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Internet Sales Tax?

E-commerce is up, and now the state governments seem more determined than ever to get their “share” of the sales taxes.

Looks like they’re getting serious.

Comments

  1. December 23rd, 2005 | 11:31 am

    I read with a sigh of relief that they are only looking at sellers with more than $5 million in sales. I was an accountant in my previous life, so I’m very good with numbers and it’s still a struggle to keep up with it. I can’t even imagine what it would be like to manage that. At least the “big guys” can afford someone to figure it out. Does this include you yet Brad :D

  2. December 23rd, 2005 | 1:31 pm

    Brad
    I hope for the sake of all consumers that these type bills don’t get passed. With everyone buying online now the cost to consumers will be enormous.

    Lee
    Knife Sharpeners

  3. December 23rd, 2005 | 5:25 pm

    Hi Everyone,

    I wonder if there are any lobbyst that are fighting on the side of us e tailers?

    no longer available

  4. December 23rd, 2005 | 5:51 pm

    I knew that this would be coming soon. It is helpful to know that our industry really is making a contribution in such a way that it grabs the attention of washington.

    I hope that we have some leaders that will fight for our interests so that we do not get the short end of the stick

    Teething solutions for your Teething baby

  5. December 25th, 2005 | 1:50 pm

    When I first started reading the article, I figured if they required something like that, then I would have to just shut down, no way I would go through the hassle of filing for every state every month – I can’t image that, but then when I read that it would only be for larger companies, I was relieved. Okay, I won’t freak out now, but I do see how that will raise prices and if so, then people won’t see as much savings shopping online at least not with larger companies.

  6. December 26th, 2005 | 11:16 am

    Any time there is money to be made the state municipalities usually want their cut because they see it as a way of being able to generate income streams for their projects and such.

    Teething information, and Teething products for your Teething baby

  7. December 26th, 2005 | 2:53 pm

    Whenever any money is made, tax should be paid, regardless of online or offline..

    Drum Sets

  8. December 27th, 2005 | 12:45 am

    I can see that anytime entrepreneurs and smart thinking business owners start making money in an arena that isn’t levied by state or federal authorities, they want to catch up quickly and get their piece of the pie.

  9. December 27th, 2005 | 9:29 am

    The Entrepraneur (hope i spelled that right) really does help to drive the american economy in a way. You can tell when we are making a financial impact when Government wants to get involved…

    Teething information, for your Teething baby

  10. December 27th, 2005 | 3:34 pm

    Even though they may be going after the big boys for now, they will get to us small fish sooner or later. After they get to the small company’s then the local cities in each state will try to get their peice of the action. Also what would keep the large company’s from breaking themselves apart into smaller groups to stay under the 5m level or whatever number they come up with? Just my thoghts.

    http://www.gearupforcamping.com

  11. December 27th, 2005 | 5:01 pm

    This tax requirement has just been requested by one of of my suppliers in the US so I am not suprised that the state lawmakers are getting into the act. Being quick and nimble and great SEO students will be the name of the game in this new environment

    http://www.sewing-machine-outlet.com

  12. December 27th, 2005 | 6:56 pm

    Well hopefully they will get to us small guys later than sooner… It would be interesting to see what types of creative tax shelter methods are on the horizon for online business. The concept of breaking our business into smaller part to lower our gross revenues is an interesting idea…

    Teething information, and Teething products for your Teething baby

  13. GJZ
    December 27th, 2005 | 8:56 pm

    My small town retail store launched one of the orignal B2C Halloween Costume sites back in 1996, was voted top Halloween site by USA Today and had 4 gigabytes of traffic overwhelming our suppliers each day. We paid sales tax for every order we invoiced that was shipped to California. I will gladly (and do) pay local and state sales tax, online and off, If pennies on the dollar put your online business in the red than I would look at a better business model. There is so much money to be made online…with or without sales taxation – is all the gripe about sales tax charges just a smokescreen for those not wanting to get tough and make their millions with some muscle grease ?

    GJZ
    http://www.SunshineAndSandcastles.com
    Sarasota Real Estate | Longboat Key Real Estate | Sarasota Fl Real Estate

  14. December 27th, 2005 | 9:42 pm

    Another tax “simplication” act. During all this time I had imagined our senators to be busy frantically searching for ways to cut existing taxes. How is it that they would have time for this?

  15. December 28th, 2005 | 9:08 am

    Government getting their share of the internet pie is cool with me, I still think that there should be some open debate about what is their fair share so that our online business is not over burdened by inexcessive taxation.

    No Longer Available

  16. December 28th, 2005 | 4:21 pm

    They said that they are only considering taxation with a gross amount of 5 million… do you think that they will ever start looking at taxing the income of those web business owners that make less?

    Teething information for your Teething baby

  17. December 29th, 2005 | 12:25 pm

    Here is a link that I found which talks about the issues that are currently being explored with regard to E Commerce taxation… check it out below:

    http://www.cob.sjsu.edu/facstaff/nellen_a/e-links.html

    Teething information, and Teething products for your Teething baby

  18. December 29th, 2005 | 6:26 pm

    Will there be any benefits for those of us with businesses on the internet? I wonder if we will have more protection from stolen internet traffic fraud or perhaps we can all get an hour at the top of Goggle…it’s fuel for thought on how we (under 5million gross in sales) can benefit once the government has this new steady sales tax income?

    Addams

    www. PartnersInCrimeMysteries.com
    Murder Mysteries | Solve Murder Mystery Online | Halloween Costumes

  19. December 29th, 2005 | 6:36 pm

    Now that’s a good idea… I am not sure how involved we would want government to be in our affairs… but a little protection would be good.

    Teething information, and Teething products for your Teething baby

  20. December 29th, 2005 | 6:53 pm

    I think it’s a great idea! Four years ago all of our Halloween traffic was stolen, a smart employee from a company we hired to keep us up in the search rankings re-directed our url to point to several other costumes sites – which he charged a small fee. He made a lot of money and our seasonal rush was flat.

    The Feds have been busy since 9/11 – internet fraud and crime has been on the back burner – additional protection could be a win/win for all?

    Gwendolyn
    http://www.SunshineAndSandcastles.com

    Sarasota Real Estate | Longboat Key Real Estate | Sarasota Fl Real Estate

  21. December 29th, 2005 | 10:31 pm

    That’s not cool Gwendolyn… sorry to hear about what happened to your traffick that year.

    Their needs to be some protection, it’s probably there now in different forms, but the laws may need some more teeth in some instances in order to have any real effect.

    Teething information, and Teething products for your Teething baby

  22. December 30th, 2005 | 5:33 pm

    Trying to stay on top of all the tax rates in all of the states and municipalities will be nigh on impossible.

    My question is: how will all the jurisdictions enforce the rules and how widely will the punishments vary. This could get very dicey for everyone involved.

    It may actually be cheaper for the governments to just keep their fingers out of this pie!

  23. December 31st, 2005 | 10:57 am

    Here is a link that I came across on the blog of mr jason brashear:

    http://www.jasonbrashear.com/page/2/

    This blog poses a very interesting discussion post about the same topic… check it out.

    Teething information, and Teething products for your Teething baby

  24. Rebel
    December 31st, 2005 | 1:01 pm

    If you see one of these thieving politicians/bureaucrats in your area, pelt them with rotten eggs. :twisted:

  25. December 31st, 2005 | 10:01 pm

    I saw this coming too. Other countries will follow suit if it is implemented in the States. But I must say it is challenging for the politicians to keep track as the extend of monitoring internet sales taxes is no easy task. Interesting to watch how it develop.

    Secrets of a 250 year old sport – Cricket

  26. David
    January 1st, 2006 | 11:56 am

    This is an issue that any retailer faces, “giving the government his due”. If anyone believes that we will be able to sell products online ongoing without the headaches of paperwork that a brick and mortar store endures, they probably have their head in the sand.

    I certainly don’t want to pay taxes for the sake of paying taxes, but if it is implemented in a halfway sensible way, then by the time you are affected, you should be able to hire staff or an accountant to track it for you.

    Here is an interesting link to discussions on this topic:


    Sales tax discussion

    David
    Discount golf clubs, used golf clubs,
    golf gifts

  27. January 1st, 2006 | 11:10 pm

    Looks more like the same ole, same ole that has been going on since the beginning of time itself, the moment a tax person spots an untapped source, the lawyers, politicians and the like will not rest until its finally tapped, and tapped again, and again…until it either breaks it or makes certain the only ones making any money are tax people and lawyers… same ole story, different day…Take any taxed source.. look up its taxed history, sound familiar.? :roll:

    Residential Electrician | Home Improvement & Remodel | Concrete Contractors Blount county Maryville TN

  28. January 2nd, 2006 | 2:26 am

    Does that mean that I will have to charge taxes for all states now?

  29. January 2nd, 2006 | 1:03 pm

    No… it won’t be a situation where you have to pay taxes in all states… at least not yet. They are still working out the bugs… I do think that is their ultimate goal though….

    Teething information, and Teething products for your Teething baby

  30. January 3rd, 2006 | 11:41 am

    Mike has a point…

    the irony though is that because our economy is based upon free market ideas our system lends itself to some perceived exploitation on the part of the government as they glean from the best and most profitable concepts and ideas and then use the income to help with funding the things that our country needs via the means of taxation… i.e. roads, schools, etc…

    Teething information, and Teething products for your Teething baby

  31. January 4th, 2006 | 9:15 am

    Hey David,

    I checked out that link that you left on your post. They gave some pretty neat examples to explain potential scenarios where a buyer would not have to pay vs when they would have to pay taxes… good stuff.

    Teething information, and Teething products for your Teething baby

  32. January 4th, 2006 | 6:53 pm

    Internet sales tax ? I guess the taxman never fails to find a way to tax. What else will they think of next ?

  33. Ray
    January 5th, 2006 | 12:01 am

    Gee, it seems that it would be hard to keep under control. It looks like we’re in for a few years new laws to fine tune the new laws :lol:

  34. January 5th, 2006 | 4:17 am

    I think it’s silly to expect that billions of any transaction will go untaxed forever, but I think it would be wise to start at corps over $5M–a rare time I see some intelligence in gov’t bureaucracy!

    house appraisals free home appraisals

  35. January 5th, 2006 | 2:15 pm

    As has been said, it was just a matter of time …

    Chronicles of Apartheus

  36. January 5th, 2006 | 10:38 pm

    I hope they don’t charge taxes online. It would hurt my income tremendously. The good side though is that online sales keep going up every year.

  37. January 5th, 2006 | 10:50 pm

    Well, I hope everyone enjoys it while there still is no tax. It’s almost like when America was founded where it was tax free until the Boston Tea Party. It’s bound to happen. :cry:

  38. Sam
    January 6th, 2006 | 3:08 am

    Hi Brad,

    Today I just went to your MyWeddingFavors.com and noticed your PR down to 3 from 7 !

    What’s happened?

    Would you explain any thing about this?

  39. January 6th, 2006 | 1:17 pm

    …death and taxes…

    Macon Confectionery

  40. January 6th, 2006 | 10:28 pm

    As was wrestled with in 2002 legilation… with over 7500 tax rates it’ll probably cost a chunk of change to set up and manage…plus, what is and is not taxable… I don’t see it still for a while…

    College News

  41. January 6th, 2006 | 11:59 pm

    This is good for the government, but bad for the small business owners and customers.

    Fairy Necklaces

  42. January 7th, 2006 | 12:57 pm

    Yes, it was inevitable. And no, I don’t necessarily think it’s a bad thing. Ecommerce has continued to grow and thrive partly because of the many advantages that it has over the traditional brick and mortar store. Should a state lose its tax income because a consumer decided to buy online because they could receive a better price there, mainly because the etailer did not have the overhead expenses that the local retailer did? I don’t think so. Tax is simply a part of doing business, and keep in mind, it’s not the etailer that is paying the tax, it’s still the consumer. The State and Municipal taxes are there to provide for the consumer’s educational system and local infrastructure. So, while a consumer may be getting a bargain, the absence of a sales tax, as internet sales continues to grow, also becomes a negative to the consumer.

    I believe we should all do our part, and if the headaches of managing thousands of tax zones is our biggest burden, then maybe we should invest tens of, or maybe hundreds of, thousands of dollars in a brick and mortar, pay outrageous utility bills, be tied to the counter or pay enormous wages to staff to man the store, work nights, weekends and especially long hours on all of the holidays, and forfeit our life savings if the business fails. The internet is still the only place where, for a modest investment of both time and money, we have the opportunity to become successful entrepreneurs and leave the leave the dreary nine to five behind. Will the addition of taxes across the board cut into our profits? Possibly, if we have to cut into the profit margin in order to compete with the local retailer. But keep in mind how much of a larger profit margin we have to begin with. We don’t have those excessive expenses that the local retailer has.

    What I would suggest, with respect to equality, and to ease the “burden

  43. January 7th, 2006 | 3:11 pm

    Of course they want a piece of the pie. I don’t mind being protected.

    Affordable baker’s rack designs and kitchen decor

  44. Jesse
    January 7th, 2006 | 3:13 pm

    Government always sees fit to get a chunk of the profits. Small business aren’t always going to benefit.

    Find Kitchen Carts and Bar Stools

  45. January 9th, 2006 | 3:53 pm

    E-Commerce is not the only area that the government wants to regulate-of course,it is inevitable-I hope that is not a situation of the big guys get richer and the little guys can’t afford the software and other adjustments that need to be made………

  46. January 9th, 2006 | 4:04 pm
  47. January 9th, 2006 | 4:22 pm

    A supplier requested this-shows you who’s got the deep pocket right now………..

  48. January 9th, 2006 | 5:24 pm

    I think Frank hit the nail on the head. I agree with the sales tax, and like Frank mentioned, it’s the consumer that has to pay, not the etailer. The etailer just needs to file. It will be interesting to see what kind of method they come up with. Hopefully it will be a standardized form that is the same for each state. I’m not sure about everyone else, but we do not get sales from all 50 states. Ours tend to be from the West Coast and East Coast with a few states in between.

  49. January 9th, 2006 | 10:46 pm

    Don’t be fooled by the “5 million” mark. The tax game is all about incrimentalism. If this gets instituted that number will inevitably drop- and faster than you’d imagine.

    Cash first. Then jewels. Then your wallpaper and the last tin of tuna.

    http://www.discountwallpaper.info/

  50. January 10th, 2006 | 5:38 pm

    Damn the man

  51. January 10th, 2006 | 7:02 pm

    as long as the tax is used specifically and not in a general tax revenue

  52. January 10th, 2006 | 10:04 pm

    Just another way our government is going to put us U.S. business owners at a competitive disadvantage to foreign business owners.

    Custom Hats For Sale

  53. January 12th, 2006 | 10:41 am

    I’m curious if there will eventually be taxable and non-taxable item categories as far as internet revenue goes as there are in the physical market. Will we see a boom in “internet grocery” items? Most grocery items are exempt from sales tax in the U.S.- I’m sure there are other categories that are non-taxable as well. It will make for an interesting marketplace if they have to sort through every category of sale and you can bet that entrepreneurs will be naturally attracted to any exempt market.

    discount designer wallpapers

  54. January 13th, 2006 | 6:09 am

    I understand that the government wants a piece of the pie too, but this just doesn’t seem right for some reason. Perhaps the Fair Tax is the answer? Who Knows…

    Justin Kish
    Outdoor Furniture

  55. Mr. Skeptical
    January 13th, 2006 | 1:47 pm

    Brad, why haven’t you mentioned anything about being indexed a few weeks back..the silence proves that you were doing sneaky stuff..

  56. January 13th, 2006 | 8:33 pm

    ahhh!! the old saying, death and taxes

  57. Rob
    January 13th, 2006 | 9:03 pm

    They’ll never get to the little people! The only care about the mega companies.

    Titanium Jewelry Shop

  58. Ralph
    January 14th, 2006 | 7:08 pm

    We should have known this was coming.

    baby showers

  59. January 14th, 2006 | 7:12 pm
  60. January 15th, 2006 | 9:04 am

    Well, death and taxes, as they say… Too bad they have to tax everything that people enjoy. I firmly believe the LACK of tax is the reason why online shopping has exploded (That and people trust it more now)

    mod chip

  61. January 15th, 2006 | 10:23 am

    When will the taxes stop? Who says taxes on retail sales are Constitutional, anyway?

    Will they continue to tax items if they are being resold? Should someone pay tax on that old clock you are selling on Ebay?

    I recently moved from Ohio to Arizona. In Ohio, if you buy a new or used car, you will pay sales tax. In Arizona, you only pay sales tax (which is 8.25% where I live) if you buy a new car. This, of course, is substantial with a $20,000 purchase.

    I was pleasantly surprised when I learned of this after I relocated to Arizona. That policy alone saved me over $3,000 in my first year here.

    I am not sure our Constitutional forefathers would be pleased with the taxes we already pay, let alone taxing Internet purchases.

    Just my $0.02,

    Neal

    http://www.planchurchmusic.com

  62. Anonymous
    January 15th, 2006 | 3:41 pm

    my wedding favors gone from google?

    http://www.google.com/search?hl=en&q=wedding+favors

  63. January 16th, 2006 | 1:16 am

    It never ceases to amaze me at how many “creative” ways the government will come up with to tax us to death. I don’t think I would mind paying reasonable taxes to take care of the truly poor, the hungry, maintaining the highway systems, etc. if we knew that the taxes we paid would actually make a positive difference and go to the programs they are allocated for.

    Instead, more unnecessary government programs, even ridiculous ones, continue to drain the average taxpayer.

    The government needs to reorganize, get rid of waste, and clean up itself before they conceive of new ways to diminish the quality of our lifestyles. They don’t deserve more money in taxes until they fix what is already wrong.

    Even though I work with retained executive search, I am bombarded by resumes from the unemployed on a daily basis. Although I can’t take action on those resumes because I don’t have appropriate search assignments, I take note of the industries and positions these individuals are in. Some have been unemployed for months, many outplaced from high paying positions.

    A most logical transition would be for these individuals to try to start a business of their own. In fact, I recommend this. But if more taxes become an obstacle, what incentive will they have to build an online business? Online businesses don’t build overnight (unless you are Brad Fallon the SEO expert who has a wonderful “Stomping the Search Engines CD series). It takes time and it takes money. The unemployed who want to start businesses don’t have the money, and with the time they have, if the incentives to start online businesses are out of reach, they need to be seeking a full time traditional job.

    Let’s give more incentives to individuals seeking to start online businesses and provide training programs to the unemployed to do just that. If I ever get my websites to generate a decent wage, that is exactly what I intend to do, unless of course, it is no longer lucrative because the government finds ways to tax on top of tax.

    Don’t stop the wave, the new job creation that has been started by more and more people starting internet businesses. Encourage and grow those businesses. Off my soap box. . . I hate taxes.

  64. January 16th, 2006 | 8:44 am

    The government will eventually find a way to manage and implement the taxes as they have in the past… the major concern for me is the time and $$ is will cost my company to manage the taxes.

    Automotive News

  65. Hover
    January 17th, 2006 | 12:11 am

    As long as everyone is made to pay and not just certain states.

    Birchwood Casey

  66. January 17th, 2006 | 9:37 pm

    The tax issue is going to make it harder for the little guy, especially folks selling items on eBay or Amazon.com.

    If the states need more money, they should put their energies into keeping big companies from outsourcing as many jobs to out-of-state workers.

  67. Chris
    January 18th, 2006 | 8:36 am

    Seeing as our trade deficit is skyrocketing – some drastic steps need to be taken.

  68. January 20th, 2006 | 6:18 am

    One thing is for sure… the govt will have to ensure that small business is not over burdened, because if we are then the economy could suffer heavily in the long run.

    Teething information, and Teething products for your Teething baby

  69. Anonymous
    January 20th, 2006 | 10:40 am

    I hear ya about the sales tax. The ebay fees are going up also. Not good news for me at all being a ebay drop shop store.
    Not good news at all.

    Chris.

  70. January 20th, 2006 | 10:45 am

    Being a eBay store owner myself, this is of great concern. With ebay fees going up and additional taxes, the government is not encouraging me to start or continue my business at all. But I will continue. This is a great way of life. I hope I never have to work or anyone ever again!

    Humming bird fish finder

  71. January 24th, 2006 | 11:54 am

    Look, someone has to pay for the battleships and airplanes to keep us safe. Someone has to pay for the armor on the Humvees and the bullet proof vests to keep our soldiers safe. Four and half years after 9/11 and no terrorist attack on US soil. Sounds like our taxes are almost being well spent!

    Trading Stocks? If You Have Read Reminiscences of a Stock Operator – Give Your Feedback, and Get a Free Book

  72. January 25th, 2006 | 9:23 am

    It would be such a relief that only businesses with Sales over 5 mil. have to pay sales tax. Otherwise Internet business rookies would be shut down within the first year.

    CandlesandCandlescent

  73. January 27th, 2006 | 7:55 pm

    I do agree that to force the early entrepreneurs to have to pay taxes would become an overburden, it could end up discouraging and stifling productivity because there usually a period where monies are just recirculated right back into the business and profit is not always immediate.

    Teething information, and Teething solutions for your baby

  74. January 28th, 2006 | 11:59 am

    How did you get MWF back up to 6PR so quickly? Am I correct in assuming that any PR is as fragile as this?

    What is Your House Worth? | Free CMAS | Affordable Real Estate

  75. January 29th, 2006 | 9:12 am

    With a lot of money being made online… I figured that this would happen at some point

    astralscents

  76. February 1st, 2006 | 10:54 am

    I never want the government in any of my business. Yes, eventually the trickle down will hurt the little guys. Most times when the government says it is doing something for your protection it is only using that as an excuse to have access to your confidential information.

    Glamour Lingerie & Bras

  77. February 5th, 2006 | 11:50 am

    Postage Due for Companies Sending E-Mail? Will AOL and Yahoo really be able to pull this off? I am simply stunned, does anyone know more about it?

    For those who haven’t read the article click here

    What is Your House Worth? | Free CMAS | Affordable Real Estate

  78. Jim
    February 6th, 2006 | 3:23 pm

    It was only a matter of time…

    Spy Surveillance Remote DVR – Providing professional grade covert/embedded surveillance DVR systems, CCTV cameras and Spy equipment.

  79. February 7th, 2006 | 4:21 pm

    The gov. get’s enough as it is! All this will do is discourage small business from doing anything out of state.

  80. February 18th, 2006 | 2:58 pm

    Just more of an issue for eCommerce entrepreneurs to be concerned with. Want to get your tax accountant to look dumbfounded scratching head?… just ask questions about taxation across state lines doing business on the internet. It’s definitely far from difinitive because some companies charge sales tax when they shouldn’t be. I don’t see them forwarding those taxes to the appropriate state, but they don’t hesitate to charge them.

    Robert

    Trapping Forum

  81. February 25th, 2006 | 11:09 pm

    It will start with 5 million but after a few years it will be everybody. That’s the way it goes with the government. Hopefully by then everybody will be online and we will be getting better ROI so it won’t be that big a deal. CheapsSeeds Wildflower Seeds

  82. Kelly
    March 1st, 2006 | 5:04 pm

    This subject completely pisses me off. Why in the hell should I pay an internet sales tax on an old used item some guy 5 miles away is selling to me. What is next???? – charging taxes at f*cking garage sales? charging for everything you put an add in the paper to sell? Why don’t you people who are in favor of it really start taking a look at EVERYTHING you pay taxes on. Add it up and you will be astonished at the state bloodsucking.

  83. March 1st, 2006 | 10:04 pm

    I knew that it was on it’s way. I hope it takes a couple more years.

    Massage Tables

  84. March 5th, 2006 | 2:13 pm

    This whole topic is a real mind bender. Especially with cross border sales. I reside in Canada, have my US vendor drop ship in the US and Canada (and occasionally overseas). I can’t imagine trying to track and figure out who would be owed what!

    Perfect Personal Passwords

  85. March 5th, 2006 | 2:18 pm

    Sorry – messed that up. Here’s where I am!…
    Perfect Personal Passwords

  86. March 20th, 2006 | 4:22 pm

    I’m just opening my Yahoo store and have been looking to find how other etailers handle the different state taxes. Am I correct from these comments, that most do not charge sales tax?

  87. March 24th, 2006 | 4:38 pm

    I think that if they try to collect sales tax from all the little guys they will spend more trying to collect it than they make. Of course that has never stopped them before.


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