Internet Sales Tax

[cmitch]

Originally Posted by bobarian

I'm not sure how you come to the conclusion that a "national collector entity" would need to be created to collect sale tax on these transactions.

I am in an industry that pays both sales and excise taxes in all states that it is required by law. That business involves the shipping of wine from California to consumers in other states. It is the winery's(internet retailer) responsibility to collect the appropriate sales tax and pay each state on a monthly/quarterly/yearly basis. Anyone who buys wine pays their states sales tax when ordered from a legitimate shippper.

Excise tax is an entirely different matter and the OP's post referred to a StogieGuy's article that was completely speculative regarding the payment of excise taxes. IF an excise tax was passed on out of state purchases those become the responsibility of the shipper not the consumer.

You sell and ship to xx number of customers in all states and thousands of cities. So, your company or distributors cut a check every month to every city you do business with? It would seem not a huge task to keep up with sales and use taxes to 50 states but it would be prohibitive for any business to pay every single city they've sold to consumers in. Let's not forget counties/parishes either.

Internet sales taxes won't stop at new items either. It will eventually be passed to used items as well. It never stops once it starts. Our state used to exempt used items from sales and use tax. Then they started collecting taxes several decades ago on used cars that individuals sold to individuals. Now, even the old tool man at the flea market isn't safe. The law is the same. The interpretation keeps changing.

I understand it's coming. But a way will have to be found for ebay or amazon to collect taxes for every city and county an item is shipped to and that's going to require a central authority to do it. They'll have to pay into the private tax collector and then the private company will wire the appropriate funds to each municipality. Our state has such an authority known as RCS (Revenue Collection Systems). Technically, it's the consumer's responsibility to pay use tax in our state.

[bobarian]

Originally Posted by cmitch

You sell and ship to xx number of customers in all states and thousands of cities. So, your company or distributors cut a check every month to every city you do business with? It would seem not a huge task to keep up with sales and use taxes to 50 states but it would be prohibitive for any business to pay every single city they've sold to consumers in. Let's not forget counties/parishes either.

Your understanding of sales tax and its collecting seems to be a bit lacking. Do we cut checks to each state that we have delivered wine to in the corresponding period. YES. Do all states require payment to local entities. NO, only the state collects the tax then it is distributed down toe the counties, cities and parishes. Most states have chosen to make this simpler by only charging one rate and then disbursing the difference(usually less than 1% of sale). They want to make paying tax easier so more shippers/wineries are likely to pay.

Internet sales taxes won't stop at new items either. It will eventually be passed to used items as well. It never stops once it starts. Our state used to exempt used items from sales and use tax. Then they started collecting taxes several decades ago on used cars that individuals sold to individuals. Now, even the old tool man at the flea market isn't safe. The law is the same. The interpretation keeps changing.

I understand it's coming. But a way will have to be found for ebay or amazon to collect taxes for every city and county an item is shipped to and that's going to require a central authority to do it. They'll have to pay into the private tax collector and then the private company will wire the appropriate funds to each municipality. Our state has such an authority known as RCS (Revenue Collection Systems). Technically, it's the consumer's responsibility to pay use tax in our state.

The failure of most states to enforce its laws on "use tax" has led to the change to "sales tax" being the responsibility of the retailer/seller.