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From Matt Warnock <mwarn...@ridgecrestherbals.com>
Subject Re: News: Democrats push for new Internet sales taxes
Date Sat, 10 Jul 2010 21:37:17 GMT
Thanks for the pointer.  Like I said, it is a nightmare.  Among other
things, it says non-nexus sales are to be taxed at the destination rate.
But if there is no nexus, why does the seller have to collect the tax at
all?  That is the constitutional problem.  Localities can't just assume
the power to tax (or otherwise regulate) the whole Internet and force
compliance to their local whims.  Hence the national exemption.
Matt Warnock <mwarnock@ridgecrestherbals.com>
RidgeCrest Herbals, Inc.

On Thu, 2010-07-08 at 22:57 -0700, BJ Freeman wrote:
> you may want to read
> http://www.tax.utah.gov/sst/
> it supports the desination tax like other states as of 2009.
> Matt Warnock sent the following on 7/8/2010 12:48 PM:
> > 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.

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