Looks like they are at it again.
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He is using the "it isn't fair to Main Street Americans that Internet companies don't have to pay sales tax" cry and plans to call this legislation "Main Street Fairness Act".

It should be called the "Kill US Internet Commerce Act". Look at GE. They are this country's largest private company. When they can move their profit centers off-shore for tax benefits they do and it takes the jobs with it. If Internet Companies will be forced to pay sales tax - even in states that they are not based - then you will see a number of Internet commerce companies (or the commerce arm of those companies) to move out of the US. This would not be the magic revenue source that is needed to balance the budget. I would guess that the estimated tax revenues would not be half after 5-10 years and that internet job losses in the US would continue to climb.

Unless I am misreading it, the sales tax would be charged regardless of where the company was based, even overseas.

It's not the magic revenue source, but it's A revenue source. And not a terrible idea, certainly worth exploring. If we want to tackle our deficit, we have to both cut and bring in more revenue in areas that make sense.

This isn't my area of expertise, but isn't sales tax calculated by the origin of the buyer, not the seller? I seem to recall, in the past, seeing disclaimers about "add 7% if California resident"...

That's usually because the place you're buying from is also in california.

Newegg, for example, collects sales tax in california, tennessee and new jersey, but not anywhere else, because they don't have a physical presence there. Though depending on the state, if the merchant doesn't collect the sales tax, you're still technically liable for it.

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World of Warcraft: Kallaystra, Gweila, Steakumn, Tarathia [ Feathermoon/Horde ]

This is correct. The bill would make Internet companies responsible for paying sales tax for the jurisdiction that it was purchased, regardless of origin. If they were based off shore, how would the government collect? They would have no jurisdiction over foreign companies.

A company moving offshore to avoid collecting and distributing sales tax would essentially be cutting off their nose to spite their face. It won't be a significant cost for a company to collect sales tax and then distribute it properly. It definitely would cost less than moving offshore, even on paper.

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World of Warcraft: Kallaystra, Gweila, Steakumn, Tarathia [ Feathermoon/Horde ]

If you import something from another country don't you have to pay a tax/duty on the item?

The whole thing sounds like the federal government trying to fix a problem that belongs to states.

But I have to concede these points:

Yes, it's not fair to local businesses that people think they can buy online and not pay sales tax. Whether they're responsible for that tax or not, the perception is what drives sales online and away from local business.

But shipping costs can often eat whatever tax savings are gained, and consumers realize that as well and factor it into their decisions.

In Florida, as mentioned above, consumers are responsible for reporting and paying the taxes for online purchases directly to the state. The problem is, very few do and the state doesn't pursue them.

And yes, the state needs money.

But even though I generally agree with those premises, I'm not sure forcing the online entities to collect sales tax is a good thing.

Is there numbers on how much Internet Sales contribute to the bottome line on sales? Is this listed anywhere?

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"Creating Havoc and Pie Since 2001!"
My Website: http://www.anthonyhays.com
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I'm not sure what I think of this particular tax idea, but I think it is simply ignoring reality to think that we can balance the budget without raising taxes somewhere. With a trillion dollar+ deficit, it's simply not possible. I remember us talking about this a few months ago, and I asked someone (can't remember who) to tell us how it could be done, and no answer was ever given.

So I guess I am broadening the topic: it not here, where? In what specific ways can we raise revenues, while at the same time also doing serious cutbacks?

I would start by letting the Bush tax cuts expire, for example, but of course anyone with an R after their name will automatically oppose it.

Here's the thing, Fribur. This isn't about the federal budget deficit. Not directly, anyway. This would require businesses to pay sales tax to state governments.

Yes, states get money from the federal government, and one could argue that, theoretically, if states had more revenue from sales tax, they would need less from Washington, but in reality, state governments generally push for whatever they can get from DC, regardless of what they already have.

Regarding Durbin's basic argument of fairness, I think this quote from the article sums up its failings best:

Leo is right, this internet tax is about making Internet businesses pay state and local sales taxes.

And Frib, I did offer my opinion on how we should reduce the debt. I would not undo the "Bush Tax Cuts". I would bring the entire budget under review and would fund only those things that the country needs under the priority system. I would start with a freeze of spending across the board then look at every expenditure and cut what could be cut. I like a lot of what Rand Paul proposed. However, I would cut more in military spending - in the area of consolidating or reducing the number overseas bases (over a hundred US military installations in Germany alone!).

I would invest in some job stimulus programs. Programs that would rebuild the nation's power grid, modernization of the transportation system, and green lighting the building and operation of 4th generation nuclear power plants (replacing the coal plants, and possibly the older nuclear power plants). Those job stimulus programs are have may highly technical job components and are not a fixed term type position. They would require training of people to have a new skill set to build and maintain. These could be generational occupations.

I only have a minute but here's my first thought.

What bothers me is, "freeze spending and then look at what can be cut" doesn't actually say what you intend to cut. It's far far more than just discretionary spending. You won't get to a trillion+ dollars that way. Give me numbers! How much and what? I'm not going to pick it apart-- I understand that we don't know details about things.

I mean... if you cut ALL of discretionary spending... EVERYTHING... you still haven't cut the gap to zero.

Let's get the statement right --

This isn't suddenly taxing companies. This is putting money that (in many cases, rightfully) belongs to the state in which an individual lives. This will just make the companies account for that in their payment and accounting.

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World of Warcraft: Kallaystra, Gweila, Steakumn, Tarathia [ Feathermoon/Horde ]

Van - a very good point and important to recognize.

So it'll do two things:

1) It'll raise companies' expenses because they'll have to account for proper taxation in different areas of the country. (BTW, do we know how this would apply to local sales tax, i.e. at a county or city level?) The most considerable expense will likely occur up front as businesses have to make adjustments. There will also be recurring costs, but those are part of the normal costs of doing business.

2) It'll force consumers to pay tax on the goods they purchase online. Technically, many consumers are already liable for those tax dollars, but since very few report it (and even fewer states pursue it), people will see this as a new tax because they weren't paying before and it's more money out of their pockets.

The initial cost of collecting and disburing sales tax will (or at least should be) nominal. I know that a lot of shopping cart software has the ability to track sales tax built in, but it's not enabled by default.

The only issue I see long term is municipalities that will occasionally raise their sales tax for one initiative or another, or states with multiple levels of sales tax for different products (in GA, for example, there's a 2% sales tax on groceries, and 5%+county sales tax on other items)

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World of Warcraft: Kallaystra, Gweila, Steakumn, Tarathia [ Feathermoon/Horde ]

I doubt states would let this fly. But why cant the government just enact a Standard "Internet Sales Tax" make it a average of all 50 states current sales tax. Wouldn’t that just put a dent into the deficit we currently have, yes the state’s would not get that income but would help the nation.

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"Creating Havoc and Pie Since 2001!"
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Uh, states sort of want this, Cak.

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World of Warcraft: Kallaystra, Gweila, Steakumn, Tarathia [ Feathermoon/Horde ]

Oh yeah, state legislators of both parties must be drowning themselves in drool at the prospect of getting money in the state coffers without in any way being responsible for raising taxes.

But I disagree with the initial cost being nominal, specifically for the small businesses the bill wants to protect.

For companies like Amazon, it'd be a drop in the bucket. But for a neighborhood bookstore to keep track of the current sales tax rates in every municipality (state level only would be much easier, obviously), manage the bookkeeping for it all, and sending out checks/reports -- all that could be a major burden to a small operation.

And, after all, they're the ones this bill is claiming to protect.

as it was stated in the article "there are over 7,500 different taxing jurisdictions in the United States, each with a set of very precise rules describing what can and can't be taxed and at what rate." In Texas groceries and medications are not subject to sales tax so other items are taxed at different rates.

Perhaps the government should produce software that calculates sales tax due based on a zip code entered. This software would then be provided free to any company that wished to use it.

Are they gonna tax me and then send the money to the canadian government? ;)

Probably Fin!!!

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"Creating Havoc and Pie Since 2001!"
My Website: http://www.anthonyhays.com
Facebook: http://www.facebook.com/cakvala