Sales Tax on Internet Sales....

[Darian]

Today it was announced that the US Supreme Court ruled (in a case brought by South Dakota) that all internet retailers may be required to collect Sales Tax for those states that require it. Not all states have planned or will be ready to enforce this decision but I can tell from personal knowledge that California has been planning on how to handle this situation and licking their chops for several years now.

The potential impact of this will be on small internet retailers (think fly shops with internet sales) and to increase prices of goods sold over the internet. The application of Use Tax is unchanged by this decision. So, the days of buying without Sales Tax on the internet are probably numbered.

This may mean the end of some smaller retailers who depend on internet sales. Just imagine what it would be like to try to determine what the correct rate of tax is for every location (local/state) for each state that has a sales tax. In California, alone, there're 58 counties and not all have the same local tax rate. Even with charts, it takes time away from the brick/mortar store for a sole proprietor to calculate/collect/report/pay this tax to each taxing agency, every quarter or annually. There'll probably be a swift reaction and call for some action on the part of congress to solve this situation but I wouldn't count on it.

[Carl Blackledge]

What's good for the goose is good for the gander...sounds like a fair deal to me.

Carl

[yubaman]

My bet is that they defer to using the Sales Tax Rate of where the sale occurred? Every city has different bond measures, transit authorities, etc. who have pieces of their pie added to the established Sales Tax rate. The kicker here is that Sales Tax Rates are determined by city, not county, so now you can see the magnitude of how far this can extend. If I remember correctly, sales tax rates are currently charged at the rate of where the transaction was completed, i.e. the billing has occurred.

[Bill Kiene semi-retired]

I think that if you want to make a larger purchase Kiene's will pay your sales tax and ship it free.

Call and ask for Gary.....

We are very competitive, especially on bigger purchases.

[Darian]

Actually, Sales/Use Tax rates are set by the state and administered by the Board of Equalization. Local taxes are authorized by The Bradley-Burns uniform local tax law, in California, which allows a percentage to be added to a statewide sales tax, with the proceeds applied to benefit counties and cities of this state. This state collects both taxes and allocates local taxes. The local rate can vary by city and/or county.

Of course, as Bill suggests, a retailer may choose not to charge sales tax on a sale but will remain responsible for reporting/payment of amounts owed to the state. State/local Sales Tax is imposed on the retailer; the R&T Code authorizes a retailer to collect that amount from the buyer as reimbursement.

If the choice is to use the rate used where the sale occurs, that might help a bit....

[dynaflow]

Interestingly,Australia is about to charge a 10% GST (Goods and Services Tax) from July 1 on any item from overseas valued under $1000...previously the GST was confined to items above this amount.This is government bowing to pressure from a few business monopolies in this country.So with the declining AUD against the USD,this will have an effect on overseas purchases from Australia.

[Darian]

Ten percent is a high rate for that type tax. The result may the demise of many small businesses (there and here)....