Richard Gambrell wrote:
> The underlying problem is the huge diversity of sales tax rates and tax
> structures (and the very complex classification of goods and services).
> This was a major problem for collecting sales tax on Internet sales until the
> "uniform" approach that is being adopted. Some information about that is at
> http://www.newrules.org/retail/inttax2.html

As a counterpoint, the problem with the looming "uniform" approach is that it
places all the complexity of every state's tax structure (really, the tax
structure of every county or local taxing district in every state) on the backs
of businesses in every state.  No longer will a small business in Tennessee have
to worry about just Tennessee's tax laws.  If you sell to customers nationwide,
soon you will be responsible for knowing the tax laws of, collecting taxes for,
and remitting taxes to every state in the union (or at least all the ones that
sign the agreement).  This will place a much increased record-keeping burden on
small businesses already struggling to stay afloat, which is why it is opposed
by the National Federation of Independent Businesses:

http://www.nfib.com/object/3877992.html

A friend of mine who operates a small business recently sent the following:

> Anybody heard of the Streamlined Sales Tax Agreement?  If you own a small business, you want to read up on it.  Holy Ironic Oxymoron, Batman!  I hadn't heard anything at all about it until I got a notice from the NFIB today.
>
> The states are having fits over not being able to collect sales tax on all those out-of-state purchases over the internet.  So 42 of them got together and have come up with a plan that they're all implementing.  It will be EXCESSIVELY burdensome on businesses that ship products to their customers, and the overhead cost of it will probably drive many very small internet businesses out of business, either because they can't afford the time or money to do it, or because they make a mistake and the TN Dept of Revenue will shut them down.  Tennessee has already started implementing changes for this plan, some of which go into effect July 1, 2005.
>
> If you read the state's propaganda about it, it explains in pretty terms that the Streamlined Sales Tax Agreement will make it easier to comply with sales tax laws, and it will even the unfair playing field between businesses that sell only locally versus those that sell on the internet and don't have to charge sales tax, and it will save the world, repopulate the endangered species of the world, feed and educate your children, make us all rich and happy, etc.  But this plan is anything but streamlined.  What it REALLY means is that the sales tax system is going to be equally complex and burdensome in all 42 of these states.  The new complexities may require many small businesses to start paying a third-party to figure out their monthly sales tax returns, like we now pay CPA's to figure out our income taxes.
>
> Ok, right now if you come into my store and buy something I charge you 9.75% sales tax, 7% for the state, and 2.75% for my local governments.  If you buy something from my store on the internet, and I ship it to you within the state of Tennessee, I still charge the same sales tax rate because the sales tax is based on the ORIGIN location of the sale.  If you buy something from my store on the internet, and I ship it to you out-of-state, I collect no origin sales tax at all because Tennessee has no jurisdiction to tax a Michigan resident who didn't set a foot in Tennessee.  In reality, existing laws say that when you buy something on the internet, you're supposed to personally file a report with the TN Dept of Revenue confessing your purchase and paying the sales tax directly to them.....but nobody does that, and the state can't afford to track individual purchases down and oppress the consumers about it.
>
> Under the new law, if you come into my store and buy something, I charge you the same 7% + 2.75% as I do now.  That part doesn't change.  But if I ship it to you in another Tennessee county, the sales tax is based on the local rate WHERE YOU RECEIVE IT.  So for 95 counties in Tennessee, I could potentially have to track each county separately, charge a different tax rate for each county, and essentially file 95 sales tax returns each month.  And for out-of-state purchases, they say that I can "volunteer" to collect the sales tax for those other states as a convenience to those individuals so they don't have to file individual returns....but it sounds like the rest of that sentence that they don't wanna mention yet MIGHT be that if I don't volunteer to collect the tax, I'll probably have to send a listing of my out-of-state customers to the respective states so their state can make the individuals pay the sales tax.  And the tax rate could be different in each county of eac
h state as it is here in TN, so a business that does large volumes of out-of-state business could potentially have to report THOUSANDS of different sales tax items each month.  The state of Tennessee hasn't been too descriptive about the details, but it's not too hard for me to imagine how complex this will be.
>
> Deep down in the documents on the state's web site about this plan (www.state.tn.us/revenue/streamlined.htm), there is a disguised acknowledgement of the complexity of this system.  They are already planning three different "models" a business can use to file their returns.....either 1) have a third-party do it for you, or 2) buy some software probably sold by friends of the TN general assembly members, or 3) write your own in-house software to sort it all out.  They know this will be nearly impossible for a small business to handle themselves manually.
>
> Like I said, they're not telling us all the details yet, so once it comes out, it may vary somewhat from my understanding above, but I think I get the general idea.
>
> WE MUST FIGHT THIS !!!  We need to get the state to confess the nitty gritty details so we know what we're up against.  We need to get talk show hosts talking about it.  We need to get the word out to small businesses while there's still time to stop this thing.  We need business owners to rally in Nashville like people rallied against the state income tax....

--
"One man with courage is a majority." -- Thomas Jefferson