[LINK] Kogan on Online Retail....

[Scott Howard]

On Sat, Jan 8, 2011 at 9:11 PM, Richard Chirgwin
<rchirgwin at ozemail.com.au>wrote:

> With regards to the US, Internet sales are, as I understand it, exempt
> from state taxes (something which several states are lobbying to change).
>

Not quite...

 "No taxation without representation" is a concept in the US which dates
back to before the American revolution, when the British taxed American
settlers without giving them anything in return.

Mix that with sales tax being state based, and you get a situation where
taxes are only charged at the time of purchase where the purchaser is in the
same state as the seller (or more correctly, where the seller has a presence
in the same state as the purchaser). ie, the buyer only pays the tax where
they have local "representation".

I'm in California.  If I go down to the local Target and buy something, it's
taxed.  If I buy something from Amazon.com, it's not taxed, because Amazon
don't have a presence in California.  (They actually do, but under a
difference company name, so..).  If I buy something online from
target.comthen I DO pay tax, because they have physical shops in
California - even
through their website is probably in another state, and the goods most
likely ship to me from elsewhere.  In fact, most (all?) Target.com stuff
ships from Amazon.com due to a partnership between them - but the exact same
goods, coming from the exact same warehouse, will have different taxation
depending on whether Target.com or Amazon.com sold them!

Someone from New York does pay tax for Amazon purchases (as they are based
there), as do people from about 5 other states where they have a presence -
although at least one or two of those are states that don't charge Sales Tax
(eg, Oregon).


If that's not complex enough, technically you DO need to pay tax to your
LOCAL state for out-of-state purchases.  eg, although I can order something
from Amazon and not pay sales tax on it, technically I need to then turn
around and pay the State of California a tax of 9.25% on whatever I
purchased.  In practice this is not enforced for individuals, but it IS
enforced for companies/businesses.


For things that are shipped out-of-country then obviously there's no Sales
Tax.  However unlike Australia and many other countries there's no way to
reclaim the tax paid on goods if you purchase them and then take them out of
the country a short time later (the one exception being Louisiana who do
allow this - but it only applies to international flights departing directly
out of Louisian, and there's not exactly a lot of those...)

  Scott.