[nylug-talk] [OT] internet sales tax for NY in Dec. and the US?

[Joseph Annino]

An other issue is its just too damn hard to collect taxes properly in  
many states.  New York is the prime example.  I think most online  
businesses may get the tax rate or jurisdiction wrong some fraction of  
the time, because it is so hard to know exactly how much a particular  
address is taxed.  Tax zones may span zip codes, may be parts of  
towns, etc.

I know some states wanted to get together to simplify their tax codes,  
in an effort to get legislation passed to allow them to collect sales  
tax from online retailers.  Many states backed out of the plan because  
it meant they couldn't use local special tax zones to pay for special  
projects, like transportation.

I think if states really want this, they need to give up something,  
and run government in a more open way.  Base tax rates on zip codes,  
and have all states submit the tax rate mappings to a list maintained  
by an agency funded by all the states.  That agency will publish the  
list on a web site, for retailers to download.  It would be published  
at some regular interval, and you can use each downloaded list for say  
3 months.   Tax payments could be made to a single address through  
this multistate agency, and payment records would include the version  
number of the tax list used.

With the above, it wouldn't be too hard to make open source and  
commercial libraries to support the tax scheme, and to keep everyone  
up to date.  Right now, tax calculation is so complex businesses have  
to turn to expensive geocoding based systems.  That can be a big  
barrier to small online businesses.


Although getting rid of all sales taxes everywhere I think is the best  
thing.  Sales taxes are one of the more regressive taxes, as they  
collect a bigger percentage of income from the poor than those who  
make enough to save or invest.

On Nov 14, 2007, at 7:16 PM, Brian Gupta wrote:

> The key phrase I refer to is the ban on "Multiple or discriminatory
> taxes on electronic commerce". This prevents states from implementing
> new tax rules that specifically target internet sales. Under the
> existing supreme court ruling that was referred to in the original
> article, a state does not have the power to order an out of state
> corporation to collect tax on transactions, unless that corporation
> has a "Nexus' of business in the state that wishes to collect the
> tax.. (Generally a Nexus has referred to bricks and mortar, or a
> staffing presence, not as Spitzer is claiming, that pixels on a screen
> are now a Nexus.)
>
> Here is the full text of the act:
> http://www.techlawjournal.com/cong108/inda/20040429_s150es.asp
>
> I did some digging, and I understand your confusion. There is a common
> believe among technorati that this act offers no ecommerce provisions,
> and is simply a internet access tax act. This is further confused by
> the fact that the general populace believes that there is a
> "moratorium on internet sales tax", which is also not true.
>
> BTW - The tax you are referring to that most people aren't paying
> isn't sales tax. It is "use tax".
>
> In the end it is a moot point. Current law is preventing most states
> from collecting sales related taxes on cross border transactions. This
> act was designed, to keep the status quo in place regarding internet
> ecommerce taxes, and make sure that the states didn't use this as an
> opportunity to create a new method to bypass the "Nexus" ruling.
>
> I suspect states are going to have to tread very carefully, as they
> risk alienating their voters. (Basically, if they could some how
> magically enforce the "use tax", citizens would not view it as
> enforcement of an old tax, but rather a new tax. With Spitzer's claim
> of no new taxes, it will be interesting to see, if a) he pulls it off,
> and b) voters don't throw him out of office.
>
> -Brian
>
> On Nov 14, 2007 5:40 PM, Alex Pilosov <alex at pilosoft.com> wrote:
>> On Wed, 14 Nov 2007, Brian Gupta wrote:
>>
>>> Sigh...
>>> http://www.hklaw.com/Publications/Newsletters.asp? 
>>> ID=533&Article=2860
>>>
>>> The moratorium wasn't just on "Internet access". The significance  
>>> of the
>>> moratorium are mostly dealing with it's larger clauses relating to
>>> "e-commerce". Basically, the moratorium prevents new sales taxes, on
>>> internet sales. If Amazon doesn't have a factor/warehouse in New  
>>> York
>>> state, currently New York state can't charge sales tax for items  
>>> bought
>>> from Amazon, as Amazon is not a New York retailer.
>> Yes, someone on the list is going to school me about internet tax
>> moratorium, sighing, no less. After being in business for 10 years,  
>> and
>> having my attorneys argue with ILECs and CLECs about exact meaning  
>> of what
>> constitutes telecommunication and what constitutes "internet  
>> access", I'm
>> going to have someone on nylug explain ITNA/ITFA to me. Not. Freaking
>> amateurs. *groan*
>>
>> I repeat, again, the internet tax moratorium has absolutely  
>> *nothing* to
>> do about sales taxes on anything that is not *internet access*. Go  
>> to the
>> URL that you posted. Read it. Talk to me after you do.
>>
>> -alex
>>
>>
>>
>>
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>
>
>
> -- 
> - Brian Gupta
>
> http://opensolaris.org/os/project/nycosug/
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