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Grover Norquist
Grover Norquist
Anti-tax hardliners like Grover Norquist and the Heritage Foundation are seeing their power over congressional Republicans take another hit thanks to the bill that would close the loophole that allows online businesses to not collect sales tax on many transactions, undercutting the prices of brick-and-mortar stores. Norquist and Heritage are, unsurprisingly, opposed to the Marketplace Fairness Act even though it doesn't create any new taxes, just makes it more likely that existing ones will be collected. But it has passed a series of Senate votes with a last vote coming soon, and it seems as though House opposition may be softening:
“I have some concern about the legislation,” said Representative Bob Goodlatte of Virginia, chairman of the House Judiciary Committee, which has jurisdiction on the issue, “but we also recognize the fairness issue—certain items being taxed in certain circumstances, other items being not—is a problem for brick-and-mortar businesses, so we’re going to try and solve that.”
Norquist and Heritage have marshaled their usual array of threats and talking points against the bill, but somehow ploys like calling it the "Let People in Alabama Loot People in New York Act" (huh?) aren't working so well this time and may contribute to a backlash.
“I have a lot of constituents saying to me, ‘Grover Norquist did not elect you,’ ” said Representative Steve Womack, Republican of Arkansas and the author of the Internet tax bill in the House. “Members that come to Washington and kowtow to special interests end up contributing to this very polarized government. These are tough decisions we have to make up here.”
Since the Senate bill exempts businesses with less than $1 million in annual sales, it's hard to paint it as hurting small business (not that that stops opponents from trying). Another key talking point is that it puts "fairly rigorous and onerous requirements on online businesses to collect taxes for other states." But since states would have to provide free software to calculate the taxes, that argument too isn't the killing blow Heritage and Norquist want it to be. Not when Republican legislators are hearing stories about businesses in their districts like the one recounted by Missouri Sen. Roy Blunt, who described a local bridal store where people tried on dresses only to order them online, saving themselves the sales tax. "They use the parking lot. They use the sidewalk. They benefit from police protection, and then the local merchant who pays for all of that doesn’t get the sale." As a recognition that government spending is important it's not quite "you didn't build that," but it's got to be scary for Norquist and Heritage to hear a Republican saying nonetheless.

Originally posted to Laura Clawson on Mon Apr 29, 2013 at 07:46 AM PDT.

Also republished by Daily Kos.

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Comment Preferences

  •  There are a lot of GOP already lining up on this (6+ / 0-)
    Recommended by:
    DeathDlr73, JeffW, skillet, AoT, koosah, Eyesbright

    This will pass easily in the Senate.

    I'd be curious as to how it stands in the House though.

    Красота спасет мир --F. Dostoevsky

    by Wisper on Mon Apr 29, 2013 at 07:49:30 AM PDT

    •  GOPers like Regressive Tax Hikes (5+ / 0-)

      As center-lefters, we should be ashamed that so many Dems are supporting this 240B (over 10 years) tax hike on the working and middle-class.

      Dems have no urgency regarding closing the REIT (real estate investment trust) loophole.

      But when it comes to working and middle-class Americans availiing themselves of a loophole, Dems will act, regrettably.

      And regrettably, so many Kossacks, otherwise concerned about wealth and income inequality, support a policy which will exacerbate said inequality.

      Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project. www.hamiltonproject.org

      by PatriciaVa on Mon Apr 29, 2013 at 08:30:22 AM PDT

      [ Parent ]

      •  Universal application of existing Sales Tax? (18+ / 0-)

        Really?  The fact that people have been avoiding this established tax for years and now Congress wants to correct it and suddenly this is turning into an Occupy Amazon movement?

        When you buy things you pay your state sales tax on it.  People do it now everyday.  

        Even this "loophole closure" still exempts any business doing less than $1M in annual sales.

        Its sales tax.  Its not even a sales tax increase, just plain old simple sales tax.  A tax you are already supposed to be paying, but aren't.

        Color me unoutraged.

        Красота спасет мир --F. Dostoevsky

        by Wisper on Mon Apr 29, 2013 at 08:50:46 AM PDT

        [ Parent ]

        •  It will amount to annual 24B in tax receipts, (5+ / 0-)

          ....with.80% coming from the working and middle-class.

          Want more tax receipts?  Why not close other loopholes?

          Why not insist on the "universal application" of the income tax on carried interest?

          Why do Dems want to close a loophole which benefits working and middle-class Americans.

          Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project. www.hamiltonproject.org

          by PatriciaVa on Mon Apr 29, 2013 at 08:55:41 AM PDT

          [ Parent ]

          •  Carried Interest is currently allowed (4+ / 0-)
            Recommended by:
            FG, ColoTim, Eyesbright, Odysseus

            I'd love to see it codified as regular income.  Sure.. sign me up.

            ...but this was the case of an existing law being deliberately unenforced.  Maybe you could justify it in the past as a "technology outpaced policy" kind of thing but in 2013 there is no reason not to have this applied across the board.

            Doesn't matter if its D or R, this kind of loophole should be changed.  

            This $24B is an even bigger loophole than the "Big Oil Subsidies" we are always lamenting.  Obama's budgetary estimates were $20B over 10 years to close the Oil loopholes.

            I think we should do those to.  

            You are trying to make this into some "either/or" argument or that we shouldn't fix THIS problem because RICHPEEPLE!!  

            Красота спасет мир --F. Dostoevsky

            by Wisper on Mon Apr 29, 2013 at 09:02:52 AM PDT

            [ Parent ]

            •  I think you are missing that many/most (5+ / 0-)
              Recommended by:
              AoT, Desert Rose, Odysseus, Zinman, stevemb

              people here think that the sale tax itself is a poor choice of a tax. Sales taxes are regressive, and they are costly to collect for the government and for businesses. And now, you've got this huge compliance problem with the growth of the internet. I think we'd all be better off if the state governments just gave up on sales tax and instead increased real estate and income taxes. It's not so much that you are arguing with people who are for the loophole as much as they are against any of these sales taxes.

              •  absolutely...increase real estate taxes. Because (1+ / 0-)
                Recommended by:
                Wood Dragon

                none of us are paying enough to local governments for the privilege of sleeping under a roof we are paying the bank for already.  And my Mom, whose house is paid off, but who is elderly and living on Social Security, certainly can afford to pay more rent to the state for the house she only thinks she owns.

                _"Love is the rosebud of an hour; Friendship the everlasting flower."_ Brook Boothby

                by Keith930 on Mon Apr 29, 2013 at 06:26:24 PM PDT

                [ Parent ]

                •  I favor Henry George's Single Tax (0+ / 0-)

                  Everything we need - local, state, and federal - can most fairly be paid for through a proper property tax.

                  Too late for the simple life, too early for android love slaves - Savio

                  by Clem Yeobright on Mon Apr 29, 2013 at 06:37:00 PM PDT

                  [ Parent ]

                  •  What do you do with someone who lives on (1+ / 0-)
                    Recommended by:
                    Wood Dragon

                    a fixed income but has managed to pay off their mortgage years ago, because they didn't move around every 5 years?  Their home is paid for, but they live on Social Security or SSDI, and barely earn enough to pay for necessities.  Do they forfeit their home to the state?  Move in with their kids?

                    Because I can guarantee you my Mom can't afford to pay the annual property taxes on her house and still by groceries, her prescriptions, pay the utilities and other day to day expenses.  If the kids weren't helping her, she'd be up shit creek.

                    _"Love is the rosebud of an hour; Friendship the everlasting flower."_ Brook Boothby

                    by Keith930 on Mon Apr 29, 2013 at 06:54:26 PM PDT

                    [ Parent ]

                •  Why not? Government needs revenues (1+ / 0-)
                  Recommended by:
                  Zinman

                  from somewhere. Real estate taxes are easy to collect and can be very progressive.

                  •  The numbers I'd like to see... (0+ / 0-)

                    How does the value of the average working-class person's home compare to their annual income as compared to the average one-percenter?  My guess is that the less wealth one has, the greater percentage of it is tied up in one's home.

              •  You're joking about real estate taxes, right? (1+ / 0-)
                Recommended by:
                Clem Yeobright

                Because property taxes about as regressive as they come.

                •  Explain please (0+ / 0-)

                  Property taxes tax wealth, the more you own, the more you pay, that is progressive. Exemptlons may modify the equation, but they don't essentially change it.

                  Why would you think property taxes are as regressive as they come?

                  Eradicate magical thinking

                  by Zinman on Mon Apr 29, 2013 at 09:09:28 PM PDT

                  [ Parent ]

                  •  Property taxes suggest that your home (2+ / 0-)
                    Recommended by:
                    Clem Yeobright, nchristine

                    is only a financial asset.

                    So, if property values rise for whatever reason, people can be priced out of their homes. Yes, they can sell and get the cash. But people don't always want to do that.

                    Similarly, if you lose your job, your income might go to zero for that year. You won't owe income tax. But you'll still owe property tax, and for some people in some states property tax on a relatively ordinary home can be $1,000 a month (and you still have mortgage and insurance).

                    Moving is expensive and hard on the kids. People having to move because of taxes is probably not a good situation.

                    There are frequently exemptions for farmers, who might be earning $30k a year off a property that is valued at $1m if you sold it for houses or commercial development.

                    So it's not regressive per se, but it is not without disparity and pain.

                    Fry, don't be a hero! It's not covered by our health plan!

                    by elfling on Mon Apr 29, 2013 at 11:13:17 PM PDT

                    [ Parent ]

              •  I'd much rather have the online merchant... (0+ / 0-)

                ...collect the sales tax. I'm tired of having to keep track of every online purchase so I can pay the state the amount that should have been collected every year when I do my taxes.

                When I buy things online it's because I've checked to see if I can purchase the product locally. If I can't, THEN I buy it on the Internet.

                I'm retired, and I really don't want to see my property or income taxes go up.

            •  wrong. (4+ / 0-)

              "...but this was the case of an existing law being deliberately unenforced."

              existing law only requires state sales taxes to be collected at the source, if the business has a physical presence in the state, going back to the USSC decision in Quill v Michigan. it is the states themselves that are failing to enforce their state laws, requiring that individuals file a sales & use tax report, for purchases made with out-of-state sellers. they want the federal gov't to basically enforce state law for them. frankly, i'm not certain this bill will withstand judicial scrutiny.

              •  Washington state won this arguement (1+ / 0-)
                Recommended by:
                Odysseus

                against Mattress World, an Oregon company, by establishing nexus. Deliveries were made, beds assembled, and old mattresses disposed of in WA by Mattress World employees or third party vendors hired by Mattress World, thus establishing a business relationship. WA Dept of Revenue assessed 1.7mm in taxes and fines. I can't see why an online retailer would be considered any differently than a company like Mattress World, clearly doing business in the State and not collecting the taxes due. Quill decision had no bearing at that point.

                http://djcoregon.com/...

              •  Quill v North Dakota (1+ / 0-)
                Recommended by:
                Odysseus

                The decision was pretty clear. Congress does have the authority. From that decision:

                Accordingly, Congress is now free to decide whether, when, and to what extent the States may burden interstate mail order concerns with a duty to collect use taxes.
            •  Loophole? (2+ / 0-)
              Recommended by:
              Kane in CA, stevemb

              I don't mind paying a local or state sales  tax because that's one of the things that pay for fire protection, police, the water system, streets and so forth. The PHYSICAL issues of being a brick-and-mortar store. When an out-of-state or out-of-country merchant is tasked with collecting a local tax - that's a problem - and it's already been settled by SCOTUS in 1967, part of the Dormant Commerce Clause.

              Retailers like Amazon are building warehouses in many states now and WILL have a presence in many states, but most retailers do not, and get no help or protection from states, who want to charge them anyway without having to provide ANY services.

              So someone buying over the internet would pay NOT ONLY sales taxes but shipping too, thus emboldening the locals to the detriment of the internet merchant. Often Shipping and local sales tax are a wash, states are just unhappy that the money goes to UPS instead of them.

              I buy locally whenever I can, after looking up part numbers and options on the internet, then finding someone who sells locally, even if they are a little more expensive.

              I'm a small merchant and almost never sell anything in my home state in person, but I have a state Sales tax license and have to submit a report every 90 days. The fact that states are having problems raising money is not an excuse to overturn the traditional tax rules and muddy the waters. I would be exempt from the requirement anyhow on account of low dollar volume, but it's simply a money grab.

              Put more people to work who will spend more money locally and tax receipts, both sales and income, will rise. Paul Krugman thinks that's a good idea, but what does he know????

              Without geometry, life is pointless. And blues harmonica players suck.

              by blindcynic on Mon Apr 29, 2013 at 09:22:10 PM PDT

              [ Parent ]

          •  Not closing a Loophole, changes to improve (7+ / 0-)

            compliance.

            The most important way to protect the environment is not to have more than one child.

            by nextstep on Mon Apr 29, 2013 at 09:43:02 AM PDT

            [ Parent ]

        •  Teachers and students depend on Amazon for (0+ / 0-)

          supplies and textbooks.  Mom and pop stores charge double and have very limited supply.

           This is outraging teachers. Why do all tax hikes have to be on the shoulders of the poor and working class...middle class too??

          •  Amazon already charges sales tax... (2+ / 0-)
            Recommended by:
            Clem Yeobright, elfling

            ...in quite a few states.  And it will soon be doing so in several more.  Between the "already collecting" and "about to collect" categories, Amazon will be collecting sales tax in California, New York, and Washington.  Add in some of the smaller states where they collect taxes already, and probably half the population of the US will be in states where Amazon collects sales tax.

            It doesn't look to me like the impact will be that great on students and teachers buying supplies from Amazon, because half of them will be paying sales tax regardless of whether this bill passes or not.

            Political Compass: -6.75, -3.08

            by TexasTom on Mon Apr 29, 2013 at 08:55:22 PM PDT

            [ Parent ]

          •  I paid sales tax on all my textbooks and supplies (0+ / 0-)

            and lived to tell the tale.

            Certainly the cost of books is a huge burden, but it's not the sales tax really driving the issue.

            Also: y'all now have the option of eBooks, which are not subject to sales tax, at least not in my state.

            Fry, don't be a hero! It's not covered by our health plan!

            by elfling on Mon Apr 29, 2013 at 11:16:59 PM PDT

            [ Parent ]

      •  This isn't a "tax hike"... (8+ / 0-)

        ...and people not paying the taxes they owe on internet purchases is not a "loophole."

        This is a situation where people already owe the tax as a use tax rather than a sales tax, and their not paying the tax is evasion of the taxes they owe.

        It does not change the taxation rate; it simply creates a mechanism by which people can pay the taxes they owe, taxes they would have paid if they'd gone to a brick-and-mortar store and thus supported the creation of jobs in their own communities.

        "When I give food to the poor, they call me a saint. When I ask why the poor have no food, they call me a communist." --Dom Helder Camara, archbishop of Recife

        by JamesGG on Mon Apr 29, 2013 at 08:57:01 AM PDT

        [ Parent ]

      •  How will this increase inequality? (3+ / 0-)
        Recommended by:
        nextstep, Capt Crunch, TexasTom

        Quite the opposite, I'd say.  It's not the poor and working class who shop online, or even the middle class really.  It's people with discretionary income, credit they don't anticipate will be needed for living expenses, and a good way to receive deliveries.

        •  We in the rural hinterlands (5+ / 0-)

          tend to shop a lot online. There are a lot of people loving the ability to buy staple groceries with free delivery when they live far from town.

          Fry, don't be a hero! It's not covered by our health plan!

          by elfling on Mon Apr 29, 2013 at 05:33:05 PM PDT

          [ Parent ]

          •  You'll still get the free delivery. n/t (0+ / 0-)

            "Michael Moore, who was filming a movie about corporate welfare called 'Capitalism: A Love Story,' sought and received incentives."

            by Bush Bites on Mon Apr 29, 2013 at 06:00:09 PM PDT

            [ Parent ]

          •  at least in PA (3+ / 0-)
            Recommended by:
            Clem Yeobright, elfling, Odysseus

            groceries and clothing among other necessities are exempt from sales tax which is why I think the regressive nature of sales taxes are sometimes overblown.  That is the one part I worry might be botched in the implementation though they have been talking for years about simplifying the exemption list and lowering the rate.  Maybe this will be the impetus for that?

            I also wonder who you are buying groceries from that doesn't have an in-state presence anyway?

        •  That describes me. I have extra money (0+ / 0-)

          to spend it, and I enjoy spending it all over the web. The gratification is so instantaneous it is probably similar in some ways to heroin. You see a neat object in the real world, or hear of it. You go to amazon, pick your make and model and color and bam! you get it in like 48 hours. I bet though that there are a lot of poor people who also like ordering unnecessary things online but for whom this represents a threat as dangerous as heroin.

          •  Off topic, but the wish list and web bookmarks (1+ / 0-)
            Recommended by:
            nchristine

            are pretty spiff tools for stopping impulse buys. You can put an item there so you won't forget you wanted it or where to get it, and then when you come back later, you can see if you still do or if it's now pointless.

            Fry, don't be a hero! It's not covered by our health plan!

            by elfling on Mon Apr 29, 2013 at 11:19:19 PM PDT

            [ Parent ]

        •  Not true (0+ / 0-)

          we look to the cheapest sources we can find. Many times those sources  are on the internet. And many of those things are necessities.

          Don't project your purchasing habits onto other people.

        •  Are you kidding?? Every student and teacher I (0+ / 0-)

          know buys almost everything online.

          •  There's a reason for that. I've got 2 kids in (0+ / 0-)

            college and both of their school's bookstores are now linked to barnes and noble "college" -- one of them actually has to order online to buy/rent in bookstore -- walk ins aren't an option.
            In the state university town where I live there are several independent used bookstores and all charge more to rent/buy than amazon.
            The textbook market has been taken over by the Internet and prices have gone up -- now easily $800 a semester for used books for each or $600 to rent.

      •  Upper income people are actually more likely... (2+ / 0-)
        Recommended by:
        Kane in CA, Eyesbright

        ...to shop via the Internet.

        http://www.pewinternet.org/...

        So, it might even be marginally progressive.

        "Michael Moore, who was filming a movie about corporate welfare called 'Capitalism: A Love Story,' sought and received incentives."

        by Bush Bites on Mon Apr 29, 2013 at 05:59:28 PM PDT

        [ Parent ]

      •  Fun while it lasted (4+ / 0-)

        While I certainly enjoyed not paying tax on all of my online purchases over the years I also knew it was wrong.  I was avoiding paying my fare share and hurting my local community and state.  

        We are the smart ones remember?  

        We KNOW that some taxes are necessary.

        We KNOW that sales taxes pay teachers, police and firemen.

        We KNOW that its our duty to pay, not avoid through loophole, our fair share.

        Now what Democrats need to do is close the loopholes that favor the rich.  Close the Romney Loophole that let him put millions in his IRA.  Close the loophole that lets hedge fund managers pay 15% on income.  Close the loophole that lets private jets operate at public expense.

        It is well that war is so terrible -- lest we should grow too fond of it. Robert E. Lee

        by ksuwildkat on Mon Apr 29, 2013 at 06:35:49 PM PDT

        [ Parent ]

    •  It may not hurt small business or it may. It hurts (1+ / 0-)
      Recommended by:
      stevemb

      the CONSUMER, the average, every day working person trying to hold it all together. If those folks have to spend more on taxes, they are going to spend less on something else. And they will remember it was the Democrats that gouged them a little deeper and the Republicans who said "No way".  Pulling for the Republicans on this one.

  •  Wow, love the great choices (7+ / 0-)

    a regressive sales tax or Norquist.

    My response:  Robin Hood tax.

    "To recognize error, to cut losses, to alter course, is the most repugnant option in government." Historian Barbara Tuchman

    by Publius2008 on Mon Apr 29, 2013 at 07:52:48 AM PDT

    •  P2008 - the tax is already owed (11+ / 0-)

      The only issue is whether it is collected by the online retailer or owed by the buyer directly to the state.

      "let's talk about that"

      by VClib on Mon Apr 29, 2013 at 08:11:36 AM PDT

      [ Parent ]

      •  It it's owed, why do we need a new law? (8+ / 0-)

        The truth is, state and municipal lawmakers want additional revenue.

        They are too afraid to target the very wealthy.

        So they target the easy marks.  The working and middle-class.

        Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project. www.hamiltonproject.org

        by PatriciaVa on Mon Apr 29, 2013 at 08:32:38 AM PDT

        [ Parent ]

        •  I personally don't favor the proposed new law (1+ / 0-)
          Recommended by:
          johnny wurster

          but the reality is that few people pay the tax, even though it is legally owed.

          "let's talk about that"

          by VClib on Mon Apr 29, 2013 at 08:40:36 AM PDT

          [ Parent ]

          •  Really? (1+ / 0-)
            Recommended by:
            Kane in CA

            I'm a bit surprised VClib.  What do you use to justify the dichotomy of tax collection?

            Are you arguing against Sales Tax as a whole?  If so, I can understand but if Sales Tax is legitimate, why would we want some business to have to collect it but others are free to sell things "tax free"?

            I'm sure you are not advocating a correction to this by stricter enforcement on the individuals.  That seems untenable.

            I can't think of another argument.

            Красота спасет мир --F. Dostoevsky

            by Wisper on Mon Apr 29, 2013 at 09:12:50 AM PDT

            [ Parent ]

            •  Impact of Quill Corp. v. North Dakota? (2+ / 0-)
              Recommended by:
              VClib, AoT

              It is a loophole.

              Legislation is necessary to close this loophole.

              And Dems, regrettably, want to use the legislative process to close this working and middle-class loophole.

              To say that the middle-class owes taxes on Web purchases is akin to saying that PE general partners owe taxes on the carried-interest part of their income.

              Quill Corp. v. North Dakota, 504 U.S. 298 (1992), was a United States Supreme Court ruling concerning use tax. Quill Corporation is an office supply retailer. Quill had no physical presence in North Dakota (neither a sales force, nor a retail outlet),[1] but it had a licensed computer software program that some of its North Dakota customers used for checking Quill's current inventories and placing orders directly. North Dakota attempted to impose a use tax on Quill, which was struck down by the Supreme Court.

              http://en.wikipedia.org/...

              Effect on taxation of online sales

              In Quill Corp. v. North Dakota, the Supreme Court ruled that a business must have a physical presence in a state for that state to require it to collect sales taxes. However, the court explicitly stated that Congress can overrule the decision through legislation.[1]

              Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project. www.hamiltonproject.org

              by PatriciaVa on Mon Apr 29, 2013 at 09:36:41 AM PDT

              [ Parent ]

              •  It is not a loophole. (6+ / 0-)

                A "loophole" is when legislators exempt certain things from taxation. In a loophole, a person or corporation who might otherwise owe taxes on something, does not owe taxes on that thing.

                In the court case you describe there, a loophole is not set out for the tax itself; rather, the loophole is for the retailer, who does not have to take responsibility for collecting and filing the tax on behalf of the consumer. The consumer still owes the use tax, but the responsibility for keeping records and paying the tax falls on the consumer, not on the retailer.

                The consumer is not taking advantage of a "loophole" by not paying use tax; he or she is evading taxes he or she owes. This has been pointed out to you on numerous occasions, in this piece and in the other piece on this subject; in my opinion, the fact that you persist in suggesting that this is a "tax hike" and a "loophole," terms that suggest that consumers do not currently owe taxes for purchases made online, is beginning to cross into the realm of dishonesty.

                "When I give food to the poor, they call me a saint. When I ask why the poor have no food, they call me a communist." --Dom Helder Camara, archbishop of Recife

                by JamesGG on Mon Apr 29, 2013 at 10:02:19 AM PDT

                [ Parent ]

                •  No, this is a loophole (1+ / 0-)
                  Recommended by:
                  Kane in CA

                  that is being closed. The loophole is that businesses without offices in the state are not required to collect taxes from purchasers in that state. The consumer is taking advantage of a loophole that makes it so stores don't have to charge tax. Yes, the consumer is still legally required to pay that tax, but come on.

                  If debt were a moral issue then, lacking morals, corporations could never be in debt.

                  by AoT on Mon Apr 29, 2013 at 05:30:25 PM PDT

                  [ Parent ]

            •  Wisper - I could support the bill (2+ / 0-)

              If the small business exception was more like $5 million, rather than $1 million. Obtaining and maintaining the software to keep track of the sales tax by zip code is a burden on small business. I have no problem with requiring Amazon to collect sales tax.

              To me the key is the tax is already owed and people should pay it, I do.

              "let's talk about that"

              by VClib on Mon Apr 29, 2013 at 09:45:05 AM PDT

              [ Parent ]

              •  I think the zip code is less of a problem (1+ / 0-)
                Recommended by:
                VClib

                than the issue of what counts as a taxable item, which is different in every state.

                But I think if the software is too messy, it's probably a fair trade for a standardization of taxable items and even rates in exchange for that compliance.

                Fry, don't be a hero! It's not covered by our health plan!

                by elfling on Mon Apr 29, 2013 at 05:41:00 PM PDT

                [ Parent ]

                •  The software is pretty standard (3+ / 0-)

                  I've set up sites before and compliance with this should be fairly easy. We're going to have to comply with this at my work as well.

                  If debt were a moral issue then, lacking morals, corporations could never be in debt.

                  by AoT on Mon Apr 29, 2013 at 05:43:16 PM PDT

                  [ Parent ]

                  •  AoT - I have no personal knowledge here (0+ / 0-)

                    but with more than 9,000 different sales tax entities who is responsible for staying current? That's why I would like to see the small business definition to be increased to $5 million.

                    "let's talk about that"

                    by VClib on Mon Apr 29, 2013 at 08:43:26 PM PDT

                    [ Parent ]

                    •  I would guess the counties (0+ / 0-)

                      I see what you're saying but if counties publish their rates it is easy to have the location in a program. Or have a feed that publishes all of them? It will probably be a combo of the two. It's best for everyone that it be easy so it will be. This will end smaller online retailers.

                      If debt were a moral issue then, lacking morals, corporations could never be in debt.

                      by AoT on Mon Apr 29, 2013 at 10:06:29 PM PDT

                      [ Parent ]

                  •  Do you have items that are taxable or not (1+ / 0-)
                    Recommended by:
                    AoT

                    in different states?

                    For example, digital downloads aren't taxable in California, but software on a CD or a physical book is. I don't know if other states tax those items.

                    Fry, don't be a hero! It's not covered by our health plan!

                    by elfling on Mon Apr 29, 2013 at 11:21:34 PM PDT

                    [ Parent ]

                    •  Everything we have is taxable everywhere (0+ / 0-)

                      So that isn't a problem for us. Although, that will be a problem for others. But, again, everyone involved has a vested interest in making figuring those things out as easy as possible so hopefully they will be.

                      If debt were a moral issue then, lacking morals, corporations could never be in debt.

                      by AoT on Tue Apr 30, 2013 at 10:01:30 AM PDT

                      [ Parent ]

                •  Different In Every State? (0+ / 0-)

                  Try different in every county, city, school district, water board, or whatever else the politicians have invested with taxation authority.

                  On the Internet, nobody knows if you're a dog... but everybody knows if you're a jackass.

                  by stevemb on Tue Apr 30, 2013 at 06:54:48 AM PDT

                  [ Parent ]

        •  We need a law (3+ / 0-)
          Recommended by:
          TooFolkGR, Eyesbright, Odysseus

          because companies online (as opposed to every physical store in the nation) we're not required to collect sales tax.  

          YOU were supposed to be keeping track of your out-of-state purchases, calculating your own tax and mailing it to your State comptroller.  If you haven't been doing this you have been committing tax fraud.  (spoiler alert:  99.9999% of Americans were committing this kind of tax fraud)

          All this law does (without changing a single tax) is now require the online retailer to collect it just like they would if they had a physical store.

          They then disperse all the money they collect to the 50-states based on the number of residents that purchase their products.

          Красота спасет мир --F. Dostoevsky

          by Wisper on Mon Apr 29, 2013 at 09:10:08 AM PDT

          [ Parent ]

  •  Interesting That They Consider This a Conflict (12+ / 0-)

    This bill wouldn't actually raise anybody's taxes.... it's just that most people (knowingly or otherwise (in my case knowingly)) commit minor tax fraud every year by telling their home state they didn't buy anything that qualifies.

    Nothing in this bill actually increases anybody's taxes.  People aren't taking advantage of a loophole by not paying them.  They're just lying.

    It's like if you claimed your income was $10,000 when really it was $100,000, you're not taking advantage of the "Lower Income Statement" loophole. :)

    Too Folk For You. - Schmidting in the Punch Bowl - verb - Committing an unexpected and underhanded political act intended to "spoil the party."

    by TooFolkGR on Mon Apr 29, 2013 at 08:08:21 AM PDT

  •  For a so-called "Expert" (2+ / 0-)
    Recommended by:
    yella dawg, Hohenzollern

    Old Grover's knowledge of taxation and Tax Laws is pretty low.  And I make a living as a Tax Accountant.

  •  NOT closing a loophole, improving Tax compliance (2+ / 0-)
    Recommended by:
    Kane in CA, Eyesbright

    A loophole means a legal tax advantage.  The issue here is the  high rate of noncompliance by ordinary people by not paying use tax when they don't pay sales tax from on-line transactions.  

    This is not a tax increase, but a change to improve tax compliance.

    The most important way to protect the environment is not to have more than one child.

    by nextstep on Mon Apr 29, 2013 at 09:41:39 AM PDT

    •  Just abolish the sales tax (5+ / 0-)

      Oregon does not have a sales tax, and gets along just fine. See link:

      http://www.oregon.gov/...

      Their businesses don't have to bother collecting it and remitting it, their residents don't have to pay a use tax on out of state purchases. How can this be? Well, they get enough money from other sources, such as their income and property taxes.

      As a result of not having a sales tax, the taxes in Oregon are less regressive than they are in States which do have a sales tax. It seems to work out well for them. If you would like to have a less regressive State tax system, then will join me in calling for a replacement of sales taxes with other taxes the way Oregon does.

      Eradicate magical thinking

      by Zinman on Mon Apr 29, 2013 at 12:45:03 PM PDT

      [ Parent ]

      •  Believe me, as an Oregonian it pains me to say (8+ / 0-)

        that our system is NOT "working out well."  Ask any educator.  

        With the revenues from resource extraction (timber taxes) disappearing, and Measure 5 freezing property taxes and reversing the ratio of local/state funding of schools, the situation for funding schools has reached the breaking point. Schools must fight for a declining share of a state budget hit hard by loss of income taxes (high unemployed=no or low taxable income) and a loss of property values, which in turn translates into less tax revenue.  Plus, many, if not most, school districts in Oregon have experienced declining enrollments (enrollment = state $$) as children are moved by their parents to major population centers in search of employment.    

        Thank you, Great Recession.

        Education in other states has had a tough time, but most states have a "third revenue stream" to help buffer some of the worst effects of recession.

        I think if we could get rid of Measure 5 and its offspring and get rid of the idiotic "kicker" that prevents the State from using any surplus to create a Rainy Day Fund, then the No Sales Taxes in Oregon system might be a bit more tenable.  But Measure 5 has got to go.  It puts almost all of the burden on small landowners and, as time has gone by, left corporations with smaller and smaller property tax bills.    

        Metaphors be with you.

        by koosah on Mon Apr 29, 2013 at 06:04:10 PM PDT

        [ Parent ]

    •  It is closing a loophole (3+ / 0-)
      Recommended by:
      Zinman, Kane in CA, stevemb

      I don't understand why this is so hard for people to get. There's a loophole that allows companies to get out of charging sales tax and that's going away.

      If debt were a moral issue then, lacking morals, corporations could never be in debt.

      by AoT on Mon Apr 29, 2013 at 05:35:03 PM PDT

      [ Parent ]

      •  The loophole/noncompliance needs to go (2+ / 0-)
        Recommended by:
        AoT, stevemb

        As I understand it, Oregon does not have a sales tax and has worked out a simple model of how to deal with interstate sales.

        My larger point is that sales taxes are regressive, disproportionately more onerous to the poor than to the rich, in State or out of State. Why not abolish sales taxes in all of our States and rely on more progressive taxes to fund State governments?

        The situation as it is should be changed, no doubt about it, but eliminating all sales taxes seems the fairest way of all. Some national legislation might need to be crafted to facilitate the transition.

        Eradicate magical thinking

        by Zinman on Mon Apr 29, 2013 at 06:20:19 PM PDT

        [ Parent ]

  •  Not working because they do that already (2+ / 0-)
    Recommended by:
    koosah, stevemb
    Let People in Alabama Loot People in New York Act
    AKA "Let the welfare Red states loot the Donor Blue states".

    In a capitalist democracy - every dollar is a "vote" ... spend wisely ...

    by RUNDOWN on Mon Apr 29, 2013 at 01:34:06 PM PDT

  •  paying fealty to the demigod, Norquist (1+ / 0-)
    Recommended by:
    koosah

    Warning - some snark above‽ (-9.50; -7.03)‽ eState4Column5©2013 "I’m not the strapping young Muslim socialist that I used to be" - Barack Obama 04/27/2013

    by annieli on Mon Apr 29, 2013 at 05:23:40 PM PDT

  •  Yay! Enforce the regressive taxes! (3+ / 0-)
    Recommended by:
    psnyder, Keith930, stevemb

    And let the big companies get away with paying virtually nothing. Something both parties can agree on.

    If debt were a moral issue then, lacking morals, corporations could never be in debt.

    by AoT on Mon Apr 29, 2013 at 05:35:55 PM PDT

    •  That is a problem. (3+ / 0-)
      Recommended by:
      koosah, Bush Bites, Eyesbright

      But the other problem is the differential treatment of brick-and-mortar vs. internet sellers. It's hard to argue that they should be treated differently.

      The GOP can't win on ideas. They can only win by lying, cheating, and stealing. So they do.

      by psnyder on Mon Apr 29, 2013 at 05:42:21 PM PDT

      [ Parent ]

      •  No, they shouldn't be (5+ / 0-)
        Recommended by:
        psnyder, koosah, Odysseus, Zinman, stevemb

        But the fact that this is getting pushed while the government can't even be bothered to audit most major companies is absurd.

        If debt were a moral issue then, lacking morals, corporations could never be in debt.

        by AoT on Mon Apr 29, 2013 at 05:51:26 PM PDT

        [ Parent ]

        •  You'll notice I didn't argue that point. (3+ / 0-)
          Recommended by:
          koosah, AoT, nchristine

          Because I agree with it. But, then, most of what our government is doing and not doing these days is fucking nuts solipsistic, servile, and absurd.

          The GOP can't win on ideas. They can only win by lying, cheating, and stealing. So they do.

          by psnyder on Mon Apr 29, 2013 at 06:07:12 PM PDT

          [ Parent ]

      •  doesn't seem to be a problem at all for most (1+ / 0-)
        Recommended by:
        psnyder

        who have commented here.  If you make a purchase on the internet, how is it any different than driving across the state line to buy something in a state with a lower sales tax?  If the web based seller isn't based in my state, why should they collect sales taxes for my state?

        _"Love is the rosebud of an hour; Friendship the everlasting flower."_ Brook Boothby

        by Keith930 on Mon Apr 29, 2013 at 06:35:05 PM PDT

        [ Parent ]

        •  I don't think it's a problem for purchasers. (3+ / 0-)
          Recommended by:
          Eyesbright, Kane in CA, elfling

          It does seem to be a problem for sellers who invest in brick-and-mortar businesses. As for driving across a state line, I live in south Florida. Driving across the nearest state line will take me about 6 hours.

          I'd just as soon get rid of sales taxes altogether, but differential treatment of retailers based on lax enforcement doesn't seem fair to me. Most small brick-and-mortar retailers are struggling to survive. Leveling the playing field a tad might not make all the difference, but it would eliminate a discriminatory difference.

          The GOP can't win on ideas. They can only win by lying, cheating, and stealing. So they do.

          by psnyder on Mon Apr 29, 2013 at 06:50:17 PM PDT

          [ Parent ]

      •  If You Don't Want Differential Treatment... (1+ / 0-)
        Recommended by:
        psnyder

        ...treat them the same way (i.e. they collect whatever taxes are applicable where their physical operation is located, and thus each have to comply with one and only one set of rules).

        On the Internet, nobody knows if you're a dog... but everybody knows if you're a jackass.

        by stevemb on Tue Apr 30, 2013 at 07:01:15 AM PDT

        [ Parent ]

  •  The problem with a country this full of stupid (0+ / 0-)

    is that once something comes into being, any attempt to change it declines to a battle between self-interested lobbyists instead of on substance. The tax loophole was defensible policy back when it started, as a way to encourage a new form of commerce. Now that is obviously no longer necessary. Logic says the exemption should be scrapped. But logic will have nothing to do with the outcome.

    What's really needed is a national added-value tax on all sales, with the proceeds distributed by the feds to the state/county/municipality where they originated. But don't hold your breath.

  •  Tell me again Mr Norquist.. (0+ / 0-)

    How many votes you got to get this lofty position?

    Psst!!!......Mittens you are more of a poor loser than I thought.

    by wbishop3 on Mon Apr 29, 2013 at 05:43:00 PM PDT

  •  I have never shopped locally, then bought online. (3+ / 0-)
    Recommended by:
    AoT, Desert Rose, Odysseus

    If I'm buying online, it's because I cannot get a product locally.  If they want to collect sales tax, fine, but it really should go to the locality of the store from whom I am purchasing.  If my state wants that sales tax, they should encourage stores in the state to actually sell the things I want, which would have the added bonus of keeping more of my money spent locally, and benefiting local economies.

  •  Grover Norquist (1+ / 0-)
    Recommended by:
    Hohenzollern

    Who pays Grover Norquist?

  •  The significant question is no longer (2+ / 0-)
    Recommended by:
    koosah, nchristine

    "who elected you?" but rather, "who pays you?" I'm afraid we lowly voters don't count for much anymore.

  •  Here's the problem: (2+ / 0-)
    Recommended by:
    Zinman, stevemb

    We (the middle class) are being nickel and dimed so states can give big tax breaks to businesses. Earmark the additional sales tax money for education, and I'm in.

    No matter how cynical you get, it is impossible to keep up.--Lily Tomlin

    by Desert Rose on Mon Apr 29, 2013 at 06:09:12 PM PDT

  •  Maybe if these states had equitable income taxes (2+ / 0-)
    Recommended by:
    Odysseus, stevemb

    instead of fighting the battle to the bottom by taxing sales, this wouldn't be a problem. I was shocked that the example cited by Blount was a dress shop, since clothes are exempt from sales tax in the states I have lived in. But with no income tax, you have to get money where you can, I guess.

    I won't believe corporations are people until Texas executes one. Leo Gerard.

    by tgrshark13 on Mon Apr 29, 2013 at 06:14:12 PM PDT

  •  Funny story about tax complexity (5+ / 0-)

    I once did a job for a company that provided production and post-production services in the entertainment industry. By law, production was taxable but post was not. BUT the State Board of Equalization decided that IF a company provided BOTH services, then both were subject to sales tax, in other words, our company's services were taxable while a competitor's identical services were not.

    Since the company operated with a profit margin less than the sales tax and would be bankrupted by the tax bill, I had to create software to compose letters to all customers explaining the situation and asking them please to pay sales tax on all purchases over the previous three years.

    Would you believe that over HALF the customers sent in checks, some in the thousands of dollars?

    The kicker: The appeal of the BOE decision was successful and I then had to write software to return the funds to those who had been good enough to pay.

    Happy ending, no?

    Too late for the simple life, too early for android love slaves - Savio

    by Clem Yeobright on Mon Apr 29, 2013 at 06:29:48 PM PDT

  •  The day this law goes into effect (3+ / 0-)
    Recommended by:
    Odysseus, Bailey2001, stevemb

    expect a new kind of web page for shopping.

    What do you want to buy?  ______

    Available at Amazon for $X + 7% tax

    Available at these <$1mm Internet based businesses for $X with no tax.

    There is an allure to shopping on line tax free, the same allure that drives people in Washington to Oregon to shop, or Maryland to Delaware, Mass. to New Hampshire, and so on....

    Some states (NY) have a sales tax amnesty period just before school starts to help people buy back to school supplies.

    The increased spending during that week is surprisingly huge.

    People will, if possible, avoid (evade) paying sales tax.

    We've been spelling it wrong all these years. It's actually: PRO-GOP-ANDA

    by Patriot4peace on Mon Apr 29, 2013 at 06:42:35 PM PDT

  •  how many vendors on the Web are also (3+ / 0-)
    Recommended by:
    Patriot4peace, Bailey2001, stevemb

    "Local Business Owners", who happen to have a web page?  They, too, benefit.  Not every purchase on the web is made through Amazon.com.

    There are small businesses who also reach a much wider clientele than they would otherwise, and benefit from the lack of sales tax.

    It's pretty amazing how many people here think paying more sales tax is a really good thing.

    Must be the socio-economic demographics at play.

    _"Love is the rosebud of an hour; Friendship the everlasting flower."_ Brook Boothby

    by Keith930 on Mon Apr 29, 2013 at 06:48:43 PM PDT

  •  Norquist-GOP Win-Win; Democratic Lose-Lose (0+ / 0-)

    If the bill fails, Norquist's theatrics help insure that people remember that the GOP protected middle-class shoppers from having to pay more in taxes. Win for him; win for the GOP; lose for the Democrats.

    If the bill passes (with mostly Democratic and peeled-off Republican votes), Norquist has a rallying cry and people are repeatedly reminded that the GOP tried to protect them from "new Democrat taxes". Win for him, bigger win for the GOP; bigger lose for the Democrats.

    On the Internet, nobody knows if you're a dog... but everybody knows if you're a jackass.

    by stevemb on Tue Apr 30, 2013 at 06:53:27 AM PDT

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