I see you have questions. You want Madame Titmowse to meditate on your question, gaze into her crystal ball and predict the future? No problem. I see the clouds parting. I see a vision coming into form. I see sales taxes in your future.
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"The biggest dilemma facing the subject of online sales taxes is one of disparity between the states." |
Last week Wal-Mart, Target and Toys R Us began charging sales tax for items purchased through their online stores. The retailers implementation of sales tax is a voluntary one. As of yet, there’s little US law enforcing sales tax for online purchases. People who purchase items from online stores have only had to pay sales tax from venues within their particular state.
The idea behind this voluntary taxation is the hope that the ones who volunteer won’t be sued by states for back-taxes. Of course, this all comes at a time when states are suffering economically. Governors across the nation are eyeing Internet sales taxes as a way to help alleviate their massive financial burdens.
Sales tax for tangible goods. It makes sense. But what about sales tax for virtual products? Will adult paysites eventually have to add a sales tax onto their membership fees? Will designers, content providers and hosting companies have to comply with sales taxation?
Madame Titmowse concentrates. She asks the powers that be. She listens for the answer. What do the fates have to say?
Taxes -as everyone knows- fund city/state/federal governments. Taxes pave the roads, pay for law enforcement, maintain the waterworks and keep our cities relatively clean. For all the moaning and groaning about taxes the fact is, we’d all be in a pretty crappy place without them.
State Governors aren’t the only ones who want Internet sales taxation. Brick-and-mortar merchants point out the unfairness of tax-free purchasing on the net. They have to charge sales tax to their customers and so should Internet merchants. Internet sales account for about three percent of all retail purchases. That doesn’t sound like much percentage-wise but three percent adds up to about 72 billion dollars a year.
Internet sales taxes should not be confused with Internet access taxes. Internet access taxes are a much more controversial issue than Internet sales taxes. Supporters of Internet access taxes want to add an additional charge onto individual’s ISP bills. They say the tax would be comparable to the tax one pays for phone service. There is strong opposition to Internet access taxes from Internet groups and even the President of the US.
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At this point, an online retailer is only required to charge sales taxes on purchases made by residents of the state where the retailer bases their operation. In other words, a person who lives in Texas would have to pay sales tax on a computer they buy online from Dell because Dell is a Texas-based company. A person who lives in Utah wouldn’t have to pay sales tax for a Dell computer they got online.
The biggest dilemma facing the subject of online sales taxes is one of disparity between the states. Sales tax for California is five percent. Sales tax for Texas is six percent. Cities have different sales tax percentages. Amarillo, Texas charges eight cents on the dollar. Canyon, Texas charges seven. That discrepancy is the main concern of Internet trade groups. They want a more simplified tax standard for the web.
Ah but Madame Titmowse. What has this to do with the adult Internet? We sell fantasy. We sell entertainment. We provide services, not items. Madame Titmowse channels the spirit of the Texas State Comptroller. The Comptroller utters these words: Taxable labor.
Movie theaters charge a sales tax. Massage parlors charge sales taxes. Even the local family photographer has to charge sales taxes. We’re not aware these places charge sales tax because they are required to include it within their fees. They don’t tack the tax on at the end like a appliance store. The experience of seeing a two-hour film is intangible but it’s still taxable.
The question is, will the adult Internet volunteer to charge sales taxes? Or will we wait until we are forced? Wal-Mart and Target claim they volunteered to begin charging sales tax because they were promised amnesty from back taxes. Will we get that same promise if we volunteer?
Madame Titmowse suddenly bolts upright. Her face turns white. She screams. She scrawls something on a piece of paper and faints dead away. On the paper are two words:
Sin Tax...