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From Matt Warnock <mwarn...@ridgecrestherbals.com>
Subject Re: News: Democrats push for new Internet sales taxes
Date Thu, 08 Jul 2010 19:48:20 GMT
Currently brick-and-mortar sales taxes are collected where the STORE is.
Thus a store in Salt Lake City may have an extra local transit tax that
a store in an adjacent suburb does not.  But there is typically only one
tax rate (the local one) collected, though that rate may vary for
different types of goods, too (food vs. non-food are taxes differently
in many states).

Catalogs have had to collect multiple taxes in the past, but only for
states in which they "do business" (which is more than just "have
customers"), and it can be a nightmare, even if you know EXACTLY where
you are shipping (which may be different than where the customer placed
the order, or pays for it).  It tends to lead to turf wars between
jurisdictions (if my warehouse is in Salt Lake, but my office is not, do
I collect the transit tax or not?), and encourages "portable" businesses
to move to sales tax havens like Nevada.  Congress has never really
addressed this problem adequately for catalog companies.

You seem to assume that internet retailers would collect taxes where the
USER is.  That is a considerable jump in complexity for current
practice, and many internet retailers selling digital goods (like
ebooks) may have no idea where the user is.  All they have is a
username, password, and a credit card number.  This is a complexity that
arose with the internet, does not exist with brick and mortar stores,
and has never been solved.  If I buy from an IP address in a Chicago
hotel, using a Sacramento shipping address (perhaps my kid at college)
and pay for it with a credit card with a Salt Lake billing address,
which tax(es) do you collect?

Congress granted the Internet an exception to avoid turf wars between
all the various entities. Granted, it won't last, but I doubt that the
solution of taxing based on USER location is either feasible, or as you
say, inevitable.  There needs to be a global (or at least national)
solution, and until it appears, the "need" is pretty speculative.  

I think OFBiz is flexible enough to create and use compliant tax rules
for any kind of tax structure that might be settled on.  Some are more
complicated than others.  If Congress does it, at least it will be
consistent for the whole country.  Some schemes may require
outside-the-box thinking and programming.  Just my opinion, though.
Matt Warnock <mwarnock@ridgecrestherbals.com>
RidgeCrest Herbals, Inc.

On Wed, 2010-07-07 at 07:30 -0700, Mike Z wrote:
> I came across this news article this morning, and I immediately
> thought of my previous question were I asked about the "TaxWare"
> status of ofbiz.  It was also noteworthy (to me) that only BJ
> responded to my inquiry.
> http://news.cnet.com/8301-13578_3-20009603-38.html
> So:  Is ofbiz ready for the inevitable?  Eventually, we'll be required
> to collect sales tax (and report) on a nation-wide basis for all
> ecommercce transactions.  How will this possibly work?

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