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back to article E-taxes aren't really stuffing Uncle Sam's pockets enough

Some US states have started collecting the first tranche of internet sales taxes, but it's a lot less than studies were anticipating. A number of states fought to get a sales tax on internet commerce, saying that the advantages enjoyed by etailers like Amazon not paying the man over bricks-and-mortars shops was unfair. Of course …

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Silver badge
Facepalm

Until unemployment reaches 6.5% or his version of inflation exceeds 2.5%!!!

> Of course, the fact that federal coffers have been a bit light since the global economic recession

What? What do you mean? The treasury is issuing bonds like crazy to the Federal Reserve and receives ~50 billion USD per month (either as a container of paper with pictures of dead white males or as an XML datablock, not sure) for the privilege.

I don't call that "light".

At all.

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Anonymous Coward

Re: Until unemployment reaches 6.5% or his version of inflation exceeds 2.5%!!!

Issuing bonds like crazy fills the coffers in the same way as credit cards fills your wallet. Also I wonder how much of those bonds goes towards paying the interest on previous bonds.

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Silver badge
Devil

Re: Until unemployment reaches 6.5% or his version of inflation exceeds 2.5%!!!

At least credit cards give you honest-to-god credit, not obfuscated wealth transfer from the taxpayer to your best cronies.

AFAIK interest on bonds held by the Fed must by law be paid back to the treasury after deductions for the cleaning lady.

It's an interesting masturbatory exercise.

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WTF?

US Sales Tax - you think EU VAT is tricky?

I'm UK based but have been working with various US online shops for years and their approach varies - some are going full-on with it, some hardly care, most are in between.

For those that do, it can be a world of pain:

- overall tax rate = city tax + state tax + federal tax (I think!)

- some zip codes span two cities, so you can't even tax purely by zip code

- in around half the states, shipping should not be taxed

- there are companies providing overall tax rates based on zip and city

- the list of records for every combination of zip and city for US + Canada is 700,000+

- oh, now you want to ship some shopping cart lines to one location and some to another?

- wait, now you want certain products to be tax exempt?

Ridiculously complex - I expect 100% of the tax is needed to pay the salaries of those administering the system.

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Re: US Sales Tax - you think EU VAT is tricky?

There's no Federal sales tax in the US, so it's really rate = special district + city + county + state.

And that leaves out the special incentives offered by some states, like for "teleproduction equipment" (in California) which can reduce the state portion of the tax calculation by 50% if the buyer and seller fill out the right paperwork, or the exemption of all "pre-programmed (non-custom) software delivered electronically" from any sales tax (in California).

I'm all for making all net transactions (including interstate) subject to sales tax, but only if there are common rates established so I don't have to pay a fortune for some service to calculate the tax for me.

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PT

Re: US Sales Tax - you think EU VAT is tricky?

Correct, it's ridiculous. When I was running a small internet sales operation a few years ago, I refused to accept orders from my own state to avoid the complexity of charging something like 17 different rates. I was still required to register for sales tax, deposit a large bond, and make monthly tax returns. All my returns were for $0.00, on which I incurred a penalty if they were a day late.

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Anonymous Coward

Re: US Sales Tax - you think EU VAT is tricky?

Pah.

v_tax := 0;

FOR i IN 1..v_items.COUNT

LOOP

v_item_rate := get_state_sales_tax( v_state, v_items(i).item_type_cd );

IF v_item_rate > 0 THEN

v_tax := v_tax + v_item_rate * v_Items(i).item_value;

END IF;

END LOOP;

IF v_shipping_value > 0 THEN

v_state_shipping_rate := get_state_shipping_tax_rate( v_state );

IF v_state_shipping_rate > 0 THEN

v_tax := v_tax + v_shipping_value * v_state_shipping_rate;

END IF;

END IF;

RETURN v_tax;

Seriously, there's really no excuse not at least to charge _state_ sales tax, given that national bricks and mortar companies seem to manage just fine. My state doesn't have county or city taxes so if they took the state tax they'd be done.

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Silver badge

Re: US Sales Tax - you think EU VAT is tricky?

get_state_sales_tax is not defined. It should probably be a switch into a separate functions for each state. Remember to update each of those functions every year, and include the date of the sale to handle introduction of new tax rates. item_type_cd is not a simple propertry of items for sale. It depends on the state and the date. Compound items way have separate tax rates for different components. v_shipping_value is not defined. At a guess, it is the shipping cost for the entire cart, so it is getting multiplied by the number of different items in the cart. You did not include the quantity of each type of item.

This only deals with state tax. The web site will be showing one price will the customer shops, then a completely different price when you know what state he is in. No explanation for the price increase is given so there will be expensive phone calls from angry customers.

Premature/defective optimisation: skipping the multiplies for multiplies by 0 with a conditional branch is often more costly than just multiplying by 0 and adding 0. As it introduces extra code paths and extra tests I would leave out the conditional branches until processing speed becomes an issue, profiling shows this is a place to work on, and the change actually shows some benefit.

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Silver badge

Re: Ridiculously complex

You forgot Back to School tax exempt rate. Different week in Maryland than it is in Virgina, and those are the two I hear the ads for. No idea what other States, Counties, Municipalities, and Cities might do, although I assume States will pre-empt subordinates if they pass a tax-exempt week. And there might even be some special taxing areas associated with things, like the one that was proposed for Northern Virginia recently.

Yeah, there was a GOOD reason SCOTUS decided catalog companies didn't need to charge sales taxes unless they had a physical presence in the taxing jurisdiction. And why Conservative Republicans have resisted taxing internet sales for so long.

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Unhappy

Amazon, and others, are probably funneling the profits through Bermuda.

That seems to be the usual way to do it in Europe. The USA is next.

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Facepalm

Re: Amazon, and others, are probably funneling the profits through Bermuda.

Pretty sure we already use the Cayman's among others. Let me go ask Mitt. He doesn't have much to do right now....

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Anonymous Coward

Close but no cigar

"Uncle Sam" is a reference to U.S. federal govenment not to state governments. There is no U.S. Federal sales tax similar to a VAT. There are individual states, some of whom that have a sales tax.

These states see internet sales as a means to generate undeserving revenue under the guise that the states are somehow entitled to collecting tax on internet sales conducted in another state, when in fact this is illegal. You can expect these states to get an eye-opener when this case reaches the U.S. Supreme Court as it's unconstitutional for the states to act as the federal government by enacting country wide sales tax laws. The Federal government is the only entity that could impose a Federal sales tax similar to a VAT.

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Bronze badge

Re: Close but no cigar

The traditional answer to this problem has been to tax the *buyers*, with what is called a "user tax".

Some decades ago, Massachusetts State Police were often to be found checking cars along the road South from Salem, NH, where an especially enterprising retailer was making a mint on appliances and other high-priced goods free of sales tax (NH does not have one).

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Silver badge

untaxed commerce (cheques and balances)

He also pointed out that sales tax collections have lagged economic growth, suggesting that untaxed commerce has grown.

And it will continue to grow, simply because it has to, in order to compete with government efforts to destroy the economy.

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Bronze badge
Mushroom

you're forgetting federal excise tax

which is mostly hidden now by the companies that have to collect it....but it's a holdover from long ago and still being collected on certain purchases to line the feds pocket whilst picking ours.

I'm not sure why the states think they would be better off taking money out of my pocket which i can spend on other things and handing it over to them so they can piss it away. I can do plenty of that, myself...thank you!

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