WorldWatcher
Gold Member
Sorry, but on this one you are completely wrong. Collecting different tax rates for every single taxing authority and having to write out checks to make payments to as many as a few hundred taxing authorities per month would be one massive headache for any Internet company.
It's not as if they just need to collect sales tax for their own state; they have to collect it for every state where they ship their product.
My apologies, but you are incorrect. What you post is not in the bill.
1. They will only have to interface with 45 Taxing Administration points. The bill requires simplified tax filing and a single point for each state. There are currently on 45 states that have sales tax.
2. Secondly, they will not be writing checks to remitting payment to the 9,600 taxing authorities (or even hundreds as you claim). They will file with one tax administration entity for each state.
3. The law requires that States that want to participate in the program provide software that allows for the automatic computation of the tax at the time of sale and files the state tax returns. States already have online funds transfer when it comes to the payment portion.
4. The legislation exempts online retailers with less than $1,000,000 in sales during the previous tax year, any business doing online sales through the internet so electronic filing and remittance will not be that much of a headache and no one is going to have to sit down and right hundreds of checks each month.
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Yes only 45. Great use of time. How would you like to do your taxes 45 times at the end of the year?
What exactly is this software going to do? The shopping cart is where the tax will have to be calculated and collected. Will this software provide the programming for every website? Something tells me no. Many shopping carts will have to be upgraded just for this. All the taxes will have to be manually setup in the shopping cart. It's a huge mess. If states want all this work done then they should pay companies to collect it.
I'm a database guy by trade, I work with HR and not retail, but the fundamental concepts remain the same.
Shopping Cart software already has to include tax calculations for the state the seller is in. When a customer makes an online purchase, it looks up the address of delivery, if the state of the seller and the purchaser are the same - tax is calculated. If they are not the same, then currently no tax is calculated. For sites with over a $1,000,000 in sales - ya, an upgrade will be patched into the database. The States are required to provide the underlying tables free to the business community. In the future when the address is looked up, it will access the table for that address in that state and compute the tax and return it to the cart for display. The law also requires that the software prepare the returns for electronic filing.
I have no disagreement with the concept of the businesses getting some type of compensation for the additional work. I was talking to a business person on another board and he was saying that by filing timely returns that they get discount on the total tax owed. Such a discount in essence paid the company because they were allowed to keep a percentage of the taxes collected which covered expense.
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