Online retailers will now have to collect sales tax in the US

[Razor Blade]

6 hours ago, dalekphalm said:

Cars are one of the few exceptions in which the private sale of used goods are liable for tax.

*snip*

However (at least in my state) it isn't the car that is taxed... it is the transaction. If (for example) I traded someone a computer for an old car, I would pay tax for the value of the computer during title transfer. Not the value of the car. Yet if I sold my computer or I was given a car, no tax would be paid. See why I think it's stupid?

 

You can "gift" someone a car and they wouldn't have to pay any tax on it to the state... however if the gift is over the IRS limit then there will be gift tax due to the federal gooberment. It is just the state taking advantage of a registration system to force use tax on something...anything. They know they can't monitor every private sale or I would imagine they would be enforcing tax on those transactions too.

 

Like in a famous quote by Benjamin Franklin when he was talking about the constitution being permanent... "in this world nothing can be said to be certain, except death and taxes."

[lazypc]

This wasn't the first state to do this.

California already requires state taxes to be charged by big online retailers like Amazon. Amazon actually refused to build any warehouses in California until this was put into effect to avoid paying state sales tax.

Granted not every online retailer is charging state tax when sending something to California, so this may have been a specific lawsuit against Amazon. Or retailers just not understanding the law and they should be charging sales tax. Hard to say.

Running a business is not easy when it comes to shipping to different countries and states. I'm actually glad I am not doing that anymore.

[Donut417]

7 hours ago, Dionyz said:

I am not understanding this rule completely. So does it mean that online retailers will charge tax based on its region? Or the consumer's region?

 

If it's based on retailer region then if we purchase from china we are free from taxes? Or do we pay china tax as well?  

Thats the issue. Its not like a state can force a foreign company to collect tax, especially if they are not located in the US in any way. But to my understanding, the retailer will have to collect tax for the state the buyer is in. My thing is this, how does this affect people from outside the US purchasing items from US stores? 

[lazypc]

If you are outside the US there is no state tax you would pay, but the receiving country may hold the package in customs and charge an import tax there.

Each country has it's own laws regarding this, and even personal packages can be affected.
Working shipping something I would see quite often is people in the US send packages back to their families in Mexico. Mexico customs was very specific that shoes and clothing and such being sent to Mexico be brand new with the retail tags still on them. That way when the package went through customs, they would add up the value based on the retail tags, then require the recipient to pay tax on that amount before releasing the package. If they refused to pay the tax the package was sent back, often at additional charge to the sender, which if the sender refused to pay, would just see the package "destoyed". I put quotes on that because I'm sure it didn't happen. They probably took/sold/or donated the contents.

[Donut417]

2 minutes ago, lazypc said:

If you are outside the US there is no state tax you would pay, but the receiving country may hold the package in customs and charge an import tax there.

Each country has it's own laws regarding this, and even personal packages can be affected.
Working shipping something I would see quite often is people in the US send packages back to their families in Mexico. Mexico customs was very specific that shoes and clothing and such being sent to Mexico be brand new with the retail tags still on them. That way when the package went through customs, they would add up the value based on the retail tags, then require the recipient to pay tax on that amount before releasing the package. If they refused to pay the tax the package was sent back, often at additional charge to the sender, which if the sender refused to pay, would just see the package "destoyed". I put quotes on that because I'm sure it didn't happen. They probably took/sold/or donated the contents.

What about people using package redirection services so they can buy US goods? If its shipped to a US address it will be eligible for tax, assuming that state collects tax. I dont know of any US business that eats costs. So those costs will have to be paid by the customer. So yeah, their is a chance people outside the US will have to pay that tax in some way. Because I can tell you, the states dont give two shits if you live in the US or not, they will make you pay tax regardless. 

[lazypc]

1 hour ago, Donut417 said:

What about people using package redirection services so they can buy US goods? If its shipped to a US address it will be eligible for tax, assuming that state collects tax. I dont know of any US business that eats costs. So those costs will have to be paid by the customer. So yeah, their is a chance people outside the US will have to pay that tax in some way. Because I can tell you, the states dont give two shits if you live in the US or not, they will make you pay tax regardless. 

I would imagine your right. It may be possible for the redirection service to get a resell certificate that allows them to purchase the items tax exempt for the purpose of reselling them. Sales tax is only meant to be charged to the end customer, not intermediary businesses. But having personal experience with that as well I know that was also quite the POTA.

[Donut417]

8 minutes ago, lazypc said:

I would imagine your right. It may be possible for the redirection service to get a resell certificate that allows them to purchase the items tax exempt for the purpose of reselling them. Sales tax is only meant to be charged to the end customer, not intermediary businesses. But having personal experience with that as well I know that was also quite the POTA.

Actually its the responsibility of the reseller to collect the tax and give it to the government. Either way they are not out of paying. All tax exemption means for resellers if they dont pay tax on the goods they buy, but they are required to collected from those they sell to. On top of that to get tax exemption they would have to file paper work with every retailer they got product from. Its not an easy task. I feel this will be too much work for most of them. I mean they are shippers not retailers. There whole business is logistics and not selling of goods. 

[lazypc]

5 minutes ago, Donut417 said:

Actually its the responsibility of the reseller to collect the tax and give it to the government. Either way they are not out of paying. All tax exemption means for resellers if they dont pay tax on the goods they buy, but they are required to collected from those they sell to. On top of that to get tax exemption they would have to file paper work with every retailer they got product from. Its not an easy task. I feel this will be too much work for most of them. I mean they are shippers not retailers. There whole business is logistics and not selling of goods. 

Exported goods, or quote international sales are not subject to sales tax. Grated there is documentation required if your not a certified US exporter.

So I would think that a redirection service would be able to forgo sales tax on both sides if they are buying it to resell it, and then exporting the goods as an international sale.

But regardless, I think we both agree that the paperwork required for the purchasing and selling is overhead in itself...
Did we get off-topic lol?

[dalekphalm]

10 hours ago, Dionyz said:

I am not understanding this rule completely. So does it mean that online retailers will charge tax based on its region? Or the consumer's region?

 

If it's based on retailer region then if we purchase from china we are free from taxes? Or do we pay china tax as well?  

This means that Online Retailers will charge tax based on the state you live in, not the state the retailer operates out of.

 

In terms of buying anything foreign? This ruling ONLY applies to US companies. The US cannot force any foreign online retailer to collect sales tax.

 

Does that mean foreign online sales are tax free? No, not necessarily. If you buy something overseas, you're now importing an item into the US, which means you'll have to pay any applicable import taxes, which generally include your local state taxes (but not necessarily, check your local import laws).

 

That has not changed. Importing an item into the US was subject to import taxes before, and will still be after.

 

However, not every item is inspected properly. Many items slip through the cracks, and don't get import tax charged on them. If this happens to you? You got lucky.

10 hours ago, Raskolnikov said:

Why are we taxing consumption again*, it's extremely regressive.

 

*excluding sin taxes

We're taxing consumption because we live in a society in which the government needs income to provide services to you, the citizen. Taxes are part of the social contract you enter by living in your country.

 

It's not regressive at all, especially if the taxes are fairly reasonable (I consider anything 15% and under a "reasonable" sales tax). Just count your blessings that you aren't subject to the 20% tax that many Europeans have to pay.

3 hours ago, Donut417 said:

Thats the issue. Its not like a state can force a foreign company to collect tax, especially if they are not located in the US in any way. But to my understanding, the retailer will have to collect tax for the state the buyer is in. My thing is this, how does this affect people from outside the US purchasing items from US stores? 

If you are not an American, and are buying something from an American retailer and getting it shipped out of country, you do not pay American sales tax. Or, if they charge you sales tax, there are processes in which you can redeem and refund said taxes - though these processes are generally never easy.

 

I've personally never had to pay US sales tax on anything I've bought from the US, unless I was physically there in person (which is totally acceptable to me).

[Donut417]

2 minutes ago, dalekphalm said:

If you are not an American, and are buying something from an American retailer and getting it shipped out of country, you do not pay American sales tax. Or, if they charge you sales tax, there are processes in which you can redeem and refund said taxes - though these processes are generally never easy.

 

I've personally never had to pay US sales tax on anything I've bought from the US, unless I was physically there in person (which is totally acceptable to me).

What if the retailer does not ship out of the US? Thats what I am saying, a package redirection service would have to pay sales tax, because it would be delivered to a US address then shipped over seas. Some one is paying for the tax. 

[dalekphalm]

14 minutes ago, Donut417 said:

What if the retailer does not ship out of the US? Thats what I am saying, a package redirection service would have to pay sales tax, because it would be delivered to a US address then shipped over seas. Some one is paying for the tax. 

Yes of course. But that's circumventing a system that otherwise would prevent you from buying the item.

 

A package redirection service is really no different from you going to the country physically to buy the goods, or asking a family member to buy the item then mail it to you.

 

In both cases, they'd be liable for any sales tax.

 

I don't see any problem there.

[LAwLz]

I find it kind of funny that people are furious about this.

It's something passed to make their lives easier, because they will see what things cost up-front rather than get a surprise when manually filing their taxes. Less manual labor, more transparency and easier to manage your finances.

But because so many people are used to breaking the law, and now it will be harder to do, they are pissed.

[Donut417]

1 minute ago, LAwLz said:

I find it kind of funny that people are furious about this.

It's something passed to make their lives easier, because they will see what things cost up-front rather than get a surprise when manually filing their taxes. Less manual labor, more transparency and easier to manage your finances.

But because so many people are used to breaking the law, and now it will be harder to do, they are pissed.

Firstly do you think people in the US claim this on their state income tax? NO........ They are suppose to but many dont. States dont have the man power to look at every ones online purchases because frankly none of these companies report purchases to the state unless they are forced to. Even then states have a hard time doing that. Generally if a business doesnt have a physically presence in the state, then the state has no power over them. As when things cross state lines it becomes a Federal matter, and the Feds dont collect sales tax. 

 

People are pissed because now they have to pay tax regardless. I could care less because most of the shit I buy is off Amazon and they collect Michigan sales tax. Im just glad I no longer have to lie to the Government about online purchases. It makes all of us honest now, dont it? LOL. 

[Dreaper]

Time to buy everything i need for the next few years online at once

[Donut417]

4 minutes ago, VegetableStu said:

was pretty surprised (from the sound of it) that major etailers don't autotax for their customers within the US. Amazon does the import tax for me internationally o_o

 

maybe they don't have a tax department?

Here is the issue, you have no clue how the tax system works in the US. Sales tax does not apply to all items. Each state sets it own sales tax and sets what items will be taxed. Some states dont have sales tax. Amazon and Newegg and others do collect tax in select states. Generally where they have warehouses. So its up in the air on what is taxed and for what amount. I think thats why retailers dont include tax in the price of goods because it would be too much of a cluster fuck to do it. 

 

So really what you gotta take away from this, there are 50 states with 50 different sales tax and rules. etailers are just lazy to collect sales tax. If the Government doesnt make them they wont do it. Its also hard for a state to force a company to collect tax from its citizens when the business has only a digital presence in the state. If physical locations dont exist in that state, they pretty much are screwed. The federal government doesn't give a fuck about sales tax as it doesn't benefit them any. 

[SteveGrabowski0]

51 minutes ago, Donut417 said:

Here is the issue, you have no clue how the tax system works in the US. Sales tax does not apply to all items. Each state sets it own sales tax and sets what items will be taxed. Some states dont have sales tax. Amazon and Newegg and others do collect tax in select states. Generally where they have warehouses. So its up in the air on what is taxed and for what amount. I think thats why retailers dont include tax in the price of goods because it would be too much of a cluster fuck to do it. 

 

So really what you gotta take away from this, there are 50 states with 50 different sales tax and rules. etailers are just lazy to collect sales tax. If the Government doesnt make them they wont do it. Its also hard for a state to force a company to collect tax from its citizens when the business has only a digital presence in the state. If physical locations dont exist in that state, they pretty much are screwed. The federal government doesn't give a fuck about sales tax as it doesn't benefit them any. 

It's funny, in Texas sales tax applies if you buy a deoderant marked deodorant. If it's called antiperspirant it's not taxed.

 

source: https://comptroller.texas.gov/taxes/publications/96-280.pdf

 

Lots of fun little rules like that for online sellers to handle.

[Andreas Lilja]

10 hours ago, dalekphalm said:

=We're taxing consumption because we live in a society in which the government needs income to provide services to you, the citizen. Taxes are part of the social contract you enter by living in your country.

 

It's not regressive at all, especially if the taxes are fairly reasonable (I consider anything 15% and under a "reasonable" sales tax). Just count your blessings that you aren't subject to the 20% tax that many Europeans have to pay.

It's regressive, it hurts the poor more.

 

I never questioned the welfare state, however consumption taxes are silly.

[minervx]

21 hours ago, Raskolnikov said:

Why are we taxing consumption again*, it's extremely regressive.

 

*excluding sin taxes

because cigarettes should completely consume most of a poor smoker's dispensible income while consuming 0.01% of a rich person's income

[Andreas Lilja]

24 minutes ago, minervx said:

because cigarettes should completely consume most of a poor smoker's dispensible income while consuming 0.01% of a rich person's income

Smoking incurs healthcare costs on everyone else.

 

Buying a TV not so much.

[asus killer]

reading some of the comments here this puts in perspective some of the arguments in Europe about certain countries that have citizens who dislike to pay taxes and therefor they are looked down as not being civilized.

 

I just don't get how the states get their money from? just from IRS revenue?

 

In Europe, and i guess most of the world, we have VAT not because we like to pay one more tax but because unlike the IRS, the VAT is a way of collecting taxes from people that do not declare income for some reason (and i mean not legal), unless you live in a cave in the mountains eating roots everyone in Europe pays taxes. In the US i guess it's easy for someone to live their all lives without paying a single tax.

[Donut417]

7 hours ago, asus killer said:

I just don't get how the states get their money from? just from IRS revenue?

IRS is Federal. Like I said earlier. Federal and State Governments are two separate things. Think of states as independent entities. Most states have a Treasury Department who handles tax collection. 

 

How we are taxed

 

Income tax (Federal, State and some cities (Detroit for example) )

Sales tax (States, some cities (varies state by state))

Property tax (Cities/ School district) 

Car registration fee (State) 

Gas Tax (Federal, State)

Tobacco products (Federal, state)

Alcohol (Federal, State) 

Tickets (State, County, City) (We have 3 layers of law enforcement in Michigan, State Police, County Sheriff, and Cities police) 

 

Thats just some of the ways the government gets money out of us. Im sure Im missing a few. 

8 hours ago, asus killer said:

In the US i guess it's easy for someone to live their all lives without paying a single tax.

Not really, its illegal and you go to prison as a result. If you dont pay property taxes the government takes your property, if you dont pay income taxes you either fined and charge interest or your imprisoned. If you get caught working under the table you and the employer are in deep shit. Dont fuck with the IRS, they are the largest collections agency in the world and they will fuck you up. IRS can take about any money or property WITHOUT a court order. The only certainty in this world is Death and Taxes. My sister owed money for student loans and was in default. Her and her husband at the time were expecting a $5K tax refund. The IRS decided she was going to pay those student loans off, as they were issued by the government. My sister ended up not getting a refund after all, the IRS took it to pay off the loans. The Feds about always make collection in one way or another. 

[asus killer]

22 minutes ago, Donut417 said:

 

Not really, its illegal and you go to prison as a result. If you dont pay property taxes the government takes your property, if you dont pay income taxes you either fined and charge interest or your imprisoned. If you get caught working under the table you and the employer are in deep shit. Dont fuck with the IRS, they are the largest collections agency in the world and they will fuck you up. IRS can take about any money or property WITHOUT a court order. The only certainty in this world is Death and Taxes. My sister owed money for student loans and was in default. Her and her husband at the time were expecting a $5K tax refund. The IRS decided she was going to pay those student loans off, as they were issued by the government. My sister ended up not getting a refund after all, the IRS took it to pay off the loans. The Feds about always make collection in one way or another. 

i understand what you are saying but all those taxes can be avoided, let's not go into details but i guess you know what i'm saying, either smart asses or the (how should i put this) "people who want to live of the government", bad characters in general

VAT it's absolutely impossible to avoid, every time someone in the EU goes to the supermarket they are paying taxes, and the only way you avoid it is not buying anything and i mean every thing or just stealing.

And at least in my country a lot of people like to be "creative" with taxes. 

[EPENEX]

I don't like paying taxes because my money isn't going to causes that I believe in, and I'm too poor, I should be exempt from sales tax. I can understand taxing income, but why tax sales? You're forcing children to pay taxes when they buy candy. Luckily stuff like food and clothes aren't taxed here.

[dalekphalm]

12 minutes ago, EPENEX said:

I don't like paying taxes because my money isn't going to causes that I believe in, and I'm too poor, I should be exempt from sales tax. I can understand taxing income, but why tax sales? You're forcing children to pay taxes when they buy candy. Luckily stuff like food and clothes aren't taxed here.

For one thing, it would be an administrative nightmare to selectively apply sales tax to some of the population and not the rest of it. Especially based on income. Yes, it could be done, but it's not really worth the hassle, in my opinion.

 

Best way to help low income folks? Lower their income taxes (or eliminate them all together), along with other programs to reduce their expenses, such as subsidized housing, etc.

 

As for taxes going to causes you don't believe in? Well that's unfortunately a fact of modern society. Lobby your Congressman and Senator to change said causes and policies. Find like minded individuals or join an organization to help push your agenda for change.

 

Failing that? Save up and work towards immigrating to a country that aligns with your personal beliefs.

[dalekphalm]

17 hours ago, Raskolnikov said:

It's regressive, it hurts the poor more.

 

I never questioned the welfare state, however consumption taxes are silly.

If it's hurting the poor, then you have a problem with your social welfare system. Other, better ways of helping the poor (instead of eliminating sales tax):

1. Lower or eliminate income tax for those under the poverty line

2. Introduce income supplements

3. Government subsidized housing

4. Inject investment into the economy to help promote job growth

etc

 

Consumption taxes are not silly. They actually make a lot of sense, financially. If someone cannot afford to pay the sales tax on items because of how poor they are, then they need other assistance, not removal of said sales tax. They need more income, or less income taxes (or both). Or they need a better job.