Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Ask HN: Congress is Passing an Internet Sales Tax: Why Doesn't HN Care?

news.ycombinator.com

Post reply on HN
Print view View original

101–110 of 116 posts

Re: Ask HN: Congress is Passing an Internet Sales Tax: Why Doesn't HN Care?

#101

Post by dragonwriter »

mark-r wrote: post #95

I noticed the $1 million exemption for small businesses. How will that work? If you sell for 11 months without collecting taxes then find yourself going viral around Christmastime and crossing the $1 million mark unexpectedly, are you suddenly liable for all those prior sales?

> I noticed the $1 million exemption for small businesses. How will that work? If you sell for 11 months without collecting taxes then find yourself going viral around Christmastime and crossing the $1 million mark unexpectedly, are you suddenly liable for all those prior sales?

No, the $1 million is for total remote sales in the preceding calendar year. So up until the first year you make remote sales of $1 million, you are exempt; once you reach that threshhold, you are not exempt in subsequent years until the first year after the first year in which you fail to make $1 million in remote sales.

Re: Ask HN: Congress is Passing an Internet Sales Tax: Why Doesn't HN Care?

#102

Post by dragonwriter »

bmelton wrote: post #74
bane wrote: post #27

1) There probably should be a sales tax, more and more of the economy is moving onto the Internet, and local state coffers are hurting for it 2) Figuring out local sales tax is hideously difficult, it opens lots of great opportunities for new startups as payment processors who "do taxes right" 3) Other bigger stories have consumed the media

So, it American companies are imposed sales tax burdens no matter which state they're selling to, wouldn't that just encourage companies like Amazon to move outside of the United States? They could avoid collecting sales taxes altogether, coming in lower than the competition, and that would also deprive the US of collecting revenue taxes on income, etc. If the economy is moving to the internet, what incentive is ther…

> So, it American companies are imposed sales tax burdens no matter which state they're selling to

They aren't even if this bill passes; this bill allows states to tax sales into the state no matter which state they are selling from.

> wouldn't that just encourage companies like Amazon to move outside of the United States?

Amazon has already reached the point where its given up trying to relocate outside of individual states to avoid sales taxes, because the efficiency it gets from having facilities close to customers is worth more than sales tax avoidance.

So I doubt very much it would try to move out of the US for sales tax avoidance reasons.

Re: Ask HN: Congress is Passing an Internet Sales Tax: Why Doesn't HN Care?

#103

Post by dragonwriter »

zwieback wrote: post #78

My senator Ron Wyden (D-OR) is vehemently against this tax. Oregon doesn't have a sales tax so I'm not really sure why he's against this proposal so much. Maybe he thinks we already have a "level playing field" and OR has nothing to gain since we wouldn't collect anything?

> My senator Ron Wyden (D-OR) is vehemently against this tax. Oregon doesn't have a sales tax so I'm not really sure why he's against this proposal so much.

Probably because "Oregon doesn't have a sales tax" is an incentive for internet-based retail business to locate facilities in Oregon under the current regime where sales tax only applies to transactions where, approximately, (1) the state levying the sales tax is one in which you are incorporated or have physical presence, and at the same time, (2) the recipient is located in the state levying the tax.

Note that the incentive to locate in Oregon or other no-sales-tax state over a state with a sales tax goes away under a model where the first condition is removed and only the second condition applies.

Re: Ask HN: Congress is Passing an Internet Sales Tax: Why Doesn't HN Care?

#104

Post by rayiner »

twrkit wrote: post #82
rayiner wrote: post #46

Earlier quoted context omitted.

> Congress had a hands-off approach to the internet for some time, and it took off like wildfire because of it. All that's changing now, it seems. The internet would've taken off regardless of Congress's level of involvement with it.

I wholeheartedly disagree. Even if they wanted to regulate it at the time, they would have no idea where to start. The legislative body is, even to this day, not exactly comprised of technologically savvy individuals. Rather, these are people who are very good at acquiring and wielding power, crushing any opposition, and pandering to their core demographics. So if you told them that, oh, a 'series of electronic tubes…

> Openness, freedom and sharing of information, innovation, and experimentation are intricately woven into the DNA of the web; this would simply not be the case with any sort of stifling draconian policies.

How does taxing meat-space purchases that happen to be done over the internet affect any of these things?

> Entrepreneurs would have little incentive to take the leaps of faith that have since turned the Internet into, at least in Congress' eyes, the economic powerhouse that it is today.

Yes, regulation has eviscerated America's drug industry, its financial industry, its content industry, its defense industry, its rail freight industry, its agricultural industry, etc. Oh wait, no, all of those are preeminent in the world. But it does kill innovation, right? Well no, one of the most innovative companies in the history of the world, that built the world's preeminent telecommunications network of the time, was a de-facto government-sanctioned monopoly (AT&T).

Re: Ask HN: Congress is Passing an Internet Sales Tax: Why Doesn't HN Care?

#105

Post by dragonwriter »

mark-r wrote: post #89

The complexities go far beyond just knowing the rates for each jurisdiction and arranging for payment. Naturally there's going to be a call for some kind of compliance testing. How are you going to catch the cheaters when you don't have access to their financial records, as you would if the business was in your state? Even just the rates themselves can get complicated. Minnesota for example doesn't tax clothing or fo…

> Naturally there's going to be a call for some kind of compliance testing. How are you going to catch the cheaters when you don't have access to their financial records, as you would if the business was in your state?

The law allows for an audit by the levying state (but requires that it be a single audit, even if multiple taxes from multiple jurisdictions in the state are included in the consolidated tax collected on remote transactions.)

Re: Ask HN: Congress is Passing an Internet Sales Tax: Why Doesn't HN Care?

#106

Post by SkyMarshal »

zwieback wrote: post #78

My senator Ron Wyden (D-OR) is vehemently against this tax. Oregon doesn't have a sales tax so I'm not really sure why he's against this proposal so much. Maybe he thinks we already have a "level playing field" and OR has nothing to gain since we wouldn't collect anything?

Oregon has a strong tech scene, at least in Portland. That ecosystem will be hurt by the compliance costs.

Re: Ask HN: Congress is Passing an Internet Sales Tax: Why Doesn't HN Care?

#107

Post by dragonwriter »

joshuahedlund wrote: post #57

Does anyone know if this would apply to SaaS stuff or only to physically shipped products? Also, the $1 million threshold exemption is good, but could it create scenarios where your product/service takes off and then all of a sudden you gotta figure out if you need to start sticking sales tax in there?

> Also, the $1 million threshold exemption is good, but could it create scenarios where your product/service takes off and then all of a sudden you gotta figure out if you need to start sticking sales tax in there?

Its based on the preceding calendar year, so the only time that is remotely possible is if you have an unexpected spike at the end of a calendar year such that you have to little time to comply for the beginning of the next year.

Sensible planning would just set a threshold substantially lower than $1 million in projected calendar year sales at which you make it a priority to incorporate functionality to handle sales tax collection for the next year.

Re: Ask HN: Congress is Passing an Internet Sales Tax: Why Doesn't HN Care?

#108

Post by hfsktr »

mark-r wrote: post #95

I noticed the $1 million exemption for small businesses. How will that work? If you sell for 11 months without collecting taxes then find yourself going viral around Christmastime and crossing the $1 million mark unexpectedly, are you suddenly liable for all those prior sales?

It probably would be that the first $1 million is free then after that the tax. I don't want to even guess at how much harder that would be to track on top of everything else.

edit: Looks like someone else has a better grasp of it. Still would suck all around.

Re: Ask HN: Congress is Passing an Internet Sales Tax: Why Doesn't HN Care?

#110

Post by mark-r »

dragonwriter wrote: post #105
mark-r wrote: post #89

The complexities go far beyond just knowing the rates for each jurisdiction and arranging for payment. Naturally there's going to be a call for some kind of compliance testing. How are you going to catch the cheaters when you don't have access to their financial records, as you would if the business was in your state? Even just the rates themselves can get complicated. Minnesota for example doesn't tax clothing or fo…

> Naturally there's going to be a call for some kind of compliance testing. How are you going to catch the cheaters when you don't have access to their financial records, as you would if the business was in your state? The law allows for an audit by the levying state (but requires that it be a single audit, even if multiple taxes from multiple jurisdictions in the state are included in the consolidated tax collected…

So what happens when the stars align against you and 25 states decide to audit you at once?
Post reply on HN