Tuesday, July 12, 2011

A sales Tax Nightmare - for Consumers - a Fantasy Come True for States

Some people are missing the overall point of the sales tax problem being highlighted by Amazon's fight.
You live in Texas.
You are surfing the web and find a site that sells a "widget" and it solves a problem  for you so you click on the Amazon link to get it and NOW you find out that the person lives in California and you HAVE to pay sales tax - even though you live in Texas. Because the Amazon Associate lives in California.
Amazon is in Washington State and say the legislature decides to jump on the free money bandwagon and state that ANY sale by Amazon is considered to have occurred in Wa - so they too slap a sales tax on the item and add it into the bill.
The actual item is a 3rd party shipping so it comes from New York and now THEY slap a sales tax since it actually was shipped from their state and when it gets to Texas now you AGAIN have to pay a sales tax on the item per Texas law.
So that one item you could be REQUIRED to pay sales taxes to four different states - because each wrote a law stating that when it was sold the person buying it had to pay sales taxes at that point.
In each state you can NOT get your money back or even file for it - since you are not a citizen of that state you have no standing to file plus the law would be written forbidding the refund of sales taxes anyway - else they would never enact the law.
So your $100 widget could easily cost you $25+ dollars in sales taxes.
And of course if the widget can ONLY be bought over the Internet - then you are stuck having to pay sales taxes to each and every state.
This is how the current sales tax laws can end up in a few years unless stopped.