New Haven Joe posted:I disagree that it will be easy for small internet sellers to collect sales taxes nationwide. I sell model trains and some other stuff on eBay. Most of the trains I sell come from my own collection or I am selling for a friend or my train club. The things that I sell from my own collection usually don't sell for what I paid for them. My total sales are about $1,000 per year. I have a CA business license that costs $120 per year and I pay sales tax on all CA sales. (Sometimes the tax comes out of my own pocket because I can't charge tax on all sales.) Most of my eBay sales go to states East of Mississippi. I don't see how I could possibly get business licenses in every state where I make an eBay sale and collect and pay sales tax for that state. I would stop using eBay to sell excess things.
The only way a nationwide sales tax would work for small eBay sellers like me is for eBay to collect and file the appropriate tax for each state. Personally, I think that the only way for this to work would be for a uniform sales tax across all states. This would mean that states that have no sales tax would have to implement one and those states such as CA which have very high sales taxes (10% where I live) would probably have to lower their rates. (In fairness, the CA sales tax is 7%. A series of local sales taxes (county, BART, etc.) brings the total rate to 10%.)
I think that collecting sales taxes nationwide would be very difficult. This also why at York the general public is only allowed in the dealer halls. Large dealers have staffs or accountants to collect sales taxes in every state where they operate. The small seller from VA who sets up a table at York in the member hall probably does not have PA business license or collect and pay sales tax on his or her sales.
This issue is more complex that it seems at first glance.
NH Joe
Congress would need to work this out if for example the Supreme Court rules that sales taxes have to be collected on internet purchases (what is interesting is that pre the internet mail order firms didn't collect sales taxes unless located in the state the buyer was in, they were not much competition to brick and mortar stores), and likely they would put a lower limit on what size business has to report taxes, and they also might stop states from requiring out of state internet businesses to have to get a business license, that business licenses would only apply to the state they are located in), perhaps under the same reasoning that people don't need a driver's license in all 50 states, they need one in their local state only........at least that is my guess, that requiring a state license in all 50 states would be basically a form of protectionism. Back when most internet vendors were tiny operations, the sales tax exclusion was seen as a way to encourage the then new medium, today though it is hard to argue that vendors on the internet are mostly tiny, most firms doing e-commerce on the net do enough sales out of state that having to collect sales taxes and send them in of itself is not an undue burden (again, they likely will give an exemption for businesses below a certain size). It is one argument that brick and mortar stores have made, that it isn't fair they have to collect tax and internet vendors don't, it is a form of subsidy that shouldn't be there. As far as actually processing sales tax, there is commonly available plug ins for web commerce that know exactly what the local rates are and who to send it to, for the kind of business we are talking about they don't need army of accountants, the software handles all that for them, including sending the funds to the various entitites. It is going to happen, too many people see the sales tax not being collected as unfair to businesses that do have to pay it. Not going to solve the plight of brick and mortar stores, going to take a lot more than the sales tax exemption to help them fully compete against the convenience of web based commerce, but it is going to make it a lot more close than it is today. Put it this way, years ago people said Banks were going to disappear, it was all going to be online, bank branches weren't needed, within the past 10-15 years suddenly bank branches exploded all over the place, because they found it had them doing a lot more business, and today bank branches are often open late and weekends, not 8-3 Monday to Friday *shrug*.......
