[Vision2020] Ringo's legislative report

[Kai Eiselein, editor]

The more taxes there are, the more of a "black market" there will be.
----- Original Message ----- 
From: "Sue Hovey" <suehovey at moscow.com>
To: "Paul Rumelhart" <godshatter at yahoo.com>; "Shirley Ringo" 
<ringoshirl at moscow.com>; <vision2020 at moscow.com>
Sent: Monday, January 21, 2008 3:17 PM
Subject: Re: [Vision2020] Ringo's legislative report


> Paul, I don't think very many people save those slips and enter the
> appropriate tax whether they use Turbo Tax or not.  It also appears to me
> that there really must be a good solution to the taxing of Internet sales
> because some out of state  companies do, in fact, include the state tax 
> when
> the item is ordered.  I don't know how they make their remittance to the
> state, but work on the assumption that they do.  It just seems so unfair 
> to
> me not to tax Internet items as they are being sold in direct competition
> with local vendors. All taxation is somewhat messy, and you make points I
> had not considered, but I am optomistic there has to be a good solution.
>
> Thanks, Shirley.  I too, think this is an issue, as well as a
> reconsideration of all those exemptions, which needs to be examined.
>
> Sue H.
> ----- Original Message ----- 
> From: "Paul Rumelhart" <godshatter at yahoo.com>
> To: "Shirley Ringo" <ringoshirl at moscow.com>; <vision2020 at moscow.com>
> Sent: Monday, January 21, 2008 8:15 AM
> Subject: Re: [Vision2020] Ringo's legislative report
>
>
>>A State sales tax is too parochial of a concept to put
>> on the Internet.  Do you compute taxes on the State
>> the brick-and-mortar store that is selling the item is
>> located?  Do you compute them based on which State the
>> corporation is incorporated in?  What if it's a single
>> person selling something on e-bay, and not a
>> corporation?  What if the business exists as an
>> Internet-only store?  In some cases, the business not
>> only won't have a home office, it won't even have a
>> physical server - just data that can be hosted
>> anywhere.  Do you compute taxes based on the State
>> that the servers are located in?  What if you have
>> servers in different states?  Do you compute taxes
>> based on where the transaction servers are located?
>> This is often a completely different State than where
>> the website server is located.  What if the web server
>> is in one State and the database it connects to is in
>> another?  Where do you draw the line?  Any given
>> webpage could be directed either from the web server
>> or the database server (through the web server).  Do
>> you compute taxes based on where the person buying the
>> item is located?  What if they are in an airport, or
>> an Internet cafe on a trip?  What if they are in a
>> plane?
>>
>> This is why the concept has never gotten off of the
>> ground.  Once an answer is chosen, then everyone will
>> flock to State with the smallest sales tax, or host
>> their site overseas.  The Internet is a mobile place.
>>
>> Maybe they could throw some sort of Federal use tax on
>> Internet sales that would be portioned out to the
>> States somehow.  I don't know.  It's not an easy
>> problem to solve.
>>
>> One good question might be: does the State deserve the
>> sales tax on the item sold?  What part do they play in
>> the transaction?  That answer will vary based upon
>> what choice is made about how to tax things, I guess.
>> I can see some States getting no tax because no one
>> has a store there, or some States getting the tax even
>> though nothing other than a hosting company was in
>> their State.
>>
>> Also, am I the only person that diligently saves their
>> packing slips and puts them down on their taxes every
>> year?  I use TurboTax online, and it always prompts me
>> for it.
>>
>> Paul
>>
>> --- Shirley Ringo <ringoshirl at moscow.com> wrote:
>>
>>>
>>>
>>> This week in the Legislature
>>>
>>> Representative Shirley Ringo
>>>
>>> January 18, 2008
>>>
>>>
>>>
>>> A major disappointing development out of the Revenue
>>> and Taxation committee this week involves their
>>> refusal to consider legislation regarding the
>>> Streamlined Sales Tax.  This is a multi-state effort
>>> to apply state sales tax to internet sales.  Passage
>>> of this legislation would not commit us to specific
>>> action, but would give us a seat at the table for
>>> discussion.
>>>
>>>
>>>
>>> As a result, we will continue the unfair practice of
>>> requiring Main Street business to apply the 6% sales
>>> tax, while their competitors who sell over the
>>> internet are not required to do so.  Supposedly, we
>>> are to pay the state a "use tax" of 6% when we are
>>> not charged a sales tax.  This is rarely, if ever,
>>> done.
>>>
>>>
>>>
>>> Thus, out of state internet vendors get a 6%
>>> discount; home town vendors get the shaft.
>>>
>>>
>>>
>>> I would like to discuss two additional issues with
>>> regard to taxes.  There are a number of exemptions
>>> and exceptions to the sales tax that have been on
>>> the books for some time.  Each of them was added for
>>> a reason, but they stay on the books without being
>>> revisited.  A great deal of revenue is lost through
>>> these exemptions.  If some of that revenue were
>>> recovered, it would be possible to reduce taxation
>>> in other areas and move toward greater fairness in
>>> the system.  I have suggested a systematic review of
>>> these exemptions - an investigation of which are
>>> serving no purpose and should be dropped.  The
>>> majority of members on the Revenue and Taxation
>>> Committee continue to block such considerations.
>>> They have done so again this year, by refusing to
>>> consider the recommendations of a committee studying
>>> these issues.
>>>
>>>
>>>
>>> My colleagues and I will bring legislation this
>>> session to move towards phasing out the sales tax on
>>> food.  We propose a plan to phase out the tax on
>>> food at 1% per year.  This represents a substantial
>>> loss in tax revenue, so it must be approached with
>>> great care.  In the end, we must seek a system of
>>> taxation that provides revenue for important needs,
>>> but is fair to Idaho citizens.
>>>
>>>
>>>
>>> As long as we tax people 6% on food, the Governor's
>>> plan to target the grocery tax to provide more help
>>> to low income folks is intriguing.  Last year,
>>> unfortunately, this plan failed to gain support in
>>> the Revenue and Taxation Committee.
>>>
>>>
>>>
>>> I have legislation drafted that would develop an
>>> Idaho Earned Income Credit at 10% of the federal
>>> level.  This is a very successful federal program
>>> that provides tax relief to working families.
>>>
>>>
>>>
>>> I continue to oppose the plan State Superintendent
>>> Tom Luna has proposed for compensating teachers.  It
>>> is a politically motivated plan that is not sound
>>> educationally and is unfair to teachers.
>>> Improvements in our method of compensating teachers
>>> and administrators should definitely be
>>> investigated, but we need to work together to
>>> develop a better approach.
>>>
>>>
>>>
>>> If you have questions or suggestions, you may reach
>>> me at 208-301-2272, ringoshirl at moscow.com, or
>>> sringo at house.idaho.gov.
>>>
>>>
>>>
>>> Shirley Ringo
>>>
>>>
>>>
>>>
>>>
>>>
>>>
>>>
>>>
>>>
>>>
>>>
>>>
>>>
>>> >
>> =======================================================
>>>  List services made available by First Step
>>> Internet,
>>>  serving the communities of the Palouse since 1994.
>>>
>>>                http://www.fsr.net
>>>
>>>           mailto:Vision2020 at moscow.com
>>>
>> =======================================================
>>
>> =======================================================
>> List services made available by First Step Internet,
>> serving the communities of the Palouse since 1994.
>>               http://www.fsr.net
>>          mailto:Vision2020 at moscow.com
>> =======================================================
>>
>
> =======================================================
> List services made available by First Step Internet,
> serving the communities of the Palouse since 1994.
>               http://www.fsr.net
>          mailto:Vision2020 at moscow.com
> =======================================================
>
Kai Eiselein
Editor, Latah Eagle