US internet sale tax is coming!

[Armanius]

Nobody likes being taxed. That's for sure. But it's too easy to scream raise the taxes without giving much thought of why (or why not) taxes should be raised, when one doesn't get taxed. I'm sure IF (and I doubt that it'll ever happen in my lifetime) they ever replaced income tax with sales tax, there would be exceptions to necessity items like food and clothing. In Texas, we already don't pay sales tax for certain categories of food items like caviar and Dom Perignon.





ps: Just kidding about the caviar and Dom Perignon! I forgot to include anything with a red dot on it!

 

[bartjeej]

Nobody likes being taxed. That's for sure. But it's too easy to scream raise the taxes without giving much thought of why (or why not) taxes should be raised, when one doesn't get taxed. I'm sure IF (and I doubt that it'll ever happen in my lifetime) they ever replaced income tax with sales tax, there would be exceptions to necessity items like food and clothing. In Texas, we already don't pay sales tax for certain categories of food items like caviar and Dom Perignon.





ps: Just kidding about the caviar and Dom Perignon! I forgot to include anything with a red dot on it!

Yup, in EU countries, there're 3 tax rates: 0%, for medical services, financial services and some other things; a low % for food and other necessary items (6% in the Netherlands), and a high percentage for "luxury items" which includes most things that aren't necessary to survive (21% in NL).

 

[Amin]

On a personal note, I'm a little worried Amazon and B&H might stop doing affiliate partnerships if they have to charge sales tax. Not sure I could pay for the sites without affiliate revenue.

 

[Gary]

On a personal note, I'm a little worried Amazon and B&H might stop doing affiliate partnerships if they have to charge sales tax. Not sure I could pay for the sites without affiliate revenue.

Maybe you could tax the users ...

 

[Armanius]

On a personal note, I'm a little worried Amazon and B&H might stop doing affiliate partnerships if they have to charge sales tax. Not sure I could pay for the sites without affiliate revenue.

Amazon already charges sales tax to a good chunk of its customers. What is the connection between affiliate partnerships and sales tax? A double whammy lower revenues due to lesser consumption and having to hand additional $ to the affiliate partners?

 

[Gary]

My $.02 ... I agree with most of what I read. I hate taxes, but I also appreciate the need for taxes and I purchase most of my stuff locally. I do not think that internet retailers should enjoy an unfair advantage over local brick & mortar stores.

 

[Yeats]

Maybe you could tax the users ...

Gary, don't we find this place taxing enough? :tongue:

My $.02 ... I agree with most of what I read. I hate taxes, but I also appreciate the need for taxes and I purchase most of my stuff locally. I do not think that internet retailers should enjoy an unfair advantage over local brick & mortar stores.

I think many of us wouldn't mind taxes so much if we knew the money was being spent responsibly.

 

[Armanius]

Study on sex habits of slugs is not responsible expenditure?

 

[Luke]

This is a hard topic to discuss without discussing politics. Just a reminder

 

[wrangler]

As I understand it, most states require that each consumer is responsible to remit sales tax to the state in which they live. I also have read that only about one percent of us do that. The proposed federal legislation allows a mechanism for out of state merchants a requirement to collect those taxes. I think "fairness" is a misnomer, this law simply prevents the majority of us shopping on line from being law breakers.

 

[Yeats]

As I understand it, most states require that each consumer is responsible to remit sales tax to the state in which they live. I also have read that only about one percent of us do that. The proposed federal legislation allows a mechanism for out of state merchants a requirement to collect those taxes. I think "fairness" is a misnomer, this law simply prevents the majority of us shopping on line from being law breakers.

The aspect of "fairness" or "unfairness" that comes into play is when the online purchase comes from a different state than the location of the business. The state in which the buyer lives will benefit from the sales tax, but none of that money is going to the state in which the business physically operates.

 

[Gary]

The local stores where I purchase my camera stuff, sell at or near B&H. I think more would shop locally is the price is not significantly different. Removing the self regulating element(s) from internet sales has got to be a plus for smaller retailers.

Gary

 

[wrangler]

The aspect of "fairness" or "unfairness" that comes into play is when the online purchase comes from a different state than the location of the business. The state in which the buyer lives will benefit from the sales tax, but none of that money is going to the state in which the business physically operates.

Interesting argument! If I go to New York, walk into Adorama's store and purchase something, the sales tax goes to the State of New York. That sales tax then benefits the infrastructure supporting that business. If I buy that same item on line, the sales tax will go to the State of Minnesota where it will ostensibly benefit the consumer. On which side is the fairness?

 

[Lawrence A.]

I don't think it is a fairness issue, but an issue of necessity. State and local governments cannot take up the slack of federal budget cuts if an important part of their tax base is disappearing into cyberspace. We all want the fire trucks there when our house catches fire, but --damn! -- we do hate paying for it. I'm not lobbying for or against the legislation, and in fact have a lot of mixed feelings about it. But the revenue base of state and local governments has been whacked over a number of years, yet they still have important jobs to do, and unless we want vigilante posses and bucket brigades, dirt roads and collapsing bridges, and no public health departments, the money has to come from somewhere. I hate paying it as much as the next guy, and I can bitch about spending on this or that thing that is not among my priorities, but when my elderly neighbor had a heart attack, I was sure glad to be able to call 911.

Paradise is lost, and (to mix my literary references) we have tend our garden. But the seeds and fertilizer cost money.

 

[Amin]

Amazon already charges sales tax to a good chunk of its customers. What is the connection between affiliate partnerships and sales tax? A double whammy lower revenues due to lesser consumption and having to hand additional $ to the affiliate partners?

When Amazon was first made to charge tax in California, their first response was to drop the 10,000 affiliates in California. I don't know if that was an attempt to influence the law (dropping affiliates means less income for those 10,000 Californians) or just reflects the fact that they were expecting to make less money in CA and coudn't afford to give affiliates their 4% (or whatever) anymore. Eventually they reversed their position and welcomed back those affiliates, but having to charge tax might substantially affect business for a lot of companies, and I could see some of them deciding to drop affiliates.

If Amazon or B&H were to drop us, a lot of things would have to change here, probably starting with a move to a slower, cheaper server and dropping support for the site-specific apps.

 

[Yeats]

I don't know if that was an attempt to influence the law (dropping affiliates means less income for those 10,000 Californians)

I'm guessing that's it. As long as everyone has to play by the same rules, I'd think the affiliate program would be mostly unaffected.

 

[Luke]

I'm guessing that's it. As long as everyone has to play by the same rules, I'd think the affiliate program would be mostly unaffected.

I would think along these same lines. Also, if Amazon drops us from their affiliate program, then all these camera-holics just buy their mountains of cameras from B & H (or Adorama, or whatever)

 

[zapatista]

Issues surrounding taxation and the perceptions of people are always fun to discuss. For myself, the proposed changes hit me on a professional and practical level. 1st off, I'm a tax accountant by profession and I work for the federal government (I'll let you guess where I work). I also have a decent side business selling photography equipment, primarily on amazon marketplace and eBay. The $1,000,000 exception likely applies to smaller businesses like myself, even though I sell through the likes of a giant organization like Amazon. On a practical level, if I had to remit tax & file sales/use tax returns to every State I sell in, well I'd be out of business. On the theoretical/moral skein, it's only fair that everyone pays their fair share of tax.

 

[bartjeej]

Issues surrounding taxation and the perceptions of people is always fun to discuss. For myself, the proposed changes hit me on a professional and practical level. 1st off, I'm a tax accountant by profession and I work for the federal government (I'll let you guess where I work). I also have a decent side business selling photography equipment, primarily on amazon marketplace and eBay. The $1,000,000 exception likely applies to smaller businesses like myself, even though I sell through the likes of a giant organization like Amazon. On a practical level, if I had to remit tax & file sales/use tax returns to every State I sell in, well I'd be out of business. On the theoretical/moral skein, it's only fair that everyone pays their fair share of tax.

euhm... IRS! I'm studying for a master's in Economics and Taxation (which looks at taxation from a legal, financial and economic POV), so pretty close I guess
An important consideration with regards to B&H's profit margin is the elasticity of demand for the products B&H is selling; if customers hardly react to price changes (usually because they badly need or want something), B&H can just raise their price and the customer pays most of the tax. If customers react to price changes strongly, B&H can't increase their prices much and will have to bear the taxes themselves, hurting their profitability. With cameras being a luxury product, chances are customers are very sensitive to price changes, which would be bad news for B&H and the like, unless the products were hyped so badly that customers are willing to pay almost any price (like Apple products).