Do you buy a lot on the Internet?
Between iTunes and Amazon, I buy a ton of stuff off of the Internet. If sales tax were applied, I’d be in serious trouble. Thankfully, my church, which also buys a ton of stuff online, has its tax-free status. That’s huge, as I’m sure you know.
However, the tax-free party just might end if a bill currently up for discussion in the Senate passes. This bill is “supposed” to help “brick and mortar” businesses compete in the Internet age.
I’m sorry, but we are in the Internet age!
It’s time to accept that fact and stop trying to turn back time. It would be one thing to put old businesses on life support, but what this bill actually would do is to put a limitation on new and growing e-commerce businesses. Some major e-retailers are supporting it, like Best Buy and Amazon, but others are seriously opposed to it, like eBay.
Is this really a “church-specific” post? Not really, except that, like my podcasting post, I think we should be aware of and resistant to most (knee-jerk) attempts to limit the Internet.
If you want to get involved, let your Senator know how you feel. I sent a message to both of my senators, one of whom has voiced quite a bit of support for this bill.
Should the Church fight Internet controls?
Is this a situation in which the Church should support local “brick and mortar” businesses or Internet freedom?
[via Yahoo! | Image via 401(K) 2013 via Compfight cc]
Bill says
1.) Sales taxes help to pave your roads, light your streets and pay your police. If sales tax revenue dries up it will hurt local and state governments. (or will significantly increase property and local and state income taxes)
2) Why should online sales be privileged?
3) Collecting sales tax on online sales, in this internet age, only requires the addition of a module in the checkout process that calculates and allocates that tax.
Phil Schneider says
1) Good point, except that the rhetoric around the bill is all about “leveling the playing field” between Internet and physical stores. Not cool. Not good for the economy, which is shifting toward the Internet.
2) Why do major corporations get tax breaks? Why do physical stores get massive tax incentives to build in stores/factories/etc in cities across the US? Some states don’t even have sales tax at physical stores. Why should Internet stores face a federal sales tax in those states?
3) It’s not the complexity for the consumer. People with side project businesses don’t necessarily have time to track, count, and turn in sales tax. Why complicate their lives when they’re trying to improve their financial status?
Jonathan Scott says
Another thing to consider: New Hampshire has no sales tax and instead relies on property taxes to pave their roads, light their streets, and pay their police. Not to mention they are one of the few states to have a balanced budget. Sales taxes aren’t necessary, and maybe it’s time to reconsider them as sales move from the physical marketplace to the internet marketplace.
Phil Schneider says
Good point, Jonathan. (And not just because you’re agreeing with me.)
Joanna says
We have a similar debate raging in Australia. We pay sales tax on online purchases from Australian online and bricks and mortar stores but if we order something from an online store registered in and shipping from a different country the threshold for paying sales tax/customs duties is very high ($1000 I think). Some politicians are proposing bringing it down to around $20 to enable local stores to compete better. Problem is, the local markup is very often way more than the 10% sales tax in a lot of product categories and taxing everything that comes in would likely slow down delivery times due to stuff getting stuck at customs.
I’m a bit torn on the ethics of the situation. On one hand, I can see the merit in supporting local businesses that provide local employment and are paying taxes that support local needs. On the other hand, I have to consider effective use of resources. One example where this is a problem is Christian books, something for which my budget is quite limited. I can shop at an Australian retailer and ether drive 25 minutes plus each way to pick the books up or pay quite expensive local shipping charges. Alternatively, I can shop online from a UK retailer where books are usually 20-50% cheaper than in Australian stores, the selection is bigger and shipping is free to Australia. In this case, the really inefficient use of resources that shopping locally is becomes hard to justify on the basis that it will provide a tiny bit of support to the local economy.
Phil Schneider says
I think this is a great example of the lack of logic in modern Western politics.
They (pols) want our nations to operate as part of a global workforce, which essentially encourages companies to operate out of developing world countries where they can pay lower wages; however, they don’t want to allow foreign-based businesses to be able to sell in their country on an equal footing.
Be consistent. Either isolate your nation or open it.
Eric Dye says
Does anyone know if this applies to digital products, such as music, games and apps?
Phil Schneider says
What I’m seeing is that it would apply to all “digital goods.”
Eric Dye says
Agh.
James Cooper says
In the UK we pay VAT (value added tax – our sales tax) on and offline. But we have different level of VAT for different things/services: http://www.hmrc.gov.uk/vat/forms-rates/rates/goods-services.htm
If you’re a business with a big turnover and/or a non profit you can claim back the VAT on certain things.
One good thing we do have is ‘giftaid’. If you’re a tax payer, when making donations to registered charities you can give it as ‘giftaid’ which means the charity can claim the tax on the donation (so an extra 20% for free!) http://www.hmrc.gov.uk/individuals/giving/gift-aid.htm
Phil Schneider says
Wait? Do you pay taxes when you donate money online? Is that how they can claim it back?
James Cooper says
No, you don’t pay tax when making donations, giftaid enables charities to ‘reclaim basic rate tax on your gift’. So they get extra for nothing 🙂
Phil Schneider says
Ohhhhh. Well, that’s awesome.