Sales tax online

[MarissaNicole]

Illinois will now be charging sales tax for all of its online companies based in the state. I guess Amazon is already cutting ties with Illinois companies.

I know it's been coming, but it still stinks! I suppose its only a matter of time before there will be sales tax on all online sales....

[HouseofWool]

Technically, as the purchaser, you are supposed to report all of those online purchases and pay sales tax. Since few do this, I can see how states will be pushed into collecting the tax at the time of sale. It seems like an easy thing for the state to enact to help balance their budgets without looking like a villain.

[MarissaNicole]

Technically, as the purchaser, you are supposed to report all of those online purchases and pay sales tax. Since few do this, I can see how states will be pushed into collecting the tax at the time of sale. It seems like an easy thing for the state to enact to help balance their budgets without looking like a villain.

Really - I had no idea!

[HouseofWool]

yep really. When I sell products on-line to out of state customers, the buyer is supposed to tell their state that they bought it. I don't have to collect sales tax and pay it to each of the states. No one does this. Since lots of people purchase online instead of locally, it is a huge amount of sales tax that states are missing out on. Given IL's horrible budget problems, it strikes me as a clever way to generate income without actually raising taxes. They are just shifting the reporting liability from the buyer to the seller, which is where it should be to begin with as sellers have the incentive to accurately report income.

[oceanchild]

Colorado tried this last year. Amazon got all huffy. But there really isn't any way to force compliance, so I don't know anyone who's bothering to report it. If Amazon would actually collect the tax and send it to the state, it would be different, but they are unsurprisingly refusing to do that.

[Vanquisher]

Colorado tried this last year. Amazon got all huffy. But there really isn't any way to force compliance, so I don't know anyone who's bothering to report it. If Amazon would actually collect the tax and send it to the state, it would be different, but they are unsurprisingly refusing to do that.

Frankly, I don't blame them. They would have to charge a different calculated sales tax for every state. Some states do not have sales tax on clothing or food, or other things. Plus, there are local county/city taxes. Furthermore, other companies aren't going to do it, which makes their bottom-line price less competitive in the marketplace, and they have to have the manpower to write the sales tax codes into their software and to send it in. I don't blame them for not wanting to do it one bit.

I totally understand the state's position too.

[ides]

They have been doing this in New York state for a couple years with Amazon.com. It sucks but whatever. I think some other sites that have distribution centers in the state & sell online also charge sales tax.

[oceanchild]

Frankly, I don't blame them. They would have to charge a different calculated sales tax for every state. Some states do not have sales tax on clothing or food, or other things. Plus, there are local county/city taxes. Furthermore, other companies aren't going to do it, which makes their bottom-line price less competitive in the marketplace, and they have to have the manpower to write the sales tax codes into their software and to send it in. I don't blame them for not wanting to do it one bit.

I totally understand the state's position too.

Yeah, I also understand both positions. I think it's something that's ultimately going to have to be solved at the federal level. I will point out that large chains with physical locations have to calculate taxes in a variety of states and localities, and they seem to have figured it out.

[poky]

They have been doing this in New York state for a couple years with Amazon.com. It sucks but whatever. I think some other sites that have distribution centers in the state & sell online also charge sales tax.

Yeah, if they have a physical presence there, they have to collect sales tax there. Amazon's always charged sales tax in WA also, for the same reason.

This is part of why I loved living in Oregon.

Originally Posted by oceanchild:
Colorado tried this last year. Amazon got all huffy. But there really isn't any way to force compliance, so I don't know anyone who's bothering to report it. If Amazon would actually collect the tax and send it to the state, it would be different, but they are unsurprisingly refusing to do that.
Frankly, I don't blame them. They would have to charge a different calculated sales tax for every state. Some states do not have sales tax on clothing or food, or other things. Plus, there are local county/city taxes. Furthermore, other companies aren't going to do it, which makes their bottom-line price less competitive in the marketplace, and they have to have the manpower to write the sales tax codes into their software and to send it in. I don't blame them for not wanting to do it one bit.

I totally understand the state's position too.
[Edit] [Reply]

To Heidi's point above (quoting on an iPad doesn't work) - that's how all retailers w/ brick & mortar stores already do it. If you buy something online from OfficeMax, your tax is based on the rate for your state (assuming there is a store there). If I purchase the same item from the same site, it's calculated on mine. Online sales tax is based on where the irks is being delivered, but to this point, it's only been if you have a brick & mortar presence. As to the man-power/code changes - it's totally feasible and done. We were doing it 10 years ago when I worked on POS software.

It will definitely affect their advantage in the marketplace, though.

[ladymoreta]

That's weird... I've noticed several sites charging sales tax. I wonder if Oklahoma already has this law in place?

Are they sites that have physical stores in OK?

[diggitydot]

I used to work for an online retailer sans a brick & mortar location. We only had to charge tax to customers from our own state.

[ladymoreta]

Wish I could remember... (What does that say about my online shopping habits?... Haha!)

I just checked, and Babies R Us does it. Not sure if/which other sites do.

[SuzySunshine]

Do they just have to have a presence or a store? Jenn, does Amazon charge tax in KS? They have a distribution center in SE Kansas.