Sales Tax on Internet purchases

Pitfall69

Internet sales are subject to sales tax, and even if the site does not collect sales tax, consumers are techinally responsible for paying any unpaid sales tax on internet purchases directly to their state. If your states does not have sales tax, then you don't have to pay.

It bugs me when people use "tax free" as a cheaper way to buy their Legos. I always pay my sales/use tax at the end of the year, and now states are actually putting a line in their tax forms for you to calculate and pay your sales/use tax on internet purchases.

Your thoughts...

LegoFanTexas

My Government taxes me enough, I already think taxes are way too high, so I have no interest in giving them more money.

If they start to enforce it, more power to them, but keep in mind this country started from events like the Boston Tea Party where we got fed up paying sky-high taxes.

So consider it civil disobedience. :)

BrickDancer

It starts with the idea: "Is paying one's tax mandatory or voluntary?"

Most will answer 'mandatory', where everyone should pay what they are required to pay under existing laws. If so, then why should one volunteer to pay more than is required, simply because the government asks us to? If it is indeed mandatory, such as all other taxes, then they should implement laws that apply to internet purchases where it is charged up front at point of transaction or end of fiscal quarter/year. Which is what is happening now starting in some states. But until then...

Can't have it both ways Big Brother.

Pitfall69

We are not taxed enough. Alot more countries are taxed much higher.

So, do you feel this way about most other things too? If there is nobody there to enforce a law it is ok to break it? I sense you have high morals.

Bandit

I'm with LFT -- never in a million years would I do this. The record keeping alone would be ridiculous. Either charge me the tax to begin with, or forget it.

Pitfall69

The US Constitution forbids other states from collecting taxes from other states. Interstate commerce. States can and will audit you if they sense you make a ton of internet purchases and they stand to collect a large sum from you.

BrickDancer

^Just as background to where my opinion comes from, I do have a high level of morals and ethics. But I'm also very contemplative about things considered as law, required, expected, assumed, etc. I'm in the business sector for a global operations, so all these things such as taxes, customs/duties, etc certainly are considered in all matters and followed carefully.

But what you are speaking of is not 'law' and is still currently under debate within legislature at federal and state levels. Therefore, enforcement of such is a non-starter if it does not apply to your state to begin with. For instance, I'm in California where internet purchases are not subject to sales tax. I do not recall an option to file such during my tax filings this past year either. So in that case, what should one do? Of course, what you are speaking of relates to states that do request that you declare such purchases. Federally speaking, those states are in the gray area. Interstatial trade and commerce is still up for debate for everyone else.

Black and white is how the law should be. If you want it, make it law that applies like everything else. Charging sales tax like everything else makes it clear as an obligation of the individual. Fair and even across the board, isn't that how it should be?

Pitfall69

I guess I am in the minority. I suppose this is one reason The United States is going down the tubes. People scream bloody murder because the rich don't pay their fair share of taxes yet those same people that are required to pay don't either. Hippocracy.

Renny

At least for Illinois you don't really have to keep a record book of all of your internet purchases. You can if you want but you can also pay a fixed amount based on your annual income (government assumption). For me that is generally a lot less than if I were to calculate the actual amount.

drdavewatford

So, do you feel this way about most other things too? If there is nobody there to enforce a law it is ok to break it?

I guess it depends on the law, and in this case anyone can see that this particular law is absurd. Kind of like some of the archaic statutes from 150 years ago about walking on the wrong side of the road on Thursdays that nobody has bothered to change.. When I think of the amount I buy online, the administrative aspects of trying to stay in compliance wouldn't be far short of a full-time job.

Pretty much every country in the civilised world seems to have figured out a system of clawing back tax on online purchases without putting such a monstrous burden on their citizens; if the U.S. Government was genuinely serious about levying such taxes I suspect they'd have figured out a way of doing it by now...

Pitfall69

If the law is black and white then why are laws always up to debate and have to be interpreted in a court of law?

BrickDancer

^Because they are 'constructs', as most things are. Laws need to be created to address new situations. The internet as whole is under this phase right now. But how it is implemented is the question. I fully agree with you on paying one's required amount of taxes, no qualms or objections to that. But that's the point I bring, it's not required for internet purchases. If it was, it would be enforced on the seller end in all logical sense. Imagine if it was a physical transaction and they required you to keep receipts of all such until end-of-year filings. It just doesn't work that way. So I guess our point of difference is how and whom should be the party responsible for tracking & recording the taxes generated.

Pitfall69

I save all my receipts from all my business purchases to be reported as deductions on my tax form. I also save my receipts from internet purchases. I would love to be around if you ever get audited and say to the IRS "I'm sorry, the administrative aspects of trying to stay in compliance is too much work and it is absurd of you to expect that from me" lol

drdavewatford

^ I think you might be waiting for quite some time, so I'd suggest you don't hold your breath...

Pitfall69

I knew this would be a good subject of debate. I also don't mean to be condescending. I'm just very passionate about this subject.

BrickDancer

As a business owner, I'm proof positive you have more experience in these matters than I would. I'm just a salary guy that has a fixed amount of tax obligations and little to no write-offs. Paying taxes is straight-foward and low labor for me, as I don't have many receipts to file. But I feel this would apply to most common folk in the country. So trying to get 350 million citizens to start tracking their online purchases and filing all purchases might not be the most efficient route to take. I think the IRS would agree, just imagine having to go through all that for individuals each year. Just makes more sense that Amazon charges the tax than the citizen filing it.

I repeat @Pitfall69 , I agree we should pay all our taxes. Just a matter of how the process works. I just don't agree with the current approach of burdening the individual instead of the business.

I wish they would audit me actually, maybe they'd realize I've been paying too much and not deducting enough lol.

Pitfall69

Fair enough.

I know Amazon is exploiting the loophole because they dont have a brick and mortar store and they use it to their advantage.

Bandit

There's no way a state could ever even know how much you did or didn't buy online short of an online retailer reporting it to them, so how would they even know to audit you? Colorado recently tried to force Amazon to do just that, and lost in court.

Pitfall69

I know everyone is used to my sarcastic humor by now, so i know my responses do not come as a shock to everyone ;) Except my apologies if i offended anyone.

allmybricks

@pitfall69 - why bring this up? Politics aside, Brickset is a global forum and this particular issue the way you're posted about it is US specific. This does nothing but divide a community and won't spur any type of healthy discussion.

Does it make your ego feel better that you pay taxes on internet purchases and that 99% of the rest of US taxpayers are probably not in compliance? This is like the posts when I read someone has stockpiled 40 MMV (no offense @LegoFanTexas) in the Predictions thread. It's just eye rolling worthy... why bring it up? There is nothing positive to come of it.

I pay more taxes than the majority of citizens of this country... seemingly more than the majority of businesses in this country! I also believe that I'm taxed enough and pay way more than my fair share. If I can get a set less at Amazon than Target where they ship it to me free in 2 days, I'm doing that every time. When it comes time for Amazon to settle up, they'll be fined by my state and I'll start paying the tax just like many others are doing.

I'm visiting my parent's this weekend in Delaware and shopping tax free at the LEGO store. I'll drive that haul back to my house in North Carolina. Am I disserving my fellow citizens of North Carolina because I made a purchase in a state that doesn't have a sales tax? Now some program probably won't get funded.

Why we're debating silly things... why not bring up that LEGO is made of oil? Or how we hurt the environment with all air express 2 day Amazon Prime shipping of sets... Or how driving around to 5 different Walmarts and Targets during clearance season is polluting our ozone layer. Oh wait... it takes gas to fill up my truck and jet fuel to fly those planes... which are taxed! :-)

If anything, all this spending of money with Amazon helps stimulate this crap global economy we're all dealing with. More money spent = more jobs = more taxpayers... and less people using certain programs that taxes go to pay for.

jadeirene

^For instance, I'm in California where internet purchases are not subject to sales tax. I do not recall an option to file such during my tax filings this past year either.

There is a line for the use tax in the California tax form.

timinchicago

Not just Amazon, pretty much across the board for any business that does not have brick and mortar stores.

LegoFanTexas

I guess I am in the minority. I suppose this is one reason The United States is going down the tubes.

First, I would debate the premise that the United States is going down the tubes, Europe seems to be going first. :)

Second, If we ARE going down the tubes, this isn't the reason. Out of control spending, out of control tort laws, and other reasons would place much higher in my list.

LegoFanTexas

If the law is black and white then why are laws always up to debate and have to be interpreted in a court of law?

Very little in this world is so black and white. Courts are also made up of human beings who have their own biases, both good and bad.

This is why courts issue opinions and not statements of fact.

For example, the recent SCOTUS ruling on The Affordable Care Act is wrong, it is clearly unconstitutional to anyone who can read the English language, however so is half of what the US Government does, so we threw out that old dusty paper long ago. Now it (the US Constitution) means whatever our Government wants it to mean.

But that has always been true throughout all of human history. Go read the Declaration of Independence. Not all of it applies today, but much of it is now true of our own Government. We are still better off in most ways than we were under King George, but in some ways worse.

But it is a different world today, so who knows what the future holds. :) I'm pretty sure we won't solve a thing debating it here, that's for sure! :)

drdavewatford

OK folks, probably time to nip this one in the bud now as any relationship to LEGO is tenuous at best.... I'll slap my own wrist for joining in rather than shutting it down earlier !