WASHINGTON — The Senate sided with traditional retailers and financially strapped state and local governments Monday by passing a bill that would widely subject online shopping — for many a largely tax-free frontier — to state sales taxes.
The Senate passed the bill by a vote of 69 to 27, getting support from Republicans and Democrats alike. But opposition from some conservatives who view it as a tax increase will make it a tougher sell in the House. President Barack Obama has conveyed his support for the measure.
Under current law, states can only require retailers to collect sales taxes if the store has a physical presence in the state.
That means big retailers with stores all over the country like Wal-Mart, Best Buy and Target collect sales taxes when they sell goods over the Internet. But online retailers like eBay and Amazon don’t have to collect sales taxes, except in states where they have offices or distribution centers.
As a result, many online sales are tax-free, giving Internet retailers an advantage over brick-and-mortar stores.
Interesting. Virginia legislators passed a law last year that makes Amazon purchases subject to sales tax starting September 2013. Yet, those lying dogs have the gall to chest thump and brag that they have continued to vote for no tax increase.
I will be buying less from Amazon once that tax goes through. I don’t know why local retailers feel they have any ownership of my purse-strings. Why would a conservative government vote to help out the local retailers? Where is that good old laissez faire attitude that conservatives love to brag about?
How did our local legilsators vote on the Amazon tax situation? They had better not dare say they haven’t raised taxes. They are are raising them on me.
Actually, the interesting part here is that Amazon itself is lobbying heavily for the tax, and EBay is lobbying against it.
I don’t know why. I do know that Virginia cut some sort of deal with them. In other words, why do they care if they screw us? (both VA and Amazon)
The best deal in town is amazon prime. Now they have products as add ons to cut down on their mail expenses.
Maybe states could change tax laws on necessities. Paying tax on items you choose to buy is one thing.
Why should you pay taxes on things not bought locally? Why should Virginia get to tax me even more than it already does? If they want to add that tax, then those who vote for it are going to have to bite the bullet and admit that they voted to increase taxes.
If the county adds a new permit that people have to get for home improvement, then they have added a tax, regardless of what it is called. Its just sneakier.
@Moon-howler
Those a$$hole House Republicans just may save your bacon here moon
@Moon-howler
Hey, Moon, has Grover Norquist gotten to you??? :>)
I sure hope not. I have been fairly pissed off over knowing that soon I would be paying taxes on Amazon purchases. Now the feds have codified this highway robbery, I am even more pissed.
I just don’t think that politicians should be going around bragging that they havent raised taxes when in reality, they have.
The Amazon tax bill was introduced by Senator Frank Wagner (R).
Not to hang it all on the Republicans but the bill passed overhelmingly in both houses.
Obviously none of our lawmakers minded throwing us under the bus in favor of their ‘brick and mortar’ business folks who are probably contributing heavily to their campaigns.
The “brick and mortar” retailers have been whining about internet sales for years. There IS a solution. Have internet sales in addition to retail stores.
BOTH PARTIES SUPPORTED THE AMAZON TAX BILL.
I think Amazon charges tax in states where they have distribution centers. They would be able to expand distribution centers. They would still be competitive against those large sellers that use eBay as a vehicle if those large sellers had to pay tax.
But this is business. Business is good for US. Democrats are anti business. Business is what will save us from Obama. Small business is the root off our society. Oops, this is BIG business….BIG difference. The increase of BIG business profit vs wage increases is about 90degrees.
Lyssa, I find myself in agreement with you. Philosophically, I am more on the anti-tax side of center, but I understand that taxes are necessary in order to fund the core services that are legitimate responsibilities of government (Public safety, roads, schools, public property, utilities and infrastructure). In this light, I have always favored consumption taxes over income taxes, and I do believe that certain items should not be taxed, like groceries and basic clothing, utilites, and basic phone services (ie land-lines, and if no land-line is available, the first cellphone line.)
I am an Amazon fan, and this company has grown quite a bit from its start as a place to buy books, CD’s and movies online. Yes, Amazon is a big company, but it is a channel for hundreds, perhaps thousands of small, medium and large companies too. Some orders are fulfilled directly from Amazon. Some orders are fulfilled directly by the manufacturer or distributor. Some items allow you to choose from multiple vendors, and fulfilment is done by the vendor you choose. Amazon gets a cut, I am sure, but this is compensation for the exposure and world-wide reach these smaller companies have by using Amazon as their virtual storefront.
I stupidly forgot about all those small companies that often mail out without charging you for postage. Some do, some don’t.
If eBay is responsible for collecting the state sales tax instead of having the responsibility fall on individual sellers, eBay had better make that tax info available to buyers/bidders because an item with a similar starting price will cost more if bought from a NY seller than from one in Delaware and the buyer should be aware upfront about the difference in the final cost.
I don’t know where Ebay fits into all this.
I’m not sure I like this idea.
It sounds like it promotes “fair play”, but actually is going to exempt smaller online businesses, and just hit the big ones. Presumably it’s a prelude to entertainment taxes down the road where we’ll have to pay to watch streaming video (and maybe someday youtube videos) the way we pay surcharges each month for get cable TV.
My problem with taxing the Amazons and Googles is that THEY ARE BUILDING THE NEW WORLD. They are building things that aren’t envisioned by governments – Google’s search capability is I think the 8th wonder of the world, something that couldn’t have been imagined 20 years ago (a million computer servers working in concert to process huge amounts of information within seconds). These companies’ innovations are, as much as our weapons development, keeping us in a position of prominance even while we surrender ouir abilities to make physical things (manufacturing).
And I wonder if taxing them is a good idea.
Very interesting points, Rick. I hadn’t even thought of that angle before.
Of course the counter argument is simple – we spend immensely more than we take in, and somebody has to pay more taxes.
So then those people who voted for the Amazon Tax Bill will have to admit that they raised taxes. It was most of the state senators and delegates from both parties.
They will all be up lying and denying that they raised taxes very soon.
Amazon’s public face is their product purchases and shipping, but their web/cloud services are their big area of development right now. Increasingly, people who need to provide software and data storage are doing it on shared servers hosted by Amazon (or someone else), rather than buying their own dedicated hardware. This promotes fuller use of computing resources – it’s more cost-effective, and better for the environment, to more fully use existing computer resources rather than everyone buying their own and using it at low capacity/throughput. This is fueling the enormous growth in the data people spray around onto the internet and their constant access of data from devices. Is taxing Amazon smart, or would letting them grow unchecked be smarter?
On the one hand we have government contractors running our military and government’s efforts, full of overpaid workers who learn to fit into a niche and collect large salaries at taxpayers’ expense. The government agencies are generally ineffective and squander billions, but are “too big to fail” so the same managers keep mismanaging their efforts and rising to the level of their ineptitude.
On the other hand, companies like Amazon and Google who are lean and mean and building the new reality.
I’d rather “sequester” the government another 1/2 percent, than to start taxing internet business.
Make that emphasis on mean. They really are lean and mean.
Let’s also not forget about the govt contractors who are doing a great deal of the war effort in the middle east for us also.
This is a state’s right – you are supposed to pay these sales taxes anyway – how does the state prefer to collect – from the vendor, where it may get the majority of taxes owed – or through your state tax return, where most of the taxes are not paid currently. It is just a different form of collection.
@Pat
Are you speaking of the honor system? We are supposed to start paying amazon 9/1/13. Right now, the State has a deal with Amazon.
Yes, consumption tax is right. I think it gives you a choice. I am a major Amazon customer – since about ’96. Kindle to Christmas gifts across the US – what do you understand about their tracking practices? I decided not to think about them tracking me so well….. The book reviews are dead on.
I’m just concerned about the huge gap between big business profit and wages.
Just think about the total cost of every internet sales business that now has to maintain tax collections for all 57 (sorry 50) states. Each state will also have to put in place a mechanism to collect and verify the internet taxes. Now comes the paper trail where the feds ask if you made any purchases out of state. And on and on! At the end of the day how much increase in net revenue will be raised?