Sales Tax – An Ongoing Debate

I’m a seller and a shopper. Like all shoppers, I love to get a “good deal,” saving a bit of money on things that I buy. This is especially true since I am a senior citizen on a fixed income. So when I shop on the internet, I know that it’s possible to find what I want and avoid paying any sales tax on it. Score!

But, I am also a citizen of the town/county/state in which I live.  Those governmental entities provide services to which I have access – many of them could diminish or completely disappear without sales tax support.  And I want those services!  I can hear you grumbling that governmental bodies waste too much money, and there are excellent arguments to support that.  But still, sales taxes collected by various governmental entities do make the places that we live what they are.

So here’s where the debate comes in…  internet sales should include sales taxes so that venues aren’t losing that revenue.  Actually, I don’t have a problem with that.  After all, when I do a show, I collect/pay sales tax at the rate that is in effect in the place I am standing when the customer hands me money.  This is not a problem, it’s just part of doing business.  But when the customer buys my item in cyberspace, this is where it gets complicated.

Perhaps the most absurd idea that I have heard to remedy this problem is that the seller (me) should calculate/charge/and pay the sales tax in effect at the location of the buyer, assuming that buyer is in the United States.  Once I have that sales tax, I would file a return and remit payment to the buyer’s location.  How on earth am I supposed to know what the sales tax is in absolutely every town/city/county/state?  There’s probably a service out there (for a fee which wouldn’t require sales tax since services are generally not subject to them) that would be able to assist me with this.  But as a micro-business, the last thing I want/have time to do is to file sales tax returns in a multitude of locales.  The people who came up with this idea have never worked in retail!

What I don’t understand is why not just make the rule or law that sales tax will be collected and paid at the rate in effect at the seller’s location – the point of sale?  The argument is that the buyer’s venue will lose revenue that it should have received.  But I believe that revenue would be replaced by sellers within it who would be taxing sales they receive online.  It would make life so simple from a seller point of view…  file a sales tax return for online sales at your local rate to your local entity.  Shoppers could still find bargains because sales tax rates aren’t the same everywhere.  For example, the sales tax rate at my house is 4.9%.  If I drive 4 miles into town, the sales tax rate is 6.9%.

It is a quandary and I doubt the debate will end any time soon.

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