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Thread: California tells online retailers to start collecting sales taxes from customers

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    Re: California tells online retailers to start collecting sales taxes from customers

    Quote Originally Posted by MrVicchio View Post
    Local Retailers have both a political impact in terms of votes, and a gain from using state resources by being in the state.

    A company that is not IN the state, has neither political power, nor access to resources provided by said state, yet must spend resources to collect, account and disperse funds. How is that right?
    Out of state retailers have a lot to gain from resources within the state as well. Moreover, when buyers send their dollars out of state, they never do come back.

    Online out of state retailers can go wherever they want, so can pick a place where there is no sales tax at all, and thus have an unfair advantage over the local retailers.

    However, they do currently collect California State sales taxes. I'm not sure what is happening in other states.
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    Re: California tells online retailers to start collecting sales taxes from customers

    In the Op' story,

    California's new law was drafted to circumvent a 1992 U.S. Supreme Court ruling that sellers can't be forced to collect sales taxes unless they have a physical presence in the state.
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    Re: California tells online retailers to start collecting sales taxes from customers

    Quote Originally Posted by Cardinal View Post
    Second stupid question: are these out of state companies already paying sales tax in their own state?
    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 the 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.

    edit: I am suddenly thinking of the dominant position Ca has on internet computer parts sales. That is potentially going to be decimated, especially with the ease to comparison shop for prices on the same part from a multitude of vendors.
    Last edited by marduc; 06-30-11 at 03:13 PM.
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    Re: California tells online retailers to start collecting sales taxes from customers

    Quote Originally Posted by Dittohead not! View Post
    Out of state retailers have a lot to gain from resources within the state as well. Moreover, when buyers send their dollars out of state, they never do come back.

    Online out of state retailers can go wherever they want, so can pick a place where there is no sales tax at all, and thus have an unfair advantage over the local retailers.

    However, they do currently collect California State sales taxes. I'm not sure what is happening in other states.
    It can save the state quite a bit of money, especially with road funds and traffic congestion.

    They're trying to have their cake and eat it too.
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    Re: California tells online retailers to start collecting sales taxes from customers

    Quote Originally Posted by Dittohead not! View Post
    Out of state retailers have a lot to gain from resources within the state as well. Moreover, when buyers send their dollars out of state, they never do come back.

    Online out of state retailers can go wherever they want, so can pick a place where there is no sales tax at all, and thus have an unfair advantage over the local retailers.

    However, they do currently collect California State sales taxes. I'm not sure what is happening in other states.
    I buy stuff online all the time. And rarely, if ever pay sales taxes.
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    Re: 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.
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    Re: California tells online retailers to start collecting sales taxes from customers

    Quote Originally Posted by tessaesque View Post
    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.
    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
    Last edited by marduc; 06-30-11 at 03:17 PM.
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    Re: California tells online retailers to start collecting sales taxes from customers

    Quote Originally Posted by marduc View Post
    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.
    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.
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    Re: California tells online retailers to start collecting sales taxes from customers

    Quote Originally Posted by marduc View Post
    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.
    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.
    Last edited by 1Perry; 06-30-11 at 03:18 PM.

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    Re: California tells online retailers to start collecting sales taxes from customers

    Quote Originally Posted by 1Perry View Post
    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.
    Online retailers have the advantage of volume based pricing, since they aggregate sales over a large area.

    Kinda like how Walmart does it.
    I was discovering that life just simply isn't fair and bask in the unsung glory of knowing that each obstacle overcome along the way only adds to the satisfaction in the end. Nothing great, after all, was ever accomplished by anyone sulking in his or her misery.
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