So how many other states are going to do this?

I fear USA internet commerce may take a serious hit here soon. I shop online often because I don't have to worry about sales tax. My state laws are joining a couple other states in requiring sales tax based upon where it is shipped to. Guess it's time to move back to Oregon.
http://www.kirotv.com/money/16730835/detail.html
I wonder how many e-tailers will enforce this.

My favorite flashlight store (brick and mortar) got slammed by the state on sales taxes. No! No!! No!!! They WERE/ARE paying sales taxes. They just included it in the price. I loved going in there and seeing a price and checking my wallet without mental guestimate math. Now they have to play the same stupid game.

Not that I am helping by being political, but this should go to the Underground.

PhantomPhoton said:

Guess it's time to move back to Oregon.

Click to expand...

Already here! :wave:

I don't know how this entire scheme will succeed. Online retailers already have to pay a tax, better known as "shipping and handling". This article seems to make it appear as if it applies to Washington online retailers only, not all online merchants. Would be hard to enforce to out of state merchants, and with the increased transportation costs, an added sales tax would put a severe dent on all online commerce.

The intent of the law as I understand it is to "level the playing field." So that merchants in WA state which have to pay sales tax can compete with merchants outside of the state.

I posted this because I think a couple states already have laws that stipulate residents pay sales tax regardless of where they are buying from within the US. So I'm wondering if anyone else knows. And also the article made it seem like more states will be putting up similar laws.

For me this will likely kill a lot of my internet shopping, as usually shipping is in the ballpark of what I'd usually pay in sales tax. Sometimes more, sometimes less. But sales tax plus shipping really will hurt e-commerce imho.

PhantomPhoton said:

The intent of the law as I understand it is to "level the playing field." So that merchants in WA state which have to pay sales tax can compete with merchants outside of the state.

I posted this because I think a couple states already have laws that stipulate residents pay sales tax regardless of where they are buying from within the US. So I'm wondering if anyone else knows. And also the article made it seem like more states will be putting up similar laws.

For me this will likely kill a lot of my internet shopping, as usually shipping is in the ballpark of what I'd usually pay in sales tax. Sometimes more, sometimes less. But sales tax plus shipping really will hurt e-commerce imho.

Click to expand...

I don't think that would be practical on a technical level and a procedural level. And I think the laws you refer to maybe state the residents must self report via use tax, not sales tax by the vendor.

Imagine a merchant who ships one sale to a WA resident, now will have to file a sales tax return soley for a single sale? That would be too much work for the merchant, who if forced to file in every jurisdiction he/she sold to, could put the merchant out of business.

The current sales tax processes typically stipulates if the merchant has "nexus" in that state, the merchant must file sales taxes. Since the merchants are outside of WA, they would have no nexus in WA and thus would be exempt from charging sales tax. So this makes it easier for the merchant to file taxes because of the express presence in that state / jurisdiction.

Doing it as what you interpreted (by the vendor) would be far too onerous for vendors.

PhantomPhoton said:

I posted this because I think a couple states already have laws that stipulate residents pay sales tax regardless of where they are buying from within the US. So I'm wondering if anyone else knows. And also the article made it seem like more states will be putting up similar laws.

Click to expand...

Some states are putting up similar laws but I'm predicting they will all eventually get shot down in court. Remitting sales tax to 50 states and thousands of localities just isn't practical on many levels. It places an unacceptable burden on small businesses. Even large businesses like Amazon would have a hard time with this.

IMHO the Internet should remain tax free forever. It's been the fastest growing sector of the economy precisely because merchants have only had to collect sales tax from residents of the state they're operating in, if at all. Granted, many states have self-reporting requirements where people are supposed to remit the state sales tax themselves on Internet purchases, but the cost of enforcing such laws would likely exceed the taxes collected.

Laws like this don't level the playing field. Rather, they put Internet merchants at a big disadvantage. A brick and mortar store only must remit sales tax to the state and locality where it operates. An online business could potentially have to remit to every state and thousands of localities. If this kind of thing becomes the norm, I think we'll be seeing a huge decrease in online commerce. That will hit state coffers a lot more than any small amount of sales tax they may collect.

I guess if there's one constant in the universe it's that you can depend upon the government to kill a good thing.

I agree 100% jtr. For some reason I thought though that a couple states already had laws on the books about charging a state sales tax. I just remember seeing special tax fine print on some websites in the past stating that if shipping to XX state there's still a sales tax that will be charged. But that could have been due to the vendor having a presence in the state, so I"m not sure.

I heard some discussion about this on NPR today actually. The way I understand it, the current laws only tax businesses that have a physical presence in a state, because those businesses are helping to support the state that provides services to them; i.e. police protection, fire protection, roads to the business, etc. However, with internet sales, I purchase an item from my home in Wisconsin, but Wisconsin may be doing nothing to provide services to the seller, since they could be ANYWHERE. Thus it is silly to expect that those businesses pay money to states they have no dealings with and derive no benefits from. It does seem to be illogical to do that. Unless of course you're the one making up the state budget and you realize there are deficits....