Internet Sales Tax Exempts Online Businesses with Less Than $1 Million In Annual Revenue

[fearthereaperx]

http://hosted.ap.org/dynamic/stories/U/US_BUDGET_BATTLE_INTERNET_SALES_TAX?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2013-03-22-20-13-33

Part of what is at stake is potential revenue for cash-starved state governments across the country. An estimated $20 billion in sales taxes go uncollected annually by out-of-state online merchants.

Supporters also argue that not collecting the levies is a competitive disadvantage for retail stores, which must collect local sales taxes.

One sponsor, Sen. Richard Durbin, D-Ill., said Internet sales taxes should be collected "so those local businesses will have a fighting chance."

Sens. Mike Enzi, R-Wyo., and Lamar Alexander, R-Tenn., were other chief sponsors.

Opponents said the plan would be unworkably complicated, would pressure states without sales taxes to adopt them and would encourage companies to move overseas, where they said sales taxes could not be enforced.

"It tramples on states' rights," said Sen. Kelly Ayotte, R-N.H.

Online businesses with less than $1 million in annual sales would be exempted from having to collect the levies.

[itshappening]

Pathetic.

[fearthereaperx]

Pathetic.

Everything about this Act is bad, but there's at least one positive kernel pushed into the legislation to look forward to assuming it does pass.

[ctiger2]

I saw this quote on Armstrong's site:

“With Congress, every time they make a joke it’s a law, and every time they make a law it’s a joke.”

Will Rogers (1879–1935)

[Matt Collins]

A friend of mine had a computer business, and most of his customers were out of state. He would do maybe $3-4 million worth of sales, and by the time all the dust settled, and split with his partner, he brought home about $60k/yr.

[muh_roads]

A friend of mine had a computer business, and most of his customers were out of state. He would do maybe $3-4 million worth of sales, and by the time all the dust settled, and split with his partner, he brought home about $60k/yr.

$60K is too much to allow the mundanes to have.

[Dr.3D]

So those business with more than $1 million in annual revenue with have to become two or more businesses to avoid the taxation.

[muh_roads]

...

[muh_roads]

So those business with more than $1 million in annual revenue with have to become two or more businesses to avoid the taxation.

With all the licensing fees that come with doing that, you might as well just pay the sales tax. Maybe not for all industries...but for many.

[Ranger29860]

How in the world would they even enforce this? I mean just doing companies in the states would be a nightmare but good god imagine trying to enforce imports. Would they block any packages at customs if they are from a company that does not follow the rules?

[HOLLYWOOD]

http://hosted.ap.org/dynamic/stories/U/US_BUDGET_BATTLE_INTERNET_SALES_TAX?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2013-03-22-20-13-33

Part of what is at stake is potential revenue for cash-starved state governments across the country. An estimated $20 billion in sales taxes go uncollected annually by out-of-state online merchants.
Everytime I hear this "$20 Billion in uncollected"... this ALSO reminds me of the 2005 Bankruptcy Act, when W Bush's propaganda speech of collecting $20 Billion more for corporations/businesses, on top of giving the federal government supreme control in anything that may be owed to them as well. Which of course was a direct attack on the individual and hit the poorer classes the most.

Thomas Jefferson warnings keep arising, ...they(.GOV) will eventually steal everything from the citizen over time.

[fearthereaperx]

A friend of mine had a computer business, and most of his customers were out of state. He would do maybe $3-4 million worth of sales, and by the time all the dust settled, and split with his partner, he brought home about $60k/yr.


3.4% profit margin(on $3.5 million sales) for an online business?

[Ranger29860]

3.4% profit margin(on $3.5 million sales) for an online business?

O thank god I was not the only one to notice that lol. That must be ton of overhead.

[fearthereaperx]

O thank god I was not the only one to notice that lol. That must be ton of overhead.

Highly saturated Computers/electronics market +Ebay fees could get you close to that number, though. It's all about volume even though these are grocery store margin numbers lol.

[AGRP]

Whats the difference if online business does more or less than $1 mil? Are there physical roads in cyber space that need to be repaved?

[Zippyjuan]

How would it be constructed (the internet tax system)? What rate or rates would be charged? Would a business say in New York simply assess New York sales taxes for all online purchases (states like California- where say the customer lives would still be losing money the person would have spent in- state)- which would encourage all busnessses to move to lowest sales tax states to set up shop. The other option puts huge costs on businesses- they would have to know the state sales tax of all 50 states and have a separate calculation of sales tax to that state (not that hard with computers- entering the shippling ZIP code would tell them where and the software does the tax calculation) and then they would also have to tally the money for each state and send that money to the respective states (monthly?).

[MoneyWhereMyMouthIs2]

A company with 1 million in annual sales may not be making much at all. What if they employ 10 people? What about their materials costs? I mean... your could have one million in revenue and 1.1 million in costs. You company could be losing money every year and still subject to this nonsense.

[fearthereaperx]

A company with 1 million in annual sales may not be making much at all. What if they employ 10 people? What about their materials costs? I mean... your could have one million in revenue and 1.1 million in costs. You company could be losing money every year and still subject to this nonsense.

It's obviously a "dangling carrot" to appease those arguing that it's a small business/start-up killer.

[Ranger29860]

Whats the difference if online business does more or less than $1 mil? Are there physical roads in cyber space that need to be repaved?

I don't know if that is all that strong of an argument used to oppose this. One could easily counter with the fact that if you buy something online it has to be shipped to you so that means more travel for UPS/FEDEX/USPS so that leads to road wear.

Now the selling of digital goods is a whole other issue. Say if I buy a game online and download it then does this bill say I have to pay taxes on that as well? Since there is no wear and tear on the roads for that sold item then I would not see how that argument can be used.

But lets be honest here this whole thing is a cash grab for the federal and state governments. It has nothing to do with anything these businesses may impact. Gas tax already pays for roads so what else could they possibly justify the tax for? I am a stern believer in indirect taxes that only tax things that directly impact services that are needed (aka gas tax for roads)

[Zippyjuan]

Noting also that this was a non- binding amendment to a non- binding spending bill.

[AGRP]

I don't know if that is all that strong of an argument used to oppose this. One could easily counter with the fact that if you buy something online it has to be shipped to you so that means more travel for UPS/FEDEX/USPS so that leads to road wear.

Shouldnt the delivery services who use the roads be taxed?

[Ranger29860]

Shouldnt the delivery services who use the roads be taxed?

(again playing devils advocate here)

They already are with a gas tax. But since they have to stay competitive we have to level out the taxes to all those in the food chain. Is it fair that only the middle man pays for services (aka roads) that both the consumer of the product and the producer of the product benefit from?

[AGRP]

(again playing devils advocate here)

They already are with a gas tax. But since they have to stay competitive we have to level out the taxes to all those in the food chain. Is it fair that only the middle man pays for services (aka roads) that both the consumer of the product and the producer of the product benefit from?

Why should the person who sells light weight and high value objects be taxed more than someone who sells heavy and low value objects? The toll on the road for the light weight objects is miniscule compared to a bowling ball manufacture, no?

[Matt Collins]

Whats the difference if online business does more or less than $1 mil? Are there physical roads in cyber space that need to be repaved?No, it's just a big sounding number for the unthinking masses to think is reasonable. After all, if you're business makes over $1m then you must be "rich". :rolleyes:

[Matt Collins]

Highly saturated Computers/electronics market +Ebay fees could get you close to that number, though. It's all about volume even though these are grocery store margin numbers lol.


3.4% profit margin(on $3.5 million sales) for an online business?


He had a business partner and a family of 4.

Here is his site:
http://multi-monitors.com/

[Ranger29860]

Why should the person who sells light weight and high value objects be taxed more than someone who sells heavy and low value objects? The toll on the road for the light weight objects is miniscule compared to a bowling ball manufacture, no?

Then why don't we tax suv's more for gas than cars if weight of cars was more of a factor than the amount of cars?

[Ranger29860]

He had a business partner and a family of 5.

Here is his site:
http://multi-monitors.com/

well shit if your gonna count family expenses as a negative from the take home profit then 60k of pure non allocated (as in bills and food) profit then I can understand that number. If that is what you did that is a really confusing way to word it its like if I earned 2k a month and had bill and food cost of 1800 a month and told people I make 200 dollars a month.

BTW I bought my 6 monitor mount and tv wall mount from him lol.

[AGRP]

Then why don't we tax suv's more for gas than cars if weight of cars was more of a factor than the amount of cars?

We should if the argument is to remain consistent.

[Zippyjuan]

Then why don't we tax suv's more for gas than cars if weight of cars was more of a factor than the amount of cars?

A tax per gallon of fuel would capture a lot of that since larger vehicles also tend to use more gas.

[Ranger29860]

A tax per gallon of fuel would capture a lot of that since larger vehicles also tend to use more gas.

(again devils advocate here so dont kill me)

Well if thats the case then a heavier load for trucks would mean more gas used anyway. So the lightweight product evens out with the heavier one.

[AGRP]

A tax per gallon of fuel would capture a lot of that since larger vehicles also tend to use more gas.

That doesnt apply to the internet business tax. $1 mil in paperclip sales = $1 mil in bowling ball sales.

[Ranger29860]

That doesnt apply to the internet business tax. $1 mil in paperclip sales = $1 mil in bowling ball sales.

But it does take the burden of revenue generation off of the middle man trucker. Since this revenue is needed it had to come from somewhere. Do you advocate the raising of the gas tax because a online business doesn't want to pay what ever brick and mortar store already pays and what each of us pay on anything we buy already? Making our burden even more?

[Matt Collins]

(again devils advocate here so dont kill me)

Well if thats the case then a heavier load for trucks would mean more gas used anyway. So the lightweight product evens out with the heavier one.The proper phrase is "don't flame me bro"... :p

But this is why there is a push for GPS tracking on all vehicles, these hybrids and other more fuel efficient vehicles are causing less gas consumption, and the government, again, is feeling like they aren't getting their cut. So the idea is floating around more and more about doing a per-mile tax. Of course the only way to calculate that is to put a GPS tracking device on everyone's vehicle (which has actually been suggested). :mad:

[Matt Collins]

well shit if your gonna count family expenses as a negative from the take home profit then 60k of pure non allocated (as in bills and food) profit then I can understand that number. If that is what you did that is a really confusing way to word it its like if I earned 2k a month and had bill and food cost of 1800 a month and told people I make 200 dollars a month. No, that's not what I meant. His takehome was that.


BTW I bought my 6 monitor mount and tv wall mount from him lol.Awesome. Know that you were doing business with a fellow liberty guy.

[pauljmccain]

Sheesh. 10 million would be way more realistic, at that point the business should be able to support an accountant to deal with filing sales taxes in 50 states. But at 1 million, most businesses would only have a couple sales/service staff as well as the warehouse staff. If this is passed, they had better make it VERY easy to file.

[pauljmccain]

well shit if your gonna count family expenses as a negative from the take home profit then 60k of pure non allocated (as in bills and food) profit then I can understand that number. If that is what you did that is a really confusing way to word it its like if I earned 2k a month and had bill and food cost of 1800 a month and told people I make 200 dollars a month.

BTW I bought my 6 monitor mount and tv wall mount from him lol.
Why are you guys obsessed with analyzing this? Any new company should be making zero dollars as it reinvests in growth. A net income number with zero other information tells you nothing about a business.

Paul

[JorgeStevenson]

But it does take the burden of revenue generation off of the middle man trucker. Since this revenue is needed it had to come from somewhere. Do you advocate the raising of the gas tax because a online business doesn't want to pay what ever brick and mortar store already pays and what each of us pay on anything we buy already? Making our burden even more?

What is "our burden"? We didn't go on the road.

The middle man went on the road. He paid the gas tax. When we negotiated with the middleman, he already knew exactly how much gas tax he would incur in order to fulfill the contract. Knowing that he would have to pay the gas tax, he demanded a higher price for the delivery of goods than he would have without a gas tax. Therefore, when we paid the middleman we already paid the gas tax.

Anyway, I think the whole "gas" argument is a distraction. I have no idea under what authority states claim the right to a cut of every B2C sale that occurs within their state, but I have a feeling road repair is not one of the primary ones.

[oyarde]

If there is ever an effective date for this , I will buy nothing off the net I have to pay tax on.I already pay some high shipping , not paying both, will just buy everything out of the classifieds in the local paper.Screw a bunch of tax.