Amazon going to tax NE residents.

[Lmbass14]

Saw on WOWT news that Amazon will start charging sales tax in NE as of Jan. 1, 2017.  Sad to see it, but at least I don't spend a ton of money there.

[newfalguy101]

 I cant imagine the sales tax having much if any effect on our usage of Amazon, the free shipping ( with Prime ) will offset the tax, AND it comes to my door!!

[GreyGeek]

It has been the Ne Dept of Rev's desire to collect internet sales tax for several years and there are NE  laws on the books which require citizens to report their internet purchases and pay taxes on them according to the city rates they live in. 
http://www.revenue.nebraska.gov/info/consumers_use.pdf

I've been paying taxes on my Amazon purchases for several years.   Other Internet sales outlets already collect taxes for Nebraska.

Amazon Prime sales aren't necessarily a good deal.  Many prime prices are identical to 3rd party sales prices PLUS shipping, so shipping isn't really free on many Amazon Prime items. 

Since my wife and I haven't watched many Amazon movies over the last two years  I've decided to cancel the Prime service before it comes due this April.

[Mntnman]

Amazon Prime sales aren't necessarily a good deal.  Many prime prices are identical to 3rd party sales prices PLUS shipping, so shipping isn't really free on many Amazon Prime items. 

True, but not many will have them to you in 2 days! Many of the things I buy on prime are at least as good a deal as companies that ship whenever they get around to it and some actually are better. My kids watch the video more than I do but we have Netflix as well. Each has content that the other doesn't.

[Kendahl]

I use Amazon for two things:

• Books, movie DVDs and music CDs. I have had good luck buying used with a quality rating of Very Good or better.
• Customer reviews of products I end up buying elsewhere. It's the reverse of checking out a product in a local brick and mortar store but buying it on line at a lower price.

Amazon Smile is a way to get them to donate a small fraction of your purchase to the organization of your choice.

[Dan W]

I will add that Amazon customer service is very hard to beat when it comes to returns or defective items and will continue to be my preferred provider for internet shopping, but then I have paid use tax for these purchases so my cost will not be going up next year

[RobertH]

i like the Amazon trade in.  it usually beats selling a used textbook there than back to the bookstore.  i cleared my shelves of CDs, DVDs, Blurays and books that i didn't need anymore.  the books are the best price, but CDs/DVDs/Blurays usually don't give you much, but if you have Prime and Netflix, you're not watching disc's much anymore.

[HuskerXDM]

If you use Chrome, there is an app you can add called Wikibuy.  When you select a specific item on Amazon (and other sites) in just a few seconds it will tell you if there is a better deal available somewhere else. 

[GreyGeek]

I forgot to mention that NE will be collecting past history from Amazon and other Internet sales outlets and matching up reported internet sales with actual Internet sales. If you haven't been reporting Internet sales taxes expect a letter from the Dept of Revenue sometime in the future.  They'll probably offer an amnesty period.  After that the penalties for under reporting will be significant.  I wrote the code for comparing incomes reported on the fed form with that on NE's form.  Several thousand cheaters were found and prosecuted.


Sent from my iPhone using Tapatalk

[newfalguy101]

I wonder how many thousands of dollars the state will spend chasing hundreds of dollars in unreported taxes........

[JTH]

I forgot to mention that NE will be collecting past history from Amazon and other Internet sales outlets and matching up reported internet sales with actual Internet sales.

For the sake of my curiosity, what legal right gives Nebraska the ability to collect past history regarding sales from companies not in this state?

[Kendahl]

I wonder how many thousands of dollars the state will spend chasing hundreds of dollars in unreported taxes........

Depending on how much people have bought on line from vendors who didn't charge sales tax to out-of-state customers, it could be substantial. I know of people who do all their Christmas shopping on line. The gifts are shipped directly to the recipients. All the buyer sees is a line in his next credit card statement.

I don't understand why Amazon, or any other on line vendor, would do this voluntarily. It puts them at a competitive disadvantage compared to their competition. Usually, there is a trade off between sales tax and shipping. If you have to pay both, there is no longer a reason to buy on line unless the item is unavailable within the state. Most of what Amazon sells can be bought locally although it may take a special order. Reporting sales history so that the state can collect back taxes will alienate loyal customers.

I wonder how much of this is driven by the state's (insatiable) hunger for tax receipts and how much is driven by pressure from in state, brick and mortar vendors who are having a hard time competing with a more efficient business model. Will Nebraska require Nebraska-based on line vendors to charge sales tax on shipments to other states? I'll bet not.

[Les]

I forgot to mention that NE will be collecting past history from Amazon and other Internet sales outlets and matching up reported internet sales with actual Internet sales. If you haven't been reporting Internet sales taxes expect a letter from the Dept of Revenue sometime in the future.  They'll probably offer an amnesty period.  After that the penalties for under reporting will be significant.  I wrote the code for comparing incomes reported on the fed form with that on NE's form.  Several thousand cheaters were found and prosecuted.


Sent from my iPhone using Tapatalk

Hmmm, doesn't sound legit, retroactive?  Do you have a link to that?  Court challenge imminent?  And would it not require an audit of your taxes?  Looks like the state needs to hire more staff.  Like a dollar waiting on a dime. Lol

[newfalguy101]

Depending on how much people have bought on line from vendors who didn't charge sales tax to out-of-state customers, it could be substantial. I know of people who do all their Christmas shopping on line. The gifts are shipped directly to the recipients. All the buyer sees is a line in his next credit card statement.

I don't understand why Amazon, or any other on line vendor, would do this voluntarily. It puts them at a competitive disadvantage compared to their competition. Usually, there is a trade off between sales tax and shipping. If you have to pay both, there is no longer a reason to buy on line unless the item is unavailable within the state. Most of what Amazon sells can be bought locally although it may take a special order. Reporting sales history so that the state can collect back taxes will alienate loyal customers.

I wonder how much of this is driven by the state's (insatiable) hunger for tax receipts and how much is driven by pressure from in state, brick and mortar vendors who are having a hard time competing with a more efficient business model. Will Nebraska require Nebraska-based on line vendors to charge sales tax on shipments to other states? I'll bet not.

There is already an "online sales tax" however at this point it only affects the top dogs in the online shopping world, such as Amazon, and as such, its not exactly voluntary for Amazon to begin collecting sales tax, and , yes, any Nebraska based company that meets the threshold will be collecting sales tax for stuff shipped out of state.

The other part about sales history sounds somewhat dubious to me........

[Kendahl]

There is already an "online sales tax" however at this point it only affects the top dogs in the online shopping world, such as Amazon, and as such, its not exactly voluntary for Amazon to begin collecting sales tax, and , yes, any Nebraska based company that meets the threshold will be collecting sales tax for stuff shipped out of state.

That's not what the Small Business Administration web site says about internet sales tax. A mail order company is required to charge sales tax only if it has a physical presence in the same state as the shipping destination. Presence can be a headquarters, office, store front, sales rep or warehouse. A third party seller, which Amazon uses extensively, can also constitute a presence. No presence means that sales tax is between the buyer and his state of residence.

According to another site, federal legislation to require collection and distribution of sales tax has been under consideration for several years. That sounds like the "online sales tax" you mentioned. However, according to the site, nothing has been passed. As you said, it would only apply to mail order businesses with annual sales greater than $1,000,000. That's not a very high threshold in today's world. A small business with a warehouse and half a dozen employees would need that much just to break even.

ebay is another internet giant. However, since they are an auction house rather than a seller, I doubt that federal legislation would affect them. Ditto for GunBroker and Armslist.

According to WOWT, the Nebraska Tax Commissioner stated that Amazon is "exhibiting responsible corporate citizenship." That sounds more like the companies that used to twist employees' arms about donating to United Way than a legal mandate.

[Mntnman]

I forgot to mention that NE will be collecting past history from Amazon and other Internet sales outlets and matching up reported internet sales with actual Internet sales. If you haven't been reporting Internet sales taxes expect a letter from the Dept of Revenue sometime in the future.  They'll probably offer an amnesty period.  After that the penalties for under reporting will be significant.  I wrote the code for comparing incomes reported on the fed form with that on NE's form.  Several thousand cheaters were found and prosecuted.

Hmmm..... Who's side are you on?

[GreyGeek]

One the side of Law, order and ethics.  How about you?
The largest difference between state and fed reported gross income was $100,000.  It took me a couple hours to write and test the SQL scripts which did the comparison, so it wasn't a case of "thousands of dollars chasing hundreds of dollars", as someone with little knowledge of the subject implied. 
The difference threshold could be any amount.  My first run using $250 found over 10,000 thousand returns.  Using $1,000 found over 1,000 returns, IIRC, and they were sent letters. Using $10,000 found over a hundred, which included the $100,000 cheater.  No one makes an accidental $100,000 mistake. 

Currently the NE tax collections are down $700 MILLION and the Dept is under staffed and over worked.  They can't afford to pay new hires the current salary businesses pay so hiring quality programmers is hard. Keeping them is equally hard.


Sent from my iPhone using Tapatalk

[JTH]

One the side of Law, order and ethics.  How about you?
The largest difference between state and fed reported gross income was $100,000. 

What does that have to do with sales tax, I wonder?

The difference threshold could be any amount.  My first run using $250 found over 10,000 thousand returns.  Using $1,000 found over 1,000 returns, IIRC, and they were sent letters. Using $10,000 found over a hundred, which included the $100,000 cheater.  No one makes an accidental $100,000 mistake. 

So....what does this have to do with sales tax?  People reporting different amounts of gross incomes on different tax forms is a completely different topic.

Currently the NE tax collections are down $700 MILLION and the Dept is under staffed and over worked.  They can't afford to pay new hires the current salary businesses pay so hiring quality programmers is hard. Keeping them is equally hard.

Okay.

So...what does that have to do with sales tax?

And to reiterate my earlier question:  What legal right gives Nebraska the ability to collect past history regarding sales from companies not in this state?

[Les]

One the side of Law, order and ethics.  How about you?
The largest difference between state and fed reported gross income was $100,000.  It took me a couple hours to write and test the SQL scripts which did the comparison, so it wasn't a case of "thousands of dollars chasing hundreds of dollars", as someone with little knowledge of the subject implied. 
The difference threshold could be any amount.  My first run using $250 found over 10,000 thousand returns.  Using $1,000 found over 1,000 returns, IIRC, and they were sent letters. Using $10,000 found over a hundred, which included the $100,000 cheater.  No one makes an accidental $100,000 mistake. 

Currently the NE tax collections are down $700 MILLION and the Dept is under staffed and over worked.  They can't afford to pay new hires the current salary businesses pay so hiring quality programmers is hard. Keeping them is equally hard.


Sent from my iPhone using Tapatalk

No offense to your situation but what I was implying was government entities aren't typically ran efficiently.  And as a business owner I have had experience dealing with the Department of Revenue and had a friend that was a programmer at the Department of banking. 

[RobertH]

so.... taxation isn't theft?