Amazon Sputtering Over MN Sales Tax Law (lawyers, house)

[moving123456]

The popular deal site FatWallet moved to Wisconsin after Illinois passed a similar law. Many companies including Amazon dropped all Illinois affiliates as soon as it was passed. FatWallet would have lost a large percentage of their revenue if they stayed in Illinois.


Moving Day: A FatWallet Documentary - YouTube

[Beenhere4ever]

Anyone actually looked at the use tax reporting form. You think the regular ones are twisted. And then the estimated tax reporting form is bad. But the use tax form was obviously NOT put together with any expectation of it being used. I'd say if Minnesota had a scrap of tax sense, it would charge a single tax rate statewide. But in an effort to overcome political opposition to some taxes, the legislature has allowed local governments to create taxing zones so that it isn't even good enough to know where you live. Anyway, the federal law when passed will attach the statewide tax to all online purchases, and that will end this controversy.

[sholomar]

we really should be paying state sales tax. It will suck when it finally happens, but 'meh' is about all I'll have to say when it finally does happen. I don't envy the people who have to do the paperwork and accounting for it.. our tax system is so convoluted and overly complex. In South Dakota, I do not yet pay sales tax using amazon, which makes up about 90% of my online purchases.

Oh.. there's no way you'll ever get me to track purchases and pay the taxes on them. Either add it to the bill automatically, or it's not getting done. I detest paperwork and having to 'track' anything outside the workplace.

I have to do it with stock and options trading.. that's bad enough.

[Beenhere4ever]

Yeh, the best part for me is a STANDARD tax, charged at sale. Not this cockamamie stuff where you drive from town to town and each one has a different tax. That's one of the most idiotic government policies here in MN. Don't find that in any other state. Not that we own all the boobs. We probably don't. But when our state does something really dumb like city-specific rates, it is a letdown for me. I refuse to lower my standards for Minnesota behavior.

[xandrex]

Originally Posted by stockwiz

we really should be paying state sales tax. It will suck when it finally happens, but 'meh' is about all I'll have to say when it finally does happen. I don't envy the people who have to do the paperwork and accounting for it.. our tax system is so convoluted and overly complex. In South Dakota, I do not yet pay sales tax using amazon, which makes up about 90% of my online purchases.

Oh.. there's no way you'll ever get me to track purchases and pay the taxes on them. Either add it to the bill automatically, or it's not getting done. I detest paperwork and having to 'track' anything outside the workplace.

I have to do it with stock and options trading.. that's bad enough.

I don't know how convoluted a sales tax online could be. After all, this is only a state-level tax. I don't know that I've ever seen a proposal with the local taxes levied as well. So it's the standard 6.875 percent we'd be charged.

Originally Posted by Beenhere4ever

Yeh, the best part for me is a STANDARD tax, charged at sale. Not this cockamamie stuff where you drive from town to town and each one has a different tax. That's one of the most idiotic government policies here in MN. Don't find that in any other state. Not that we own all the boobs. We probably don't. But when our state does something really dumb like city-specific rates, it is a letdown for me. I refuse to lower my standards for Minnesota behavior.

Errr...you see plenty of cities in other states with their own taxes. I don't really see what the issue is unless you're simply opposed to a sales tax. You pay a little more or a little less in any given location (though for purchasing goods, a city can levy at most 1 percent, so it's not exactly some huge variation), but it's not like you need to track it or anything. So how exactly is this "one of the most idiotic government policies"?

[Beenhere4ever]

Because it means that governments can only raise money by imposing special regressive taxes. Minneapolis has a load of them. I think some things downtown get 11 percent slapped on them. It is a STUPID way of paying for stuff. But the reason it happens is that if a city government asks if it can tax extra within its boundaries, people outside just shrug and say "another reason to keep my business in cities that don't do that". It is an incentive to support businesses elsewhere. Which also means it is hurting both consumers and businesses.

[xandrex]

While sales tax has the effect of being regressive, I would say Minneapolis' special entertainment district taxes are probably a bad example. They apply to restaurants, liquor (I believe), and other entertainment-related things. But downtown hardly has much aimed at lower-income people to begin with. Restaurants are overwhelmingly expensive places that can afford downtown rents for those coming in during the evening or skyway-level chains that appeal to downtown workers (who I wouldn't classify as generally low income) on lunch breaks. And most of these taxes apply to what amounts of luxury goods (in the economic sense, not necessarily the pricing sense): They are needs, not wants.

It certainly might encourage people to shop elsewhere, but I know few people who think about the tax rate when making smaller purchases. It's just not worth it. In most cases, you save pennies by traveling outside of a certain city's taxing limits and waste more money in gas/bus fare and lost time.

[Beenhere4ever]

Originally Posted by xandrex

While sales tax has the effect of being regressive, I would say Minneapolis' special entertainment district taxes are probably a bad example. They apply to restaurants, liquor (I believe), and other entertainment-related things. But downtown hardly has much aimed at lower-income people to begin with. Restaurants are overwhelmingly expensive places that can afford downtown rents for those coming in during the evening or skyway-level chains that appeal to downtown workers (who I wouldn't classify as generally low income) on lunch breaks. And most of these taxes apply to what amounts of luxury goods (in the economic sense, not necessarily the pricing sense): They are needs, not wants.

It certainly might encourage people to shop elsewhere, but I know few people who think about the tax rate when making smaller purchases. It's just not worth it. In most cases, you save pennies by traveling outside of a certain city's taxing limits and waste more money in gas/bus fare and lost time.

This whole argument about "aiming" something at the lower income folks is a dodge. They don't have to "aim", they simply tax a particular service in a particular area, and it doesn't matter if some businesses are priced out of the range of the poorer people because the businesses they CAN afford pay the same tax. It is just like bombings that aren't "aimed" at civilians but are inherently indiscriminate. Sales taxes are bombs that hit all pockets within the zone where they are imposed. And for purposes that are themselves unavailable due to high price to all the people paying the tax.

[xandrex]

Originally Posted by Beenhere4ever

This whole argument about "aiming" something at the lower income folks is a dodge. They don't have to "aim", they simply tax a particular service in a particular area, and it doesn't matter if some businesses are priced out of the range of the poorer people because the businesses they CAN afford pay the same tax. It is just like bombings that aren't "aimed" at civilians but are inherently indiscriminate. Sales taxes are bombs that hit all pockets within the zone where they are imposed. And for purposes that are themselves unavailable due to high price to all the people paying the tax.

Do you have evidence of businesses that shut down because of the entertainment tax? I have a hard time believing that's really been the case. If a slight uptick in sales tax is what kills you, you're likely not running a very tight ship to begin with.

And while Minneapolis's downtown area gets a rap for having a high downtown sales tax on certain items (mostly restaurants, which again, is not a need). The taxes are actually fairly targeted, despite what you think. Restaurants downtown are again overwhelmingly high end, hotels are filled with people here for business and conventions often paid for by businesses, and it's hard to find a justification for lowering the tax rate for booze.

You may not be a fan, but Minneapolis' downtown entertainment taxes are incredibly more targeted than other parts of the city. Growing up in Duluth, we paid about 10 percent on all food...anywhere in the city. But guess what didn't happen? No restaurants moved out to Hermantown or Proctor or Cloquet. Why? Because it's such a negligible amount. A $20 meal downtown costs about $0.61 more than if that same meal were served elsewhere in Minneapolis (although based on where people go downtown, it probably isn't available outside of downtown).

I just don't see how one can make the argument that a small sales tax increase on certain goods will make people flock to other cities, while presumably arguing that nobody will move from Minnesota with an additional income tax (a far greater "take" from the government). It's inconsistent.

[Beenhere4ever]

Do you ever BUY anything to eat downtown? My choices are in the food court in Gavidae Commons and in a little sandwich shop on 5th next to light rail. But overall, downtown is just not a place to eat unless (a) you do it infrequently or (b) have an expense account. Frankly, people with incomes under the median would be wiser just to stay in their own neighborhoods or, better yet, make a short trip to surrounding suburbs that excuse themselves from all these "liberal" taxes. Can't believe how the people imposing these taxes still fancy they are "liberal" in any sense. Lost in a web of their own rationalizations. And the conservatives aren't going to challenge it because they would do even more if they got a chance.