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1 lawhawk  Mon, May 6, 2013 7:15:23pm

This is one of the most misunderstood bills to come down the pike in a long time. The bill doesn’t impose any new taxes. It clears the way for states to collect the taxes already owed them but which most everyone ignores because the onus is on the purchaser to remit the tax.

Some states already attempt to collect the tax via their income tax returns. Others hope for voluntary remission and compliance, but for the most part states are owed use tax on sales made by their residents/in-state businesses on purchases made out of state.

Quill and Complete Auto Transit in particular both limited how the states could move to collect the tax on out-of-state sellers, but the Supreme Court in Quill also indicated that Congress should act to clean up the mess - that Congress could establish a clear nexus standard and require collection of use tax online. Up til now, the main arguments against was that it was prohibitively difficult to figure out the tax rates for the thousands of state and local jurisdictions. But with the advent of the Streamlined Sales Tax Agreement, member states have clarified that their state tax departments are the single entity responsible for collecting the tax, rates are identified on a regular periodic basis (quarterly, biannually, or annually) and that databases are kept to identify the rates.

It’s the databases that make this key. The states have to maintain the databases.

But all of this wont stop some folks from saying that this is a tax hike or tax grab. States that would realize a revenue gain from this could and should reduce the overall tax rate - since they’re generating more revenue than previously but don’t count on rate reductions anytime soon. The revenues will help close budget deficits and go towards shoring up shaky fiscal conditions.

2 EiMitch  Mon, May 6, 2013 9:41:41pm

re: #1 lawhawk

The bill doesn’t impose any new taxes. It clears the way for states to collect the taxes already owed them

I remember commenting in another thread about this, stating that Grover Norquist and American’s for Tax Reform were mysteriously silent on this. You mentioned then that this was simply about collecting existing taxes.

I still say Norquist and AfTR are more clearly showing their true colors by not opposing this. Why? Because they helped Intuit fight against tax return simplification. They argued that optional pre-filed tax returns would somehow trick people into paying more taxes, as if the current system is less confusing. Yet, a law to help collect taxes is apparently not worth their time.

Don’t misread me: I don’t oppose this bill. I just can’t stand that corporate shill Norquist. He pretends he’s against new taxes on principle. But the obvious double-standard in his choice of battles shows that he only cares about helping the 1%’s bottom line.

3 jhrhv  Tue, May 7, 2013 3:00:17am

One of the articles I read on this said where it could hurt sales is internationally. In Canada for instance you wouldn’t have to pay tax and on many items there is no duty. I have often found the same product to be cheaper on US amazon over Canadian amazon.

Wondering if that will when/if this becomes law.

4 Joanne  Tue, May 7, 2013 6:29:09am

re: #3 jhrhv

One of the articles I read on this said where it could hurt sales is internationally. In Canada for instance you wouldn’t have to pay tax and on many items there is no duty. I have often found the same product to be cheaper on US amazon over Canadian amazon.

Wondering if that will when/if this becomes law.

I don’t think this is true. If it comes into Canada, it has to have documentation and someone will have to pay the Canadian taxes. Perhaps not always, but if something comes in without the duty being paid, they can and will confiscate it.

I could be wrong, but I live in Canada in a border town and am always bringing stuff into Canada from the states. Additionally, hubby has a business and does a lot of importing.

And the last thing you want is to have the government putting you on a watch list for possible tax evasion. They take it less kindly than the IRS does.

5 Joanne  Tue, May 7, 2013 6:36:26am

From the NYT:

But opponents say they will try to slow the process down in the House and shift the conversation to their issues: fears that the complexity of collecting the taxes will put many Internet retailers out of business or subject them to an avalanche of audits from state and local governments around the country.

In a “Memo for the Movement,” a coalition of 52 conservatives on Monday demanded that House Republican leaders not bring the Senate bill straight to the House floor and also said House conservatives “should reject any bill that expands the authority of out-of-state governments to regulate businesses with regard to online taxation.”
In a “Memo for the Movement,” a coalition of 52 conservatives on Monday demanded that House Republican leaders not bring the Senate bill straight to the House floor and also said House conservatives “should reject any bill that expands the authority of out-of-state governments to regulate businesses with regard to online taxation.”

Signers included Mr. Norquist, the keeper of the no-new-taxes pledge that almost every Republican in Washington has signed, conservative luminaries including Phyllis Schlafly and Richard Viguerie, and the heads of Heritage Action, the Heritage Foundation’s political arm, the Tea Party Patriots, Americans for Prosperity and FreedomWorks.

“We’re fairly confident that at the very least, we will slow this down,” said Dan Holler, a spokesman for Heritage Action. “Then we have to make the arguments that can win.”

With conservatives in Washington organizing against it, the bill faces an uphill climb in the House, but not a steep one. The House bill already has 65 co-sponsors, almost half of them Republican, and those Republicans include veteran conservatives like Representatives Joe Barton of Texas and Spencer Bachus of Alabama. Proponents point to their own conservative supporters, including Al Cardenas, chairman of the American Conservative Union, and Arthur Laffer, a conservative economist.

6 EiMitch  Tue, May 7, 2013 12:23:34pm

re: #5 Joanne

Okay. I spoke too soon.

If only I could down-ding my own post…

7 Joanne  Tue, May 7, 2013 12:27:10pm

re: #6 EiMitch

Okay. I spoke too soon.

If only I could down-ding my own post…

Nah. Just wait until tomorrow. They’ll be for it again. And against the day after.


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