Tuesday, April 30, 2013

4 Things to Buy Before Congress Passes the Sales-Tax Law

Last week, Congress cleared the way for a May vote on the Marketplace Fairness Act, which requires online retailers to collect sales tax on all purchases. Under current law, states can only require online sellers to collect sales tax if they have a physical presence in that state. E-books are exempt.

Marketwatch says these 4 things should be bought before the bill becomes law.

1. Electronics

Says Marketwatch:

 Amazon.com currently charges sales tax only on orders to Arizona, California, Kansas, Kentucky, New York, North Dakota, Pennsylvania, Texas and Washington. Newegg.com charges sales tax on orders heading to California, New Jersey and Tennessee. A $2,998 60-inch Sony 1080p LED television would cost another $209.86 for a Vermont buyer, with 6% state sales tax and up to 1% in local taxes. The 6% sales tax for a shopper in Maryland adds $71.94 to the $1,199 price of an Apple MacBook Air.

2. Jewelry

Says Marketwatch:

 BlueNile.com collects sales tax only on orders shipped to New York and Washington; Diamonds.com, to Nevada. A $13,015 platinum ring with a 1.51-carat princess-cut diamond would cost $780.90 more for a buyer in the District of Columbia with the 6% sales tax included.

3. Designer clothes and accessories

Says Marketwatch:

.Many of the sites selling luxe brands only charge sales tax in a few states — Net-a-Porter.com on purchases shipped to New Jersey and New York; Bluefly.com on orders shipped to California, Colorado, New York, Ohio and Pennsylvania. For a Rhode Islander buying a $3,525 Bottega Veneta tote, the state’s 7% sales tax would add $246.75 to the bill. A $13,850 Alexander McQueen gown heading to South Carolina could be as much as $1,246.50 extra, with a state sales tax of 6% and local sales tax rates of up to another 3%.

4. Furniture and fixtures

Says Marketwatch:

Overstock.com currently collects sales tax only on orders shipped to Utah; Wayfair.com, to Massachusetts, Utah and Kentucky and Build.com, to California. A New Yorker buying a $3,097 sectional sofa could pay as much as $278.73 extra, with 4% state sales tax and up to 5% in local taxes.


10 comments:

  1. I am surprised it took this long for the political skimmers to skim money from online purchases. The administrative side of making this all work should be interesting. You too can tell later gens. about the good old days of little sales-use tax payment/collection that you enjoyed.

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  2. I'm surprised you didn't mention gold/silver bullion, maybe "jewelry" was enough and obvious to most of us here.

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  3. Unreal! Congress is hell-bent on destroying E-Commerce and any innovation that goes along with it.

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  4. The tax should be same tax say 5% 2 for seller's state, 2 for buyer's state and 1 for feds. not the crap they are working on. Then if the states don't like the different level of taxes, let them lower their sales tax to match the internet tax. Food products should always be excluded from any internet tax.

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  5. This new requirement will probably put me out of business. I don't have the software to track all the different sale taxes. Accounting, reporting, and filing would be an expensive nightmare for as small of business as I have. This is just another way for the big boys to squeeze out the little man all while claiming "fairness". Just because the buyer may be breaking the law by not paying the taxes due should not place the burden on me to collect it.

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  6. Write your congressmen!! This is not a done deal, but will be voted on real soon!!

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  7. Is this a sales tax or a purchase tax?

    What they want to do now is to collect a tax on purchases, rather than a tax on sales. That’s why it’s been called a sales tax.

    Even though you calculate the tax and pay it at the register, it’s the business that owes it to the state it does business in. It could just be added into the product cost, but most chose to separate it at the point of sale for convenience, and not knowing when it would change everything they had marked. A business is attracted to a low tax state for obvious reasons. Maybe internet sales companies should consider where they set up shop, but they clearly owe it to the state the company making the sale resides in, not to the state a person who buys from them lives in.

    How could this go un-noticed?

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    1. It hasn't gone unnoticed; it is the elephant in the room that no one is allowed to talk about. States with large sales taxes have more clout in Congress than those with small ones. States with large sales taxes don't want to compete with low tax states for online businesses. So the obvious solution (tax based on the location of the business, not the location of the buyer) is never even discussed.

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  8. What you need to buy before congress passes the sales tax law is anything unusual or collectable which is cheaply purchased from a private individual rather than a large company. We can expect eBay to go out of business in its current form. Individual sellers just selling a few dozen or even hundred or even a few thousand items a year will not be able to comply. Want a particular discontinued pattern of china? Forget about buying it cheaply from an individual seller online. The online equivalent of a flea market may survive with some difficulty, but the online equivalent of a garage sale will be impossible without simply ignoring the law.

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  9. The venture capital firms were also a big deal if you care about that sort of thing.sales

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