National Internet Sales Tax

Discussion in 'Politics, Religion, Social Issues' started by senseless, Jul 18, 2011.

  1. senseless macrumors 68000


    Apr 23, 2008
    Pennsylvania, USA
    With Borders the latest chain to face liquidation, should we consider doing more to protect brick and mortar retailers? Is it fair that local stores have to add sales tax, while internet sellers do not?
  2. bruinsrme macrumors 603


    Oct 26, 2008
    Is it fair that NH retailers should face the burden to collect another states sales tax and send it to them.
    Case in point if I buy tires in NH, the Massachusetts Governor wants NH to collect taxes. Why should NH retailers obide to another state tax laws. I feel they shouldn't have to.

    I say no to out of state retailers having to charge tax, unless they have a b&M buildig in the state.
  3. Ugg macrumors 68000


    Apr 7, 2003
    There's absolutely no need for internet sellers to be subsidized by brick and mortar sellers. Amazon, has done a good job in creating and sustaining several business models. They don't need any more help.
  4. samiwas macrumors 68000

    Aug 26, 2006
    Atlanta, GA
    While I quite enjoy not having to pay sales tax online, I've never figured out why it is that way.

    If I buy from a retailer located in Florida, why do I not just pay Florida sales tax? If I drove to their warehouse in Florida and bought, I'd have to pay it....why is it different paying it online?

    This would alleviate the comment above about having to collect other states' sales tax. And I would think this would fix some of the revenue problems states are having. 20 years ago, this was much more it's the norm.
  5. Rodimus Prime macrumors G4

    Rodimus Prime

    Oct 9, 2006
    It high time that Internet companies like amazon should collect the local sales tax. States and local areas are being screwed out of money they rightfully are owed. The brick and mortar stores have trouble completing when amazon gets to give an added 8-10 off into of other sells.
  6. Merkava_4 macrumors 6502a

    Sep 4, 2010
    They can all go out of business as far as I'm concerned; I don't want to pay sales tax on online purchases.
  7. Rodimus Prime macrumors G4

    Rodimus Prime

    Oct 9, 2006
    So you would like your other taxes raised to help online stores? You should be paying those taxes any how.
  8. Pachang macrumors regular

    Dec 17, 2009

    Errr tell me what did they do to be "rightfully" owed this money. Pass a law saying they are owed it?

    Sounds like great justice to me.
  9. RWinOR macrumors 6502

    Sep 11, 2010
    Greenest and wettest place in North America
    Technically by law if you purchase something to be delivered to your home, you as the buyer are responsible to pay the sales tax to your local municipality. If you feel that bad about buying on line and not paying your fair share of sales tax, just go to you government offices and pony up the funds. Then everyone wins.

    Most people do not do this, they are unaware it is their responsibility, plus they like saving a few bucks.

    It will be nearly impossible to enforce a sales tax on internet sales, with so many retailers being outside the country.
  10. 0007776 Suspended


    Jul 11, 2006
    I don't see any way that this could be effectively enforced. Yeah it would be helpful for areas to get the sales tax owed them, but I don't think it's practical to enforce.
  11. GoCubsGo macrumors Nehalem


    Feb 19, 2005
    Where are you getting your data? If you blanket your statement with "internet sellers" then you're implying it is all internet sellers. I for one pay tax for a number of purchases made online. While living in CA I was always faced with tax. Now in another state, Amazon is the only online retailer who doesn't collect tax from me when I check out.

    But to your question, Borders did not go out of business solely (if at all) because of taxes. Digital media probably had a major hand in killing them off. Do I think a law should enforce online retailers to charge tax? Aren't you already responsible for paying taxes on internet purchases whether the retailer charges you or not?
  12. iJohnHenry, Jul 19, 2011
    Last edited: Jul 19, 2011

    iJohnHenry macrumors P6


    Mar 22, 2008
    On tenterhooks
    If New Hampshire has a reciprocity tax agreement with Massachusetts, they are obligated to do that very thing.
  13. Rodimus Prime macrumors G4

    Rodimus Prime

    Oct 9, 2006
    Only if it is shipped from over seas otherwise they are going to have to have a US location. Shipping from outside the country would eat up any savings and then some plus add a lot of time to shipping, and dealing with customs. This means very enforceable.
    The only argument I have seen about people not wanting this is they do not want to pay sales tax.
  14. mcrain macrumors 68000


    Feb 8, 2002
    If you have a sales tax in your state, you probably also have a use tax. If an online retailer does not collect and remit the sales tax from you, you have an obligation to report and pay the use tax. If you do not, and the state collects purchaser information from the internet seller or you get audited, then you will be responsible for the tax plus penalties and interest. In addition, if you willfully failed to pay, you could be criminally prosecuted.

    Having the internet company collect and remit the tax is a lot easier, faster and avoids the risks associated with non-compliance.
  15. stonyc macrumors 65816


    Feb 15, 2005
    Agreed. Where is your proof OP, that Borders went out of business because other companies did not collect taxes on internet purchases?

    I wouldn't even have so much of a bone to pick with your original point if you had even said that part of the reason they went out of business is because other online entities did not collect sales tax... but you didn't. I need only to point at Barnes and Noble, while they are not exactly thriving, they are much more competitive with Amazon than Borders ever was. Why is that?

    Jessica named a big one: digital media. Amazon has the Kindle. Barnes and Noble quickly recognized the digital media evolution and hopped on board with the Nook. Borders?

    I think competitive pricing was another area in which they could have done better. I don't mind supporting brick and mortar stores over online distributors, even at higher prices, because the opportunity is there to help local businesses. But when the same book at Borders is $20 more than what can be found on Amazon, even with shipping, there's a problem. Textbooks are even more disparate.

    You could also make the argument that Borders expanded too quickly, or expanded in the wrong areas... Cold Stone Creamery is a great example of franchise over-saturation. I don't know how big a factor this was to Borders' downfall, but I have to think it played a part.

    I think there were a multitude of factors that led to Borders' collapse... and believe me, I'm just as saddened by their collapse as the next person because I live in Michigan... but to say that they went out of business solely because online companies did not have to collect sales tax is an assertion not based in fact.
  16. mkrishnan Moderator emeritus


    Jan 9, 2004
    Grand Rapids, MI, USA
    AFAIK, it's an interstate commerce thing. If you drive to Florida and buy something in Florida, you're not conducting interstate commerce, because you're taking possession in the state of sale. You deal with FL up front and then you're responsible for anything your own state obligates you to (technically, in many states, if you drive to another state and buy something and bring it back, you may be liable for use tax).

    I don't think states are able currently to tax sales that are made to out-of-state destinations. I don't think this is unique in any way to the internet -- it was a much smaller but still existing issue in the day of catalog sales.

    I agree with you though -- I think the simplest and most equitable solution would be to force all business to collect their own state's sales tax for all sales (at least domestically). It poses far less burden on the business, and if they don't like it, they can pressure their state to lower sales tax or relocate. However, my understanding is that the current interpretation of the Commerce Clause prohibits that, and states might need explicit federal authorization to do this.
  17. SVT Amateur macrumors 6502

    Dec 22, 2006
    Tyler, Texas
    I think the closing of Borders has more to do with the decline of their business model than the loss of sales due to increased costs associated with sales tax. I haven't been to a Borders lately but I have been to Barnes & Noble and I can usually find a book online on Amazon cheaper than I can at Barnes & Noble, and that is before sales tax is figured in.

    I personally see Barnes & Noble going under as well, at least in their retail locations. I remember 15 years ago Barnes & Noble stores were the place to hang out, read some books, and usually on weekend nights they had to staff many cashiers to deal with the lines. These days when I go in the store feels like a ghost town.

    I think part of it has to do with the internet age in which almost all online goods are cheaper. But if Borders is anything like Barnes & Noble it seems the customer service that used to be awesome has gone way downhill. I remember Barnes & Noble stores having many different places to sit and read - and while you would have people in there that would never pay for a book - I guarantee you they made a lot of sales from people picking up a book and then not being able to put it down so they end up buying it - I know did.

    Now I go into these bookstores and not only are almost all the seats gone but the staff just seems less friendly. Case in point, I visited a Barnes & Noble recently and tried to find a certain book which they didn't have in stock. I had my iPad with me so I bought it on their online store and was reading it using their app on my iPad. There weren't any seats to sit down and read so I found a quiet corner where no one was. Even though this was the middle of a work day and no one else had walked by one of the staff came up to me and said they don't allow sitting on the floor anymore. I decided to leave.

    I just don't see how this company will end up making it in the retail world for many more years. I honestly think that in 10 years most Barnes & Noble retail locations will be closed, just like Blockbusters are now and Borders will be in September, and that it has really nothing to do with the lack of an internet sales tax and instead mostly to do with a dying business model.
  18. rdowns macrumors Penryn


    Jul 11, 2003
    I think your whole premise is faulty.

    Border's is going out of business because they made serious errors in running their business. Off the top of my head, they screwed up in basically outsourcing their online sales to Amazon and were very late to the ebook market. I bet many didn't even know they had an ebook offering. Having to charge sales tax was certainly not a major factor.
  19. hulugu macrumors 68000


    Aug 13, 2003
    quae tangit perit Trump
    Well, Amazon avoids charging sales tax because it claims it doesn't have a presence in each state, but this isn't really true—which is why California changed the law on affiliates.

    Amazon gets a competitive advantage over stores like Borders by skirting the law, but organizes things such that they don't pay taxes in any state, whether that be California, where the Kindle is designed, or in any of the states were they maintain a huge warehouse system.

    Well, Amazon was able to offer dramatically lower prices because they didn't have to pay taxes—not to mention the costs of B&M locations. So that encouraged people to buy from Amazon and not from Borders.

    I agree. The initial deal with Amazon should have been a backstop and Borders made a huge mistake by failing to demand some kind of affiliate deal. Every dollar made by Amazon through was Amazon's.

    As for digital sales, I don't think this mattered as much as people think. Borders was bleeding cash before the Kindle came out, mostly because of high debt and poor management decisions. Digital was the final catastrophic shot to the head of a mortally wounded company.

    Borders failed because, in no particular order:
    1. It succeeded it's online prescence to Amazon
    2. It 'corporatized' its stores and rejected local authors and events
    3. It punted on poor implementation, confusing layouts, and poor uptime.
    4. The company failed to manage its debt
    5. The company dwaddled on bankruptcy.
    6. A revolving door of CEOs gave golden parachutes to several men who utterly failed to help the company, but yet managed to get fat checks at the expense of investment and employees.
    7. Borders failed to deal reliably with publishers, losing credibility with the people they needed most.
    8. Poor decisions by management to sell the most profitable chunks of the company for fast cash.
    9. A lack of innovation.
    10. Partnerships with equally losing companies, like the terrible Kobo and Sony.
    11. Once Borders discovered eReaders, they pushed cheap and poorly made Android devices rather than the more profitable Borders app for iOS.

    The business model of selling books has shrunk and will not be able to support the large stores. However, I think niche based local stores will still endure for a while. The current eBook market is a mess and people still like books, especially those that do not translate to the eBook market, art and photography books for example.

    This will change, but the days of B&N and Borders are gone.
  20. mkrishnan Moderator emeritus


    Jan 9, 2004
    Grand Rapids, MI, USA

    I think both can be true -- Amazon does get a competitive advantage over local stores or online arms of retailers that have physical presences in all fifty states. On the other hand, that's clearly not the only reason Borders went under, and it's likely they would have gone under even if Amazon were paying sales tax.
  21. RWinOR macrumors 6502

    Sep 11, 2010
    Greenest and wettest place in North America
    I think companies like Amazon have a competitive edge on price over any brick and mortar store. The overhead is much different. I shop at Amazon because I can get what I want for a fraction of the cost of the local retailer.

    Here in Oregon there is no Sales tax it does not even play into it. If Brick and Mortar stores want to compete they need to up the service, people will pay for great customer service. But if service is piss poor, and the price is high, then they are on borrowed time. Borders clock ran out.
  22. mkrishnan Moderator emeritus


    Jan 9, 2004
    Grand Rapids, MI, USA
    Walmart is probably an exception....
  23. Queen of Spades macrumors 68030

    Queen of Spades

    May 9, 2008
    The Iron Throne
    Ah, Borders...the only place in the world I've ever seen regular DVDs priced at $29.99 and $39.99 a pop.
  24. Liquorpuki macrumors 68020


    Jun 18, 2009
    City of Angels
    Maybe if Best Buy got the Dish Network guy to stop stalking me around the store while I'm shopping, I'd actually go back

    I'm kidding
  25. hulugu macrumors 68000


    Aug 13, 2003
    quae tangit perit Trump
    Borders was never able to react quickly to changes in the market, so as the prices of DVDs dropped and CD sales precipitously declined, Borders was left holding contracts to the media companies.

    In nearly every shift in the market, Borders had the reflexes of a drunk.

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