Night Strike wrote:They're required to be the tax collectors whether or not they have the resources to hire someone to keep up with the approximately 3600 different sales tax jurisdictions. They're not specifically taxed, but they are in effect taxed because they have to hire people to do the job or just stop selling their products online. The money doesn't just magically transfer from the customer to the government...the business has to keep track of what money goes where and when and then send it.
Okay, I'll deal with this post above separately, but does this post indicate that you are comfortable that you cannot assert, in any way, that this law is "taxation without representation"? That is an absolute inane assertion. You are not permitted to make it any more.
Yes, the business has to keep track of where the money goes. Yes, the business has to implement sales tax software or some kind of procedures to collect and remit sales tax. Yes, that costs money.
Night Strike wrote:By the way, the taxation without representation also applies to the customers. I don't live in California and am not presently traveling in that state. Why should I be forced to pay their sales taxes?
It does not apply to customers. First of all, if you purchased a product from Amazon last year and Amazon did not charge you sales tax, you would have been required to self-assess and remit use tax to Missouri (or whatever state you live in) on the purchase of said product (assuming said product was taxable). So now, you pay the sales tax to Amazon and Amazon gives it to Missouri. Easier for you, easier for the state, harder for the company (but should not cost the company a whole lot of money). This internet sales tax law is meant to provide three things: (1) uniformity and (2) administrative ease (for states) and (3) level playing field for local businesses compared to Amazon. I'm not suggesting that those are good or bad things. Rather, there is no "taxation without representation" associated with this law. That is a stupid argument and should be ignored out of hand. If Rush or Hannity or any of those boys are pushing this, they need to be shut down now.
Night Strike wrote:Software that has to be purchased and then updated every time any jurisdiction changes their sales tax rates.
In most sales tax software packages the rates are updated as part of the initial license agreement.
I would note further that I suspect that Amazon and most other internet companies that are big enough and subject to this law, probably already have sales tax software. Most of these online retailers have been audited continuously by states for the last decade. Amazon just reached an agreement with New Jersey where New Jersey would throw out the audit in exchange for Amazon creating some number of thousands of jobs in the state.
Night Strike wrote:And how do these "central authorities" work? Sales taxes are enacted by county and city governments as well, not just states. Plus, does this mean each business will have to install and run more than 50 different programs in order to take care of each state plus territories? Once again, this is the government proposing a solution that is worse than the perceived problem they're trying to correct.
Most states collect sales tax on behalf of local jurisdictions and remit that tax to the local jurisdictions (after taking a cut). There are not 50 different programs (Ohio has, I believe, 2,000 or more local jurisdictions), but one sales tax program will do all of that for a company, especially a company that only sells products (which are generally not subject to various different taxability determinations).
Night Strike wrote:But if a company uses another company to handle all the sales taxes, then the company that handles the tax money doesn't get those "guarantees" of not being prosecuted for mistakes.
Tax software providers are generally not liable for "mistakes." And if they make a mistake, the market will take care of the company.
Night Strike wrote: Under this new law, states would be pulling in money from all over the country and would then distribute it based on the customer, not the merchant.
States are not pulling in money from all over the country. This is not difficult to understand. Instead of thinking about "oh, oh, the internet, whatever shall we do?" just think of it as "Hey, I'm Night Strike. I'm travelling to Philadelphia to see a Cardinals game. I think I'll purchase a book at the local book distributor. Here book distributor, here is $10 plus 80 cents of sales tax pursuant to the 8% Philadelphia sales tax rate. Now you be a good tax collector and send that 80 cents to the Commonwealth Department of Revenue who will then give 10 cents to Philadelphia. Thanks." Now instead of a brick and mortar store, you're talking Amazon. Insert "Amazon" for "local book distributor" and you have your answer.
The hardest part about this law (and the thing that states and taxpayers struggle with now) is how to determine the location of the customer. If I'm a New Jersey resident that travels to Maryland and purchases itune songs in Maryland and uses those itunes in New Jersey and Pennsylvania... who gets the tax?