[Vision2020] Ringo's legislative report

[Paul Rumelhart]

It just seems strange to me that I can buy a DVD from
Japan while traveling out-of-state, and still have to
count it on my State taxes.  I see the unfairness to
brick-and-mortar stores, but I don't think they're
likely to come up with a solution that works in all
cases without being unfair to someone else.

Paul

--- Sue Hovey <suehovey at moscow.com> wrote:

> 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.
> >>
> 
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