Internet Sale Tax in the Senate

[CigarSaint]

I truly meant to come back and post more on this, and I will, but I just haven't had the time over the last couple days.


More later.

Good looking forward to it!!:ccool:

 

[CigarSaint]

Doesn't new legislation come from the house anyways??

 

[Alwayslit]

Has yet to pass the house.

 

[CAJoe]

So the extra tobacco taxes would not be included but this would be a way for states to be forced to report to other states what was sold and allow the state to go after the individual for the sin taxes...

 

[CAJoe]

Doesn't new legislation come from the house anyways??

Legislation that involves taxation is supposed to come from the house. Other legislation can come from either one.

 

[JDog]

I found an interesting update on the following blog:
http://thehill.com/blogs/floor-action/senate/296299-senate-advances-online-sales-tax-bill-will-finish-work-after-recess

Here's a quotation of the first paragraph:

After the threat of a midnight vote and weekend work, the Senate agreed Thursday to advance a bill that would allow states to collect online sales tax. In a 63-30 vote, the Senate ended debate on The Marketplace Fairness Act, S. 743, which would empower states to collect taxes on purchases made online by consumers in their states. The Senate will vote on final passage of the bill when senators return May 6 from a weeklong recess.

I'm glad we got clarification on the "sin taxes" from others within the thread... it sounds like those will not be collected.

 

[Phaedron]

KGD asserted that the GOP was adamantly opposed to this. I don't think that's necessarily true-- there was a 63-30 vote in the Senate to end debate on the bill, meaning it can now be scheduled for a real vote. That is an implication of bipartisan support there... Anyway, maybe I'm missing something, but doesn't the bill just institutionalize for all retailers what some retailers have had to do all along? I mean-- if I live in Wyoming and I order online from the Costco website, well, there are no Costcos located in Wyoming. Therefore, I don't get charged any sales tax. But if I live in Wisconsin (which I do) and I order from Costco.com, well, we have Costco locations here. So I have to pay the sales tax. All this bill does is stop discriminating on the basis of where the buyer lives as to whether the tax is charged or not. If you live in a state that has no sales tax, like Montana, it would appear that the law would have no effect on you. Clearly, there's software available that enables this differentiation of taxing regions. Additionally, it's not as though the bill creates a "new" tax. In Wisconsin, it is, in fact, current law that you have to pay the sales tax on these sorts of online purchases. You're supposed to report it all on your state tax return. Do people report it? Hell, no. So, we're a state full of tax cheats, and the state can't possibly figure out who is cheating and by how much. This law would significantly stop the cheating.

With that said, you might think I'm supporting this bill. No, I'd hate it. I wonder if one way around it (in addition to the other ways that have been mentioned) would be to purchase a private mailbox in, say, MONTANA with a forwarding service. If I score a $200 box of cigars with free shipping and have it sent to Montana... and then my service turns around and mails it to me, I would incur a shipping cost-- lets say it's $5.95 for a 1 pound box at standard post. Well, the 5.5% sales tax in my city/state in Wisconsin would have cost me $11. So that's a savings of about $5 on that shipment. Of course, then there's the annual cost of the service itself to consider. I suppose if you're a high volume online shopper, it could make sense...

 

[StogieNinja]

Or just have a real good buddy who lives in a low tax state! :smoke:

 

[JDog]

Senate passes the legislation:
http://online.wsj.com/article/SB10001424127887323687604578467322874089766.html

Here are the Cliff Notes from the above online article:
• Senate voted 69-27 to pass the legislation.
• President supports the Bill.
• GOP-controlled House hasn’t scheduled hearings or votes yet.

Here are some interesting tidbits found in today’s WSJ (5/6) but not in the online article:
• A scenario presented in the article is how an online retail would have to determine the counties to remit the tax dollars to by using the shipments’ ZIP codes.
• More than 100 entities lobbying for Internet sales-tax legislation.
• Amazon has paid a lobbying firm $220,000 for the first three months of 2013 FOR the sales-tax.
• A retail association paid about the same amount but over a 15 month time period.

 

[njstone]

This will happen eventually, just a matter of time. But I don't think the current bill will pass the House.

As it stands now, the bill would exclude those who do less than $1M in ONLINE sales ... which I think would exclude most cigar shops. The big online retailers, and shops with a large online marketplace would probably be effected, though. The question that remains to me is whether phone sales from an out-of-state buyer would be subject to sales tax or not ...

I obviously do NOT want this to pass ever, but I do think it's inevitable. But in the grand scheme, SALES TAX is no big deal. The killer would be if MN was allowed to charge TOBACCO TAX as well for online out-of-state orders. This would lead to a HUGE grey market for cigars.

 

[thejavaman]

I wonder what the implications will be for online cigar retailers if this passes the house. Not paying taxes on my online cigar purchases is one of the main reasons why I buy the majority of my smokes online. So will each state's unique tobacco taxes now apply to all online orders as well? Not sure how this is going to work if it becomes law.

http://www.usatoday.com/story/money/business/2013/05/06/winners-losers-online-sales-tax/2139681/

 

[Cigary43]

This is going to be a huge headache for both the retailer and the individual. They will try and hit up the retailer first and then try and get the addresses along with the orders they sent out...the double whammy.

 

[spark]

I believe as the bill stands, retailers that do less than $1M online interstate sales are exempt from tax

 

[thejavaman]

I believe as the bill stands, retailers that do less than $1M online interstate sales are exempt from tax

$1M a year in online sales is peanuts to the large players in the game though, so that will kind of be a moot point, IMO.

 

[spark]

I believe as the bill stands, retailers that do less than $1M online interstate sales are exempt from tax

$1M a year in online sales is peanuts to the large players in the game though, so that will kind of be a moot point, IMO.

Oh, I was raising the point for B&Ms that take online or phone orders, and not CI, Famous, etc. In a way, I think this might make the smaller B&Ms more competitive in the online market.