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| Authored by: Wol on Thursday, August 16 2012 @ 05:53 AM EDT |
Do use taxes the way we do VAT in Europe. We used to have exactly the same
problem with sales tax but VAT fixes that.
EVERY vendor (even B2B) must charge VAT - at the local rate - on all intra-EU
sales. There is an exception - if a registered business in one country trades
with a registered business in another country they can trade at zero-rate.
Each business then files a VAT return which says "we made sales of £x with
a VAT income of £y, we bought supplies of £a which included £b vat, here's a
cheque for £y - £b".
Then there's a little bit of reporting on interstate commerce to clean things
up.
I know it's tricky, but I'm sure Washington could use the interstate trade
clause to provide a framework like VAT ... :-)
Cheers,
Sol[ Reply to This | Parent | # ]
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| Authored by: joef on Thursday, August 16 2012 @ 11:30 AM EDT |
Another side of the issue is that of fairness. The one caught in the crossfire
is the local merchant, who must pay the sales tax, and who is at a significant
disadvantage to the web merchant who does not.
Perhaps what is needed is an internet-based clearinghouse service that would
provide the tax information needed to determine the correct tax, perhaps based
on the 9-digit zip code of the shipping address. It would be up to the taxing
authority to ensure the data is current and accurate, and the responsibility of
the merchant to actually consult the clearinghouse. It should be as
straightforward as handling a credit card payment.
And the clearinghouse could handle filing the tax returns to all the
participating agencies and making the payments to them, while the seller would
make a single payment to the clearinghouse. The clearinghouse would take a
small portion of the money flowing through to cover its costs.
I can imagine that a "big data" operation like Google would have no
trouble handling such an operation, and there should be good competition for
obtaining a contract for operating such a clearinghouse. If the international
financial clearinghouses can process hundreds of trillions of dollars in
transfers per year, this is certainly doable.
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| Authored by: rocky on Thursday, August 16 2012 @ 12:25 PM EDT |
The barriers to the state being able to make a case for failure to
pay use tax is so high that there is effectively no downside to not reporting,
so no one does.
I take exception to the "no one does" part.
That is akin to the argument that it is very unlikely that you will get caught
from illegally downloading music or movies, so no one pays to download or stream
those things. That's obviously not so--why? How about the very fact that not
reporting and paying that sales tax is committing tax fraud, and some people
don't want to be criminals committing tax fraud? Even if it's hard for the
government to find out, some people ethically don't want to be in that position.
For ourselves, we just tag all of our online purchases with a category in
Quicken and then at the end of the year run a report to show the total and fill
it in on the state 1040 form. I know the point you were trying to make, that
most people don't do it, but I hate seeing it oversimplified into an absolute,
that "no one" complies with the law. [ Reply to This | Parent | # ]
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