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Posted
by Roedapple
September 20, 2011 at 10:18 a.m.
Internet Sales Tax
$5 BILLION in sales taxes will go uncollected due to internet sales this year, and the numbers increase every year. We are legally obligated to report any taxes due as a result of online purchases, but few of us do. Thoughts?
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Comments
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jafs (anonymous) says…
There's a place in your tax return where you are supposed to pay an out of state purchases tax amount - it's usually around $25. I always do it.
But, there's something funny about paying the state of KS for purchases made in other states - it would make more sense for that revenue to go to the state in which items are purchased, I'd think.
RoeDapple (anonymous) replies…
It's complicated jafs, and I don't pretend to have all (any) of the answers. Could it be you owe the taxes where you paid for the purchase?(From your computer at home?) If that were the case, what about people traveling through multiple states with a laptop? Would a Lawrence resident traveling through Hastings,NE who orders an item through Amazon owe sales tax in Kansas or Nebraska?
jafs (anonymous) replies…
Right.
That's why it makes more sense to pay sales tax at the place of sale.
If some states want to charge online sales tax, they can, and if others don't want to, they can choose not to.
It doesn't make sense to pay KS sales tax on an item bought in Nebraska.
hear_me (anonymous) replies…
I have wondered the same thing. If I purchase something online from a business in Florida, I should pay sales tax to Florida. There are two possibilities for this ineffective tax system- 1) before the Internet, if you were in another state and mad a purchase, you did not have to pay the state's sales tax; 2) Kansas copied other states. It was not discussed very much in Kansas.
RETICENT_IRREVERENT (Ronaldo Ignacio) says…
Since July 1, 2003, Kansas has been a destination-based sourcing state, the rate of sales tax due on in-state sales will be the combined state and local sales tax rate in effect where the customer takes delivery/possession of the purchase.
chootspa (anonymous) says…
I think all sales tax should be automatically included in the purchase by the seller, and I think it should be included as part of the price of the item rather than a separate gotcha after the transaction has occurred.
jafs (anonymous) replies…
Yep.
deec (anonymous) replies…
That wouldn't really work on any site that charges the seller a commission, such as ebay, etsy, amazon, alibris, etc. If the sales tax were included in the sale price, the seller would owe commission on it. Additionally, on some sites including the tax in the sale price could cause higher listing fees for the seller.
boltzmann (anonymous) replies…
The real problem here is that, unlike the value-added taxes (VAT) that are used in Europe, which are constant within each country for specific item types and which enables them to include the tax in the price, our sales taxes vary wildly among the myriads of taxing units (state, city, even block to block with the new CID tax schemes). As long as the tax is based on the buyer's address and not the seller's address, there would be no way for the seller to know in advance what the appropriate tax would be. This is an enormously and in my opinion unnecessarily complicated taxing structure that is definitely one of those things that is rife for simplification. Of course, one could argue that this is the price we pay for "local control", but it is still not efficient.
RoeDapple (anonymous) says…
Good to know R_I. If I purchase a gift valued at $200 through the internet from Connecticut and have it shipped direct to my friend in Oregon, who gets the sales tax if I never take delivery/possesion? Incidentally, The $5 billion figure is a very conservative estimate. Some sources estimate as high as $23 billion.
Catsap (anonymous) says…
A satisfying form of civil disobedience:
The city of Manhattan, Riley County & the state of KS have spent a portion of my taxes to bring the National Bio- & Agro-terrorism defense Facility to within 1.6 miles of my residence. I make most purchases in a manner to deny them additional funding for that purpose.
I live outside the city limits, which = taxation on home improvements @ the county rate. We selected Pott County contractors for home improvement projects. I have made dining & electronics purchases in the N End Redevelopment, where the tax is not dumped into Manhattan's general fund.
KS kindly estimates the amount of out-of-state internet taxes I should pay & I take them up on that estimate. My MO is to research the internet, & make an out-of-state purchase when it is the lowest total cost. Amazon has a warehouse in Coffeyville, so sales tax usually eliminates Amazon as a competitive seller.
The NBAF will be operational in 2018. We Kansans were NOT told the KSU Colonels responsible for this facility also were responsible for the security & safety protocols under which the Anthrax Mailer operated. For that reason alone, I'm a staunch opponent. We plan to leave our native state ASAP ~ 2018. I view my actions as a protest against Taxation With Misrepresentation of the NBAF.
ljwhirled (anonymous) replies…
When (not if) a germ gets out, it will cost them a lot more than your little tax protest.
I've seen estimates of $5 Billion in damage to Kansas agriculture if hoof-and-mouth, Bovine spongiform encepholopathy or any of a number of other very bad bugs gets out.
I went to Joplin to volunteer after the storm, and I'll tell you what. nothing as big as the proposed bio-defense complex will survive a direct hit from a Cat-5 tornado.
Like I said, not if. When.
But our leadership will be long since retired by then, so it is someone else's problem.
They'll never be held accountable.
blue73harley (anonymous) says…
I NEVER buy anything online.
That is my story and I am sticking to it!
kernal (anonymous) says…
It's always been my understanding the sales tax is due where the purchaser resides.
Makes me wonder just how better off would our city coffers be if everyone voluntarily paid sales tax owed to the City of Lawrence? Ditto for the state.