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California tells online retailers to start collecting sales taxes from customers

For about a two week period I saw e-bay sales being taxed. The text would read, "residents of (state) will pay (tax rate) on this purchase". That didn't last long.
 
tessaesque said:
For about a two week period I saw e-bay sales being taxed. The text would read, "residents of (state) will pay (tax rate) on this purchase". That didn't last long.
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Technically if they are in the same state then there should be a sales tax collected, a largish chunk of my business is selling product online, and for Florida orders I have to collect that tax - any other state, nope. I amnot sure about the Ebay rule, or how they skirt it (if push came to shove it would be on the vendor, not them), but technically same state sales even through private individuals is supposed to be taxed
 
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marduc said:
They are only paying sales tax for customers that order from within the same state. Any out of state customers there will be no sales tax. So they are paying sales tax, but only on a fraction of their customer base.

This is one horrifically bad move in regards to business on Californias part. Even if the businesses are not compelled to up and move to another state, Ca business will have to drop their retail prices by the equivalent amount of the tax to stay competitive, otherwise the4 ease of internet price shopping will drive all that business elsewhere. A lose lose situation.. either drop your prices, and your profit margins, or lose your customers who will go elsewhere to save 7% or whatever.
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Exactly. If out of state retailers have an unfair advantage, then retailers will tend to go out of state. Driving business out of state is a sure formula for bankruptcy.

California state sales taxes vary from city to city, but hover between 9 and 10% in most places. It used to be 5%, state income taxes were not enough to justify witholding, and yet the state balanced its budget and paid its teachers more than practically any other state.

But that sad story is another issue.
 
marduc said:
They are only paying sales tax for customers that order from within the same state. Any out of state customers there will be no sales tax. So they are paying sales tax, but only on a fraction of their customer base.

This is one horrifically bad move in regards to business on Californias part. Even if the businesses are not compelled to up and move to another state, Ca business will have to drop their retail prices by the equivalent amount of the tax to stay competitive, otherwise the4 ease of internet price shopping will drive all that business elsewhere. A lose lose situation.. either drop your prices, and your profit margins, or lose your customers who will go elsewhere to save 7% or whatever.
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This has always been an arguement I've had problems with. Yes, the retailer from out of state is not paying tax BUT they have additional costs in getting the product to the customer. Many out of state or online retailers will offer "free shipping". Now we all know it's not free. It's a cost that local retailers are not hit with.

Either that, you pay it which is likely as much if not more in certain cases as the tax would be. If I buy a t-shirt from a company in another state I have $20 and at least $2.00 for shipping. Locally I can get it for $20 and with a 7% tax I save 60 cents. The out of state retailer has no cost advantage.
 
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1Perry said:
This has always been an arguement I've had problems with. Yes, the retailer from out of state is not paying tax BUT they have additional costs in getting the product to the customer. Many out of state or online retailers will offer "free shipping". Now we all know it's not free. It's a cost that local retailers are not hit with.

Either that, you pay it which is likely as much if not more in certain cases as the tax would be. If I buy a t-shirt from a company in another state I have $20 and at least $2.00 for shipping. Locally I can get it for $20 and with a 7% tax I save 60 cents. The out of state retailer has no cost advantage.
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Online retailers have the advantage of volume based pricing, since they aggregate sales over a large area.

Kinda like how Walmart does it.
 
Harry Guerrilla said:
Online retailers have the advantage of volume based pricing, since they aggregate sales over a large area.

Kinda like how Walmart does it.
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It's WalMart doing the bitching. It's WalMart leading the crusade that it's unfair. Yours is also a vast generalization not based in facts. A small t-shirt company has no volume advantage over WalMart.
 
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1Perry said:
This has always been an arguement I've had problems with. Yes, the retailer from out of state is not paying tax BUT they have additional costs in getting the product to the cutomer. Many out of state or online retailers will offer "free shipping". Now we all know it's not free. It's a cost that local retailers are not hit with.

Either that, you pay it which is likely as much if not more in certain cases as the tax would be. If I buy a t-shirt from a company in another state I have $20 and at least $2.00 for shipping. Locally I can get it for $20 and with a 7% tax I save 60 cents. The out of state retailer has no cost advantage.
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Many businesses pay a set shipping rate with one of the major carriers, and you can ship x amount of product without having to pay individually for every item shipped, it is then incorporated in the overall price scheme, or accounted for regarding profit margins. The shipping bill is just overhead. There is no cost difference to worry about regarding shipping in state or out of state. This is how they are able to do free shipping with $x purchases.

the problem is for Ca vendors they will have to pay that shipping bill, and that tax bill now.
 
The traditional brick and mortar stores have to pay shipping, too. They also pay property taxes. Moreover, their customers have to get to the store in one way or another, as opposed to sitting in the recliner with a laptop.

Let's not give the online retailers too many more advantages, or we'll see even more empty stores in the malls.
 
1Perry said:
It's WalMart doing the bitching.
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Yea, because the online guys have very low overhead costs.
Hate it for em, but Walmart has to compete or die.

The small t-shirt company has the advantage of specialization and intimate customer service.
Something Walmart lacks in every way.
 
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Dittohead not! said:
The traditional brick and mortar stores have to pay shipping, too. They also pay property taxes. Moreover, their customers have to get to the store in one way or another, as opposed to sitting in the recliner with a laptop.

Let's not give the online retailers too many more advantages, or we'll see even more empty stores in the malls.
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Could always level the malls and make better use of the property space, for things like homes and non retail work places.
 
Dittohead not! said:
The traditional brick and mortar stores have to pay shipping, too. They also pay property taxes. Moreover, their customers have to get to the store in one way or another, as opposed to sitting in the recliner with a laptop.

Let's not give the online retailers too many more advantages, or we'll see even more empty stores in the malls.
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I don't think we're anywhere near doing all purchasing online and killing off these stores. I can't order an emergency item online. I can't try on pants online. I can't compare face-to-face with on-line products. And, as I've learned very quickly during this housing process, online ads can be very, very deceiving.
 
marduc said:
Many businesses pay a set shipping rate with one of the major carriers, and you can ship x amount of product without having to pay individually for every item shipped, it is then incorporated in the overall price scheme, or accounted for regarding profit margins. The shipping bill is just overhead. There is no cost difference to worry about regarding shipping in state or out of state. This is how they are able to do free shipping with $x purchases.

the problem is for Ca vendors they will have to pay that shipping bill, and that tax bill now.
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Sure, but it's still a cost that a local business does not have. It still indeed does cost something to ship that item.
 
Dittohead not! said:
The traditional brick and mortar stores have to pay shipping, too. They also pay property taxes. Moreover, their customers have to get to the store in one way or another, as opposed to sitting in the recliner with a laptop.
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And if that customer is across country they do not have to collect the tax. The online retailer pays property taxes also. Most people still like to leave their houses now and then.

Let's not give the online retailers too many more advantages, or we'll see even more empty stores in the malls.
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More likely is that the huge square feet charges might have to come down a little. Besides, blacksmths were unsuccessful with this arguement.
 
1Perry said:
Sure, but it's still a cost that a local business does not have. It still indeed does cost something to ship that item.
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There are a multitude of online vendors that could not survive on local sales. Mine would be one of them, I sell niche products that require a presence much larger than my local area, or my state alone could provide.

I compete with out of state companies, If I suddenly had to collect sales tax, while others in a different state did not my bottom line would suffer -immensely, My local tax rate would be roughly half of what my profit margin is currently.
 
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marduc said:
There are a multitude of online vendors that could not survive on local sales. Mine would be one of them, I sell niche products that require a presence much larger than my local area, or my state alone could provide.
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Small vendors like yourself seem to have a volume advantage over the WalMarts. Especially after the costs you incure in trying to cipher and pay the taxes to 50 different states.
 
1Perry said:
Small vendors like yourself seem to have a volume advantage over the WalMarts. Especially after the costs you incure in trying to cipher and pay the taxes to 50 different states.
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My products would never be sold in a Walmart, or for that matter virtually any retail outlet- aside form a smattering of mom and pop specialty stores, there would not be enough local demand to warrant having my product occupying the shelf space.
 
marduc said:
There are a multitude of online vendors that could not survive on local sales. Mine would be one of them, I sell niche products that require a presence much larger than my local area, or my state alone could provide.

I compete with out of state companies, If I suddenly had to collect sales tax, while others in a different state did not my bottom line would suffer -immensely, My local tax rate would be roughly half of what my profit margin is currently.
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Why would others in a different state not collect sales taxes? It depends on where you're selling, not where you're located.
 
California's legislature is going way out of it's way to insure that the state goes bankrupt. :rofl
 
MrVicchio said:
Come to Texas, we don't do that **** here.
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Amen Brother. No state tax in Texas. We are business friendly. Businesses are moving here in droves. FACT: 38% of all jobs created during this recession were in Texas.

Rick Perry for President 2012
 
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Dittohead not! said:
If they see the state as a market, then they have a presence in that state.

Why should local retailers have to pay more taxes than those who are not local?
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I'll agree with that when local retailers have to pay the equivelent in shipping costs for each item sold.
 
Cardinal said:
There are other nuisances, too, but point is California is not the most fun place to run your small business.
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Do what I did six years ago. Leave. They won't miss you. And you won't miss them.
 
Dittohead not! said:
Why would others in a different state not collect sales taxes? It depends on where you're selling, not where you're located.
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oops. I completely had it backwards. I had originally skimmed the thread while doing other things, and then started posting and ran with it without rereading.

I was thinking that California businesses were having to collect taxes on out of state sales, not that out of state businesses had to collect taxes for California sales. :3oops:
 
Harry Guerrilla said:
Because if you're out of state, you're not incurring additional expenses on the state.
There is no justification for the taxes.

Plus the Supreme Court has already ruled that a state, can not tax someone out of state.
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it isn't the business being taxed, it is the CUSTOMER who is being taxed. The business is merely collecting that tax.
 
ludahai said:
it isn't the business being taxed, it is the CUSTOMER who is being taxed. The business is merely collecting that tax.
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Of course it's not. However the online business is being put at a severe disadvantage by having to charge sales tax AND shipping too.
 
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