Internet Sales Tax

Ray

Ray

Dealer - Purveyor
Both political parties seem to be in favor of an internet sales tax to level the field between on-line and 'brick and mortar' stores and to raise revenues. Possibly as much as 11%. I think that'll pretty much take my site off of the internet. I likely have only a few years of knife making left, but don't know how the younger guys will weather this.
 
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Death and taxes was the saying. I think it has changed to death by taxes. I dont mind collecting sales tax for state and local. The tax that gripes me the most are the taxes the county want for my equipment. Heck, that junk has had more taxes paid on it in the past than it is worth on the market now!
 
I'm pretty young still, and the taxes and fees are very eye opening when you realize how much money is being siphoned off of production industries like ours. Everything considered the tax rate I am looking at is just short of 40 percent, and although I can claim expenses to help some, tacking on another 11% to that will mean half of my sales are mine, and half are...the governments. Fifty percent.
 
So, is this a State Tax or Federal? What idiot politician is going to impose a sales tax on it's own people (voters) That the Chinese and other outsiders won't have to pay?

Sounds like someone trying to fix something that's not broken. A business model with reduced overhhead should not be penalized. Sounds like communism to me.
 
I never understood the motivation for this, the law already says you have to pay sales tax even if you buy online, the seller just isn't collecting it and you are responsible for paying it yourself, usually while filing your taxes. You declare your out of state purchases that weren't taxed and your taxes are adjusted accordingly. The problem is that the states don't all have the same kind of sales taxes and can't all agree on how to handle it.

I expect we'll see some sort of setup where the states tighten the auditing for this kind of thing. If they put in a federal tax it would never pass unless it excluded in state transactions that are paying taxes unless the federal government got the states to drop the taxes on online purchases that are in state. Then they'd have to agree on a tax RATE, or maybe set of rates since they rarely tax things like food at the same rate as luxury goods. It starts getting very difficult to actually make it work and get enough of the states to agree and this is the kind of thing were there federal government would have a hard time forcing the states to comply. The state tax structure is not determined at the federal level, so the fact that the congressmen and women came to an agreement doesn't mean each state's own government will.

If they just add an additional tax of any significant size to online purchases I think they'd just be shooting themselves in the foot in terms of revenue. More and more people would do transactions in a way that lets them avoid paying taxes at all, those who are honest will still change spending habits to some extent and many small businesses would fold. An additional 10% for an online purchase, on top of the taxes already being paid (particularly if the buyer is honest and pays their state tax on the purchase) would be a real hard smack on the economy in this country. You can't tax your way out of a depression.
 
any discussion around taxes gets heated fairly quickly so I anticipate I will have to lock this thread at some point but if we can keep name calling out of it, i will keep it open.

I have a pretty big stake in this so I have been following it closer than most politics (which I never follow). It is my understanding that states are currently trying to collect taxes for any sales done in their state where a business has affiliates or some type of physical presence. Several states want to tax every sale "made in their state" whether it is from a physical store front or virtual. The Supreme Court ruled states can not collect taxes on a sale if the seller does not have a physical presence in that state. This is a not a new argument but it seems to be gaining steam as states look for more revenue sources. It makes for a great sound bite for politicians as they spin it to make it look like they are fighting for the little guy. The truth is the biggest supporters for this is big business that already have a physical presence in most states. This makes them more price competitive by "raising" the price an eCommerce businesses charges.

The politicians argue it isn't fair to the local downtown business. This is more than a bit silly. The local downtown business doesn't pay the sales tax. The local resident making the purchase pays it. Businesses pass on sales taxes by law. There are a few customers that will buy an item online to avoid a sales tax certainly but that sale was probably already lost to begin with. When a politician spins the argument they are only trying to help the little guy, they aren't being honest. They are trying to raise additional revenue from their own constituents. This is a political money grab pure and simple. They make the out of state business look like they aren't paying any taxes. I should show them my state of Minnesota (land of 10,000 taxes) state tax bill some time. The eCommerce company pays taxes I assure you.

If you want to pay more taxes (and some do) support the politician pushing to tax all sales. The big chains will benefit, the little guy on main street won't get anything for it and every resident will end up paying more into the state for simply making a purchase. The number of small businesses on the internet dwarf the big businesses. Asking them to manage tax collections on 50 states (don't forget most cities charge a sales tax also) will force many to close as they simply can not afford to pay someone to manage those collections and paperwork. This maybe one of the biggest job killers I have seen in some time.

If a knife maker sells 20 knives a year each to a different state resident, how does he collect and pay those taxes? Did he help save a "little downtown merchant"? Hardly. Does it push knife makers out of the business? With out a doubt it will push many out. I understand knife making and selling in most cases is a cash business and "what the IRS doesn't know doesn't hurt anybody" is simply asking for trouble. Life is too short to have that hanging over you.

I could go on but now I'm getting worked up and we don't need that.

Again, if we can keep this thread free from name calling and political party call outs, I'll keep it open other wise it will get locked down due to our "no drama" policy. There are strong opinions about government and we are knife forum - period.
 
One of the difficult parts of actually being in the "business" of making knives and trying to make a living at it is that, like any other business, it comes with rules and regulations that actually make us work against ourselves and work for someone else. It is a fact of life.

Most makers I know are independent, some are anti-government and nearly all have a wee bit of a rebellious streak in them.
I am one of those with more than a wee-bit of rebellious streak.

I've learned over the years that being forced to work for someone else generally takes the fun out of what you're doing.
In response to this, I've adjusted my attitude so that I pick and choose what situations I'm willing to put myself into.
There are things in this business I just won't do any more.
That's because those things bring out the worst in me and take away from the best.

So when faced with these kinds of issues, try and ask yourself what you really want out of knifemaking, what you do no want to put up with, and then YOU CHOOSE to put yourself in whatever situation suits you best.

If you are stuck collecting taxes, and it's worth it to you so you can get other things that you want..............so be it.

Stay true to yourself and your core beliefs.
Politics and politicians being what they are.......................good people who stick to their guns and do what is right will win out in the end.
Choose your own path, stick to it, vote on election days and remember that there are too many good people out there for any government, business or other entity to really hurt us.

At some point you may have to stand up and fight for what is right.
You can't do that if the ground you are standing on is shaky.
CHOOSE your OWN ground, and be true to it.
If you do that, none of the rest of this will matter.

IMHO

t
 
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