Online Sales Tax Proposal

[Prunesmoothie]

Anyone know what happened to this proposal that would have added sales tax to any online purchase?

[stick47]

I've hit some Ebay items (cosmetics for the Wife mostly) that had tax added when I clicked to buy. They were national brands from an individual Ebay seller not from a store. I didn't complete those purchases due to the tax but interestingly on another occasion when I tried to by cosmetics the purchase was refunded a couple of days later with the excuse that the seller couldn't do business in this state. Tax issue? IDK.

[jerrywall]

It passed. Online retailers selling to Oklahoma residents must either collect and remit sales tax or provide a report to consumers on how much tax they owe the state. It's actually been the law since about forever to remit use taxes to the state as a consumer for catalog, phone, or online purchases but the majority of Oklahomans have ignored that law. I actually know someone who got penalized a few year backs during an audit because they saw online purchases on his bank statement but reported zero to the state on his return. I'm not sure they'd ever prosecute someone for tax fraud over it but if they can prove you owe them they will collect.

[king183]

It passed. Online retailers selling to Oklahoma residents must either collect and remit sales tax or provide a report to consumers on how much tax they owe the state. It's actually been the law since about forever to remit use taxes to the state as a consumer for catalog, phone, or online purchases but the majority of Oklahomans have ignored that law. I actually know someone who got penalized a few year backs during an audit because they saw online purchases on his bank statement but reported zero to the state on his return. I'm not sure they'd ever prosecute someone for tax fraud over it but if they can prove you owe them they will collect.

Quick correction, Jerry: The only thing required by the new law is that retailers provide a report to consumers of the amount of sales tax they may owe. In practice, this will likely be slightly better than useless because the retailers do not have to report that same information to the Tax Commission. Still, as Jerry said, people are supposed to pay those taxes when they file their income taxes. Very few people actually do that, but this new reporting requirement is intended to encourage compliance.

The retailers, however, still do not have to collect and remit sales taxes unless they have a physical presence in the state.

[Martin]

citizens need to pay the sales tax (or use tax) that they owe, not debating that... but i don't see how this accomplishes anything. how can oklahoma regulate businesses that have no in-state physical presence? i don't have my ged in law but i'd think that would run foul of the commerce clause.

[jerrywall]

Eh, several states have done it for years. The big online retailers are cooperating. Small ones may not but if even some of them large ones do that's revenue the state is due.

[Martin]

yeah, i think 'cooperating' is the key word. i don't think there's any way this could actually be enforced on an out of state business.

[jerrywall]

Agreed. Although if Amazon opens any of their shops in Oklahoma it gets easier. Thinkgeek already has that issue.

[mkjeeves]

It was the subject of a couple of supreme court decisions. States lost, and it's not required of the retailer unless they have a presence in the state.

https://en.wikipedia.org/wiki/Nation...ss_v._Illinois

and

https://en.wikipedia.org/wiki/Quill_...._North_Dakota

[chuck5815]

From what I understand, Congress is attempting to address the collection of sales taxes from out-of-state retailers via the Marketplace Fairness Act. I'm not really sure a Republican Congress would pass the measure, although I'm certain that commercial real estate guys like Trump are all about it. It would mean a great deal for local retailers everywhere. Even if it passes, though, I'd guess that smaller online retailers and private individuals would be far less likely to comply than the Amazons of the world.

http://marketplacefairness.org/

[Celebrator]

So will retailers email us a report of the taxes we owe to the state sometime in January, or something?

[emtefury]

So will retailers email us a report of the taxes we owe to the state sometime in January, or something?

No. It is for you to keep track of.

[TU 'cane]

If you click through a few spots on your account, you can be directed to a page that shows Amazon's official policies and states that THEY have to provide a sales tax for. Last I checked (a couple months ago), Amazon had OK listed under the "doesn't collect sales tax" category, or something similar.

A lot of people I know shop Amazon to avoid the sales taxes. And of those people only one knew about technically having to follow up on our taxes ourselves. The majority aren't aware and I think the state needs to be a little more clear and work with Amazon more to let everyone know what the possible ramifications are.

It's not fair to knock some people and not the majority of others especially when things aren't 100% clear and easy to confirm (just look at the responses here).

[jerrywall]

There is a notice on your amazon invoice that comes in the box, about use tax and Oklahoma. This is due to a 2010 bill (HB 2359). The new bill that went into effect on Nov 1 is a bit more aggressive about notifying purchasers, and requires online retailers who are not required to collect sales/use taxes in Oklahoma "annually send a letter to each in-state customer stating (1) the total purchase price of all purchases made during the year on which sales tax was not collected, and (2) that the purchaser may owe use tax on those purchases." They still won't report the sales information to the state, so a person's compliance is up to them. It's also difficult to enforce that Amazon and other retailers will follow the rule. However, based on past behavior I expect Amazon will, and that'll cover a big chunk of untaxed online sales in Oklahoma.

[baralheia]

For what it's worth, I purchase a fair amount of stuff on Amazon, and 9 times out of 10 there is no invoice in the package when I open it. I can easily find the invoice online, but there is no such notice on the digital invoice. But it will be nice to be able to have a better idea of the proper amount of use tax I really should be paying, as I normally just use the estimate that TurboTax gives me.

[TU 'cane]

Funny, this popped up today.
Start keeping track now, don't worry about the past according to this source:

http://m.newson6.com/Story.aspx?stor...5&catId=112042

[riflesforwatie]

If I remember correctly, in past years use tax was collected by either a) the use tax table in the Oklahoma Individual Income Tax booklet (which is your federal AGI multiplied by 0.00056) -or- b) worksheets for people who kept track of all or part of their non-sales taxed online purchases throughout the year. Does this new law change that procedure, or simply make it easier for people to fall under option b) via better reporting of estimated taxes owed on past online purchases?

[onthestrip]

Or tea party types and hard core conservatives in DC could just pass the Marketplace Fairness Act that has been in limbo for many years now. It does have some bi-partisan support but again, starve the beast legislators are stonewalling it. In the meantime, states are losing revenues, local real estate and bricks and mortar retailers are suffering while Amazon makes even more money.

[TU 'cane]

^^ I modified my post earlier to try and take out my political opinions, but since someone else did, I'll go back.

Again, at the end of the day the state should work with Amazon as some others have done and have them send statements to us and/or apply the tax at the time of sale and Amazon can send the state a check. Either of those methods is what's done today and is most convenient for everyone (then again, this is just more crap for us common peasants to keep up with and then be penalized for our own "ignorance").

Amazon is a way for people to avoid sales taxes in this state. Call them villains, whatever you want but that is the force of free markets. Perhaps instead always taking the default road of "evil company, evil people avoiding taxes - PAY YOUR FAIR SHARE!" as is often done, maybe we should step back and leave things as is. This really only became a hot topic due to last years budget crisis with the downturn in oil... we wouldn't be having this conversation, and I'm sure many proud liberal Dems would still be skipping out on paying Amazon sales tax like the rest of us if not for the half hearted and ridiculous attempt to yet again try and TAX EVERYTHING by the state.

Just my take.

[baralheia]

FWIW: "Proud liberal Dem" type person here (okay, not completely, but close enough). I shop on Amazon a lot, and pay my use taxes (and have done so for years, before this recent conversation). While it would make things more expensive for me, I'd be fully in support of the state asking large Internet retailers like Amazon to collect and remit taxes on my behalf or at least sending me statements so I can better calculate my use taxes.

[onthestrip]

Amazon is a way for people to avoid sales taxes in this state. Call them villains, whatever you want but that is the force of free markets. Perhaps instead always taking the default road of "evil company, evil people avoiding taxes - PAY YOUR FAIR SHARE!" as is often done, maybe we should step back and leave things as is. This really only became a hot topic due to last years budget crisis with the downturn in oil... we wouldn't be having this conversation, and I'm sure many proud liberal Dems would still be skipping out on paying Amazon sales tax like the rest of us if not for the half hearted and ridiculous attempt to yet again try and TAX EVERYTHING by the state.

Just my take.

I dont call people villains for shopping with Amazon. Just like I dont fault high earners for using every lawful tax benefit they can find. At the same time, I dont fault Amazon for doing what they lawfully can do. I fault the state and mostly federal lawmakers for continuing to not level the playing field for retailers. Its hurting small businesses, local and state revenues, and retail real estate.

Also, this has been a hot topic long before last year. The Marketplace Fairness Act has been lingering in Congress for several years. It may have got more scrutiny at the state level last year because our state doesnt know how to manage our finances but that doesnt matter. It should have been addressed sooner just based on fairness and common sense, but if it takes financial mismanagement at the state level to do something about collecting sales taxes, then good.

[riflesforwatie]

I always pay use tax, but I just use the state-provided table that derives the tax amount from one's AGI. I don't know if it ends up being more or less money than it would be to pay sales tax throughout the year on all online purchases from out-of-state entities, but it sure is easier than collecting and summing up invoices, receipts, and such from a bunch of different sources.

[Celebrator]

Republican type person here and I'd be in full support of the same. I think most people would be willing to pay it, just make it easy for us to see what we owe at the end of the year.

[stile99]

You know, I am really getting tired of the claim that people shop Amazon just to dodge taxes. I just so happen to have an item in mind that I'm getting ready to buy, let's compare, shall we?

I need a new UPS and I tend to like CyberPower. So let's look at model EC750G at both Amazon and Best Buy. I've bought this one in the past and have been quite pleased with it.

Amazon has it for $62.93

Best Buy wants $74.99 and claims that is a sale price

So it's over $35, shipping will be free on Amazon, no need for Prime. I do not have the option to go to a local store and pick it up with Best Buy, the options are ship to me (also free) or ship to the store (why the hell would I if you will ship it directly to me?). So let's bump the price up to $70 at Amazon, this would more than cover the tax. I'm still saving some good money. $70 post tax or $75 pre tax, and either way the mailman is going to bring it to me. Because again, I can't just go pick it up at the store right now, it has to be shipped there (with an estimated pick up December 10th, or ship to me with an estimated arrival by December 9th).

While we're at it, let's get some canned air.

Amazon $14.57

Best Buy $17.99 Oh wait, that isn't a fair comparison is it? Amazon's says it in the non-flammable kind. We really should compare apples to apples, shouldn't we? Besy Buy $29.99

Again, I can't go into the store and pick this up.

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

"Just my take."

[TU 'cane]

I forgot I had stile99 on ignore, and for good reason. Only responding because I saw the post while logged out.
Please knock it off with your snarky crap stile and your cheap quotes at the end mocking.

Anyway,

I tried to use generalizations in my post because I understand some people have been paying their Amazon sales tax (and good for you). But many do not and I have spoken with people who have specifically told me they use Amazon to avoid it. Furthermore I have Democrat family members who also use Amazon and told me they haven't paid the taxes, hence some of my general statements above. That's all I was meaning (not looking for an argument like some).

Most of our posts suggest that at minimum most of us do want an easier way of reporting and wish it could be applied more conveniently.