US electric dealers ' tax bill receives Senate nod

Final vote expected in early May

The days of American consumers ' online shopping tax breaks will be gone forever.

local time 22nd, the United States Senate with 74:20 overwhelming advantage, accepted the Internet sales companies levy a sales tax on the "Market Fairness Act" proposal. The bill allows states to levy a sales tax on electricity from outside the state in order to break the current low tax on electricity dealers, and the Senate is expected to vote on the proposal as early as May.

According to the current U.S. law, the state government can only have physical stores or warehouses in the state levy sales tax, resulting in the current electric dealers compared to traditional retailers have a greater tax advantage.

Sales tax in a non-existent

This is not the first time the United States has discussed taxing the electricity dealers, but many of the country-wide legislative proposals have failed, with only a few exceptions, such as California State and a handful of states that have started taxing online purchases. At present, when American consumers are shopping online, consumers need to pay a different proportion of excise tax according to their state regulations, but the state government does not impose a uniform sales tax on enterprises.

The Washington Post says that technically, both online and physical stores are required to pay sales tax to the state in which they are located, but the reality is that few people pay the online sales tax. This is due to a 1992 U.S. High Court ruling, which judged that no sales tax was required as long as Internet sellers did not have an "entity presence" on the ground. Although consumers are required to pay an unpaid sales tax when they make an income tax declaration, few people actually do.

The "good" measures, which have stimulated the development of the US electric business in the past few years, estimated that Internet sales in the US reached $226 billion trillion last year, up nearly 16% per cent.

But many state governments are now lobbying the White House to consider a sales tax, fearing that online sales will severely slash tax revenues, especially in a depressed economy and dampen local traditional retailers. Typically, the sales tax levied on traditional retailers is about 5% to 10%.

The Fair Market Act provides that, for as long as the annual sales income exceeds 1 million dollars, a sales tax should be paid to the state where the customer buys the product, and the state authorities have the right to levy a sales tax across the state, even if the seller offers a tax-free service.

As early as 2009, a study by three academics at the University of Tennessee showed that the government lost about $11 billion a year in tax revenues from a tax-free relationship. CNN says consumers should spend 12 billion to 23 billion more dollars a year on a sales tax on online purchases.

Obama administration supports tax

Supporters and opponents of taxing electricity dealers have been lobbying the government in recent years, but the voices of opposition and support are evenly matched. Supporters believe the move will give traditional sellers the opportunity to compete fairly with the electricity dealers and increase government revenue. But most of the electricity Shangdou opposed, the electric business said that the tax administration procedures are complex, and will affect the sale of enterprises.

Dan Kriping, executive director of the National Governors Association, said it was a matter of business equity and state revenue. The bill also supports large retailers, such as Wal-Mart and Best Buy, that compete with ebay, and even Amazon, the electricity merchant's website. Wal-Mart and Best Buy also joined the Fair-Market coalition, lobbying on behalf of the tax bill.

Amazon's support as a traditional electric trader is not surprising, Amazon has built up a warehouse base in the United States that has long been included in the sales tax, and as soon as the law is passed, Amazon is expected to speed up its storage and expand to more states.

But most electric dealers are still opposed to a sales tax, and ebay's chief executive, Donahoe, has called on more than 40 million of ebay users to oppose the levy, saying that even if the tax is levied, the bill should be raised to companies with annual sales of more than $10 million or more than 50 employees.

State governments, which have no sales tax, have joined the opposition to the tax. Max Bacus, a Democratic senator from Montana State, and chairman of the Senate Finance Committee, said the tax was not conducive to corporate expansion and hiring more workers, instead forcing small businesses to hire highly paid lawyers and auditors to deal with annoying documents, adding complexity to declarations between different States.

In response, some members said that this will encourage the Government to provide better measures to help enterprises to alleviate the difficulties of tax statistics, the need to establish a single network sales tax declaration channels, to avoid cumbersome procedures.

In addition, some large financial companies worry that the adoption of legislation on net purchases would spur the government to levy tax on financial transactions, such as selling shares. So they called for a hearing in legislation that would impose a sales tax on electricity dealers.

But supporters responded that the objections were unfounded and that the government was merely "withdrawing the arrears".

While the fair Market Act has been a success in the Senate, it is not easy to pass and legislate, and while the Obama administration supports it, opposition from the House of Representatives could derail the plan, which some Republican lawmakers from the chamber may see as a tax increase.

China's tax on electricity dealers needs to do homework first

The U.S. tax debate on electricity dealers is reminiscent of a previous call by Suning chairman Jindong to tax China's electricity dealers.

During the national "two sessions" this year, CPPCC members Jindong in the proposal that the tax authorities should study the way of taxing e-commerce, strengthen tax supervision and evade tax evasion from the system level. Jindong also said that at present, China's E-commerce trading volume of 90% is in the form of Consumer-to-consumer (personal to the individual) of the business (consumer) transactions, a large number of transactions outside the existing legal supervision.

Taobao, then seen as a "network representative," responded on its official microblog by saying that it was not opposed to a levy, but opposed to "taxing at this time of the day". Taobao also said that its statistics show that 94% of Taobao sellers turnover of less than 240,000 yuan, most of the tax is not within the scope.

Compared with the US, China's management system and legal protection for Internet online sales is clearly lagging far behind.

Hu Gang, a lawyer at Beijing Chaoyang law firm, told the Morning News yesterday that for tax-fair consideration, it is necessary to tax the electricity dealers sooner or later, but the situation at this stage is not allowed to take a step-by-step approach, for example, to make a clear distinction between the operator and the Consumer-to-consumer, "an important task at this stage is to collate data, Collect the basic data, to ascertain the current network business (operation) base. ”

Hu Gang suggested that even the consideration of taxation should be prudent and that the views of the various stakeholders should be fully heard and that law enforcers should be prevented from appearing as legislators.

Input editor Zhou Zijing