During the city budget meeting this month, Ellen Smith questioned Mr. Jenkins about the potential for collecting internet sales tax in the future. It didn't sound like anyone expected that to occur for quite some time. However, while going through my receipts for filing my taxes, I noticed that a number of national online retailers charged me sales tax. Some even note Tennessee on the receipt. Anyone know where this money is going? If to the state, then perhaps this is something worth digging into further so that we can pursue our piece of the pie.
I know that most collect sales tax if they have a presence in the state but I do not know if they tie it to your locale so that it would trickle down to our city/county.
As noted, many online retailers are charging sales tax now, since many of them have been determined to have a physical presence in Tennessee.
However, I think we can expect to pay sales tax to many more Internet retailers in the next couple of years. Google "streamlined sales tax" and you'll learn that Tennessee has been a participant in a multistate negotiation aimed at collecting sales taxes from purchases between sellers and buyers anywhere in the group of states that participated in the streamlined sales tax agreement.
The reason this is called "streamlined" is that the states had to agree to streamline some of their rules for sales taxation. For example, if "food" is exempt from a state's sales tax but "candy" is taxed, the state needs to define "food" and "candy." Different states had different definitions, and it could be a nightmare for an online retailer to keep track of all the different definitions in the 50 states. Standardization of definitions is one of the measures that's been negotiated to make Internet sales tax collection easier on the retailer.
The General Assembly has enacted laws setting deadlines for Tennessee to become a full participant in the streamlined sales tax compact and start receiving sales taxes on most of the Internet and mail order purchases made by Tennessee residents. At least one deadline has already passed, but the deadlines were extended because of concerns about negative consequences of the new arrangement.
As I understand it, the biggest hangup with this proposal related to the fact that the streamlined sales tax initiative would require that goods purchased in one jurisdiction but delivered in another (whether a book from Amazon or a refrigerator from Sears) would be taxed at the place of delivery instead of the place of purchase. For example, if you bought a big-screen TV from Circuit City in Knoxville and had it delivered to your house in Oak Ridge, the local sales tax would go to Oak Ridge and your county, not to Knoxville or Knox County. Obviously, big cities could end up losing sales tax revenue with that arrangement. An analysis by UT found that even smaller cities like Oak Ridge and Oliver Springs would lose tax revenue, but most counties would come out ahead. Cities and towns across the state opposed the arrangement, so the legislature kept delaying implementation.
Recently, however, the streamlined sales tax compact agreed to allow states to apply taxes at the point of sale (the store) for purchases delivered within the same state, while applying tax at the point of delivery for purchases that cross state lines. Because that should eliminate the most strenuous objections from local governments, I expect that Tennessee will climb onto the streamlined sales tax bandwagon soon.
Wh doesn't the state find a way to tax the air we breath. Come on people this is getting out of hand. On the subject of tax has any one besides myself read the Fair Tax Act? Interesting reading .. I for one would vote for it in a heartbeat.
Wh doesn't the state find a way to tax the air we breath. Come on people this is getting out of hand. On the subject of tax has any one besides myself read the Fair Tax Act? Interesting reading .. I for one would vote for it in a heartbeat.
I be the first one at the polls to vote for it packrat!
I would a venture a guess that if more read it they too would agree!