Tuesday, May 7, 2013

Online purchases face sales tax as US Senate passes bill

[FS Market]. According to recent sources, including Associated Press, Agence France Presse, the US Senate has just passed a new legistation - yesterday - that might allow (US) States to collect taxes on online purchases. Giants e-business companies like Amazon or Ebay are targetted. The sales tax would be sent to the state where the shoppers lives. Before...

 
... Before becoming law, it needs to pass the House of Representatives though. Of course, this new tax, if voted, would also affect online sales on the US country. 
 
If this bill is definitely adopted, some developers on the FS market could be affected but the final law could spare some businesses or include mecanisms like thresholds...
Editors who are exclusively developing american airports or american focused products could risk a larger exposure.
D.M.
 
 
Sources  :
 
 
 
 
 
 
 

20 comments:

Anonymous said...

So, how will that affect all the online download purchases to people located outside the borders of the USA?

Will they pass on the sales tax to our countries??? I think not...

This is an interesting and certainly not unexpected development, given that online sales are slowly making headway into classical retail purchasing...

AE

Mason Dominique said...

foreign payments made on a US simshop might be taxable too... We will see if the law is voted and it will formulated..
Dom

Anonymous said...

amazon.su, e-bay.sx

Anonymous said...

Amazon and Ebay should temporary close down their site for like one hour or something. Heh.

Anonymous said...

But the tax will not go to the country of shopper's origin... Online shops may well HAVE to provide systems of tax-free purchase for non-US customers, as you will have to provide address information as part of the payment process. Then you will be forced to declare your purchase to the local tax/exise office, who will charge the local rate of sales tax (we call it VAT)on your purchase.
Could lead to some real headaches...

A

Mathijs Kok said...

Providing sales without tax is no problem, we now do the same. US customers do not pay Europe VAT. Technically not an issue.

DAndre Newman said...

Exactly. We dont pay VAT. This is just another way Uncle Sam is trying to squeeze every nickel and dime out of the hard working citizen. Its really bullshit. And the taxes here in California.... Its insane. but still there is no tax on snack foods which make people so damn fat.... But, I imagine if I am purchasing products from a European webshop, tax should not be applicable. I think....

Anonymous said...

I'm always shopping at Aerosoft US where I don't have to pay tax. But at Simmarket I don't have to pay tax after all, even though I live in Europe

DAndre Newman said...

Hmmm i forgot about that. If Aerosoft has domestic servers here in the US, guess I will hsve to pay TAX. I will make every effort to avoid this tax whever possible if making purchases on foreign shops does the trick. Paying the nearly 7,000 a year in taxes is damn quite enough to feed the people in Africa, and fund these wars, but my damn street still has potholes scratching my 18" rims...

Anonymous said...

Hi,
This is a non-issue with the FS community, why? because if the law passes the house of representatives which is highly doubtful will only harm businesses that have income higher than 2-3 Million dollars anually, and there is no business in the FS community that makes that much. So it won't apply to FS community.

Anyways it won't affect sales since Europeans which account for 50% of the market already pay for it.

DAndre Newman said...

True but US taxes are known to be among the highest on the planet. And we just love to raise taxes around here...

Anonymous said...

@DAndre

I think the people they're really targeting are the big online stores like Amazon, but Amazon is clever and influenced the bill so it's the small businesses who end up having the biggest headaches. That means less competition for Amazon, who always had a "world domination" strategy and will hike up prices once they have a critical-mass monopoly.

Another aspect to this is that since internet sales don't pay sales tax, the brick-and-mortar stores will end up losing business. It's a huge problem in Australia where retailers, even chain stores are up in arms over overseas internet retailers who are killing their businesses by not paying GST, and the retail industry employs A LOT of people. However this argument is offset by consumer complaints that Australians are being ripped off by their retailers who charge outrageously high prices.

DAndre Newman said...

I fully agree! It's amazing even without tax how expensive retail is in Australia. The stronger value of AUD makes it even works for the folks down there. And most of the stuff still comes from China anyway.

But yes, it's always the little people that loose...

Anonymous said...

US taxes are definitely not among the highest on the planet. It is actually a very low tax rate compared to most 1st world nations. California has a big state income tax, but that is only in that one state not the rest of the country.

Anonymous said...

@DAndre: you're still going to owe a tax even if you purchase out of the country today.

Virtually all U.S. states have some sort of a "use tax" that was specifically designed for similar situations where the purchase was out of state but you're bring the product back into the state. You're supposed to report purchases that are not exempt on an annual state sales tax declaration form. While it's absurdly rare to hear this being enforced, just wanted to point out that it is current law.

Also, under the Senate version, you have to have $1,000,000 in online revenues before the tax will apply. This probably won't apply to most flightsim purveyors save for the larger stores like PC Aviator. And you may already be paying a current state sales tax if you reside in and purchase from a U.S. retailer. My state requires that I apply sales tax to all purchases because I am based within the state, even if it is bought by someone out of state.

For the sake of full disclosure, Amazon is sponsoring the bill and eBay is fighting against it.

DAndre Newman said...

You are wrong. In toy live in new Jersey and work in Manhattan,you have to pay state taxes in both states. Please tell me whose taxes is worse than the US? But yes you are correct, California is very bad. And I live in an expensive part of LA which is worse.

DAndre Newman said...

Wow I did not know that! So I better bring all that crap back to Vegas then...

(no tax there)

Anonymous said...

You keep talking about state and city taxes. Those vary from place to place in the US. I'm purely saying that the US federal government has lower taxes than most other 1st world western countries.

Anonymous said...

"True but US taxes are known to be among the highest on the planet."

Mitt Romney paid an effective tax rate of 14.1 percent in 2011.

Taxes are not that bad if the money is used reasonably. Who wants to see a rusted Statue of Liberty or an rusted aircraft carrier?

Greg Holbert said...

It's sad that this tax will cripple mom and pop businesses that only make online sales. Amazon and Ebay are for it because they know they can handle the extra charges, but others may not be able to. This is more of the rich getting richer, and the poor getting poorer...I hope this doesn't pass.
Online Taxes

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