Taxes on internet sales

sposey013168

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I was wondering what everyone thinks as to whether internet sales should be charged sales tax?
I think we already taxed to death so this is probably the first time I have ever said something should be taxed. Here is my example, let’s say I know a local golf shop. I want to sell you a set of irons for let’s say $1000, I have to add 7 percent sales tax so I have to charge you $1070. An internet golf shop does not have to charge you sales tax (they have to pay shipping of let’s says $20) so there price is $50 cheaper. How is a local shop suppose to compete in this situation.

The reason I pose this question is I hear often (myself included) how we wish we had more local golf shops. But if you think about it it’s really hard for a local shop to compete just on the sales tax issue alone.


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I believe you are required to pay a sales tax if you live in the same state as the internet supplier, but I get what your saying.

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I live in NY. We love taxes.
 
I believe you are required to pay a sales tax if you live in the same state as the internet supplier, but I get what your saying.

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Yes in the same state you do, but if I own the shop here in Missouri most internet shops are not in my state so I am kind of screwed.

Just looking for discussion


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well technically you are supposed to self-assess sales tax when the online retailer doesn't charge you. it's typically called a "sales and use tax" so if you didn't pay the tax on the sale, you should pay the tax on the use. i'm 99% sure this applies to individuals as well as businesses.

nobody, and i mean NOBODY, does this. but i've had clients get dinged with some pretty big penalties for not doing this.

but in general yes, i do believe the sales tax should be billable regardless of any physical presence test. one challenge for the retailer is accounting, reporting and submitting these taxes for each state to which they ship. a smallish internet retailer would find themselves in a compliance nightmare. sure they could hire someone to take care of this, but in a reduced-margin environment that is difficult to recover.
 
I live in NY. We love taxes.
I live in Illinois - We have never found a tax we didn't like or didn't implement.
And Higher the better....
Kinda keeps me from buying from Budget Golf being "In State"
 
Most internet places are now charging sales tax (Budget didn't used to but has on my last couple orders). As to a moral dilemma, haven't really thought about it. There are pluses & minuses to shopping on line and in person, I usually do my research, all things being equal, if I can buy it at my home course I do, if not I get it online.
 
Ohio has a use tax that you are supposed to use to self claim taxes on items where the sales tax was not collected at the time of purchase. This was enacted back when most online retailers didn't collect them but the majority of them do now.

As far as I'm concerned, it should be taxed and collected in the same way it is done in person at a store. There really shouldn't be a difference. The rules have stated that you must collect sales tax if you have a physical presence in that state. Online retailers who don't collect taxes on sales are going to have to make adjustments as a ruling of the Supreme Court in 2018 has indicated that all sales should require sales tax.

https://www.forbes.com/sites/greats...rts-internet-sales-tax-decision/#5ce96a3b3fbe
 
Most states have a use tax, similar to a sales tax. If you buy something online, or out of state, etc, and do not pay sales tax, your state most likely requires that you pay this use tax.

No one does, but the laws are there.


If online retailer has a presence in your state, they will charge sales tax.


To your point of competing, I had a similar situation when I owned a paintball store. Internet pricing could kill us, but we countered it with service.

We offered all sorts of advice, free equipment checks if you bought from us, training, tech days, etc. We would also match Internet price, but for Internet price, you got Internet service. That is, we sold you the gear and wished you well. If you paid our retail price, you got all the service and help, and yes I kept track of who bought what at which price.

Vast majority of the time, my customers were happy to pay the 10-20% premium to get the top notch services we offered.
 
I was wondering what everyone thinks as to whether internet sales should be charged sales tax?
I think we already taxed to death so this is probably the first time I have ever said something should be taxed. Here is my example, let’s say I know a local golf shop. I want to sell you a set of irons for let’s say $1000, I have to add 7 percent sales tax so I have to charge you $1070. An internet golf shop does not have to charge you sales tax (they have to pay shipping of let’s says $20) so there price is $50 cheaper. How is a local shop suppose to compete in this situation.

The reason I pose this question is I hear often (myself included) how we wish we had more local golf shops. But if you think about it it’s really hard for a local shop to compete just on the sales tax issue alone.


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The law here is that if the online store you are buying items from has a physical, retail store location within the state, you get charged state sales tax (6%) on the purchase. I agree with the idea of leveling the playing field, but I don't know if additional/expanded taxes are the way to do it. Showrooming is a huge thing at places (Carl's in particular) but they have coupons available and their top notch service likely makes up for the slightly higher prices for most. There has to be more incentive that doesn't increase the price and the solutions and implementation are way over my head.
 
Most states have a use tax, similar to a sales tax. If you buy something online, or out of state, etc, and do not pay sales tax, your state most likely requires that you pay this use tax.

No one does, but the laws are there.


If online retailer has a presence in your state, they will charge sales tax.


To your point of competing, I had a similar situation when I owned a paintball store. Internet pricing could kill us, but we countered it with service.

We offered all sorts of advice, free equipment checks if you bought from us, training, tech days, etc. We would also match Internet price, but for Internet price, you got Internet service. That is, we sold you the gear and wished you well. If you paid our retail price, you got all the service and help, and yes I kept track of who bought what at which price.

Vast majority of the time, my customers were happy to pay the 10-20% premium to get the top notch services we offered.

I am like you and would gladly pay 20 percent for service but we know a lot of consumers only care about something being cheap


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I primarily shop online for golf related purchases where they don't charge sales tax. Bummer for Budget Golf since they had a TON of business from California. Their second biggest region outside of Illinois I believe it was said in a video. eBay FTW!
 
I am like you and would gladly pay 20 percent for service but we know a lot of consumers only care about something being cheap


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When it comes to product with moving parts and natural wear, I'd opt for the premium + service every time. Closely aligned with the real-life analogy, my son played on the NC State paintball team and I saw 1st hand all the effort he put into cleaning/maintaining/repairing his gun and accessories. Devoid of his expertise, I'd very likely need help.

But when it comes to something like golf gear, I must admit that I'm practically allergic to paying retail price on most everything. I have no issues paying taxes, just retail or MAP pricing.
 
The common test of having a "physical presence" within the state is a thing of the past, thanks to my home state of California. All on-line retailers are supposed to collect CA sales tax on sales shipped to CA, and the US Supreme Court backed them up with the decision mentioned earlier in this thread. This is why Budget Golf started charging CA sales tax, as have many others. Any state can start requiring this, and I'm sure most eventually will.
 
I don't believe taxes should be used to "level the proverbial playing field." That idea is antithetical to the basis of a market economy. The idea of not paying taxes for purchases made out of state is not new to the internet age. When I got married in 1986 and bought furniture in Missouri (live in Illinois), I was offered the options of a) pick it up there and pay sales tax, or b) have it delivered (for a fee) and there was no sales tax.

It's also not really fair to compare internet business to brick-and-mortar stores. Many internet companies have little to no overhead, and can reduce their prices based on that alone. Add in the volume discounts from being able to sell to the entire world, and it's just not an apples-to-apples comparison.
 
In today's world it is close to impossible to compete with a physical presence unless you can offer some value add, OH for the on-line retailer is simply impossible to beat adding to the fact that many of them don't even carry own inventory but order directly from the OEM as a drop-ship. That's probably why the agnostic fitting business (Club Champion etc.) is doing quite well and one of the few areas in the golf business that is growing, they offer a value add that the customer is willing to pay for and a business model that is protected from on-line (at least for now...).

But yeah, taxes are not fun. At least here the sales tax is modest compared to my home country where it's 24% on top of everything (ok it's VAT so slightly different from sales tax but for the consumer end result is the same).
 
You spelled theft wrong in the title of the thread.
 
I was wondering what everyone thinks as to whether internet sales should be charged sales tax?
I think we already taxed to death so this is probably the first time I have ever said something should be taxed. Here is my example, let’s say I know a local golf shop. I want to sell you a set of irons for let’s say $1000, I have to add 7 percent sales tax so I have to charge you $1070. An internet golf shop does not have to charge you sales tax (they have to pay shipping of let’s says $20) so there price is $50 cheaper. How is a local shop suppose to compete in this situation.

The reason I pose this question is I hear often (myself included) how we wish we had more local golf shops. But if you think about it it’s really hard for a local shop to compete just on the sales tax issue alone.


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Discount Dan's Golf :wink:
 
I would agree that taxes should have to be paid for online purchases, it just doesn’t sit well with me that the local shops are put in that much of a competitive disadvantage.

I do buy a lot of stuff from Budget Golf, but being from IL I get charged the sales tax. Luckily we have a THP discount code so it still saves me money in the long run and I get to support a vendor that supports THP. Not to mention they’re great guys!
 
I live in Calif. and we're taxed to death! I seem to pay tax on anything I buy online.
Speaking of taxes, inheritance taxes are especially onerous.
 
The only two words that need to be spoken concerning taxes are The Fairtax.

Enough said.
 
I live in Calif. and we're taxed to death! I seem to pay tax on anything I buy online.
Speaking of taxes, inheritance taxes are especially onerous.

I say again, Discount Dan's Golf!

Their benefits far extend beyond sales tax. I bought my F9 driver and 3w from them.

It's been awhile since I've ordered anything from them, but free shipping to the contiguous 48, no sales tax AND absurd pricing? Yeah, pretty much a no brainer.
 
I say again, Discount Dan's Golf!



It's been awhile since I've ordered anything from them, but free shipping to the contiguous 48, no sales tax AND absurd pricing? Yeah, pretty much a no brainer.

I have ordered my cart bag, and new set of Mizunos from them in the last month. I bought 4 dozen balls from them last year, and another set of irons a year ago. They’re legit, and the prices can’t be beaten. They can’t sell Ping, FYI.
No tax, no shipping.


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IMO brick and mortar stores need to understand what they can give the consumers which they will value past the small change difference in price. If a BM was close to the same costs but provides extra service - ie loaner clubs, fitting services, simulators to try clubs, discounted club alterations, grips - then you are providing value to the customer and creating a relationship. A relationship is so much more valuable than a sale.

There is a whole industry trying to take customers, adding the small change of added taxes will not appreciably change the dynamic. Understand how you provide value to your customer and then provide the shiitake out of it and then you can create relationships which turns into a successful business.
 
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