View Full Version : Example why we should avoid taxing online sales
tailfins
01-02-2015, 09:43 AM
www.nytimes.com/2015/01/02/business/international/digital-tax-increase-to-take-effect-in-europe.html (http://www.nytimes.com/2015/01/02/business/international/digital-tax-increase-to-take-effect-in-europe.html)
It's interesting how leftie "tax reform" generally has the average citizen paying more.
Tax experts say Europe’s revamped rules could add up to an extra $1 billion in annual tax revenue for European governments.
At least this will give other countries "a level playing field".
Many of the world’s largest tech companies selling digital products, like Amazon and Microsoft, now house their European digital businesses in Luxembourg, where the V.A.T. rate is as low as 3 percent for e-book purchases. In contrast, countries like Britain charge companies a 20 percent sales tax for selling e-books.
Jean-Claude Juncker, Luxembourg’s former prime minister, who now runs the executive arm of the European Union responsible for the continuing investigations, has been criticized for his role in promoting the country’s low-tax policies.
fj1200
01-02-2015, 11:02 AM
www.nytimes.com/2015/01/02/business/international/digital-tax-increase-to-take-effect-in-europe.html (http://www.nytimes.com/2015/01/02/business/international/digital-tax-increase-to-take-effect-in-europe.html)
It's interesting how leftie "tax reform" generally has the average citizen paying more.
At least this will give other countries "a level playing field".
Almost nothing the Euros do with taxes is a good thing, see the VAT as example, but consumers already pay the tax, the question is which tax rate should they pay.
Under the new rules, first approved in 2008, the tax rate on digital services like cloud storage and movie streaming will be determined by where consumers live, and not where the company selling the product has its European headquarters. Tax experts say Europe’s revamped rules could add up to an extra $1 billion in annual tax revenue for European governments.
I won't lose sleep over this. I just noticed though that my Netflix bill is broken into streaming and DVD, the DVD portion is taxed where the streaming is not. Interesting.
Old ridge Runner
01-03-2015, 03:45 PM
This could be solved easily. Have the business collect the tax for the state they are in, if the buyer is out of state, the buyer's state is SOL. An example of this is: Here where I live we have an REI distribution warehouse that you can order from. If someone from Maryland ordered from this warehouse they would pay the Pennsylvania sales tax (which benefits Pennsylvania) but Maryland is SOL. This way the on-line store only has one state tax structure to deal with instead of 50. it's fair to the business and it is fair to the states.
fj1200
01-03-2015, 04:06 PM
^That is essentially what the Euros do... though they're looking to change. The legislation I've seen that looks to overturn SCOTUS allows a sales threshold before requiring business to report to the individual states. My guess is requiring businesses to pay local sales tax is a pretty simple fix with a few lines of code but I think tailfins would know.
tailfins
01-03-2015, 04:31 PM
^That is essentially what the Euros do... though they're looking to change. The legislation I've seen that looks to overturn SCOTUS allows a sales threshold before requiring business to report to the individual states. My guess is requiring businesses to pay local sales tax is a pretty simple fix with a few lines of code but I think tailfins would know.
It is mechanically simple. Insurance rating is a couple of dimensions more complex than any sales tax setup. I do like Ridge Runner's idea for this reason: It creates incentive to LOWER taxes. We start with an incentive to locate in one of the below states since ALL their sales nationwide would be tax-free:
* These has other taxes on merchandise sales
Alaska *
Delaware *
Tax-free states
Montana
New Hampshire
Oregon
http://taxes.about.com/od/statetaxes/a/States-Without-A-Sales-Tax.htm
Other states would have an incentive to lower their sales tax to do as you like to say "level the playing field".
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