(06-21-2018 11:27 AM)BadgerMJ Wrote: (06-21-2018 11:04 AM)Kaplony Wrote: (06-21-2018 10:51 AM)Lord Stanley Wrote: (06-21-2018 10:44 AM)Kaplony Wrote: (06-21-2018 10:02 AM)Lord Stanley Wrote: Me no likey.
Why?
Because I don't like paying taxes to the government.
I don't like driving the speed limit but I still do it.
Why should online retailers be given a competitive advantage over brick and mortar retailers?
They've managed to figure out a better, faster, more efficient way of retailing by offering more goods at cheaper prices purchased from the comfort of your own home and sent right to your house.
THAT'S their competitive advantage. If the brick & mortars can't figure out a way to keep up, they close the doors.
That's how capitalism works.
What they also did was exploit a part of the law that didn't cover taxes and internet sales. Instead of punishing them, we should be praising them and figuring out MORE ways to do that very thing.
The concept of sales & use tax is that the buyer pays the tax while the seller simply acts as a collection point.
When filing your monthly Sales and Use Tax return, Tennessee allowed the business to keep a %-age of total collections. This served as compensation to the business for acting as an agent on behalf of the state. If I recall correctly, I think it was a graduated rate up to 2%.
If your business in Memphis had $10,000 in sales you would have collected $925 in sales tax. At the time I dealt with this Memphis' rate was 9.25%.
When the business filed its monthly report with the state you would deduct 2%, $18.50, and submit the rest.
So, the seller hasn't been out anything. Rather, it's the buyer who benefits.
There was another problem the state had to deal with.
People can buy items out of state and bring them home. In Memphis people would go across the state line to buy a car because Mississippi has a lower sales tax rate. Currently it's a max of 8%.
Years ago it was 6% compared to Memphis' 9.25%. That's a savings of 3.25%.
For a car that cost $20,000, MS would charge $1,200 vs Memphis' $1,850. You could save $650 for driving an extra 10 miles to buy your car.
But.... TN has a Sales and USE Tax. The USE part means that you pay tax on the items you USE in TN that you purchased in another state. The amount you pay = the difference you saved. So technically per law the buyer was supposed to pay the savings of $650 to the state on their own.
Obviously nobody was going to tattle on themselves so the state didn't collect much via that law. So Tennessee worked out a deal with other states. They would collect the sales tax at the time of sale and submit that to TN.
Anyway, each state imposes a sales tax rate on its citizens. Businesses are required to collect that tax on behalf of the state.
A business that operates outside of the state now has to collect that tax and submit it as well.