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| Authored by: Anonymous on Wednesday, August 15 2012 @ 08:28 PM EDT |
Here is the core of the issue.
Most states have use tax laws where if you buy a product out of state and don't
pay sales tax in the state where the product was purchased you are supposed to
pay a use tax that is equal to the sales tax you would have paid had you made
your purchase in-state.
The problem is most states that have use taxe, the law is set up in a way that
is generally unenforcable. For example: in Wisconsin where I live, you are
supposed report your out of state purchases on which out of state sales tax was
not paid on your state income tax form and pay the use tax with your income
taxes.
Do you see the flaw yet?
It is totally dependent on self reporting. The state has no practical way to
know if you bought something out of state and even if they had that information,
proving you didn't pay taxes in the state of purchase would be next to
impossible.
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.
The polititians look at all the commerce going on on-line and at the use tax
laws and think that the internet is costing them revenue.
The truth is it's not the internet costing them revenue, it's an ineffective law
that is costing them the revenue.
They want all on-line retailers to have to collect sales taxes because they
can't think of any cost effective way to enforce the use tax laws. If there was
a cost effective way to enforce these laws, the whole internet sales tax issue
would be moot.[ Reply to This | Parent | # ]
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| Authored by: Anonymous on Wednesday, August 15 2012 @ 08:31 PM EDT |
| The issue of location for Internet-based transactions has been already stretched
by prosecutors in online gambling and pornography cases, such that the case may
be brought where the server is, where the user is, where the money goes, or
wherever any tenuous connection through a long-arm statute may be claimed. The
"common carrier" basis for National Bellas Hess v. Department of Revenue has been eclipsed
by revenue concerns. --DonW [ Reply to This | Parent | # ]
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| Authored by: Anonymous on Thursday, August 16 2012 @ 07:37 PM EDT |
With my head in patent space I read that headline as saying Texas not Taxes. My
immediate thought was that if this went through then the likes of Lodsys
wouldn't even have to rent an empty office.[ Reply to This | Parent | # ]
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