# IMPORTANT: For U.S. Devs and Songwriter/Composers Selling on The Internet



## Peter Alexander (Apr 23, 2013)

Dear Colleagues,

In 25 years of business this is the first time I'm writing you about pending US Government legislation that will have disastrous impact on our businesses, which extensively use the Internet for direct-to-customer sales.

I'm specifically referring to Senate Bill S. 743, or the Marketplace Fairness Act (MFA)
which requires that all businesses who sell on the Internet, collect sales tax in over 9000 US tax districts and make quarterly filings to all 50 US states.

Senate Majority Leader Harry Reid (D-NV) is trying to push this bill through before it can be discussed, and we the people, be able to comment on it.

Regardless of your political persuasion, how many of us can afford to file sales tax in 50 states 4x annually? And this also has implications for those devs outside the US (Best Service, Project SAM, Spitfire, VSL to quickly list 4) who have US customers buying direct from their web sites. 

So that you can read and decide for yourself, here are some links from creditable news sources to review:

http://dealbook.nytimes.com/2013/04/22/ ... f=business

http://professional.wsj.com/article/SB1 ... hp_opinion

http://libertyblitzkrieg.com/2013/04/22 ... k-through/

I know we all have busy schedules, but I believe this merits our time to contact both our respective US Senators and members of the House of Representatives.

And for those who appreciate the ability to buy through the Internet, especially with direct downloads, please also consider writing the representatives listed above.

Thank you for taking the time to read this.

Most sincerely yours,

Peter L. Alexander
www.alexanderpublishing.com
[email protected]


----------



## germancomponist (Apr 23, 2013)

Oh, it reads as if German authorities would be involved. ...


----------



## Peter Alexander (Apr 23, 2013)

germancomponist @ Tue Apr 23 said:


> Oh, it reads as if German authorities would be involved. ...



That could be a language barrier. What has to be determined is what responsibility to collecting US taxes does German company Best Service have for US customers buying from them directly. At present you only have to collect sales tax if you have a physical brick and mortar presence in the state. The new legislation says that even if you _don't_ have a physical presence in the state, you must collect and pay sales taxes to each of the 50 states where you received the sale from.


----------



## Blake Ewing (Apr 23, 2013)

I was under the impression this only affected companies making more than $1 million US per year.



> The Marketplace Fairness Act of 2013 authorizes each member state under the Streamlined Sales and Use Tax Agreement (the multistate agreement for the administration and collection of sales and use taxes adopted on November 12, 2002) to require *all sellers not qualifying for a small-seller exception (applicable to sellers with annual gross receipts in total U.S. remote sales not exceeding $1 million)* to collect and remit sales and use taxes with respect to remote sales under provisions of the Agreement, but only if such Agreement includes minimum simplification requirements relating to the administration of the tax, audits, and streamlined filing. Defines "remote sale" as a sale of goods or services into a state in which the seller would not legally be required to pay, collect, or remit state or local sales and use taxes unless provided by this Act.



Source: https://en.wikipedia.org/wiki/Marketpla ... ct_of_2013


----------



## Nick Batzdorf (Apr 23, 2013)

The states are hurting, but like all flat taxes, this is regressive. Taxes want to be progressive in the US.


----------



## Peter Alexander (Apr 23, 2013)

Blake Ewing @ Tue Apr 23 said:


> I was under the impression this only affected companies making more than $1 million US per year.
> 
> 
> 
> ...



Many devs here are making over $1 million annually. But why wait when you can say something now and nuke the problem ahead of time? Said Disraeli, "The art of statesmanship is to foresee the inevitable and to expedite its occurrence."

You know it's coming, so why wait, especially if you like these nice prices for sample libraries you can get online by download? 

Think beyond.


----------



## Blake Ewing (Apr 23, 2013)

Peter Alexander @ Tue Apr 23 said:


> Many devs here are making over $1 million annually.



Really? _Many_? This surprises me.

And, apparently I'm in the wrong business.


----------



## Peter Alexander (Apr 23, 2013)

I appreciate your follow up post, but how about taking a more proactive stance by looking up your US Senators and sending a brief note online that says:

Dear Senator, 

In regards to US Senate Bill S. 743, or the Marketplace Fairness Act (MFA), please vote NO.

Thank you.

Sincerely yours,

Sign your name


Takes less than a minute.


----------



## JonFairhurst (Apr 24, 2013)

I expect my Washington State senators to vote NO. Amazon is in WA, so we WA residents already pay state sales taxes on purchases from the big guy.

Yes, Amazon could afford to file in 50 states. Little guys can't. At a minimum, there should be a line below which Internet sales are exempt from sales tax.

I'm no anti-tax guy but I am an efficiency/simplicity guy. I also support small entrepreneurs and true wealth creators. I'll contact my senators.


----------



## germancomponist (Apr 24, 2013)

Peter Alexander @ Wed Apr 24 said:


> germancomponist @ Tue Apr 23 said:
> 
> 
> > Oh, it reads as if German authorities would be involved. ...
> ...



Ah yes, I understand now what you mean, Peter. Hm, a wide field in a time, when all states need money so urgently.


----------



## Peter Alexander (Apr 24, 2013)

JonFairhurst @ Wed Apr 24 said:


> I expect my Washington State senators to vote NO. Amazon is in WA, so we WA residents already pay state sales taxes on purchases from the big guy.
> 
> Yes, Amazon could afford to file in 50 states. Little guys can't. At a minimum, there should be a line below which Internet sales are exempt from sales tax.
> 
> I'm no anti-tax guy but I am an efficiency/simplicity guy. I also support small entrepreneurs and true wealth creators. I'll contact my senators.



In a nutshell, small businesses with an internet presence are being required to be collection agencies for state sales tax evaders in over 9000 tax districts.

The simple answer is for states to run PSAs reminding folks their legal obligation to pay state sales tax on items bought outside the state. Anything you buy from audioMIDI or Sweetwater, you're obligated to report your purchase on your annnual tax forms and to pay your state the sales tax it lost on your out-of-state purchase. 

And it gets thorny quickly if you made a purchase say from Spitfire Audio which has no US dealers. Are you obligated to pay state sales tax on an item(s) that are technically imports via download?

Since MP3s and sample libraries are software, are they intangible or tangible property subject to sales tax when bought as a download? How about video lectures and downloads?

This per the Constitution should be a state answer (not a famous VI Control opinion fest), unless it's now going to be a national answer.

This now leads to collection and dispersal. You can't just hire anyone to handle these payments. You have to hire someone skilled in math, accounting, and legal writing to accurately fill out the sales tax forms which are incredibly complicated. And it disintegrates from there. 

All this to say thanks for writing your senators.

PA


----------



## chimuelo (Apr 27, 2013)

These junkies will never stop.
They won't even clean the 263,000,000,000 found in waste and duplicitive programs and yet claim they need even more cash.
It would be for another political slush fund since they can't get Bernancke to give them anymore money.
The Federal Reserve says what happens, so the wealthy redistributors are left to take from wherever they find some cash.
Their plantations can't be taxed, their rich buddies like Treasury Departments Jack Lew and other Biden Hedge fund investors are hiding offshore accounts, that leaves us suckers again.

Not this time.
They seem desperate and don't realize that 2014 will be the time people start looking at their checks, and then rememberbering how Al Gore, and other wealthy Liberals are skating while we suffer, so hopefully it will pass, then that will guarantee they will be replcaed by new younger people who want growth instead of increasing income inequality by the wealthy redistributors.

But the choices we get are members of 2 Crime Families, w/o any honest people who might have once held a job somewhere before Daddy or some wealthy PAC uses them as a spokesmen, who needs dual teleprompters and 4 sentance scripts which they barely memorize.

Clean up the fraud first, but maybe that fraud is really the cash they siphen off for bcakdoor deals, who knows with these lying thieves.


----------



## Peter Alexander (Apr 27, 2013)

Good points. Now please, write your Senators.


----------



## chimuelo (Apr 28, 2013)

I can withold my membership dues, oh wait, I forgot, those funds are given to people like John Edwards, Gore and Reid, and the members don't get a choice.

I shall write again.

But in all honesty Harry Reid won't listen, but his office does reply and is professionally run by somebody, so they give the impression to you your voice counts, but there are others, and since this is a bi-partisan issue, not just a wealthy Liberal one, it shows you the usual agreements are struck when it benefits the elites in a financial way, so I am curious as to what kickbacks they are getting...?

I saw the 8 minute vote that passed overwhelmingly 2 weeks ago that allowed Congressional members a new way to have insider trading legal again for them.
I am so happy to see them acting in a bi-partisan way again..... 0oD


----------



## Peter Alexander (Apr 28, 2013)

It's sickening.


----------



## Andrew Aversa (Apr 28, 2013)

I'm a Democrat and I support raising revenue to help deal with our deficit problems (just like I support cutting spending). That being said, I told my senators I did not support this bill. I don't like that it's flat and that the cutoff is $1m. ISW isn't at that level yet (though I'm not surprised at all that many devs here are, think about the costs of doing those big orchestral libs and the revenue you would need to make it worthwhile) but still...


----------



## chimuelo (Apr 28, 2013)

The problem with wealthy redistributors is that it always starts off as a little nip here and there, and while the costs they imposes on regulatory burdens is passed onto us, that's a hidden tax.
The deception is what bothers me, and I knew the get the rich guy jive (themselves) was just a start and a great way to garner votes from the plantations they create by making sure small businesses can't hire, so take this free stuff until later. Yeah, and later when an employer see's a 2 year gap in employment, they know what you've been doing. There's a data base in each state that's illegal to use but is sold by corrupt state employees to private investigators, just like DMV employees give out IDs for illegals and felons, it pays good money.
I just hope they decide to stop destroying small business and invest in infrastructure like they promised, and not the infrastructure that leads people to your Non Union Vineyards as we saw with our "Shocel Ready Stimulus" money.
How can anyone trust these wealthy liars and hypocrits.

I wrote 3 letters, but like I said when something is bi partisan it means the politicians are all getting something out of it, so we'll see if it's just another Team Obama, Pelosi, Reid lie, or something useful.


----------



## Nick Batzdorf (Apr 28, 2013)

I'm basically with Andrew: a Democrat...except the only deficit problem we have is that the deficit is too low under the current circumstances. F Chim's conspiracy theories where the sun don't shine, and all the knee-jerk stuff about how the government isn't spending our tax money wisely bla bla bla. That is pure Republican propaganda, and you can't expect anyone who's informed about public policy to read this crap and pretend it's just some calm, unpolitical issue with no ideology involved.

I don't want civil discourse with sociopaths. Creating a country of ghettos (mainly) and gated communities is not something to smile and shake hands over and discuss politely!

The problem with this tax is that it's regressive, as I said: it hits everyone the same regardless of income. It's not the answer to states running out of money. The answer is MORE SPENDING: the federal government should be taking advantage of their ability to borrow and negative real interest rates and aiding the states, who can pay it back when their unemployment rate drops back to a sane level.


----------



## Jimbo 88 (Apr 28, 2013)

a tax on a purchase by its nature is progressive. The more you spend the more you pay. Saying the tax is bad because it is "flat" and not progressive in this case does not work.

Not sure how I feel about this tax. I feel that there needs to be some kinda sales tax given the amount of commerce. 

But how the heck do you make this tax work? 

Sometimes taxes can be good..not sure here.


----------



## chimuelo (Apr 28, 2013)

Al Gore is definately a knee jerk remark, only a Republican would notice his refusal to pay his "fair share" as he raced to get the cash before his fellow Liberals taxed him.....

How about Corzine stealing 1.6 billion..? Fox news right....?

John Edwards was almost a Liberal President, that would have been great.
Blackmail him into doing anything you want, another pathetic Liberal leader, who themselves are wealthy, yet claim they need to pay more, but avoid doing as they say.

This isn't being Republican, it's called being embarrassed and shamed I am represented by wealthy liars and thieves who sicken me just seeing them read their regurgitated nonsense.

The Republicans are stupid and weak, the Liberals see a chance to tax the middle class and get away with it, personally I believe it will be their downfall. And to see GOP members agreeing with this makes me puke at this self serving "bi-partisanship."

I only ask for an honest Government, one that doesn't disrespect our tax dollars, and one that doesn't need lobbyists to pay them extra money just to do their damn job. The CBO for any European bro reading this is made up of members from both parties to watch over Congress and the Senate budgets, they have found 263,000,000,000 USD in waste, just think of the infrastructure we could build with that. 

If we really would tax the wealthy campaign contributors and members of the Biden family hedge fund ( more knee jerk conspiracy theories) and Wall Street politicians like Jack Lew hiding their cash offshore, it would be a great start.

But to tax others while these parasites proove their greed and deciept at every turn, is a no go with me, I don't care if it's a "fair tax" or not. I don't want them wasting anymore money.

Food Stamps for Mexico is another great Liberal tactic. Sounds dumb and wasteful, but it's a great investment using our cash.
May as well buy Mexican voters and promise them food, it worked once, lets bring in Central America now so we can just blow billions of our tax dollars just to ensure Liberals a lengthy, lucrative career.

Sorry Nick, but your bros are infected, and cancerous. 
I'll be voting for the surgeon who cuts them out, regardless which Crime Family they are a member of.


OOOPS.......Almost forgot..
Which States are where all of the unfunded pensions and bancrupcies are....?

That sums up the spending and lack of foresight to take care of peoples fiscal responsibilites.

What excellent high taxing role models they make, yeah let's follow that path.


----------



## Peter Alexander (Apr 28, 2013)

RE: REGRESSIVE

That's not the point of why I'm encouraging you to write your senators. This is:

_In a nutshell, small businesses with an internet presence are being required to be collection agencies for state sales tax evaders in over 9000 tax districts. _

Now being a Virginia corporation (whereas before a California Corporation), the Congress wants Alexander Publishing to charge/collect CA sales tax on California customers and then to file CA state tax forms 4x annually. Now repeat by 48 states.

WHEREAS:

When you buy out of state whether by driving over and crossing state lines or buying on the Internet, you are required to pay the state its lost sales taxes. However, rather than making you responsible (which is politically dis-advantageous to their careers), the burden is being shifted to business to act as tax collection agencies for each state.

And if you're a developer, that means you.

And if you're selling your music over the Internet direct off your site, that means you.

Grossing $1m is nothing if you don't have sufficient net income to hire a full time qualified person to handle these tax filings.


----------



## chimuelo (Apr 28, 2013)

Bernancke prints 85 billion a month, and doesn't let the Liberals get anywhere near that money.
It goes to where he knows it will help the economy, housing is what saved us, even in it's sorry state that it is.
Since the wealthy redistributors have been cut off, they are looking for anyway they can to take more money.
If they only would go after the waste and fix that, since it is their job to begin with, I wouldn't mind sensable taxes, like consumption taxes. I know the States need money and paying more would be OK as long as it doesn't burden small businesses more than DC already has, but to let these freaks in Washington have anymore cash is plain stupid.
Even Bernanke knows this, it's why they have been cut off.
No sense feeding a dead Horse.


----------



## Nick Batzdorf (Apr 28, 2013)

> Saying the tax is bad because it is "flat" and not progressive in this case does not work.



Of course it works! It's exactly my point. You just explained what I'm saying - it's a flat tax and therefore regressive.

If the states need money, an additional flat/regressive tax is not the answer.


----------



## Peter Alexander (Apr 29, 2013)

Nick Batzdorf @ Sun Apr 28 said:


> > Saying the tax is bad because it is "flat" and not progressive in this case does not work.
> 
> 
> 
> ...



Nick - do you still run a business? Or are you on Obama's payroll these days?


----------



## Simplesly (Apr 29, 2013)

With regard to software downloads: unless I am out of my mind or something has changed, they are considered intangible goods and are not subject to sales tax. Even if you buy them in state. For instance, when Waves changed to all electronic download and offered their installer disks for at stores, we (westlake audio when i was there) stopped including tax. People could buy a $6000 mercury bundle and pay 0 in sales tax. So it would seem that sample devs would be safe for now.


----------



## Nick Batzdorf (Apr 29, 2013)

Peter, you sound like a parody of Rush Limbaugh! That's out of character for you.

And I hope you understand that I'm opposed to this tax, only for different reasons than you are. My point is that any consumption tax like this is regressive by its nature, and it's the exact wrong way for ailing states to help close their budget gaps. 

Now, if you want to make the argument about stores vs. online, then that's a different aspect to the issue that's more complicated.


----------



## Nick Batzdorf (Apr 29, 2013)

Okay, Dean Baker makes a good point in opposition to what I said:

"The sales tax is regressive. It would be great to see it replaced with income taxes. It's not going to happen whether or not we tax Internet sales. Taxing Internet sales makes the sales tax less regressive because low income people buy less of their stuff on the Internet than high income people. This is simple -- whine away, but the story is really really simple. If you want to make the tax system less regressive and you want to make the economy more efficient (why would we subsidize Internet sales at the expense of brick and mortar stores?), then you support having Internet sales subject to state sales taxes."

http://www.cepr.net/index.php/blogs/beat-the-press/george-will-is-outraged-because-amazon-will-be-taxed-like-a-mom-and-pop-grocery-store (http://www.cepr.net/index.php/blogs/bea ... cery-store)


----------



## NYC Composer (May 5, 2013)

Peter Alexander @ Mon Apr 29 said:


> Nick Batzdorf @ Sun Apr 28 said:
> 
> 
> > > Saying the tax is bad because it is "flat" and not progressive in this case does not work.
> ...



This sort of statement worries me when it comes from a good man like you, Peter.


----------



## Peter Alexander (May 11, 2013)

Read the bill. I sent a 4-page analysis to Rep Bobby Scott (D-VA) who co-sponsored the bill in the judiciary. 
http://thomas.loc.gov/cgi-bin/query/z?c113:H.R.684:

The mechanics of the bill are horrific when you work them through. It is not about progressive/regressive, it is about Representatives with companies in their district requiring their constituents to collect sales tax in 44 other states with 9000+ sales tax districts and having to file those forms with 100% accuracy - quarterly.

It took me 4 single-spaced pages to find point out the problems with this bill and to give verifiable examples.

Anyone who wants to engage in progressive/regressive discussion is merely creating a distraction. 

Voting by the House on HR 684 is happening so quickly, businesses in each Representatives district simply lack the time to read, review, and comment before this would go to vote.


----------



## rJames (May 11, 2013)

It is a tax that we are all supposed to be paying already but many of us avoid it. We are all liable for paying the appropriate sales tax for where we live.

I do agree that it is a burden that small businesses shouldn't have to bear. It just gives the behemouth companies another edge.

But the sales tax is legal. Wish that internet sales could be taxed at the sellers location instead.

But then everyone would be setting up a post office box in a location that has no sales tax.

Ron


----------



## Peter Alexander (May 14, 2013)

[quote="Nick Batzdorf @ Mon Apr 29, 2013 11:48 am"Now, if you want to make the argument about stores vs. online, then that's a different aspect to the issue that's more complicated.[/quote]

That's the issue and it's not complicated. If your California business starts pulling in the bucks with out of state orders (you do have an Internet presence), then you're responsible for collecting sales tax revenue for 49 other states containing 9000+ tax districts which also makes you vulnerable to tax audits from 49 other states.

Progressive/regressive is a distractionary conversation. 

HR 684-2013 is a bad biil. Please ask HR to vote NO.

That's easy. And you don't even need a Staples button to do it.


----------



## Peter Alexander (May 14, 2013)

Simplesly @ Mon Apr 29 said:


> With regard to software downloads: unless I am out of my mind or something has changed, they are considered intangible goods and are not subject to sales tax. Even if you buy them in state. For instance, when Waves changed to all electronic download and offered their installer disks for at stores, we (westlake audio when i was there) stopped including tax. People could buy a $6000 mercury bundle and pay 0 in sales tax. So it would seem that sample devs would be safe for now.



Depends on the state. In which case, 49 states with 9000+ tax districts need a mechanism to communicate that to every business with an Internet presence.


----------



## guydoingmusic (May 14, 2013)

I received a letter from my Congressman today, replying to my request online for him to vote no. He informed me that he disagreed and that he would be supporting this bill. 

:roll: 

Brad


----------



## Peter Alexander (May 14, 2013)

guydoingmusic @ Tue May 14 said:


> I received a letter from my Congressman today, replying to my request online for him to vote no. He informed me that he disagreed and that he would be supporting this bill.
> 
> :roll:
> 
> Brad



Thank you, Brad, for your efforts. Consider writing him back ask him who he's representing when he ignores your request. 

I did that with Rep Bobby Scott (D-VA) who co-sponsored the bill. So far, no answer.


----------



## NYC Composer (May 14, 2013)

Peter-is there no tax software that will collate this information and spit out results?


----------



## Peter Alexander (May 14, 2013)

NYC Composer @ Tue May 14 said:


> Peter-is there no tax software that will collate this information and spit out results?



1. 

But you're missing the point - 50 filings quarterly representing 9000+ tax districts when all that's needed is for NY state to remind you of your sales tax obligation. Problem solved.


----------



## NYC Composer (May 14, 2013)

Peter Alexander @ Wed May 15 said:


> NYC Composer @ Tue May 14 said:
> 
> 
> > Peter-is there no tax software that will collate this information and spit out results?
> ...



Sorry-I don't understand your response.


----------



## Peter Alexander (May 14, 2013)

There is one (1) program. But it's more than that. It's the quarterly filings for 50 states representing 9000+ tax districts. And if any merchant makes a mistake on the tax forms, they're liable for tax audits from any of those districts. If a company filing for them makes a mistake, the merchant is responsible for the filing agent's mistakes. 

This is not wave-of-the-hand-simplicity. 

All you're being asked to do is to please write your Rep and ask them to vote no on HR684-2013.

The link to read the bill is above.


----------



## NYC Composer (May 15, 2013)

Peter Alexander @ Wed May 15 said:


> There is one (1) program. But it's more than that. It's the quarterly filings for 50 states representing 9000+ tax districts. And if any merchant makes a mistake on the tax forms, they're liable for tax audits from any of those districts. If a company filing for them makes a mistake, the merchant is responsible for the filing agent's mistakes.
> 
> This is not wave-of-the-hand-simplicity.
> 
> ...



I did read, I do think it's burdensome for small business, and that didnt obviate my question. Thank you for clarifying, but you have an odd tendency to patronize in text.


----------



## Peter Alexander (May 15, 2013)

With all due respect, Larry, some of things you've posted over the years haven't exactly been models for the Pulitzer Prize either.

This is an important piece of legislation that affects a lot of people. If it doesn't affect you today, it will tomorrow.

I am proactive. I will not sit on my hands. I will not sit, wait and hope that politicians, regardless of the political party, will take care of me. I will positively encourage others to act and do so with a reason as to why, as I've done with my starting post.

These representatives work for us. We pay their salaries. We give them great benefits including the best health insurance at rock bottom rates that money can buy. When we say something is a bad bill, especially after having read it and analyzed it, they need to respond to the direction given by their constituents.

If a constituent gives no direction, and holds no politician to Constitutional accountability, then they will do what they want and we all lose.

Only through participation, or the direct absence of participation, does change happen.

That is every American's personal decision and their personal responsibility.


----------



## Synesthesia (May 15, 2013)

Unfortunately for Californians who oppose the bill, Senator Dianne Feinstein is a co-sponsor...


----------



## Mike Greene (May 15, 2013)

I should probably stay out of this, but this sounds like a Fox News "sky is falling" sort of thing to me. First, it only applies if a company has gross U.S. receipts of over a million per year. Of people posting in this thread, I'm guessing it applies to no one. Heck, I'll bet even East West doesn't do $1M in U.S. sales per year.

Second, even if it did apply to anyone here, there's a provision that _"only if such Agreement includes minimum simplification requirements relating to the administration of the tax, audits, and streamlined filing."_ So it's not really the dire case of the little guy having to file tax forms in "9,000+ tax districts."

Personally, I like this bill. More than once someone like East West will post a sale here, then Peter will jump in to tell people to buy the same thing from him instead, because then they don't have to pay sales tax. What the f's up with that??? The California company loses the sale to Peter simply because he's in a different state. Plus California loses the tax money, in a time where our state schools are being hammered with budget cuts.

Don't get me wrong, I don't like paying taxes and I don't like filling out paperwork any more than the next guy does. And I'm not so sure I even like the regressive nature of a sales tax in the first place. But given that we _do_ have a sales tax, then at least the playing field should be level.


----------



## Nick Batzdorf (May 15, 2013)

^ That's right, and I too don't particularly want to pay more taxes.

Peter, I posted a change of heart after the last post of mine you responded to. And even before that, it's silly to pretend this has nothing to do with right/left or anything and it's just simple issue of bad government creating inconveniences with no other repercussions. 

But the main question you haven't answered is why we should be subsidizing internet sales at the expense of local stores.

To repeat the Dean Baker snippet I posted last week, which convinced me that my first reaction was wrong:



> Okay, Dean Baker makes a good point in opposition to what I said:
> 
> "The sales tax is regressive. It would be great to see it replaced with income taxes. It's not going to happen whether or not we tax Internet sales. Taxing Internet sales makes the sales tax less regressive because low income people buy less of their stuff on the Internet than high income people. This is simple -- whine away, but the story is really really simple. If you want to make the tax system less regressive and you want to make the economy more efficient (why would we subsidize Internet sales at the expense of brick and mortar stores?), then you support having Internet sales subject to state sales taxes."
> 
> http://www.cepr.net/index.php/blogs/beat-the-press/george-will-is-outraged-becau (http://www.cepr.net/index.php/blogs/bea ... aged-becau) se-amazon-will-be-taxed-like-a-mom-and-pop-grocery-store


----------



## chimuelo (May 15, 2013)

First off it's suppose to be a consumer based economy. If you were brick and mortar, you simply carry what others don't have in stock, and like Sears you give away products w/o worrying about a credit rating, a great place to cultivate new young customers and get their credit built up.
Government has a role in our society, but having wealthy mooches pretend to understand business, or use more "theories" of Freidman, Krugman, and other ___man's is simply trying to retain a sense of usefulness.

It's simple it an economy like ours, you adapt or disappear, unless you are Government then you fail and still stay alive through tax payer bail outs. The Post Office has the money to beat every company it competes with, but lacks the integrity, competiveness or desire to excell.
This is repeated in every program from Amtrak to Corn purchasing.

Government has no business minded people, just used car salesmen and lawyers.
Look at Chinas leaders. Doctorates in Science, Medicine and Enginerring, and their infrastructure and defense are booming, air pollution is coming down, they are making our leaders look like dickless wealthy mooches, well that's what they are, so their not hard to beat.
Maybe if they used their own money it would reuqire at least the learning of being accountability for failed programs and poor decisions.

If they would pass legislation to state no costs would be passed onto the consumer, we'd know they are serving us, but they make deals with those they regulate, and proof of this is the costs of energy, gas, Oil, and even hybrid vehicles now.

It's the Haves or Have Nots, people need to wise up and get used to this, as the wealthy redistributors will leave in 2014 very wealthy, where we will be luckly to hold what we own, yet still pay personal property taxes on something we already paid for.
These are wealthy Gangsters with law degrees, Joe Kennedy protigee's.

You better write them, or you'll be closer to poverty by 2016.


----------



## Synesthesia (May 15, 2013)

I'm trying to work out a comparison with the UK (as thats the system I'm familiar with)..

So if I buy something from a CA based internet business - or even a mail order item from a mom n pop store, they don't need to charge or collect sales tax, as the buyer is out of state. At least, thats the way I think it works, from past experience.

But, when the item actually arrives (physical product) it incurs a duty charge and VAT at 20%, which I have to pay via the carrier, else I can't have my item.

Now - the CA based company hasn't had to deal with any of this, its transparent - because why should they? My problem - I'm in the UK, so I should handle the tax issues.

Now, vice versa... Lets say a UK based company sells something to someone in CA.. This bill proposes that rather than the recipient having to deal with the payment of the sales tax (via the carrier, who is well placed to deal with these, and charges a small fee to handle it) -- the UK based company has to deal with it, collect the CA sales tax and remit to the US tax authorities?

Leaving aside the million dollars thing, as I'm considering the principle, should companies based in other countries be responsible for collecting taxes for foreign governments?

And thus - should CA based companies, selling to people in the UK, also, to be fair, be compelled to collect the UK governments VAT at 20% and send it over to HMRC? And France? Germany? Holland? etc etc ad nauseam?

Maybe I've got my understanding of this backwards. Its distinctly possible :D -- do you guys based over here charge VAT on purchases at the moment? Its a while since I bought hardware from the US and shipped to the UK..

Hey - I'm as down on these massive billion dollar corporations for shamefully dodging their taxes on a massive scale as anyone else.

But does this move seem logical? Is there not a better way to level the playing field?


----------



## Andrew Aversa (May 15, 2013)

> Heck, I'll bet even East West doesn't do $1M in U.S. sales per year.



I am quite sure that EW does at least 5x that in sales per year. I am also pretty sure that ANY companies doing big orch sample libraries are turning at LEAST $1m regardless of who they are. Think about the expense of doing an orchestral recording session, think about the expense of 8-10 employees (which even newer companies like Cinesamples have), and imagine the revenue needed to sustain that and *grow*.


----------



## Peter Alexander (May 15, 2013)

Synesthesia @ Wed May 15 said:


> I'm trying to work out a comparison with the UK (as thats the system I'm familiar with)..
> 
> And thus - should CA based companies, selling to people in the UK, also, to be fair, be compelled to collect the UK governments VAT at 20% and send it over to HMRC? And France? Germany? Holland? etc etc ad nauseam?



1. If you, a British citizen, order from me a tangible item that we ship to you, we file all the appropriate paperwork, and you are charged the appropriate VAT. This is true for all the countries we ship to.

2. If you, a British citizen, order a downloadable item, then it's your responsibility to file and report that for yourself.

However, this very issue is before the UN who want every business online to collect sales tax, that includes your sales to the US.

You work around this issue by establishing a small network of US dealers who sell independently of you.


----------



## Nick Batzdorf (May 15, 2013)

Synesthesia, this doesn't have anything to do with international sales, it has to do with inter-state sales.

The way it works now is that if you're in CA and you buy something online from a CA retailer, they collect sales tax from you just as they would if you walked into the shop. But if they're in another state, they don't collect tax. So CA residents can buy from other states and save 9% or so sales tax, whether or not we're technically supposed to report it. This law would change that.

By the way, I happen to be partners in a company that sells exclusively through mail order (except when we sell to college bookstores), so even though Peter is mad at me for not agreeing with him, I would be affected if we sold $1 million a year (we don't).


----------



## Peter Alexander (May 15, 2013)

> But the main question you haven't answered is why we should be subsidizing internet sales at the expense of local stores.



Funny question since you have an Internet presence.

The answer is "we" (to use your pronoun) are not subsidizing internet sales at the expense of local stores at all.

1. If U B responsible 4 U and follow your state laws, there's no "subsidizing" at all.

2. You presume that all local stores want to sell everything all of us in this sector have to sell. That's a false presumption. 

By experience, in today's market, most stores don't want to sell music software programs because they don't want to get stuck with them. I know this empirically, not by opinion, from distributors I talk to and from other software developers selling direct. 

Oddly enough, music stores don't want to sell music books. For a period of time, I did more business with Barnes and Noble than I did with GC.

There has always been a role for direct marketing whether it's an infomercial, a catalog, an ad in a magazine, or a mailing piece. The internet is simply an easier way of ordering vs. mailing in an order and paying by check because customer "wait time" is lowered, and shipping time is sped up.

3. You forget that there is a difference between tax avoidance and tax evasion. Ordering out of state has mostly been tax avoidance which is not illegal. What is now happening is that this is becoming an issue of tax evasion.

For example, there are a whole host of devs on this forum located in CA who sell their product all over the US. They're not charging sales tax and collecting it for all the other states that do. But some soon will be!

And BTW, that desk you created makes you a type of developer too! So "Youse" part of the "we" old chap!


----------



## Peter Alexander (May 15, 2013)

Mike Greene @ Wed May 15 said:


> I should probably stay out of this, but this sounds like a Fox News "sky is falling" sort of thing to me. First, it only applies if a company has gross U.S. receipts of over a million per year.
> 
> Personally, I like this bill. More than once someone like East West will post a sale here, then Peter will jump in to tell people to buy the same thing from him instead, because then they don't have to pay sales tax. What the f's up with that??? The California company loses the sale to Peter simply because he's in a different state. Plus California loses the tax money, in a time where our state schools are being hammered with budget cuts.



You're absolutely right. You shouldn't have. 

1. I'm proactive on bill that impacts lots of people and sets up unwieldy machinery to see it implemented that's totally unnecessary if each state did it's job in reminding citizens of their personal responsibility to obey laws that frankly, are murky from one state to another. 

Because I'm proactive, gave cogent reasons why to write and your Rep to vote no, and included a link so HR684 could be read independently, your response is to make me look like a Foxite. And _you're_ a California business owner and entrepreneur taking orders out of other states, which, if they're sufficient, enable you to hire more people in your state to have gainful employment. So what the state loses on one end, it gains on the other with a larger payroll base of people buying goods locally who are paying local sales tax. 

2. Benjamin Disraeli said, "The art of statesmanship is to foresee the inevitable and to expedite its occurrence." I read the bill. I wrote a 4-page analysis of it and sent it off to Rep Bobby Scott (D-VA) who co-sponsored the bill in the House, pointing out why this is BAD LAW.

3. Singling me out is a bit much given that audioMIDI and others have been openly advertising, "No sales tax except in California," for years. Why didn't you mention them? And has the state of California ever slapped their hand for taking business away from other states?

And while you're displaying your MSNBC level of true fairness (since I'm obviously a FOXite to you), keep in mind that audioMIDI's business has been growing and they hire people and pay all levels of taxes and services that benefits the state of California.

If you're a regular reader of Bloomberg Business Week (as you're an entrepreneur I certainly hope you do), then you know that the reason that Amazon is now behind this bill, when previously they had been fighting it in court, is because they're planning to set up a presence in each state to do same day/next day delivery.

4. Now, the $1 million annual sales figure. Retailers selling online grossing $1 million are not NETTING $1 million. By the time you work out cost of goods, floor planning, rent/lease, insurances, employee benefits, liability insurance, professional fees, advertising, etc., there's not enough left to hire someone at $60K or more per year to oversee the accuracy of collections, reporting, dispersals - quarterly.

It all looks so fair until you dig into it and you find that it's bad law that doesn't accomplish the desired end in an effective manner. 

U B responsible 4 U. Do it yourself. Stop making me responsible 4 U.


----------



## Peter Alexander (May 15, 2013)

Nick Batzdorf @ Wed May 15 said:


> ...so even though Peter is mad at me for not agreeing with him...



Don't assume.


----------



## Synesthesia (May 16, 2013)

Peter Alexander @ Thu May 16 said:


> Synesthesia @ Wed May 15 said:
> 
> 
> > I'm trying to work out a comparison with the UK (as thats the system I'm familiar with)..
> ...



Interesting.. This has not been my experience 99% of the time. 

Hmrc rules appear to state that if the place of supply is outside the EU the company supplying does not have to charge vat at the point of supply. 

Ie: as long as your items are in the us, and exported to the UK, you are fine. If you are selling from a UK warehouse though, that's VATable.


----------



## Mike Greene (May 16, 2013)

Peter Alexander @ Wed May 15 said:


> Singling me out is a bit much given that audioMIDI and others have been openly advertising, "No sales tax except in California," for years. Why didn't you mention them?


Because they don't butt into other peoples' Commercial Announcements threads to say this.


----------



## chimuelo (May 16, 2013)

Funny how wealthy redistributors always use the "children" when they need more taxes to cover their unfunded 6 figure pensions for paper pushers, or 7 figure pensions for Police Chiefs.
If they would only march around the children during their pro abortion rallies I wouldn't find their never ending quest for cash offensive.

I remember the Lottery was to take care of the "children" and even fund a Desalinization Plant,.....never happened.
But actually 30 years later in Carlsbad, CA. a Desalinization Plant is being built, mostly funded by the private Corporation from Connecticutt named Poseidon.

But they really care about the "Chee-illll-dren."
And the little people too.


----------



## Peter Alexander (May 16, 2013)

Synesthesia @ Thu May 16 said:


> Peter Alexander @ Thu May 16 said:
> 
> 
> > Synesthesia @ Wed May 15 said:
> ...



As this is not my area of expertise you can write Caroline at [email protected] and she will answer your questions and point you to key links.


----------

