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Universal Online Sales Tax Imminent?
That Congress has had aspirations on collecting sales tax on online purchases, which comprise an increasingly bigger portion of all retail sales in the US, in the past is nothing new. However, following last night's passage of the Marketplace Fairness Act in the Senate with a cloture-busting 74 votes for (and 20 against), the US may be very close to finally adopting a uniform standard taxing all online transactions, regardless of physical jurisdiction or any other geographic boundaries.
As Ars Technica reported last night, "your tax-free days of online shopping are numbered. If S743, also known as the Marketplace Fairness Act, becomes law, the millions of Americans who have been able to avoid sales tax online will have to start paying it. Given the broad support shown by today's US Senate vote, some version of it is likely to come to fruition."
And since a tax is a tax is a tax, it means that the purchasing power of online shopping Americans will be uniformly reduced by some X%, depending on what the final tax structure is agreed upon, which also means that the volume of all online transactions will have to decline by a corresponding amount all else equal, in turn leading to lower overall revenues and profits for online retailers. But at least the Federal government will have more cash to waste on such high ROI generating projects as Solyndra and Fisker.
From Ars Technica:
The bill will compel companies having annual online sales of more than $1 million to collect sales tax on those purchases. Interstate sales have long been exempted from sales tax, but brick-and-mortar businesses have just as long complained about the edge that online businesses have since they avoid collecting taxes. A key opponent of online taxation, retail giant Amazon, recently switched sides after losing some key legal and political battles over taxation. Amazon already collects taxes on sales in nine states, including California, New York, and Texas.
"We've had a lot of innovation in the online space, but federal laws have failed to keep pace," said bill supporter Sen. Mark Udall (D-CO). "Today nearly one in ten sales occur online," and the lost sales tax revenue is hurting state coffers. "It just makes common sense... the Marketplace Fairness Act is about equitable treatment for all sales."
Opponents have already shifted their focus to limiting the scope of the bill through amendments, but it remains unclear if that will make much headway.
"A vote for the Marketplace Fairness Act is a vote to subject a senator's home state Internet [sales] companies to tax collectors in state courts around the country," said Sen. Ron Wyden (D-OR). Instead, states should look to "voluntary compacts" making it easier for companies to voluntarily collect sales taxes, rather than being compelled to do so.
In addition, the act is an attempt to apply "local laws to the international medium that is the Internet," said Wyden. That could inspire other countries in their own efforts to regulate the Internet, with taxes or with outright censorship.
Curiously, for all the vocal rejection of "austerity" in recent days following the R&R excel gaffe, the amusing aspect is that European governments had never actually implemented spending cuts (as we have shown in the past here and here), and it was the tax hike component to austerity that infuriated most people. It is therefore amusing to watch as the same people who denounce austerity in Europe and around the world, are those who are pushing for an online sales tax, which as the name implies, is simply another form of taxation, and less real disposable income going to end purchases.
We can't wait to see in one or two years whose excel errors will be trotted out for public consumption when this latest taxation proposal backfires and crushes already razor thin retail margins further, leading to yet another downward economic swoon.
Luckily, by then it will be the Fed that will be the end buyer of not only securities, but goods and services as the central bank insanity takes another step-function leg higher, and when "more of the same" fails to stimulate the economy, the only logical response is to do "much more of the same."
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While we're at it lets just throw in a new federal tax.
Gold and silver not readily available.
Ammo same same.
Online sales to be taxed, thus reducing stored assets/prepatory items.
BUY FOOD NOW.
Availability thereof about to be reduced.
Stock up BITCHEZ.
Is it for the childrenz?
Desperate attempt to pull online sales forward because this economy sucks balls right now. I bet they go back and forth on this a few times...reminds me of Bernanke and his merry men (float some Fed Reserve members to mention tightening, then more QE; or just like the sequester/fiscal cliff fiasco). Great to ramp the market even higher.
Better hurry up and buy all those gun parts now.
All desperate acts of bankrupt governments, using fiat currency that's desperate to survive.
Plan accordingly.
its very obvious they are getting desperate.
The 10%ers strike again. This fucking country has been hijacked by greedy, corrupt minority interests.
But of course, more money for the politicians and their banker masters.
Both sides of the aisle will collude to support the kleptoligarchy and punish citizens.
More taxes, more reductions to already taxed entitlements with the concomitant and obligatory money to banks, insurers, and corporations via government on the backs of taxpayers.
We have to come up with a new word for this kind of crony capitalist socio-facist communism wrapped in the flag and stuffed with lies, corruption, and the death of the rule-of-law.
The article makes it sound like the Federal govt will get the taxes, not the individual states. Gotta feed the beast.
You always have choice: don't bank, don't buy shit and starve the beast.
The more you tighten your grip, Congress, the more star systems will slip through your fingers.
I thought fairness would have meant that offline business would have also not have to pay taxes....I guess I was wrong. I guess that's also the reason I am fucking bleeding in my precious metals long term investments....
Nothing promotes that feeling of serenity like holding physical. If you're in paper PMs, as someone once told me during the 1987 crash, when I was crying over the loss of 1/3 of the value of my IRA, "Its just a paper loss."
FUCKING GREEDY PIG BASTARD SENATE COCKSUCKERS!!! Nothing like putting out the fire of a collapsing economy by dousing it with more taxation. SCUMSUCKING FUCKERS!!!
Progressive jihadists of both political parties attacking and impoverishing the middle class to continue to build and strengthen the Ovomit idiocracy.
STARVE THE BEAST!!!
fucking thieves
Fucking half breed Kenyan Marxists!
VAT of 20% already charged in the UK for online purchases from UK suppliers.
There is absolutely no limit to their fucking thievery. I love the title of their latest piece of confiscatory bullshit, "Marketplace Fairness Act."
We have to do this so that everything is fair. Of course titles like that always appeal to the idiots reading Huffpo.
The titles of these bills are just insulting. We're going to start randomly hitting citizens with 2X4s. It is part of the Super Happy Peace and Love Time Act.
Bullish for empty mall REITs.
Great. A State tax on commerce through federal ACTs or vountary compacts? What could not be accomplished directly due to constitutional restriction, can now be accomplished indirectly through legislation that accomplishes the same. The States, when seeking federal permission to join the other states in the Social Security Act gave the feds the power to destroy the obligation of contracts through the federal taxing power. (Federal Act tied to state police powers, the states themselves now preempted for purposes of taxation and administrative control)Now the feds seek to create an ACT that allows the States to impose an excise on interstate commerce. The power to tax is the power to destroy which is why the courts have not allowed it. But thats OK. Written constitutions are written on toilet paper. Uncle Sam is going to take another dump and needs something to wipe with.
I am an online retailer selling used books and cd’s. Classic small business and I landed here because I could no longer stomach the corporate bull shit where I was previously employed. Granted I was getting gray so they would have downsized me anyway.
My business has been declining for 3 years and faces a number of challenges. One of the latest is Hollywood along with Amazon are banning more and more sales of used DVD’s and CD’s based on copyright. I think their ultimate goal is to prevent anyone from reselling used copyrighted products period. Think garage sales, flea markets, and Craig’s List. Some others challenges are:
1. Rising cost of postage
2. Rising competition
3. Soft economy
4. Diminishing demand for books and cd’s because of changes in technology.
5. Changing policies of both eBay and Amazon impacting small vendors negatively.
6. Rising cost for listings and transaction fees.
So this is a big deal for me, I am close to shutting down anyway and this might be the last straw. I am tired of being under assault by rent seeking corporations and governments.
I am sure in time there will be a copyright fee you will also have to collect and remit.
So what happens if I lend you my Jonny Cash album and you lend me a Harry Potter book, we have to put a check in the mail to the copyright holder, or it is a Federal crime? Or you buy the items at at a yard sale, whatever, it is impossible to comprehend.
Lousiana(Jindal) went for 2nd hand goods in order to create a 'paper trail' in the name of stopping criminals(Grandad and Grandmom). Yeah right...
http://www.klfy.com/story/15717759/second-hand-dealer-law
Won't take much to snuff out the feeble vestiges of life left in our economy at this point. This might be enough by itself.
The story here will be about the unintended consequences. Regulating and taxing commerce on the internet will be like squeezing a balloon. Should be interesting to see the host of avoidance strategies used, including relocating offshore. No one could have seen that coming.
If it is more taxes in a recession, Obama is for it.
This is a tax on you, and not some faraway company. The only thing is they think you are too stupid to realize that, and what you to believe you are "leveling the playing field" for your local businesses.
It's bullshit. They want more money and they want it from you by tracking what you purchase. The businesses, in effect, become reporting agents on behalf of the state.
One giant step forward to the finale of 1984.
Marketplace Fairness Act - becaue it's not fair we only get to rape the brick and morter stores, we want online a** as well.
"Marketplace Fairness Act". Ha. Sure go ahead, put another nail in the economy's coffin. I think they are stupid enough to do it.
Well, that'll cut the velocity some.
I guess I am going to discover how much more I'm not going to spend.
The cost of buying online will increase more than just the amount of the sales tax. These online retailers, the ones which survive, will have to hire accounting personnel in order to comply with approximately 2,500 taxing jurisdictions. Very bullish for those in the compliance industry.
Imagine the global economic apocalypse that would occur if people bought what they needed instead of what they wanted.
Passed 74 to 20??? Isn't it just great when these "two" parties, who are oh so different, come together to make an agreement to steal more from their constituents?
Bend over Americans. As long as you fail to realize there is but ONE party, hell bent on destroying this country, the beatings will contine.
Fuck this. I'm not buying anything online or in the stores if I can help it.
Endless cycle of QE, spending and taxes.
More people on Disability, foodstamps and welfare, increase taxes.
More QE to buy the US debt and make it disappear of the balance sheets.
Market Place FAIRNESS Act - because even if you are poor and shop online you still pay your 'fair share'.
I just got some new "carbon footprints".....man is dey stylish
(from the new "Slavebonics Dictionary")
This will KILL online retail sales. After buying from Amazon.com THREE times in the past week, I will NEVER use you again if this passes! Amazon, buy the way, is ENDORSING this new tax as a way to hurt its small online competitors! This will KILL small businesses -- and yes, JOBS -- that sell their wares online, since they can't afford to calculate and transmit taxes to more than 1600 tax-collecting government entities following this new form of taxation tyranny!
I've bought online in the past with the thought in mind that the savings on sales tax would pay for the shipping. No more!
Internet sales is DEAD if this passes.
Boycott Amazon.com if this passes! FOREVER!
This will lead to further withering of State revenue from sales taxes. This is a Trojan Horse for a VAT taxation structure in America which will probably not trickle down to the States.
Government just wants more and more. It seems like rights are being trampled left and right.
I suppose next they'll want to tax us based on how much we breathe ... oh wait.
Hey folks. No big deal. Starve the system - it will force the government to stop this shit.
Stop spending on anything other than necessities. No more booze. No more junk food. No more techy gadgets.
Just relax and hold onto your cash instead.
You had me until "no more booze..."
No, it won't. They will just find more clever and unavoidable ways to impose upon you.
No more booze? Ever heard of home brewing? Moonshine?
This pisses me off way more than it should. I don't buy much online but when I do , I make sure I buy online so I do not pay this corrupt NJ one penny more than I have to.
Wait for it.......
Wait....
Hold...
AMAZON, EBAY, AND PAYPAL ANNOUNCE THEY WILL NOW SUPPORT BITCOIN!
When I close my eyes I can see the headline.
Bitcoin to 5000. Get some!
The Bitcoin Channel
"The bill will compell businesses Having more than $1 million in online sales to collect sales taxes on those purchases"
So i expect if someone was expecting to move $3 million in sales would quickly aquire 3 web sites, Joe's Tee shirts, Jo's T shirts and Joe's T shirts for example and none of those businesses will ever sell more than $9999999. (or a buck less than a million!). Inconveniant but probably do'able. I fail to see how it is a fairness act, brick and mortar establishments do not have to pay shipping and are at liberty compete on line are they not?If I want to buy a power supply for a sony flat screen,model#xxx then I am not going to find it at Radio Shack but some guy across the country has one in his garage ! Capish' Senator? What the US Postal service really needs right now is a good kick in the teeth by reducing the number of packages being mailed,after all they are so solvent! Unintended consiquences are a bitch.
I suppose this could be a boon for States with no State taxes and Countys in those States that have no local Sales taxes could become meccas for online businesses,even if it was only to create a business address through a P.O.box or an empty trailer rented to 1000 different clients,in a junkyard,in TumbleWeed ,Nevada,by an enterprising fellow? Their are so many ways that this is going to Not work and clearly the imbeciles in D.C. have not an inkling of how the internet or business in general,works. Clearly Senator Octogenerian does not realize that those Ballroom Dancing shoes he just ordered were order processed by an industrious Crack head in a Honolulu hotel and will be getting drop-shipped from a wearhouse in Shanghai or Chicago.Half of the old farts probably have wind up handles on the side of their wall mounted,wooden box, telephones!
Each and every single dollar collected will be squandered on war, gifted to bankers and wasted on welfare. Enjoy.
This is the Walmart preservation act.
Walmart is lobbying for this. They want to push the internet retailers out as they pose a threat to their physical stores. At the same time, if everyone has to pay online sales tax, Walmart just assumes they will buy from them, and they can undercut the competitors with free shipping to store. Alas, Walmart should remember their old slogan of "always the lowest price". That is why internet retailers have eroded W-marts market share. It is not just about taxes, shipping, but also the cost of the product itself. It is the total final price. Walmart could had adjusted their prices to make up for the sales taxes they were charging. But why do that when you have congresss paid for? When Hillary is going to be our first Walmart President of the United States?
Also, Walmart doesn't play fair. They complain about online sales taxes, but they take advantage of many local handouts, like reduced property taxes to outright grants given to set up a warehouse or new store. How Walmart can build where a little businessman would not be allowed due to zoning rules. Walmart is the last one who should be talking about fairness...
Unintended consequence #1: online retail moves to Canada. Or Mexico. They ship it across the border sales tax free and in most instances duty free.
Canadians and Mexicans: doing the online jobs that Americans won't do!
Next up, a BEA GDP adjustment called the "Fairness Act Adjustment". This will capture all of the lost sales due to the imposition of this online tax and tack it back onto the backside of the net GDP figure to ensure we always have positive GDP growth and to remind us what this country COULD HAVE BEEN without the overt manipulation of the criminal banks!!!!!!!!!!!!!!!!!!!!!!!!
Because the states can't enforce their pretty much unenforcable "use taxes", we're going to penalize and hijack businesses to do their dirty work for them. Nice.
I manufacture products that I sell online. To avoid Internet taxes, accept personal checks by mail and discount your final prices for credit card fees and any taxes. Just be sure to allow time for the checks to clear before shipping goods.
This is a little inconvenient, but it helps in the effort to STARVE THE BEAST!!!
here is where BITCOIN comes in handy and shines with all its glory
I have been leery of Bitcoin to this point, as I firmly believe that government will simply not permit a form of exchange that stands in competition to the money they issue, an alternative currency over which they have no control. and will ultimately do something quite nasty in punishment, outlawing it at the very least, resulting in the loss of anything you have invested in this. Forgive my ignorance, but if a bitcoin costs $100, and you use it for a purchase of, say, $60, what happens to the rest of your bitcoin? Do they make change in fractions of a bitcoin? How could you use this to avoid paying this tax? I might consider investing in a few bitcoins myself for this purpose alone.
Each bitcoin is subdivided into 100 million smaller units called satoshis, defined by eight decimal places.
Thanks. So, how would paying with bitcoin allow one to escape from paying on-line sales tax? Wouldn't the vendor still be responsible to pay that and so would still charge you?
Marketplace Fairness Act...I just peed myself
THANKS DEMOCRATS and the RINOs TOO!
BAD economy? FIX IT by INCREASING TAXES!!!
I think I speak for most, when I extend to you the heart felt middle fingers of both hands.
Now I have to go see what my senators just did to me, for the good of the country etcetera.
"Spare some change?" - Uncle Sam
Put all the working people who actually pay taxes in prison for tax evasion. Great fucking idea.
Hey, you get 3 hots and a cot, clothed and housed, good medical care all at the expense of the state and thus the ever dwindling number of taxpayers. Something will have to give eventually.
pity this busy monster, manunkind,
not. Progress is a comfortable disease:
your victim (death and life safely beyond)
plays with the bigness of his littleness
- electrons deify one razorblade
into a mountainrange; lenses extend
unwish through curving wherewhen till unwish
returns on its unself.
A world of made
is not a world of born - pity poor flesh
and trees, poor stars and stones, but never this
fine specimen of hypermagical
ultraomnipotence. We doctors know
a hopeless case if - listen: there’s a hell
of a good universe next door; let’s go
I really don't have a problem with this, say a flat 6% tax with 3% going to the state where the business is headquartered and 3% to the state where it was purchased.
Now are they gonna credit the tax when the item get's returned?
You don't have a problem with this? Can I borrow your car? I promise I will give it to a homeless person to sleep in when I am done with it.
So it is all for the greater good. Yikes!
We shouldnt' have sales tax to begin with. That's the problem. Our govt. assumes that since they created sales tax that everything should be subjetc to sales tax. Problem is, the money has already been fucking taxed when we earned it. Then we buy something from Bob's Hardware store, pay a sales tax, then Bob's gotta take another hit on the income. It's fucking triple penetration orgy tax from all directions.
Write to your elected mis-representatives and tell them that what they should be doing is stop making more bureacracies over the top of others and eliminate sales tax... not increase it.
Sales tax is an Excise or privilege tax on retail sales. The retailer is the taxpayer. They just collect it from you at the point of sale to offset their cost. The "privilege to be taxed is the protection afforded the business or occupation. Just like organized crime. Its a protection racket. Personally, I would rather trust the Mob to protect my business. At least with them, you know where you stand.
The Greeks became masters at avoiding the tax collector. Many other civilizations were also adept at this, and set up a barter economy - passing barbaric relic coins in exchange for services or products. No wonder the government wants everyone to move to EBT and electronic banking -- because that is the only way to track all the transactions and to avoid the barter system. The higher these types of taxes go, the more you will see people avoid them.
If you have been on Amazon.com lately, you see a long list of products now being sold by the 'little guys' - usually meeting or sometimes cheaper than Amazon itself. The key is the phrase 'Fulfillment by Amazon'. Essentially the product lives at an Amazon distribution center, but the product is technically owned by the 'little guy'. What Amazon seems to be setting up is a distribution system whereby thousands of 'little guys' each doing under $1 million each year, will be selling the same products you buy from Amazon today - and they won't have to pay the sales tax!
Barter in 3... 2 ...1
Barter as well as a lot of online retail moving to Canada. Thanks to NAFTA, a lot of stuff is duty free. What do you care where it's shipped from, so long as it shows up?
What happened to the "No Taxation Without Representation" principle ? May I now vote in Pennsylvania if I buy from a business there w/o being a citizen of that state ?