order with a California shipping address, weather I fulfill it OR Amazon fulfills it, I am required to pay sales tax to the state on that sale. Since Amazon does not have a mechanism in place to charge that sales tax during the sale, the tax comes out of whatever profit I made. In a few cases where I am priced where I make very little profit, I have ended up with negative profit. If I am shipping the item I can state "No California Orders" in my comments but I can't stop people from placing the order and if I refuse to ship it, Amazon places a black mark in my seller metrics. (This is one buyers do not see.) Also, even though I said "No California Orders" the buyer I refused to ship to can still give me a bad review, that probably is an unfair situation but it can be done. One of these days, regardless of the current sales tax fights going on, Amazon may start adding sales tax to these transactions. If anyone reading this lives in Washington State and has bought things directly from Amazon, I would be very interested if hearing if they are charged sales tax by Amazon. I know that Amazon should have to pay it to the state since they are headquartered there. If they don't charge it they are probably paying it out of their profit.

In reply to an earlier post on Aug 7, 2011 3:58:52 PM PDT
shiloh sales says:
This morning Arizona Republic newspaper has an interesting article about use tax and mentions Arizona's recent deal with Amazon.com that allows the online retailer not to collect sales tax on items shipped from Arizona including those sent to Arizona residents. Since I live in AZ, I guess this means that I might fall under that deal also if I send something to a resident in Arizona if it is sold on Amazon. AZDOR will be going after use tax from the consumer. There will be a new line on the State's income tax form next year about use tax. The Arizona Department of Revenue (AZDOR) hasn't yet provided details of the new tax reporting rules mandated by the legislature in April. It could be possible that anyone who does not report any use tax will receive a mass mailing from AZ explaining the new rule and suggest that they reconsider under the implied threat of an audit. Anyone who declares nothing in use tax and lies about it runs the risk of drawing a penalty for understating their taxes.

In reply to an earlier post on Aug 7, 2011 9:34:14 PM PDT
Last edited by the author on Aug 7, 2011 9:35:07 PM PDT
duckles says:
I'm sorry Shiloh But I doubt that you would be covered under that deal because YOU live in Arizona and are personally responsible for sales you make that are delivered to Arizona. As for that use tax thing, when no one consumer is likely to owe much use tax it makes enforcement virtually impossible. California has had that use tax for many years, people still don't report it. Unless there are going to be huge fines for non-reporting and some easy way for them to find your purchases, they are not going to do any special audits. They may ask people who are already being audited but it is not easy for them to prove you bought something and didn't report it unless they are doing a detailed audit where you have to show virtually every bit of income and expenses. A normal taxpayer will never see that. The Feds do some every year at random so they can establish the norms they use for detecting suspicious returns but they are not asking about sales taxes.
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Discussion in:  Toys forum
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Initial post:  Jul 30, 2011
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