Internet tax bill targets all digital downloads

[JMJ]

"If I'm making an app and I'm distributing the app for $3, then I've got to collect 18 to 25 cents in sales tax," says Steve DelBianco, executive director of NetChoice, which counts eBay, Facebook, Yahoo, and LivingSocial as members. "The cost of collecting that exceeds the revenue you're actually sending to the state."

In an unusual twist, companies in the tech centers of California, New York, Maryland, Massachusetts, and Illinois, will be the hardest-hit if S.743, also known as the Marketplace Fairness Act, is enacted.

That's because those states treat digital goods as non-taxable, meaning startups, individuals, or companies with offices only in those states don't need to worry about collecting sales tax. But if S.743 becomes law, any business of a reasonable size selling digital goods to the 24 states that have decided to tax them must collect sales taxes and comply with audits from up to 600 taxing jurisdictions. "

http://news.cnet.com/8301-13578_3-57583085-38/internet-tax-bill-targets-all-digital-downloads/

 

[Jasonn]

will domains be taxed? if so i'm pulling out of registrars in the US.

 

[DU]

will domains be taxed? if so i'm pulling out of registrars in the US.

What makes you think that taxes aren't in play today? The location of registrar makes no difference.. worldwide income is taxable in the U.S.

 

[Jasonn]

What makes you think that taxes aren't in play today? The location of registrar makes no difference.. worldwide income is taxable in the U.S.

huh? i am not talking about income...when you buy a domain from a registrar do you pay taxes on that domain? no...

 

[JMJ]

My belief is that this bill is to cause chaos and confusion for internet retailers so they can come back at a later date and "streamline" the tax to a national tax.

 

[DU]

huh? i am not talking about income...when you buy a domain from a registrar do you pay taxes on that domain? no...

It will be determined by state, I believe. Most states do not charge tax on intangible assets. That's US.

Canadians and Europeans can have value added taxes, I believe, but I'm not sure. I never understand why everyone is so anti-tax.

 

[equity78]

You are not sure why people are anti tax ? Really ? Because throughout time mankind has embraced paying taxes ?

Before you go into well taxes pay for this and that, save the time. I know fully well why they exist and yes certain things have to get paid for somehow. But I think its the amount of taxes and the complication of the code that annoys people. Maybe something like Hong Kong would make more people less anti tax.

Of course when someone discusses taxes it is important to understand are they a capitalist,socialist or communist ? That along with what they have as far as assets, That will probably have a big impression on how anti tax they are ?

 

[alien51]

This proposed tax law, only concerns Americans and businesses registered in the US, am i right ?

This is a good motivation for entrepreneurs to take their business outside the United States, and put up shop in a more tax-friendly country. Americans buying digital goods from say Dubai, will not have to pay American sales tax, right ? If yes, then overseas business will have the advantage, as Americans will no longer buy digital goods from American-based companies which could be more expensive.

 

[lennco]

I never understand why everyone is so anti-tax.

At what point would you become anti tax?
40%
50%
60%

Everyone has their breaking point.
I am not so much Anti Tax because I know things need to get paid.
One big problem is that people just get fed up with how much of our taxes are wasted.
You see politicians giving themselves raises in hard times, wars being put on credit cards, bridges to nowhere, $600 hammer, boondoggle after boondoggle.

And then you see schools not ever having enough money so they have to cut programs like sports and music and even layoff teachers.

And its not just one tax, it a many taxes people get sick of, Federal tax, state tax, sales tax, gas tax, property tax, death tax. taxes to use my phone, my cable, my internet and so, and so on!
And not to mention the crazy tax code.

I can understand how it can really get to some people.

 

[DU]

You are not sure why people are anti tax ? Really ? Because throughout time mankind has embraced paying taxes ?

I didn't say "anti tax" I said "so anti tax". The "so" is a little word that makes a big difference. Using foreign registrars to avoid paying a sales tax seems an over reaction to me.

Of course when someone discusses taxes it is important to understand are they a capitalist,socialist or communist ? That along with what they have as far as assets, That will probably have a big impression on how anti tax they are ?

I actually don't agree with most of the US tax laws. I don't agree with the implementation proposed here and it won't pass anyway (states cannot tax out of state businesses unless their state is a targeted market).I'm probably considered a socialist by most people in the US regardless of what I am - if it matters and has some impact on my original point.

I bolded the bit that is on topic so this doesn't become a political thread

 

[lennco]

I didn't say "anti tax" I said "so anti tax". The "so" is a little word that makes a big difference. Using foreign registrars to avoid paying a sales tax seems an over reaction to me.

The difference I see is that one is Anti Tax and the other is Really, Really Anti Tax

 

[alien51]

Not to mention the amount of taxpayer money the CIA pays to Karzai in Afghanistan, just to appease the various warlords there.

Then there's taxpayer money that was reduced to ashes after the Feds loaned it out to Solyndra and Fisker.

How about the huge taxpayer money used to fund the F-35 Lightning that the military regrets was a wrong design fighter plane?

The US government has to increase tax collection, to fund all these adventures.

 

[JMJ]

I don't agree with the implementation proposed here and it won't pass anyway (states cannot tax out of state businesses unless their state is a targeted market).

"A bipartisan coalition in the Senate easily passed legislation Monday to force Internet retailers to collect sales taxes for state and local governments, sending the issue to the House, where antitax forces have vowed to kill it.

But the 69-to-27 vote in the Senate will give the measure significant momentum. Hundreds of retailers are flying to Washington this week to pressure House lawmakers and counter the arguments of a slew of small-government groups, including Grover Norquist’s Americans for Tax Reform, which wields great influence in the House. "

http://www.nytimes.com/2013/05/07/business/senate-backs-wider-internet-tax-collection.html?_r=0

 

[DU]

"A bipartisan coalition in the Senate easily passed legislation Monday to force Internet retailers to collect sales taxes for state and local governments, sending the issue to the House, where antitax forces have vowed to kill it."

I obviously need to read more on the subject

 

[Arief WN]

I think this thread should be moved to here. :imho:

 

[JMJ]

I don't think it should have been moved. The general discussion forum is more active which is why I posted it there. This topic should be pinned to the top of the forum. It's not being discussed on many industry forums and because of the little oppposition to it even though it affects everyone in this business politicians are finding it easy slipping it into law.

 

[RaiderGirl]

As JMJ pointed out, it was the Senate who introduced this, and it still needs to pass the House of Representatives in order to become law... Where I don't see it passing, not with so many Tea party and Republican members in the house, which they now control... Thank God.

 

[JMJ]

As JMJ pointed out, it was the Senate who introduced this, and it still needs to pass the House of Representatives in order to become law... Where I don't see it passing, not with so many Tea party and Republican members in the house, which they now control... Thank God.

But it was passed by a large margin "bipartisan" so the house could just as easily pass it if it doesn't face a lot of opposition which is why we as an industry need to get the word out regarding it. The Reps in the house have their state representatives to answer to by not backing it so they will need a good reason to oppose it.

 

[eyedomainous]

Last I heard the tax would be for online retailers making over a Million a year. I can live with that threshold.

Of course, anybody that buys a domain all ready pays a tax.

IMO, the 'info superhighway" should be funded by taxes -like Interstate Highway System(s). The TelCos, here in the US, have failed... rural areas, low income ("digital divide") communities, and the Nation as a whole -with now one of the slowest networks in the developed world when it was once the fastest.

ISPs should collect a 49 cent "ICANN Fee" from every subscriber each month, for network maintenance and upgrades.

A faster, better Inter-network delivers a better user experience, which fosters more end-user development... resulting in more domain sales.

Domainers should get-off the anti-web-tax bandwagon and get a dog in the fight to (sustainably) fund a better 'public commons' internet.

As it is now, the web is whatever the corporations decide to give us. Its like an interstate that only connects the major profit centers... and even then they rather restrict (cap your data) movement then build capacity.

 

[accent]

Last I heard the tax would be for online retailers making over a Million a year. I can live with that threshold.

I expect most domain registrars sell over a million / year.

I agree with the OP - this should be in the main discussion. It appears we missed the Verisign price increase but may get hit anyway. Too many domainers don't see things before they get hit by them - the gTLDs for example. Ya can't make them read and think but you can put it where they will find it - back to main discussion!