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

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

#71

Post by the_watcher »

Avshalom wrote: post #65
DanielBMarkham wrote: post #12

It's been a very busy news week. Reid picked just the right time to slide this in -- the air has been sucked out of the room by other stories. 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. I'm disappointed that there's so many avenues of attack for legislators that it's effectively impossible to cover all of our bases.…

> I want goods and services delivered to me as efficiently as possible. You know what makes deliveries more efficient? State funded infrastructure. now, how could we finance such a thing...

Actually, it's infrastructure that makes deliveries efficient. State funding is only one avenue for creating it. Many would argue state funding is inefficient.

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

#72

Post by [deleted] »

virmundi wrote: post #7
wikiburner wrote: post #4

Earlier quoted context omitted.

The next two paragraphs after the one you mentioned were possibly more relevant: Opponents predict a bookkeeping nightmare. Online retailers would have to keep track of more than 9,000 sales-tax regimes. Internet companies in states with no sales taxes — Montana, New Hampshire, Oregon and Delaware — would have to build a collection apparatus from scratch. Senator Ron Wyden, Democrat of Oregon, called the legislation…

Look at this as a SaaS opportunity. Create a clearinghouse to manage all of the "software". Fairly simple API, you give me the State of the person, perhaps ZIP to find County level taxes and out comes a {"state":".08", "cityX":".01"}. Leave it to the client to handle exact cost calculation. As for the states that don't have sales tax, they can pay the clearing to provide a {"state":"0"} for all requests.

[deleted]

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

#73

Post by _delirium »

virmundi wrote: post #7
wikiburner wrote: post #4

Earlier quoted context omitted.

The next two paragraphs after the one you mentioned were possibly more relevant: Opponents predict a bookkeeping nightmare. Online retailers would have to keep track of more than 9,000 sales-tax regimes. Internet companies in states with no sales taxes — Montana, New Hampshire, Oregon and Delaware — would have to build a collection apparatus from scratch. Senator Ron Wyden, Democrat of Oregon, called the legislation…

Look at this as a SaaS opportunity. Create a clearinghouse to manage all of the "software". Fairly simple API, you give me the State of the person, perhaps ZIP to find County level taxes and out comes a {"state":".08", "cityX":".01"}. Leave it to the client to handle exact cost calculation. As for the states that don't have sales tax, they can pay the clearing to provide a {"state":"0"} for all requests.

I'm not sure if any of them have nice JSON interfaces yet, but there are certainly 3rd-party services where you can query geographically detailed information on sales taxes, down to exactly which SKUs are taxed at which rates (e.g. what qualifies for a "grocery" exemption).

Example: http://tax.cchgroup.com/sales-tax-data/default.htm?cookie_te...

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

#74

Post by bmelton »

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 there for these companies to stay in the US, especially if doing business in the US becomes disadvantageous for their gross sales?

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

#75

Post by chrismaeda »

creativename wrote: post #52
chrismaeda wrote: post #51

Earlier quoted context omitted.

It depends on the state. Some states tax services (eg Ohio), while most states only tax physical goods.

So it would depend on the state that your SaaS company is located in, or where your customer is accessing it from?

The latter. If you are a SaaS business in a state that taxes services, you only have to collect sales tax for customers in your state today. Under the new legislation, all SaaS businesses in the US would have to collect sales tax for any jurisdiction that taxes services.

The simplest way around this would be to set up your SaaS business in Canada.

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

#76

Post by ROFISH »

specialp wrote: post #58

I think that if they do this, they should require all states and localities to commit to updating an online clearing house of tax rates for their locality based on location and product type. If you fail to do so, merchants are under no obligation to collect your tax. The reason why this loophole has existed so long is that it is very difficult to tax according to 1000s of laws nationwide. I do not think people should…

Because I run a physical item e-commerce store, I am against this because I do not trust the states to come up with a reasonable solution. Handling the issue in our home state and city requires two accountants. I shudder at the thought of 50 state compliance.

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

#77

Post by bobwaycott »

newbie12 wrote: post #56
tejaswiy wrote: post #22

Earlier quoted context omitted.

I don't understand this line of thinking. People already pay sales taxes in big box stores, so in this case, it's more like the Government is artificially encouraging online businesses and penalizing physical stores. Both kinds of businesses being subject to the same rules is a good thing surely?

Problem is that my business is in VA, and I'm now subject to complying with taxing authorities in, say, California, where I don't have representation or a physical presence. It is unconstitutional in principle.

You need to brush up on your understanding of constitutionality.

That you pay taxes for engaging in interstate commerce is in no way, in practice or principle, unconstitutional. Please, rid yourself of the notion that taxation without representation applies to interstate commerce. It does not.

The founders worked the commerce issue(s) out after learning the Articles of Confederation's approach was woefully inadequate for the establishment and governance of a nation. There is a very long legislative and juridical history you can dive into to fully understand exactly how the commerce powers have been worked out over the last couple hundred years.

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

#78

Post by zwieback »

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?

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

#79

Post by Avshalom »

runjake wrote: post #70
Avshalom wrote: post #65

Earlier quoted context omitted.

> I want goods and services delivered to me as efficiently as possible. You know what makes deliveries more efficient? State funded infrastructure. now, how could we finance such a thing...

No national sales tax currently exists, to my knowledge. So this is a new precedent. And to answer your question, we could finance such things by avoiding wars, shutting down needless agencies, and so on. People are already struggling, burdening them with a tax that will generate revenue that is peanuts compared to what we're spending on our wars. Doesn't make sense to me.

This is not a national sales tax. This is existing state sales tax being applied to an additional category of sales.

In the US much of the infrastructure -like roads and bridges- is ostensibly state funded so decreasing the federal deficit wouldn't necessarily have any effect.

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

#80

Post by dragonwriter »

runjake wrote: post #70
Avshalom wrote: post #65

Earlier quoted context omitted.

> I want goods and services delivered to me as efficiently as possible. You know what makes deliveries more efficient? State funded infrastructure. now, how could we finance such a thing...

No national sales tax currently exists, to my knowledge. So this is a new precedent. And to answer your question, we could finance such things by avoiding wars, shutting down needless agencies, and so on. People are already struggling, burdening them with a tax that will generate revenue that is peanuts compared to what we're spending on our wars. Doesn't make sense to me.

> No national sales tax currently exists, to my knowledge. So this is a new precedent.

No, because, despite the media calling the Marketplace Fairness Act an "Internet Sales Tax", the bill is not a national (or any other) tax. It is a bill which conditionally lifts existing barriers to states extending their sales taxes to cover online retailers selling goods to people in the state.

If the bill passes, then states with sales taxes would have to choose whether or not to meet the conditions set in order to extend those taxes to internet retailers selling into the state. No tax is created directly by the bill, and any tax enabled by the bill would be a state tax, not a national tax.

> People are already struggling, burdening them with a tax that will generate revenue that is peanuts compared to what we're spending on our wars.

Most states aren't using any of the taxes they collect to fund wars, and the central purpose of this isn't so much to raise new revenues (though it will enable states to do some of that) as to eliminate the tax incentives that currently exist which favor out-of-state internet-based retailers over in-state retailers (internet-based or brick-and-mortar) due to the inability of states to levy the same taxes on the former as the latter.

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