Streamlined Sales Tax Update
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Nick Pyle
Apr 9, 2012, 1:46:26 PM4/9/12
to Numismatists United for Political Action (NUPA)
Before the Easter break I participated in 40 Hill meetings House and
Senate. While my efforts were unrelated to coins currency and
precious metals - it did seem as if the Hill was overrun by shopping
mall, strip center and store owners lobbying for state sales taxes on
internet sales. These real estate and shop owners carried a strong
message and claimed their survival dependent upon a level playing
field with online vendors. Congress was listening to the thought of
new revenue stream.
Background: During a House Judiciary Committee hearing last December
2011, executives from Amazon.com, eBay and Overstock.com were among
those testifying. Amazon, which has been fighting efforts by various
states to require it to collect and remit online sales taxes from its
customers, said that Congress needed to establish a nationwide system
for collecting the sales taxes.
“Far from an e-commerce ‘loophole,’ the constitutional limitation on
states’ authority to collect sales tax is at the core of our nation’s
founding principles,” said Paul Misener, vice president for global
public policy at Amazon. “For this reason, Amazon has steadfastly
opposed state attempts to require out-of-state sellers to collect
absent congressional authorization.”
Misener acknowledged that there should be some protections for small
online merchants, but noted that a large proportion of e-commerce is
conducted by small-volume sellers. “Nearly 30 percent of uncollected
sales tax revenue today is attributable to sellers with annual online
sales below $150,000, and only 1 percent of online sellers sell more
than this amount,” said Misener. “In other words, a $150,000 exception
would deny the states nearly 30 percent of the newly available (yet
already owed) revenue, but would exempt from collection 99 percent of
online sellers. Any higher threshold would deny the states even more
revenue and keep the playing field even more un-level.”
While Amazon has been fighting various state laws, it has backed a
pair of federal bills introduced in Congress this year, the Main
Street Fairness Act and the Marketplace Fairness Act, which both rely
upon the Streamlined Sales and Use Tax Agreement that is in use by 24
states.
On the other hand, its rival eBay has opposed both bills. Tod Cohen,
vice president and deputy general counsel at eBay, said that any
legislation would have to take into account small online retailers.
“You hear a lot about fairness in this debate,” he said. “Some have
claimed that a ‘level playing field’ means all retailers using the
Internet should be held to the same remote sales tax standard.
However, sameness is not fairness. Small businesses retailers face
many competitive disadvantages when compared to larger retailers. They
have proportionally higher costs of doing business, including
providing employee benefits.” He insisted that any legislation should
include a “Small Business Exemption.” “A real Small Business Exemption
would protect small retailers who are already falling behind,” said
Cohen. “Permanently protecting small business retailers from national
remote sales tax collection burdens will promote new retail
competition.”
Patrick Byrne, the outspoken chairman and CEO of Overstock.com,
opposes both pieces of legislation that have been introduced this
year. “In my opinion, the pending bills allow states to shirk their
responsibility to administer and collect the taxes they impose on the
taxable ‘end consumer,’” he said. “Instead, they pass that burden on
to non-resident, non-voting businesses. Passage of such legislation
would curtail the emergence of the next innovative e-commerce company
and poison the Internet’s fertile ground for growth and innovation.”
Dan Marshall, the owner of Marshall Music, a musical instrument
retailer based in Lansing, Mich., argued that small businesses face an
uneven playing field in competing with the large online retailers.
“Today, bricks-and-mortar stores like ours are becoming the showrooms
for online-only companies like Overstock, Amazon and eBay,” he said.
“Customers literally come into our stores every single day to play,
touch, look at, and evaluate higher-end musical equipment, only to
walk out of the store and go home to purchase the item from an online
retailer that does not collect the state sales tax at the point of
purchase. Retailers have always had the ability to match prices. For
the professional music equipment Marshall Music sells, our customers
are very sophisticated on price. Our sales associates are fully aware
of online prices and we are able to match those prices for customers.
Matching or beating the price of a competitor—regardless of whether it
is a bricks-and-mortar store or an online shop—is part of retail.
Always has been and always will be. But what I cannot do is tell the
customer that I do not have to charge them the state sales tax. In
fact, if I did that, I’d find myself audited, fined and potentially
thrown in jail.”
Senate. While my efforts were unrelated to coins currency and
precious metals - it did seem as if the Hill was overrun by shopping
mall, strip center and store owners lobbying for state sales taxes on
internet sales. These real estate and shop owners carried a strong
message and claimed their survival dependent upon a level playing
field with online vendors. Congress was listening to the thought of
new revenue stream.
Background: During a House Judiciary Committee hearing last December
2011, executives from Amazon.com, eBay and Overstock.com were among
those testifying. Amazon, which has been fighting efforts by various
states to require it to collect and remit online sales taxes from its
customers, said that Congress needed to establish a nationwide system
for collecting the sales taxes.
“Far from an e-commerce ‘loophole,’ the constitutional limitation on
states’ authority to collect sales tax is at the core of our nation’s
founding principles,” said Paul Misener, vice president for global
public policy at Amazon. “For this reason, Amazon has steadfastly
opposed state attempts to require out-of-state sellers to collect
absent congressional authorization.”
Misener acknowledged that there should be some protections for small
online merchants, but noted that a large proportion of e-commerce is
conducted by small-volume sellers. “Nearly 30 percent of uncollected
sales tax revenue today is attributable to sellers with annual online
sales below $150,000, and only 1 percent of online sellers sell more
than this amount,” said Misener. “In other words, a $150,000 exception
would deny the states nearly 30 percent of the newly available (yet
already owed) revenue, but would exempt from collection 99 percent of
online sellers. Any higher threshold would deny the states even more
revenue and keep the playing field even more un-level.”
While Amazon has been fighting various state laws, it has backed a
pair of federal bills introduced in Congress this year, the Main
Street Fairness Act and the Marketplace Fairness Act, which both rely
upon the Streamlined Sales and Use Tax Agreement that is in use by 24
states.
On the other hand, its rival eBay has opposed both bills. Tod Cohen,
vice president and deputy general counsel at eBay, said that any
legislation would have to take into account small online retailers.
“You hear a lot about fairness in this debate,” he said. “Some have
claimed that a ‘level playing field’ means all retailers using the
Internet should be held to the same remote sales tax standard.
However, sameness is not fairness. Small businesses retailers face
many competitive disadvantages when compared to larger retailers. They
have proportionally higher costs of doing business, including
providing employee benefits.” He insisted that any legislation should
include a “Small Business Exemption.” “A real Small Business Exemption
would protect small retailers who are already falling behind,” said
Cohen. “Permanently protecting small business retailers from national
remote sales tax collection burdens will promote new retail
competition.”
Patrick Byrne, the outspoken chairman and CEO of Overstock.com,
opposes both pieces of legislation that have been introduced this
year. “In my opinion, the pending bills allow states to shirk their
responsibility to administer and collect the taxes they impose on the
taxable ‘end consumer,’” he said. “Instead, they pass that burden on
to non-resident, non-voting businesses. Passage of such legislation
would curtail the emergence of the next innovative e-commerce company
and poison the Internet’s fertile ground for growth and innovation.”
Dan Marshall, the owner of Marshall Music, a musical instrument
retailer based in Lansing, Mich., argued that small businesses face an
uneven playing field in competing with the large online retailers.
“Today, bricks-and-mortar stores like ours are becoming the showrooms
for online-only companies like Overstock, Amazon and eBay,” he said.
“Customers literally come into our stores every single day to play,
touch, look at, and evaluate higher-end musical equipment, only to
walk out of the store and go home to purchase the item from an online
retailer that does not collect the state sales tax at the point of
purchase. Retailers have always had the ability to match prices. For
the professional music equipment Marshall Music sells, our customers
are very sophisticated on price. Our sales associates are fully aware
of online prices and we are able to match those prices for customers.
Matching or beating the price of a competitor—regardless of whether it
is a bricks-and-mortar store or an online shop—is part of retail.
Always has been and always will be. But what I cannot do is tell the
customer that I do not have to charge them the state sales tax. In
fact, if I did that, I’d find myself audited, fined and potentially
thrown in jail.”
CollVest Coins- Bob McDonald
Apr 9, 2012, 2:45:30 PM4/9/12
to coincollec...@googlegroups.com
My understanding is that if someone (physically) purchases an item out of
state where there is no sales tax or purchases an item on-line without
paying a sales tax, the buyer has a responsibility to notify it's respective
state of the purchase and forward the amount of sales tax otherwise due to
that state (eyes are rolling on this, I realize). Don't hold me to this but
I believe that is how the law(s) is currently written. Is there not a
different avenue of collection that a state can pursue to collect the sales
tax due from buyers? Could a state request who the out of state purchasers
are or some similar method?
state where there is no sales tax or purchases an item on-line without
paying a sales tax, the buyer has a responsibility to notify it's respective
state of the purchase and forward the amount of sales tax otherwise due to
that state (eyes are rolling on this, I realize). Don't hold me to this but
I believe that is how the law(s) is currently written. Is there not a
different avenue of collection that a state can pursue to collect the sales
tax due from buyers? Could a state request who the out of state purchasers
are or some similar method?
Bob McDonald
CollVest Coins, LLC
84 High Street
Suite 4
Medford, MA 02155
Office: 781-395-1011
Email: bo...@collvestcoins.com
Website: www.collvestcoins.com
Matching or beating the price of a competitor-regardless of whether it is a
bricks-and-mortar store or an online shop-is part of retail.
Nick Pyle
Apr 9, 2012, 2:58:59 PM4/9/12
to Numismatists United for Political Action (NUPA)
You are correct. In Virginia this is defined as a "use tax."
Our state version of the annual 1040 Income tax includes a line where
one is to disclose annual out of state purchases.
This became an issue once upon a time when the Virginia State Tax
officials got ahold of a certain North Carolina furniture retailers
sales and shipping records into Virginia.
Cheers Nick
Our state version of the annual 1040 Income tax includes a line where
one is to disclose annual out of state purchases.
This became an issue once upon a time when the Virginia State Tax
officials got ahold of a certain North Carolina furniture retailers
sales and shipping records into Virginia.
Cheers Nick
Harry Miller
Apr 9, 2012, 6:05:25 PM4/9/12
to coincollec...@googlegroups.com
Thnx for the update.
Regards
Harry
-----Original Message-----
From: coincollec...@googlegroups.com
[mailto:coincollec...@googlegroups.com] On Behalf Of Nick Pyle
Sent: Monday, April 09, 2012 1:46 PM
To: Numismatists United for Political Action (NUPA)
Subject: Streamlined Sales Tax Update
Matching or beating the price of a competitor-regardless of whether it is a
bricks-and-mortar store or an online shop-is part of retail.
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