Article

2015-12-14 Economy

US House okays making internet tax exemptions permanent

[THEREGISTER.CO.UK] The US House of Representatives has approved a bill that will permanently bar states from collecting taxes on internet sales.

The House on Friday gave its approval for HR 644, a trade bill that has been amended to include a permanent renewal of the Internet Tax Freedom Act. Part of the Trade Facilitation and Enforcement Act of 2015, the bill won the approval of the House by a vote of 156-158.

In passing the bill, the House also approved the renewal of the act that bars state and local governments from taxing internet access. First passed in 1998, the Internet Tax Freedom Act has been renewed several times since.

The most controversial element of the act includes the limit on the collection of sales tax, barring states from collecting tax for online transactions made out-of-state. The law, credited with helping online giants including Amazon to become retail powerhouses, has been criticized by state governments and retailers for giving internet sellers an unfair advantage over brick-and-mortar stores that have to pay tax.

The bill will now move on to the Senate for consideration. Should it pass, the bill would then go to the President for approval.

Backers of the law, including Congressman Ron Wyden (D-OR), hailed the passage and asked voters to prod members of the Senate to keep the Internet Tax Freedom Act permanent.

"The ban on internet access taxes expires in just a few days, and there's a good chance this fight over sales taxes could sink the law that has helped the internet grow and thrive," Wyden said.

Posted by Fred 2015-12-14 00:00|| || Front Page|| [11135 views ] Top

#1 Wow. Somebody got something right.

Whadaya know, guess elections do have positive consequences as well.

Posted by Nguard 2015-12-14 00:40|| 2015-12-14 00:40|| Front Page Top

#2 The bill will now move on to the Senate for consideration. Should it pass, the bill would then go to the President for approval.

I am least of all hopeful.

Posted by Besoeker 2015-12-14 01:54|| 2015-12-14 01:54|| Front Page Top

#3 Someone finally correlated real private job creation vs taxation?

Posted by Procopius2k 2015-12-14 09:01|| 2015-12-14 09:01|| Front Page Top

#4 The 'who bought it' and 'bought from' states couldn't agree on a distribution ration. When the web gets nationalized by the FCC the use tax will go to the feds.

Posted by Sloluth Protector of the Weak7539 2015-12-14 11:42|| 2015-12-14 11:42|| Front Page Top

#5 It's easy for the feds to tell the states what the states cannot tax. Not so easy for the feds to rein in their own spending.

Posted by Ebbang Uluque6305 2015-12-14 11:49|| 2015-12-14 11:49|| Front Page Top

#6 Where do you tax? The seller's location, the server farm where the transaction was processed, the warehouse from which it was sent, the residence of where it was delivered*? Too many greedy hands in play.

Quill Corp. v. North Dakota, 504 U.S. 298 (1992), was a United States Supreme Court ruling concerning use tax. Quill Corporation is an office supply retailer. Quill had no physical presence in North Dakota (neither a sales force, nor a retail outlet),[1] but it had a licensed computer software program that some of its North Dakota customers used for checking Quill's current inventories and placing orders directly. North Dakota attempted to impose a use tax on Quill, which was struck down by the Supreme Court....
- wiki

The states understand that as they expose their own claim of taxation on interstate commerce, the Feds may well step in and hog it all. The states that are willing to provide cover for interstate commerce will get the business and employment taxes rather than any form of sales tax other than products sold within the state via Quill.

* if I buy product x in the neighboring state and carry it back home, should I have to pay my local tax on it? Or if I had a friend buy it for me and deliver it to me, should I still have to pay local tax on it? If not a friend, any interstate carriers?

Posted by Procopius2k 2015-12-14 13:29|| 2015-12-14 13:29|| Front Page Top

#7 if I buy product x in the neighboring state and carry it back home, should I have to pay my local tax on it?

Per California tax law, it's "yes."

Posted by Pappy 2015-12-14 15:05|| 2015-12-14 15:05|| Front Page Top

#8 No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing it's inspection Laws: and the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States; and all such Laws shall be subject to the Revision and Controul of the Congress.

Section 10, Article I, (of the late) Constitution.

Posted by Procopius2k 2015-12-14 16:16|| 2015-12-14 16:16|| Front Page Top

#9 Where do you tax? The seller's location

Yes. It's what Adam Smith would do. Of course the tax raised wouldn't be very much as warehouses are in low cost locations, but that's great for consumers.

Posted by Bright Pebbles 2015-12-14 17:39|| 2015-12-14 17:39|| Front Page Top

#10 I'm in NH, which has no sales tax on transactions of this kind (we do have a meals tax.)

But if I were running a business in Massachusetts, I'd be dismayed that Amazon's effective prices are lower by the amount of the tax - 6.25% - than mine.

Amazon sells most anything these days, with free shipping. I don't even have to drive to the local store and lug the stuff home.

So, they already have the advantage, and this legislation increases it.

I guess Amazon gives a better Beltway lube job than the US Chamber of Commerce lobby.

Yes, collecting multi-state sales tax is a pain in the tail for small internet businesses. But Amazon can afford the infrastructure, they support collecting tax. It increases their advantage over smaller competitors.

In the end, this is good for small internet businesses, neutral for Amazon, and bad for brick and mortar businesses in sales tax states.

Posted by KBK 2015-12-14 20:28|| 2015-12-14 20:28|| Front Page Top

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