What is Internet sales tax, and will it cripple e-commerce? • Hacker News Board

Re: What is Internet sales tax, and will it cripple e-commerce?

#21

Post by bxc » Thu, Oct 13, 2011, 12:53 AM UTC

Now I don't really know how well it works in practice but the european model for VAT (the rough equivalent of sales tax) is basically this: if you're a small business, you don't have to collect VAT for the place you're sending the goods; but if you don't, you have to collect it for your own location (rather than collecting nothing). And over a certain business size, you do have to collect it for the destination.

The EU has fairly uniform VAT rates (around 20%), so then there isn't a huge difference to where you charge the tax, and so end consumer prices don't vary by a huge amount.

Maybe the much more variable rates in the US plus what seems to be more easier ability to move jurisdictions would lead to sales tax jurisdiction shopping a more than in europe.

Re: What is Internet sales tax, and will it cripple e-commerce?

#22

Post by jellicle » Thu, Oct 13, 2011, 1:00 AM UTC

The pretty obvious solution, which I expect the government will eventually luck into, would be for the Federal government to collect a, say, 5% sales tax on all inter-state commerce. Remit 2% to state A, 2% to state B, keep 1% for itself, and everyone is happy. Easy to administer, easy to collect. Lucrative!

Re: What is Internet sales tax, and will it cripple e-commerce?

#23

Post by mattmanser » Thu, Oct 13, 2011, 8:14 AM UTC

rick888 wrote: post #19

nitrogen wrote: post #17

Earlier quoted context omitted.

What about taxing delivery services instead? If states charged a flat tax on UPS and Fedex, distributed proportionally to cities, would it be enough to fill the gap in state and city budgets?

The gap can be filled by customer being a little more honest about what they purchase out of state.

Don't be absurd, that's not going to work.

Do you go after 300 million people or do you go after 10s of thousands?

This is a problem with your states, not with the general idea that in the US the internet retailers are getting away with helping people avoid sales tax at the moment.

This was inevitable, if you didn't see it coming you're a fool.

Also this type of 'problem' is easily automated by computers, you're just going to have to pay for it.

Re: What is Internet sales tax, and will it cripple e-commerce?

#24

Post by esrauch » Thu, Oct 13, 2011, 2:54 PM UTC

rick888 wrote: post #9

nostrademons wrote: post #7

Earlier quoted context omitted.

B&M = Brick & Mortar, a reference to their physical stores.

"Oh, that's a pretty silly comment then, it's where their store is. Given that people have to supply a card and/or delivery address when buying it's not going to be a massive pain for online retailers." So why can't it apply the same way to online merchants? Where their business is located? You obviously don't run an online store. It's not as easy as just charging them tax. There are so many different tax rates (that…

I think what you are claiming is disingenuous, if this was actually the issue then they could easily set some lower income bound on having to collect the tax (eg $10mil/year or something). It's not the mom & pop stores selling stuff online that the government is worried about; it's Amazon and other huge online retailers.

Amazon is able to handle the import duties for dozens and dozens of countries, each of which have complex rules that depend heavily on the actual product. Sales tax is strictly easier than what they are already doing, and saying that it is too complex for them to handle is simply absurd.