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  1. #1
    What's the word? Rhia7's Avatar
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    E-Taxes, We've heard of this issue before
    There was an article today in the Washingtonpost.com entitled Shopping Online? Watch Out for E-Taxes

    We've already discussed the points enumerated in this article on ABW but there is an additional point that ties taxation with an economic stimulus package:
    Efforts have been under way since 2000 to simplify tax-collection procedures for online and catalogue retailers. But so far, just 22 states and about 1,000 retail volunteers participate. This could be the year that Congress passes federal legislation to make collections mandatory, perhaps as part of an economic stimulus package, says e-commerce lawyer Stephen Kranz.
    Frankly, I wonder at times how effective as a stimulus taxation is? If E-Taxes on online purchases become the norm, will spending online remain the same, increase or decrease?
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  2. #2
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    People don't shop online to avoid paying taxes on purchases. They shop online for many other reasons, like convenience, inability to get what they want locally and many other reasons.
    Deborah Carney
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  3. #3
    Super Dawg Member Phil Kaufman aka AffiliateHound's Avatar
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    Quote Originally Posted by Rhia7
    Frankly, I wonder at times how effective as a stimulus taxation is? If E-Taxes on online purchases become the norm, will spending online remain the same, increase or decrease?
    Definitely decrease.

    The mantra of the economic police has always been to decrease taxes to stimulate the economy. The only place that they differ among themselves is that, certainly since Reagan, and I'm sure before that, conservatives say decrease taxes for the highest earners (and it will trickle down) while everyone else says decrease taxes for the low and middle class, and they will directly spend more. Increasing taxes will decrease spending. In Ca. the budget crises is heading towards a resolution, with a key element an overall increase in state sales taxes, which in LA County will be raised to 9.75%. This could well mean an increase in online sales in Ca. at lease until the etax is in effect as well.
    Quote Originally Posted by loxly
    People don't shop online to avoid paying taxes on purchases. They shop online for many other reasons, like convenience, inability to get what they want locally and many other reasons.
    I think a lot of online shoppers think that not paying tax is a wash with shipping charges, but if they have to pay both, they may then buy more from b & m.
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  4. #4
    ABW Ambassador affninja's Avatar
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    I agree. Not paying sales tax is a big motivator for online purchases, especially big-ticket items. Hopefully the CA situation will not follow NY's lead...that could be trouble.

  5. #5
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    Sorry guys but as an online shopper and knowing other moms that shop online, or have been heavy catalog shoppers in the past, tax is a non-issue. Time and availability of products trumps paying sales tax.

    Moms shop online because they can't get out to the stores. People that live out in the sticks shop online because they can't get to the stores. People that live in NYC shop online because it's easier than going to the store.

    Lots of people only shop in B&M when they need something now. Maybe furniture and some other big ticket items will suffer, but I really don't think so.

    The people that *will* be hurt are the merchants that get hit with more paperwork.
    Deborah Carney
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  6. #6
    MasterMike HardwareGeek's Avatar
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    Quote Originally Posted by loxly
    People don't shop online to avoid paying taxes on purchases. They shop online for many other reasons, like convenience, inability to get what they want locally and many other reasons.
    a lot of my neighbors only shop online to avoid taxes.

    They think of the Shipping charge as the car fare or gas money they would use to go to the store.

  7. #7
    Advocate mellie's Avatar
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    Whether or not the merchant collects the sales tax, the tax is due. If it is not paid at time of purchase it is supposed to be remitted by the consumer, usually along with income tax filing. Consumers who are not paying the sales tax can be prosecuted.

    The last I heard from a local politician, there is a lot of talk about creating and enforcing collection of sales tax or an online sales tax for all states who currently have a sales tax. There are talks going on at the Federal level as well as many State levels. There is a tremendous amount of pressure to streamline the procedure.
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  8. #8
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    The problem with the whole tax system is that it is an early 20th century construct that was made obsolete by technology and the people we send to represent our interests at the Federal and State level have NO clue that this fact is reality.

    If I live in Maine and I sell a product to someone in California - who pays the tax?

    If it's the consumer, then the guys elected in California get unelected because Californina has no jurisdiction in Maine and all the voters say we bought it in Maine.

    If it's the merchant in Maine, the guys elected in Maine get unelected because a tax on goods in California is not their problem and if they make it so no one will vote for them.

    And if you live in Oregon where there is NO SALES TAX ... now what?

    Seriously, what is needed is to REPEAL ALL TAXES and start over. Re-engineer the whole system so it has NO holes, treats everyone the same, is simple to understand, execute and collect. Plus, it needs to have all state taxes dovetail with the federal taxes.

    Until there is the political will to redo the tax structure ... it will coninue to be a giant
    cluster(expeletive deleted).

  9. #9
    Beachy Bill's Avatar
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    REPEAL ALL TAXES and start over.
    Nice idea - but it ain't gonna happen. The myriad tax laws put together over the years by our legislators (who are mostly all lawyers) serve effectively as job security for other lawyers.

    Each of the 45 states with a Sales Tax actually have the law written as a "Sales and Use Tax." If you purchase something from another state and bring it home to a Sales and Use Tax state, the YOU are responsible for paying the tax. A few states even have a section on their state tax forms to voluntarliy record such purchases and pay the tax. I just (last week) received a bill for "Use Tax" on an airplane I purchased in New Jersey and brought home to Maryland last September. There is no penalty involved, but I have 30 days to pay the 6% tax.

    With the increases in online shopping and, therefore, the loss of sales tax revenues by those 45 states, you better believe those states will soon be following the New York example. I would bet that several states will climb on that band wagon in 2009. I fully expect Maryland to do so. I am currently taking steps to avert any impact that may have on my business.
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  10. #10
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    I disagree with Loxly's statement that sales tax is a "non-issue" in online shopping. It is a relatively minor factor for most online transactions, but it definitely is a factor, and imposition of a national sales-tax collection and reporting system would definitely have a "net negative" impact on non-local sales (including online and mail-order), in favor of local "brick and mortar" stores. It would probably have a greater impact on big-ticket resellers (computers, digital cameras) than others.

    I would like to emphasize, yet again, that the concept of a national system for collecting and reporting state sales taxes is not the same as New York's law which attempts to impose collection and reporting requirements on non-NY companies if their NY-resident affiliates engage in certain specific practices that New York deems to create a physical presence requiring the company to collect and remit sales tax.

    I think it would be helpful if we tried to consolidate the discussion of "non-NY" sales tax issues into a single thread. I linked to several related threads in my post yesterday at http://forum.abestweb.com/showthread.php?p=914006

  11. #11
    Certified Affiliate Manager sunshiner's Avatar
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    I hear A LOT of our members say that not paying a sales tax is the exchange for shipping charges, so I think it will affect some. Of course, there are those who shop online purely for convenience, and they really don't care about the shipping charges or taxes. The most affected will obviously be big ticket items, tvs, furniture, electronics.

  12. #12
    Outsourced Program Manager TrishaLyn's Avatar
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    I have to agree with Loxly... I've had conversations with friends in the past about why they shop online and the avoidance of sales tax never comes into play. It's always about the convenience and sometimes the lack of getting it locally.

    Just my experience though.

  13. #13
    Affiliate Manager Heather@Stacks's Avatar
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    Anything that adds $ to the order total effects conversions in my experience. Customers may not care about taxes per se, by they very much pay attention to the bottom line.
    Of course if all resellers are required to collect taxes, then the playing field would remain "level".

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