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Thread: Online Sales Tax Proposal

  1. #26

    Default Re: Online Sales Tax Proposal

    "Yup. Only reason to shop Amazon is to dodge taxes."

    Who's made that claim?

  2. #27

    Default Re: Online Sales Tax Proposal

    My post was not targeted at you Jerry. My apologies if you felt otherwise.

    EDIT: Jerry, I owe you even more apologies, I thought TU 'cane's last post was from you. Brain fart on my part.

    TU 'cane: Please put me back on ignore. We'll both be ever so much happier.

  3. #28

    Default Re: Online Sales Tax Proposal

    Quote Originally Posted by jerrywall View Post
    "Yup. Only reason to shop Amazon is to dodge taxes."

    Who's made that claim?
    Post #13. TU 'cane. Again, my apologies if you felt I was suggesting you had made that claim.

  4. Default Re: Online Sales Tax Proposal

    BTW free shipping at Amazon is now $50. I won't pay for Prime, so I avoid them unless there is no one else who has the product I am looking for, even if it does cost a bit more. I refuse to fill my shopping cart to pay $50 for free shipping for an $8 item when I can find it at ebay for the same price or a bit more.

  5. Default Re: Online Sales Tax Proposal

    I own a small online business, so here's my perspective. If I were based in another state, I would probably end up ignoring whatever law Oklahoma passed, whether it be that I have to collect the sales tax and remit it to them, or send them a statement showing how much Oklahoma use tax they owe, or putting a scary notice on the packing slip, or whatever.

    Reason being that 1) I am not in Oklahoma so Oklahoma law more or less doesn't apply to me, 2) it is hard enough keeping up with changing federal laws and laws in my own state, much less whatever the other 49 states (some of which I may not ever sell to) are doing, 3) my CPA is not licensed in Oklahoma and is unlikely to be of much help in advising me in proper compliance with Oklahoma law, and 4) learning the tax remittance procedures for 50 different state governments is bound to be a major time sink.

    Of course, I am actually based in Oklahoma, so of course I do collect 8.75% Norman sales tax on orders bound for Oklahoma. If it leaves the state I don't collect taxes.

    Realistically, the only way that online sales tax ever happens is if the federal government institutes a system where we remit collected sales taxes to the IRS, which then redistributed them to the proper states and municipalities. Of course, determining the correct rate to charge the customer in real time and ensuring that's all properly reported to the IRS will be a major headache in and of itself.

    Maybe the fact that online shopping breaks the sales tax model is a sign that we should consider different funding mechanisms than sales taxes, which have a lot of other problems anyway.

  6. #31

    Default Re: Online Sales Tax Proposal

    Quote Originally Posted by tfvc.org View Post
    BTW free shipping at Amazon is now $50. I won't pay for Prime, so I avoid them unless there is no one else who has the product I am looking for, even if it does cost a bit more. I refuse to fill my shopping cart to pay $50 for free shipping for an $8 item when I can find it at ebay for the same price or a bit more.
    My Amazon Prime membership pays for itself many, MANY times over throughout the year... every year that I have had it. It's a no-brainer for me (and my entire family who uses my account for the free shipping).

    To the sales tax point, it's a sticky situation. It seems dumb to voluntarily self-report, handing over hundreds of dollars to the state that most of my neighbors, co-workers and friends likely do not. Additionally, I'm not likely to remember to set aside roughly 8.5% of every purchase to remit annually upon filing my state tax return... that's a big chunk of change... much easier to absorb with each purchase. If businesses that have a physical presence in the state who also have online sales can do it, there should be a way that everyone can do it. Perhaps a central database that payment-processing services can tap into to figure the appropriate sales tax based on the buyer's address.

  7. #32
    HangryHippo Guest

    Default Re: Online Sales Tax Proposal

    Quote Originally Posted by Scott5114 View Post
    Maybe the fact that online shopping breaks the sales tax model is a sign that we should consider different funding mechanisms than sales taxes, which have a lot of other problems anyway.
    This is what I was thinking about. It appears the model is broken, so the attention really should turn to a different tax model.

  8. #33

    Default Re: Online Sales Tax Proposal

    Paying use tax of $200 would require a federal AGI of over $350k a year. How many can't afford use tax of $200 to help fund the lion's share of municipal government on an income >$350k? Now let's say that someone lives in a tax district with a 9% sales tax - that same $200 in sales tax would require untaxed purchases in the amount of $2,222.22.

    Law already exists to pay use tax on your out-of-state purchases where sales tax wasn't originally remitted, but it works on the honor system. Forcing amazon (but more importantly, a bunch of small businesses) to report tax amounts owed to the consumer (but not the state) doesn't change the enforcement difficulties. All it does is add paperwork and compliance burdens on business without actually solving the problem of use tax non-compliance on the part of the taxpayer, or without addressing the competitive advantage out-of-state retailers and others have over in-state retailers.

  9. #34

    Default Re: Online Sales Tax Proposal

    Quote Originally Posted by Scott5114 View Post
    I own a small online business, so here's my perspective. If I were based in another state, I would probably end up ignoring whatever law Oklahoma passed, whether it be that I have to collect the sales tax and remit it to them, or send them a statement showing how much Oklahoma use tax they owe, or putting a scary notice on the packing slip, or whatever.

    Reason being that 1) I am not in Oklahoma so Oklahoma law more or less doesn't apply to me, 2) it is hard enough keeping up with changing federal laws and laws in my own state, much less whatever the other 49 states (some of which I may not ever sell to) are doing, 3) my CPA is not licensed in Oklahoma and is unlikely to be of much help in advising me in proper compliance with Oklahoma law, and 4) learning the tax remittance procedures for 50 different state governments is bound to be a major time sink.

    Of course, I am actually based in Oklahoma, so of course I do collect 8.75% Norman sales tax on orders bound for Oklahoma. If it leaves the state I don't collect taxes.

    Realistically, the only way that online sales tax ever happens is if the federal government institutes a system where we remit collected sales taxes to the IRS, which then redistributed them to the proper states and municipalities. Of course, determining the correct rate to charge the customer in real time and ensuring that's all properly reported to the IRS will be a major headache in and of itself.

    Maybe the fact that online shopping breaks the sales tax model is a sign that we should consider different funding mechanisms than sales taxes, which have a lot of other problems anyway.
    This is why this should be addressed on a federal level, not state by state. The Marketplace Fairness Act, which is the federal bill thats been lingering, you had to do like a few million in sales before you would be required to collect and remit sales taxes on purchases. So small time internet retailers, etsy dealers and such would not be required to do this. Im sure if Oklahoma looked at a state bill, it would likely have a similar minimum sales amount before requiring collection as well.

    And the headache you mention of collecting the proper sales tax amount is solved pretty easily with already existing software.

    We want to put the onus on the large e-tailers for collecting and remitting taxes, just like bricks and mortar retailers already do with their online sales. It makes no sense to make the millions of ordinary purchasers to have to keep track of this and pay their share of sales taxes.

  10. #35

    Default Re: Online Sales Tax Proposal

    Quote Originally Posted by Nick View Post
    This is what I was thinking about. It appears the model is broken, so the attention really should turn to a different tax model.
    I dont see how the model is broken. Congress simply has allowed a technicality remain in place giving an unfair advantage to the Amazons of the world. Plenty of other retailers with an online presence that collect sales taxes show that nothing is broken. Its just that they have to play from a different set of rules, for no real good reason.

  11. #36

    Default Re: Online Sales Tax Proposal

    Quote Originally Posted by onthestrip View Post
    I dont see how the model is broken. Congress simply has allowed a technicality remain in place giving an unfair advantage to the Amazons of the world. Plenty of other retailers with an online presence that collect sales taxes show that nothing is broken. Its just that they have to play from a different set of rules, for no real good reason.
    it seems you're acknowledging that the system is, in fact, broken. and I would agree. Congress needs to pass the Marketplace Fairness Act immediately--like in Trump's first 100 days in office. Every significant online retailer has the capability to collect and remit sales tax based on a buyer's geographical location. Simply use the zip code from the shipping address to determine the proper amount of sales tax. As others have noted, there is software that makes quick work of this issue.

    On the other hand, I don't think that sales tax savings is the major driver of online retail's growth. For most people, I think the convenience and the seemingly infinite amount of choices is what allows online shopping to beat brick and mortar in most cases.

  12. #37

    Default Re: Online Sales Tax Proposal

    One of these days I imagine this will be fixed, and we will be paying tax on everything.

    Until then, lol, at those that pay use tax on online purchases.

  13. #38

    Default Re: Online Sales Tax Proposal

    Quote Originally Posted by Zuplar View Post
    One of these days I imagine this will be fixed, and we will be paying tax on everything.

    Until then, lol, at those that pay use tax on online purchases.
    When republicans in places like Oklahoma, Kansas, Louisiana, and now likely in DC, when they cut taxes on oil and gas production, cut income taxes on high earners, eliminate franchise taxes, give credits to corporations, etc, to make up for that lost revenue, they look to the masses to make it up with more sales taxes, cigarette and alcohol taxes, and eliminating credits for low earners.

  14. #39

    Default Re: Online Sales Tax Proposal

    I pay my use taxes because not complying with state law jeopardizes my ability to remain gainfully employed. But even if that wasn't the case, I still would pay it because the fact is that not paying use taxes is breaking the law; not reporting use taxes constitutes filing a fraudulent return, with a minimum penalty of not less than $1,000 and/or 2 years in jail (68 O.S. § 241). We are all legally obligated to pay it, so why wouldn't I?

  15. #40

    Default Re: Online Sales Tax Proposal

    I wonder if this might change some things:

    U.S. top court rejects trade group's challenge to Colorado tax

    The U.S. Supreme Court on Monday left in place a Colorado law dubbed the "Amazon tax" designed to make it easier for the state to collect sales taxes on out-of-state internet purchases, refusing to hear a challenge to it by an industry trade group.

    The justices declined to take up the Direct Marketing Association's appeal of a February ruling by the 10th U.S. Circuit Court of Appeals in Denver upholding the law, whose nickname refers to huge online retailer Amazon.com Inc.

    The action by the justices handed a victory to states seeking to boost revenue by ensuring that online shoppers pay state taxes on their purchases.

  16. #41

    Default Re: Online Sales Tax Proposal

    Speaking of, from https://twitter.com/davidfholt:

    @stevelackmeyer Very interesting. As you know, skepticism re: state power to tax such purchases has caused OK & others to sit & wait. 1/

    @stevelackmeyer But in light of this, I think we should reconsider that approach. I'm putting this on my 2017 list right now. 2/

    @stevelackmeyer This is not a new tax. This has always been about best way to collect a tax citizens have already approved & accepted. 3/

  17. #42

    Default Re: Online Sales Tax Proposal

    Quote Originally Posted by baralheia View Post
    I pay my use taxes because not complying with state law jeopardizes my ability to remain gainfully employed. But even if that wasn't the case, I still would pay it because the fact is that not paying use taxes is breaking the law; not reporting use taxes constitutes filing a fraudulent return, with a minimum penalty of not less than $1,000 and/or 2 years in jail (68 O.S. § 241). We are all legally obligated to pay it, so why wouldn't I?
    People think they won't get caught, and in most cases it's true. But if you get audited by the OTC, you can bet they will.

  18. #43

    Default Re: Online Sales Tax Proposal

    Quote Originally Posted by jerrywall View Post
    People think they won't get caught, and in most cases it's true. But if you get audited by the OTC, you can bet they will.
    I've never provided my SSN to any online vendor. How will the OTC catch me?

  19. #44

    Default Re: Online Sales Tax Proposal

    Quote Originally Posted by Stew View Post
    I've never provided my SSN to any online vendor. How will the OTC catch me?
    My guess would be the OTC requiring a person to produce credit card records during an audit would be enough to nail most people. The crafty could probably cover their tracks fairly easily with some premeditated tax fraud.

  20. #45

    Default Re: Online Sales Tax Proposal

    Tulsa World has a story saying Amazon could be weeks away from finally applying sales tax on our purchases at the check out.

  21. #46

    Default Re: Online Sales Tax Proposal

    Quote Originally Posted by Stew View Post
    I've never provided my SSN to any online vendor. How will the OTC catch me?
    During an audit they look at bank accounts.

  22. #47

    Default Re: Online Sales Tax Proposal

    It's now official - Amazon will begin collecting use taxes on behalf of Oklahoma residents beginning 01 March. http://newsok.com/amazon-to-collect-...1?articleBar=1

  23. #48

    Default Re: Online Sales Tax Proposal

    As an Amazon shopper, danged. As someone living in Oklahoma, about time.

  24. #49

    Default Re: Online Sales Tax Proposal

    I'm good with this.. won't affect my shopping on Amazon in the least. and a good tax income for the state since its clear most people don't pay the sales tax as they are required.

  25. #50

    Default Re: Online Sales Tax Proposal

    My only thing is I would prefer if online retailers would just send me a statement of my purchase amounts for the year, because I don't only buy from amazon, and don't keep good records, so I'll be paying sales tax to Amazon, and also claiming the state amount on my tax return.

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