Internet Sales Tax Bill

IL is one of the states where you have to keep track of your online purchases that do not charge you tax and at tax time, you have to pay tax on that amount.

I don't have a thought though. 

Although I'm thinking there are a ton of tax $'s that are being missed on this for something that if it were bought traditionally a tax would have been levied. 

I know NE has a similar law that you're supposed to track and pay them, but of course nobody does and it's virtually impossible for them to come after anyone.

I think that's why they're trying to hit it on the corporate side.  As a business If I am legally required to charge somebody sales tax and I don't, then I have to pay their sales tax for them at the end of the year.  So, companies have a much higher percentage of actually charging sales tax versus consumers self reporting.

I gotta call BS on all the talk about leveling the playing field and fairness and all that. I don't buy online because I get to skip the 6% sales tax. I buy online because I can't get it here or because the price is 20-30% cheaper online. The lack of sales tax collection is not hurting local stores by any means IMO. 

Why would I want to pay for shipping and wait 3-5 business days to save 6%? I wouldn't.

Who this does hurt is smaller online retailers that now have a whole heap of compliance to deal with. Yet more regulation under the guise of fairness that just makes it harder for small places to operate. 

Amazon charges sales tax now. I just made a purchase from them over the weekend and was charged sales tax for it. I remember it being a big fight between them and whichever law required them to start collecting it.

I believe many states already have "use" tax. Meaning if you buy a product out of state and you use it in your state you are supposed to report and pay the sales tax to your state. Problem is nobody reports it.

In my opinion it is tough to make it in business already and adding the burden of playing tax collector for 49 more state and however many localities is an excessive burden on small businesses who do internet sales.

Compared to a mom and pop shop it is no that big deal for Amazon or any of those big guys to have their accounting department deal with this huge regulatory cost. They have the resources to absorb the cost and the market power to pass it on to consumers/suppliers.

But imagine a small company with a one or two person accounting department trying to figure this whole thing out. Are these companies now subject to 50 different state revenue departments and potential audits from them if the state arbitrarily thinks they are incorrectly collecting and remitting tax on the states behalf? 

Government continually talks about supporting small business and jobs. But their actions always tells a different story.

In Boise, maybe not.  In Oakland (or anywhere in CA for that matter) where Sales Tax is 9-12% this is bigger.  Florida and Texas get a lot from tax dollars because they have no income tax.  I just know that some stores will use this as a reason to bump the price even higher than online and continue to push the "buy local" piece but if you're paying all the taxes as if you had bought it local, there goes most of their dollars and cents arguments.  

I heard about businesses standing-up who will serve as a middle man in Delaware and Oregon (zero sales tax) who will process purchases and reship them for less than the price if you had to pay your states 9-12% tax. It will only work for large purchases of course.  

See, I'm with you on the competition aspect.

The Local shop argument is 1) they care about their customers, 2) they have local employees, 3) they contribute to local tax revenue.

The large box stores do 2) and 3) and a 4) have a competitive price.  

The internet company do none of the 3 right now, but it's clear they do 4) more than the large box stores.  If they did 3) and 4), suddenly the Local guys are down to "care".

I told my Local bike shop out where I live that I will buy any future bikes from him because I want that shop open close to my house but that I will likely buy any tubes, tires, etc from the cheapest source.

In Pennsylvania, if you buy something out of state you have to voluntarily send the 6% sales tax in, 8% if you live in Philadelphia.

I'm assuming this is true in most states?

Do posters here who usually vote for pro tax leftist politicians do that in their state if they buy something online and are not charged sales tax?

I think we can't blame Obama yet as this is the brain child of the morons on Capitol Hill.

Idaho asks you to track your online spending and pay your 6% when you do your taxes. Of course no one does. 

Hey, take your right wing Tea Party antics elsewhere... 

Did someone kick you out of the liberal hippie group and now you want to join the other side?

I'm not an economics major so I can only speak for myself.  For mid sized purchases (TV's, electronics, computers, etc...) I typically shop around locally to figure out what I want to buy.  I then go online and find the best price from a reputable source.  Depending on the purchase there may or may not be shipping involved, but the price is usually cheap enough to cover the shipping so my cost savings is often just the sales tax difference and possibly a little more.

Obviously this varies with a lot of different products.  With Tri gear you're exactly right in that I can often find things 20-30% cheaper and sales tax or no sales tax I'll buy it online because it's still cheaper.

I just got back from Best Buy getting a new set of PowerBeats earbuds (See "things I regret" thread about cat eating the old ones).  I looked online last night and Beats has advertised price controls in place so pretty much everybody had them for $149 plus shipping.  So, I just went to best buy and paid the sales tax because it was only a few dollars more than what the shipping would have been.  If I would have found them online for $140 plus shipping I would have bought them online.

That's what I initially thought... but I did the math... Assuming a business was open for 300 days/year (that is essentially 6 days/week), you need to average $3333.33 of sales each day. It is for sure a significant number of sales, but not out of the reach of many small businesses. Presumably being online would increase the audience and therefore the ability to generate those kind of numbers. 

$1 MM in revenue isn't much actually.  "Small business" is defined here: 

http://www.sba.gov/content/what-sbas-definition-small-business-concern 

Except that sales tax is supposed to be to help fund local projects eg roads, police, fire services etc.  If you do not use any of those services why should you pay for them?

Snerk.  I was following before you explained it.

This was bound to happen sooner or later.  For me personally it really won't make much of a difference on how I shop.  I shop on-line for because it's easy to comparison shop without the inconvenience of getting in the car and going to the shopping center.  For me that's a big time waster and I don't enjoy it.  And when I do go I usually end up buying something I had not intended on purchasing.  Point being, if the price of buying on-line is now more equal with going to the retail outlet, I most likely still going to buy it on-line.  That is unless I am in a rush and don't want to wait the 2-3 days for shipping.  But if that's the case I would have gone to the retail outlet anyway.  For me this is a non-issue.