Taxing Internet Purchases

[Conan71]

Who's state should collect the tax, the customer's or the purchaser or both? Should I pay a Tax where Amazon is found and Oklahoma? I pay two sales tax. This is just not a simple question. And please point out where the "nexus" tax policy is in our constitution.

According to Oklahoma law, if you make the purchase in the state, whether it's at your computer terminal or standing in line at Target, you get to pay tax.  If the e-tailer has brick and mortar in the state, they collect the tax for OTC, if not, you get to play the honor system and report the purchase as a use tax.

When I owned my own business, I was not required to collect sales tax on purchases by out of state buyers either for Oklahoma nor their own taxing authority.  Yet, any item I bought for resale, whether that item was going to a purchaser in Oklahoma or another state was sales tax exempt.

With the company I work for now, we collect sales tax on all purchases made by customers within the state of Oklahoma unless they have a manufacturer or agriculture exemption and we also collect sales tax for the state of Kansas on purchases where the equipment will be installed in Kansas or if their primary billing address is in Kansas.  We also must collect Oklahoma sales tax if a customer from another state sends their own truck or consignee to pick up a piece of equipment.  However, if we arrange shipping with a dedicated or LTL common carrier, there is no sales tax.  The OTC views it that the customer did not come to Oklahoma to purchase the equipment when we arrange shipping. 

IOW, I've got a sales tax advantage which might run from several hundred dollars to $10,000+ over a company selling the same equipment I do in another state.  A purchaser located next door to an equipment dealer selling the same equipment I do, say in Mobile, Alabama might save $5000 to $10,000 on a purchase even after paying for shipping.  In my industry that usually will only apply to used equipment since most OEM manufacturers are really good about protecting sales agency territory agreements.

That's an unfortunate side-effect of state-based or locally-based sales taxes, it actually tends to drive commerce out of state, much like our corporate tax structure appears to be driving jobs, commerce, and profits overseas. 

[carltonplace]

That's an unfortunate side-effect of state-based or locally-based sales taxes, it actually tends to drive commerce out of state, much like our corporate tax structure appears to be driving jobs, commerce, and profits overseas. 

From my experience corporations move overseas primarily for cheaper labour (3 to 1 in the RP at vendor price) and by extension they don't pay social security, medicare, unemployment, 401K contributions, health insurance premiums etcetera.

[heironymouspasparagus]

And please point out where the "nexus" tax policy is in our constitution.

It's the part where it says the law of the land consists of the treaties passed by the Senate, the laws/rules/regulations passed by Congress and signed by the President, and the specific content of the US Constitution.  ALL are the law of the land.  By definition.

It's those two parts defined BY the Constitution that trip up so many right wing extremists...somehow they come to the totally irrational - and wrong - belief that if it is not specifically written in the Constitution and the Amendments, then it somehow escapes being the law of the land.  But then, when it is a displaced Australian writing their script for them, what can you expect?

Wouldn't it be nice if some of those RWRE who profess to have so much love, respect, and regard for the Constitution would actually read the thing once...not even necessarily once in a while, but just once!!

[guido911]

I wouldn't eat a sandwich that came in the mail but that's just me.

It was disassembled and packed in dry ice. Sheesh, think a bit.

[Conan71]

From my experience corporations move overseas primarily for cheaper labour (3 to 1 in the RP at vendor price) and by extension they don't pay social security, medicare, unemployment, 401K contributions, health insurance premiums etcetera.

Yep, payroll taxes are a part of the equation.  I'm really curious to see what sort of deleterious effect Obamacare will have on employment, as far as reality vs. the partisan fear mongering.  Could well be that's already a part of the 9% unemployment problem.  Either it's a disincentive to hire based on fact of increased cost to business (either via revenue or compliance) or pure ignorance of what it will and won't cost small business.

[Conan71]

It was disassembled and packed in dry ice. Sheesh, think a bit.

Come on Greedo, I thought that was funny as smile

[guido911]

Come on Greedo, I thought that was funny as smile

Okay. I thought he was giving me grief. Perhaps I am overly trigger happy with him. But seriously, if you know what Tony Luke's is all about, it is worth the purchase. $5.00/sandwich (comes with 8 rolls, 8-5oz packets of rib eye and provolone) plus cost of delivery (which I recall is a bit on the expensive side) isn't too bad. They are terrific sandwiches and take only 4 minutes to prepare.

[RecycleMichael]

I would gladly pay additional taxes for a good sandwich.

[Conan71]

Okay. I thought he was giving me grief. Perhaps I am overly trigger happy with him. But seriously, if you know what Tony Luke's is all about, it is worth the purchase. $5.00/sandwich (comes with 8 rolls, 8-5oz packets of rib eye and provolone) plus cost of delivery (which I recall is a bit on the expensive side) isn't too bad. They are terrific sandwiches and take only 4 minutes to prepare.

Do you get a box of Guidos with the order?

[guido911]

Do you get a box of Guidos with the order?

I wish.

[nathanm]

That's an unfortunate side-effect of state-based or locally-based sales taxes, it actually tends to drive commerce out of state, much like our corporate tax structure appears to be driving jobs, commerce, and profits overseas. 

This isn't really on topic, but if you think taxes are the reason we ship jobs overseas, I've got a bridge to sell you. (Hint: Labor laws & environmental regulations)

[guido911]

This isn't really on topic, but if you think taxes are the reason we ship jobs overseas, I've got a bridge to sell you. (Hint: Labor laws & environmental regulations)

Tell that to Obama.

(AP)  End tax breaks that reward some U.S. companies with overseas subsidiaries and encourage those businesses to create jobs in other countries, President Barack Obama is telling Congress.

Yet it's an idea that has raised concerns even among some lawmakers in the president's own party.

At issue is a bill, now stalled in the Senate, that would do away with some tax credits and deferrals for U.S. companies for operations abroad.

"There is no reason why our tax code should actively reward them for creating jobs overseas," Mr. Obama said in his weekly radio and Internet address Saturday. "Instead, we should be using our tax dollars to reward companies that create jobs and businesses within our borders."

http://www.cbsnews.com/stories/2010/10/16/politics/main6964121.shtml
You know who is kinda on your side?  This guy:





"High taxes, harsh regulations, and a broken immigration system are pushing American jobs overseas, Rep. Darrell Issa, R-Calif., said at a hearing in his home state on Monday.

Issa, chairman of the House Oversight and Government Reform Committee, held a hearing in San Jose that featured testimony from Google and Microsoft executives, among others. The hearing was titled "Policies Affecting High Tech Growth and Federal Adoption of Industry Best Practices," and Issa argued that federal regulations impede U.S. growth.

"It wasn't that long ago that the nation's research, innovation, and high tech industries were unequaled; there was no more attractive country than the United States for technology startup capital," he said in prepared remarks. "More recently, however, the shine has started to come off the apple, and there seems little doubt that federal policies and regulations have played a large role in hampering growth."[/quote]
http://www.nationaljournal.com/tech/issa-high-taxes-government-rules-are-sending-u-s-tech-jobs-overseas-20110418

[nathanm]

There may be some stupid tax loophole companies can take advantage of, but it's still not the primary issue. The primary issue is that countries like China have no environmental regulations and no real labor laws. It's pretty much like the US in the late 19th century, in that respect. Dump whatever whereever you like, and who gives a smile if the employees are being poisoned by the production process.

I'm generally in favor of free trade, but it's ridiculous that we allow free trade with countries that don't have rules that are even in the same ballpark as the developed world. Whenever companies can get away with externalizing cost, they do (Understandably! They are profit-seeking enterprises, after all), and shipping jobs overseas is just another example of that in a long line.

[guido911]

I would gladly pay additional taxes for a good sandwich.

I'm serious, it's really is good but the penalty is the shipping cost. I'll pay it. I watch Man v. Food all the time and would like to experience some of the food highlighted in that show. After I finish with my National Coney Island chili dog kit:

http://store.nationalconeyisland.com/c-2-coney-kits.aspx

I am going for Ben's Chili Bowl:

http://www.benschilibowl.com/ordereze/Products/Products.aspx?CatID=88

On one of MvF food challenge, he took on the Shut Up Juice challenge in Arkansas. I bought it as well, but frankly I'm scared sh!tless of trying it--after seeing this (go to 1:18 just for the expression):

Back o/t, I would like to know why Oklahoma has any interest in taxing a product wholly unavailable within its borders and what legal basis it has to force a foreign company from doing anything.

[guido911]

There may be some stupid tax loophole companies can take advantage of, but it's still not the primary issue. The primary issue is that countries like China have no environmental regulations and no real labor laws. It's pretty much like the US in the late 19th century, in that respect. Dump whatever whereever you like, and who gives a smile if the employees are being poisoned by the production process.

I'm generally in favor of free trade, but it's ridiculous that we allow free trade with countries that don't have rules that are even in the same ballpark as the developed world. Whenever companies can get away with externalizing cost, they do (Understandably! They are profit-seeking enterprises, after all), and shipping jobs overseas is just another example of that in a long line.

Come on Nate, don't do this again. Obama did not say "some stupid tax loophole companies can take advantage of" was the reason jobs were going overseas. He said the exact opposite of your point unequivocally as follows: "There is no reason why our tax code should actively reward them for creating jobs overseas," and "Instead, we should be using our tax dollars to reward companies that create jobs and businesses within our borders."

The rest of your post we should take up in another thread (even though this instant discussion is O/T)