I know some locals who do order from Amazon all the time and I’m always like, wait, why would you do that?

Amazon should either charge everybody a sales tax, or nobody a sales tax. Keep it consistent and fair.

Thus to compensate for this the income tax is made more progressive.

If the VAT is instituted in the U.S. it is likely to come with a decrease in income tax rates at the lower levels and leaving the upper level brackets in place unchanged. This is what will make it palatable to the masses.

The GOP has been arguing for their national sales tax for a decade now. They just might get it. But not at all how they said they wanted it. They should have keep their mouths shut. The idea that we were ever going to abolish the income tax and replace it with a sales or VAT tax was niave at best.

15-20 years from now I suspect we will have both a VAT or national sales tax and a more progressive income tax.

John DeFlumeri Jr

David,
This might be easy for the large companies like Amazon, but what about for the small online merchants?? Watch e-commerce implode, move at a snails pace and many small businesses go under if this becomes enforced. In addition, do forget about prices overall will go higher because of the additional fees businesses must perform to track sales tax. Once again the small business owner will get screwed.

Personally, I feel like I pay plenty already, I’m not going out of my way to encourage any more taxes on myself.

“Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one’s taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone
does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands.”

If the States believe that Amazon should collect sales taxes, sue them! Win in Court and force them to collect taxes. Why haven’t all states done it yet? Cause they aren’t sure they’ll win…why won’t they win? Because the legality is unclear at best.

Your readers are also correct in pointing out that even though the sales tax is not being collected by Internet merchants (without bricks-n-mortar presence in NJ) when you purchase, you are still obligated to report and remit equivalent use tax in NJ. These are not new taxes. Sales and Use Tax Laws were substantially adopted in New Jersey in 1966, before that in New Jersey you only paid sales tax on gasoline, tobacco products and alcoholic beverages.

Finally, congress is preparing to debate this exact subject! The Main Street Fairness Act will soon be introduced before congress to address this issue – that out-of-state or “Remote Sellers” should be required to collect and remit local sales tax.

The only reason they don’t right now is that in 1967 & 1992 the issue of Remote Sellers came before the US Supreme Court (in the context of mail order catalog merchants). In both opinions, the court agreed that remote sellers should collect and remit local sales taxes, but they also conceded that requiring remote sellers to keep track of 4,000+ local tax jurisdictions would be too difficult.

With contemporary companies like Amazon.com and services like iTunes, no one questions their technical ability to keep track of many millions of transactions per quarter. Further, with the successes of the Internet over the last 25 years, it is time to revisit how difficult it is for remote sellers to manage a mere 10,000+ local jurisdictions.

It is time to tell Internet merchants to start collecting and remitting local sales tax, just like the corner store has to. Stop pretending that the transaction is “tax-free” because Use tax is still due.

Your local sales tax should be collected & remitted for you by all merchants, so businesses and individuals don’t have to meticulously keep track of all out-of-state transactions.

R. David L. Campbell
Chief Executive
The Federal Tax Authority (http://Fed-Tax.net)

There should be parity in tax laws. (I can’t believe I wrote that!) In the end, tax rates have never factored into my purchase decisions, quality of service and support after the sale play a much bigger role.

Even if Amazon did have to collect state taxes they are likely to still be a lower cost alternative due to their Lean Management approach.

I’m not sure if it’s different in different states, but I’ve never heard of this. If a retailer sells $9.99 of stuff and owes $0.70, the retailer pays the $0.70 to the state, but it’s covered by the $0.70 he should’ve collected from the customer. The retailer is not paying sales tax out of his own pocket and the state doesn’t get $1.40. Additionally, the retailer would not have paid sales tax on the items when he purchased them from the supplier for resale (at least in the states I’m familiar with).

I’m an accountant, and admittedly only started being involved with the filing of sales tax earlier this year, but I believe this article is wrong on this point.

Ah yes one of the problems running a financial web site. Disclosing too much can be financially hazardous to your wealth!

Don’t think the government can’t use what you say on the web? Think again as it already has happened..

http://online.wsj.com/article/SB125132627009861985.html

I would watch what you say on the Internets. This not only applies to Flexo but this applies to anyone.

If you want to lie to the state that’s fine. You almost definitely wont get caught, but should you ever be audited…they may make an issue of it. And in particular…since you’ve now publicly stated you don’t pay your use tax on purpose – it’s much worse, it could have been an oversight, but now you have basically admitted to fraud.

It’s probably not a good idea to advise other folks to do that as well…

I’m not going to check all the states, but I find it hard to believe there are many that don’t require you to report out of state taxable purchases.

And the issue of how to deal with the many, many, many tax jurisdictions in this country has been debunked already. There are already large organizations that collect tax nationwide (in particular the USPS collects taxes in every jurisdiction and given it’s a government agency could easily pass that info on). I mean it’s the 21st century, we have computers, a small table containing all the possible taxes is not really that difficult. Nor is remitting the taxes. You setup a GL code for each states tax, keep it all in a tax to be paid account, voila.

You are referring to a VAT and it has been recently discussed by our government. I’m all for a VAT, only IF we go with a flat income tax. Otherwise we are taxed out the yin/yang. When discussing VAT there was no mention of changing our progressive tax code.

Don’t forget that sales tax does not apply to all items. For example, clothing in NJ (my home state as well) is exempt. Collecting sales tax for multiple jurisdictions is not easy and an entity that does not have a presence in a particular state is not under that state’s jurisdiction. This is important – if there was an obligation to collect the taxes – there are rules for remitting the $$$ to the particular state and penalties for not doing so. If there is no jurisdiction then there is no proper mechanism for enforcement. Only a federal tax would be workable, I think. This opens up a big can of worms.

I believe people will resort to other means to avoid paying the taxes. Paying 8-10% can add up with big purchases.

When will our government learn increases in taxes do the EXACTLY REVERSE in what they intend to?