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MichaeltheGreat
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Apolyton Grand Executioner
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mooning the house that Ruth built.
Oct 1999 time: 21:31
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quote: Originally posted by chegitz guevara
Why shouldn't transactions over the internet be taxed? |
Hope you're not looking for any jobs related to e-commerce. 
The tax collection of sales taxes is by forcing sellers to become agents for the taxing authorities in their states.
With a physical storefront in California, I generally don't have to worry about becoming an unpaid, involuntary tax collector for more than the California State Board of Equalization. Other states can "require" me to collect taxes for them if I sell to citizens in that other state, but they can only enforce that requirement if I meet jurisdictional requirements. Merely receiving mail or shipping an item to that other state doesn't create personal jurisdiction over me.
With an internet storefront, I can be deemed to be advertising and carrying out commerce in every state, and thus be forced to become an unpaid involuntary tax collector for every state that has a sales tax. And for those counties which have supplemental sales taxes. If California decides anything I sell from my California storefront, whether online or not, is subject to California sales tax unless my buyer has a valid seller's permit for that class of item, they can do that. As Vermont can tax anything I sell virtually there, even if my buyer is also forced to pay California sales taxes.
There are no set rules on jurisdiction over internet activities, and there is no bar, except a practical one, on multiple states imposing multiple sales taxes on the same item, depending on where it's sold and the residence of the buyer.
It creates a potential huge competitive disadvantage for internet businesses that deal in tangible goods, and no particular state has any incentive to stop it - if they kill some businesses in their state, but collect taxes from businesses in every state, why not? And if they create an obstacle to their citizens buying items online, well then, they'll just have to go to their local retailer, and who cares if they pay more, we'll still get our taxes, and our state chamber of commerce will be grateful and donate to our election campaigns.
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