Walmart, Target attempting to ram sales taxes online

http://www.washingtonpost.com/wp-dyn/articles/A38198-2003Feb6.html

Go wal-mart!

I am confused by the title of this post and Jason’s post.

Is there a smiley I am missing?

Chet

Uh, that online sales being tax-free is blatant discrimination against offline businesses?

Wal-Mart, Target, Toys R Us and some other online stores are initiating a new policy wherein if you order items from their online stores, you pay whatever sales tax is applicable in your own state. The law does not require this. The law requires you to pay sales tax for online purchases only if the online store (the online division of Target is considered a separate store) has warehouses or outlets in your state.

Wal-Mart et al are doing this because their online divisions account for a miniscule portion of their revenue, and they want to put pressure on online-only retailers (and the government) to make online-only retailers charge sales tax to everyone regardless of whether or not you live in the same state as the online retailer.

As for the title of the thread, there is only limited space in the subject field to explain a complex event.

What states don’t have Wal-Mart or Toys R Us?

Hell, when I was in GERMANY last year, we stopped at a Wal-Mart to ask directions…

I’ll miss the lack of sales tax, but I expected the “free ride” would eventually go away. Still, it’s going to hurt online business, since sales tax is usually what compensates for shipping charges.

Wow, shocked to see Jason “hippie” MacCoulughahug is for MORE taxes. (/sarcasm) Let’s tax our income 5,449 times, cause it’s up to you, middle class, to support all those welfare baby machines!

Hilarious. So you favor the current situation, where online retailers get a 7% subsidy from the government?

I don’t see any need for taxes at this point. Online sales represent only two percent of all retail sales. I’d prefer to see online sales get a break to help boost the industry.

Haven’t mail order businesses been tax-free for years? Have there been complaints about those businesses too?

Actually, a common liberal position on sales taxes is that they are regressive taxation that favor the wealthy. Get your stereotypes straight, dude!

I live in the semi-liberal state of Oregon, where we don’t pay sales tax. Sorry, Wal-Mart!

This also applies to mail order.

I’d favor replacing sales taxes with a more progressive system, but until that happens, it’s unfair to existing businesses for the government to subsidize online retailing with a tax break. They may be only 2% of total sales tax revenue now, but you can bet that a ~7% discount will change that eventually.

And why on earth should the government subsidize online retailers? What’s so special about them?

Well, California has a “Sales and Use Tax,” so if you buy from a retailer in another state for use in California, they are supposed to collect and send in the tax. The retailers are cooperating because the tax is incident upon the retailer, not the consumer. If they don’t collect it in addition to the sale price the tax will come out of their pocket. The states in this program offered an amnesty for back sales/use taxes to encourage participation, and the retailers took it because they didn’t want to risk liability for several years of back sales tax.

The same could be asked for hundreds of other businesses the government subsidises, from farmers to ethanol.

In those cases where said subsidies aren’t pure pork, the government is attempting to encourage development of a portion of the economy. This is the case with the internet. The government is attempting to encourage the devolpment of online retail, which encourages other uses of the internet.

It’s called investing.

Out of curiousity, where was that store? A couple of years ago Wal-Mart was supposedly buying some small chain in Germany and outfitting them as Wal-Mart stores but I’ve never actually seen one. I thought they were all gone by now – initial reports were they didn’t have a lot of success. German retailing is a cutthroat business that’s already dominated by a few very large chains.

I’ll miss the lack of sales tax, but I expected the “free ride” would eventually go away. Still, it’s going to hurt online business, since sales tax is usually what compensates for shipping charges.

In Europe, online and mail-order sales have had taxation depending on the customer’s location for…, well, forever. There was never even any question whether or not sales tax would apply to them – and why shouldn’t they? They’re businesses like everyone else.

Europeans also pay much higher rates for internet access than Americans. Judging by this, it might be fair to say it has not been as much of a political priority in Europe to encourage development of the Internet as it has here. The moratorium thus far on sales tax is another sign of this difference.

For one, a conscious decision was never made to subsidize the growth of internet businesses by exempting them from sales taxes, the same way one was never made on that basis for mail order businesses. It’s just an artifact out of our federal system that states can’t enforce sales tax collections in other states; so, defacto, no mail/internet sales tax. Everyone falls for the “why, the internet is so fantastic we need to help it grow” line - does the same apply for mail order? It’s not as sexy, yet gets the same defacto subsidy.

The same could be asked for hundreds of other businesses the government subsidises, from farmers to ethanol.
In those cases where said subsidies aren’t pure pork, the government is attempting to encourage development of a portion of the economy. This is the case with the internet. The government is attempting to encourage the devolpment of online retail, which encourages other uses of the internet.

It’s called investing.

It’s pretty hilarious that I, Mr. Liberal, have to point out that letting the government pick winners in the marketplace is a bad idea. Do you realize you’re agreeing with Robert Reich on this? That it’s just warmed-over strategic trade theory?

That pork-barrel programs exist doesn’t mean we should add another.

I live in the semi-liberal state of Oregon, where we don’t pay sales tax. Sorry, Wal-Mart!

Me too! High Five

You guys can all just suck it!

And why the heck shouldn’t I? Who said I was a conservative? I disagree with the political ambitions of Wal-Mart, the largest retailer in the world, and that makes me a conservative?

Conscious decisions have been made at a federal level not to remove the hurdles to imposing state taxes on online businesses. It’s not all an accident. Attempts to impose these taxes have been introduced at a federal level in the past, and they have been shot down.

My point wasn’t that Reich is a liberal, it’s that Reich is dumb.

Guess I was confused by the fact that you led into it with “It’s pretty hilarious that I, Mr. Liberal,” as if it was ironic that I agreed with an advisor to a Democratic president. I voted for Clinton and helped put Reich in place. Nothing ironic there.

Reich’s track record trumps the yahoos that have filled his position since then.