Draconian tax for on-line purchasers

seamonster · Sep 6, 2012

Respectable Members

Our good for nothing, who you know, is going to introduce tax on virtually all on-line purchasers. These nuts are going to lower the GST threshold. It is to be in line with the other close to bankrupt countries.

http://www.smh.com.au/technology/te...d-in-proposed-gst-changes-20120906-25hff.html

What a lucky country Australia is - for those nuts, only!

Thank-you.

ulackfocus · Sep 6, 2012

I foresee a lot of $29 watches being bought! 😜

gatorcpa · Sep 6, 2012

I feel bad for those in Australia having to deal with this, but I can certainly understand any government's frustration with the inability to adapt 19th century laws to 21st century commerce. The governments are losing revenue by people doing business over the internet and are pretty much powerless to stop this tax evasion.

To correct an inaccuracy in the article, there is no GST (or sales tax, as we call it here) in the USA at the federal level. States get to set their own tax rates at anything from zero to infinity. States also get to decide on an what is and isn't taxable. As Dennis can tell you, in New Jersey, clothing is not subject to sales tax. In Florida, it is.

We do have the concept of "use tax", which is equivalent to the sales tax on items purchased out of state (or the USA) on which tax was not charged. If I bought clothes in New Jersey and brought them back to Florida, I would owe a use tax equivalent to the sales tax I would have paid, had I bought them in Florida. Of course, Florida has no means to enforce this law, but it is on the books. Clear as mud, right?

Also, there is no "exemption" amount as mentioned in the article. I think the US$200 is meant to be the amount per person of exemption from federal customs duty upon return from overseas. This has nothing to do with sales tax, use tax or GST, but it reads nicely in the article.

Makes me wonder what else is wrong,
gatorcpa

seamonster · Sep 6, 2012

gatorcpa
I feel bad for those in Australia having to deal with this, but I can certainly understand any government's frustration with the inability to adapt 19th century laws to 21st century commerce. The governments are losing revenue by people doing business over the internet and are pretty much powerless to stop this tax evasion.

To correct an inaccuracy in the article, there is no GST (or sales tax, as we call it here) in the USA at the federal level. States get to set their own tax rates at anything from zero to infinity. States also get to decide on an what is and isn't taxable. As Dennis can tell you, in New Jersey, clothing is not subject to sales tax. In Florida, it is.

We do have the concept of "use tax", which is equivalent to the sales tax on items purchased out of state (or the USA) on which tax was not charged. If I bought clothes in New Jersey and brought them back to Florida, I would owe a use tax equivalent to the sales tax I would have paid, had I bought them in Florida. Of course, Florida has no means to enforce this law, but it is on the books. Clear as mud, right?

Also, there is no "exemption" amount as mentioned in the article. I think the US$200 is meant to be the amount per person of exemption from federal customs duty upon return from overseas. This has nothing to do with sales tax, use tax or GST, but it reads nicely in the article.

Makes me wonder what else is wrong,
gatorcpa

Respectable Member gatorcpa

Very likely the article may be a little misleading.

Many Australians buy things on-line from the US because virtually everything is so much cheaper in your country than here. My son gets all his text-books from Amazon.

The price of new (maybe vintage ones, too) Omega and Rolex in Sydney is insane. As a result, I have friends who purchase brand-name watches from HK, Singapore and also, the US.

Thank-you.

gatorcpa · Sep 6, 2012

seamonster
Many Australians buy things on-line from the US because virtually everything is so much cheaper in your country than here.

Respectible Member Seamonster -

In the USA, each of the 50 states (plus Washington DC, Puerto Rico, and a few other territiores) are treated almost like separate countries for tax purposes.

Here, most people use the internet to avoid paying their home state sales tax on online purchases. For some items, Amazon might actually be slightly more expensive than in a regular store.

However, when you take into account a 5% to 10% sales tax savings on an expensive purchase like a watch, that might be enough to move that sale online.

Online sales drives the retailers absolutely nuts, for good reason. They hire lawyers to lobby the state legislatures. Then we wind up with restrictive tax laws on internet sales in some states like what you are experiencing now in Australia.

Take care,
gatorcpa

ulackfocus · Sep 6, 2012

NJ has a line on the state income tax return to list out of state purchases so they can collect taxes they believe they're due.

gatorcpa · Sep 6, 2012

U ulackfocus
NJ has a line on the state income tax return to list out of state purchases so they can collect taxes they believe they're due.

And Gov. Christie got his fair share from you I'm sure...😗 😁

Actually a handful of states (mostly in the northeast) have that now,
gatorcpa

dsio · Sep 6, 2012

Thing is its probably not going to happen, its been said repeatedly that if the GST was applied to everything, the increased cost and increased customs officers required to apply it would exceed the revenue dramatically. It would cost them more money to tax us than they'd get back.

gatorcpa · Sep 6, 2012

dsio
It would cost them more money to tax us than they'd get back.

I noticed that 62% of the people in the SMH poll thought that the GST should apply to all purchases regardless of price.

In the US it would be more like 6.2% if that,
gatorcpa

ulackfocus · Sep 6, 2012

gatorcpa
I noticed that 62% of the people in the SMH poll thought that the GST should apply to all purchases regardless of price.

In the US it would be more like 6.2% if that,
gatorcpa

We did have that whole thing about taxes way back in the late 1700's you know. 😉

porschefan · Sep 7, 2012

Not only do the states tax items at the rate they want, local counties and cities add to it. Sales tax in Los Angeles county is at or close to 8.75%, other areas of the state, it is about 7.5 or 8.0%

dsio · Sep 7, 2012

Avoiding tax on imports is an Australian tradition, we will find a way!

Mind you someone told me in Cali you have like an honor system on imports, like you have to actively go and get a form to fill out and volunteer to pay your state tax on items you bring in or something like that

gatorcpa · Sep 7, 2012

dsio
Mind you someone told me in Cali you have like an honor system on imports, like you have to actively go and get a form to fill out and volunteer to pay your state tax on items you bring in or something like that

Yes, they are correct. That is the "use tax" that I referred to above. Almost all the states have it.
gatorcpa

mondodec · Sep 17, 2012

Just caught on to this thread. Interesting.

Of course the NSW minister is a state Liberal and so anything he may bang on about is hardly likely to penetrate the cochlears of the Federal Labor minister (most likely the Treasurer) or scintillate other big wigs in a minority government, particularly with an election due in November next year.....but the lobby for what some people call a "level playing field for retail" is getting stronger and stronger, not the least because, arguably, buying on-line overseas is tantamount to an export of jobs in retail.

I think ultimately there will be GST on imported goods purchased through the internet, but it may take a while. One reason why there has been such an abnormal hike in internet purchasing by Australians is the high Australian dollar and perceived value for money on internet purchases. Another reason is the tradition of gouging by overseas and local retail chains - from cars to books and everywhere in between. An IKEA product made in Asia sells for about 90% more in Australia than it does in the States, for example. What a lot of companies here have done is not pass on the exchange rate windfalls, but pocketed them, and when the Aussie dollar does a Swan dive, as it inevitably will, two things will most likely happen: local retail will have to absorb the higher wholesale costs within their margins because price hikes would further depress the local market and Australians will stop buying so much overseas because OS goods will not be so cheap. When the dollars is back to a reasonable 70 cents to USD we may well see an abrupt reversal of trends.

There is also a growing lobby to curb the gouging by international and local retail - long may it continue. Perhaps a confluence of pressures may take effect and we get better value for our spend here.

Still, I think we should make hay while the sun shines, but, I'm with the 60-odd percent who believe GST should be applicable and so I'm not going to whinge too much if it is eventually introduced. I rather like the idea of a robust and competitive local retail sector and the choice it offers as opposed to shopping precincts that look like ghost towns and multitudes of service workers competing in a dramatically shrinking job market. I dont think the money I've save is worth that scenario.

Cheers

Desmond

gatorcpa
Yes, they are correct. That is the "use tax" that I referred to above. Almost all the states have it.
gatorcpa

dsio · Sep 17, 2012

Thing is in some cases the retailers are honest, the Rolex ADs peg everything to the Swiss Franc so the Rolex Daytona my brother bought in 2005 for $18,000 had actually dropped in retail price to $13,000 in 2010. Then you've got large furniture stores importing furniture made in the Philippines and Indonesia for nothing and charging ever increasing premiums.

seamonster · Sep 17, 2012

mondodec
Just caught on to this thread. Interesting.

Of course the NSW minister is a state Liberal and so anything he may bang on about is hardly likely to penetrate the cochlears of the Federal Labor minister (most likely the Treasurer) or scintillate other big wigs in a minority government, particularly with an election due in November next year.....but the lobby for what some people call a "level playing field for retail" is getting stronger and stronger, not the least because, arguably, buying on-line overseas is tantamount to an export of jobs in retail.

I think ultimately there will be GST on imported goods purchased through the internet, but it may take a while. One reason why there has been such an abnormal hike in internet purchasing by Australians is the high Australian dollar and perceived value for money on internet purchases. Another reason is the tradition of gouging by overseas and local retail chains - from cars to books and everywhere in between. An IKEA product made in Asia sells for about 90% more in Australia than it does in the States, for example. What a lot of companies here have done is not pass on the exchange rate windfalls, but pocketed them, and when the Aussie dollar does a Swan dive, as it inevitably will, two things will most likely happen: local retail will have to absorb the higher wholesale costs within their margins because price hikes would further depress the local market and Australians will stop buying so much overseas because OS goods will not be so cheap. When the dollars is back to a reasonable 70 cents to USD we may well see an abrupt reversal of trends.

There is also a growing lobby to curb the gouging by international and local retail - long may it continue. Perhaps a confluence of pressures may take effect and we get better value for our spend here.

Still, I think we should make hay while the sun shines, but, I'm with the 60-odd percent who believe GST should be applicable and so I'm not going to whinge too much if it is eventually introduced. I rather like the idea of a robust and competitive local retail sector and the choice it offers as opposed to shopping precincts that look like ghost towns and multitudes of service workers competing in a dramatically shrinking job market. I dont think the money I've save is worth that scenario.

Cheers

Desmond

Respectable Member mondodec

What you have posted is indeed very logic and true.

What I have witnessed, there is an authority or quasi-government body to oversee that players play on a level field. If they do not, they will be brought into line.

This particular body or quasi-government authority is super-efficient when confronting the local players but when they are faced with the big players like the oil companies, the banks and some multinational companies, this particular enforcement unit keep both their eyes shut. There is always the smoke but no fire.

This body is akin to a barking dog that does not bite because it does not have any teeth.

Thank-you.