States throughout the country are struggling with budget deficits and as they look for ways to solve their money problems, they are looking a lot harder for ways to change the law and enforce sales taxes on all internet sales.
The way the law stands now, businesses only need to charge and remit sales taxes for purchases made by residents of states in which the business has a physical presence. For most very small businesses, that means they only have to collect and remit tax for their own state.

But even that can be a pain in states like New York, where there are multiple taxing districts, and the businesss must collect and remit tax at the rate of the district from which the sale is made. (If you live in Albany NY and sell to someone in Smithtown, NY you are required by NY state tax law to collect and remit taxes at the Smithtown rate.)

Although not all states have multiple sales tax rates, many do, and just having to track, report and remit taxes to multiples states on a regular basis threatens to be an enormous administrative headache.

How would your business cope? Or could it? (Read our thoughts on the matter here: http://www.businessknowhow.com/money/internetvstax.htm )Would you still be able to sell on the internet and be profitable if you had to collect and remit taxes for every state in the country?

Post your comments here.



Janet Attard
Founder, Business Know-How
http://www.businessknowhow.com

IT IS AMAZING HOW THE STATES WANT TO COLLECT SALES TAX FROM THE SMALL BUSINESS GUY ON THE INTERNET. THEY SAID ABSOLUTELY NOTHING WHEN THE FEDERAL GOVERMENT CAME UP WITH NAFTA CAUSING MILLIONS IN LOST JOBS AND REVENUE. IN DO NOT HERE THEM CLAMORING TO PUT A STOP TO THE PHONY OFSHORE CORPORATIONS BEING SET UP TO PROTECT THE ASSETTS OF BIG CORPORATIONS AND INDIVIDUALS. ALL ONE HAS TO DO IS GO TO FORT LAUDEERDALE OR MIAMI FLORIDA AND LOOK AT THE MEGA YACHTS FLYING FOREIGN REGISTRY TO AVOID SALES TAXES. SOME OF THESE SHIPS ARE IN THE 20 MILLION PLUS CATEGORY AT 6 OR 7% THATS A LOT OF LOST SALES TAX.
ENOUGH SAID. PERSONALLY I BELEIVE THE SALES TAX TO BE REGRESSIVE COSTING SALES AND JOBS. IF THESE SAME STATES WOULD STOP THE RACE FOR CORPORATE WELFARE WE WOULD ALL BE FURTHER AHEAD. OUR FORE FATHERS HAD ENOUGH SENSE TO STOP ONE STATE FROM IMPOSING TARRIFFS ON ANOTHER. KNOW INSTEAD OF TARRIFFS WE OFFER FREE LAND, SUBSIDIZED LOANS AND NO TAXES. THEN WONDER WHY WE CAN'T SUPPORT THIS MESS. AMEN.

NO MORE TAXES!!! ENOUGH IS ENOUGH!

More taxes is just a way of saying "We can't manage our budget."
As business owners, we have to operate on a budget if we want to stay in business. There is sooo much waste in state governments, not to mention the federal folks.

Internet sales are roughly 3% of all sales. NO to more taxes!



Need Ink? Don't pay
retail.
www.MaxPatchInk.com

If all of the states are like Georgia,on-line businesses would have to register in each state and file a sales tax return in each state,each month,whether or not they make a sale in that state that month. Fifty-two sales tax forms each month would be an extreme amount of paper work on a small business.
Are the states trying to do away with small businesses?

David R.Messer

It would be absolutely detrimental to me if I had to start collecting info and remitting forms for all the states I sell to (and then some if I needed to pre-register just in case I sold to a particular state, which could happen at any time). Not completely sure how this would affect me, not being an American, but I buy from American businesses, and hire American services, many of whom are internet businesses selling from, and to, all over, just like me. If their administrative costs rise, then my costs rise.... then I'm out of business because my cost to the end consumer would be too high, and - to point out the obvious - sales would drop. Not good.

give some. get some.
www.ScoreBrowniePoints.com

Unless there is a direct cost to the State for a vender to conduct trade over the internet, I feel that the State has no right to a tax. If there is a cost to the State for vendors doing trade over the internet then like any other tax we should collect it for the State and submit it accordingly.

This topic is very important to me because it is so misunderstood by most people I talk to. Brick and Mortar businesses (B&M) believe that Internet merchants have an unfair advantage because they do not collect sales tax but the B&M merchants do. They always say that to "level the playing field" Internet merchants should be required to collect sales tax.

1. Sales tax IS collected in any state where the company has any physical assets such as a store (this is called Nexus).

2. The shipping/box charges that Internet merchants must pay (whether collected from the customer or not) is usually much higher than the states sales tax. This already puts Internet merchants at a disadvantage. Add sales tax on top of shipping and it would be very hard to be price competitive.

3. B&M stores are limited to filing taxes with only one state and their local city/county. This makes knowing the tax rates, what is and is not taxable and filing sales tax returns much easier. Internet Merchants would have to deal with over 7,500 possible taxing jurisdictions. If it was limited to just state sales tax, there are 45 state with a sales tax not to mention the home city/county sales taxes.

4. Large discount chains such as Walmart and Kmart already have a physical presence in each state and know how to deal with all the sales taxes. They can afford to staff their sales tax departments with many tax accountants. If all Internet merchants were required to collect taxes they could use this as a competitive advantage on top of the other benefits they have for being so large.

5. Other states provide absolutely no services to out of state Internet merchants. This is like free money. They take it in but do not need to provide any benefits for it. The local B&M's get police, fire, roads, schools, etc. in return for collecting sales taxes. When an Internet merchant ships a product out of state, they pay UPS, FedEx, etc who in turn pay taxes in that state for use of the roads for delivery.

6. Local business people can vote their government leaders out if they do not like their policies or tax rates. The Internet merchants can not. This is "taxation with out representation" a founding principal in this country. Internet merchants can only effect their home state/locale.

7. Internet merchants pay every other tax that the B&M merchants do such as federal income tax, state income tax, county taxes, city taxes, and these taxes are paid on all the money collected, not just the income received from the local state/county/city. Internet merchants pay tax and a lot of it.

Just my views....


Greg Banta
Bad Planet
www.badplanet.com

There are too many problems with assessing a new tax nationwide. Not only are there more than 50 different jurisdictions (as some states delegate taxing authority to city or county levels) but there are too many different sets of laws. In my state (Illinois) goods are taxable, but services (such as extended warranty plans)are not. Yet, in Wisconsin warranty plans must be taxed. Food and drug items are taxed at a reduced rate in a grocery store, but food is taxed at full rate in a restaurant. But then, what exactly is considered a drug or food item? Is candy a food? Also, there are tax-exempt organizations (not only not-for-profits, but TIF enterprize zones, certain wholesalers have exceptions for certain goods, and re-sellers). It would truly put undue hardship on small business to become tax experts in each jurisdiction. Actually, my accountant would not have all that knowledge at this time. It bothers me already that businesses are required to be tax-collectors. And for the privelege of collecting taxes from the people and remitting them to the state, and filing the required forms, if your form and payment happen to be one day late, do you know what your penalty is? 20 % ! What if the credit card companies tried to do that?
There is another silly arguement that I must address: The issue of "lost" revenue from otherwise taxable sales at a local store. It is the same logic that the postal service tried to use to calculate how much e-mail has "cost" them. I don't think I send any e-mail that would have been sent via regular mail, but perhaps have replaced a few phone calls. The same can be said of internet sales. It's not as if there are the same number of sales each year and now a certain percentage is switched over to internet sales. There are increases. Just because one has gained by a larger margin, does not mean there is a loss of the other.

I see no problem with collecting taxes for the state. They do have to pay my going rates and must reimburse me for any difference if tax revenues are not sufficient to pay fro my time.
The state constitutions and federal constitutions forbid slavery.
My tax collecting rates are $1,000. per hour.
Although this may seem like wishful thinking, I know of a number of people who have rasied this issue with state governments and have not heard from them again.
Government is criminal activity by another name. It is possible, government agents might attempt to prosecute anyone not willing to be a slave.
It might be interesting to threaten the states with this issue if they do not drop the matter; by creating a legal attack fund to challenge forced collections within the state. This may be an issue they prefer to keep out of the limelight and the courts.
If politicians pass such a law, the matter will not be over until the fat lady sings.

Live Long & Free,
Don Winfield
www.libertyaffiliate.com

The state has no right to take any share for internet sale because the state has not payed nothing to support it. The state has made money while you live in it.

James

www.4topink.com

www.einkclub.com