Wednesday, June 5, 2013

New Tax Laws for Online Food Retailers.....



Internet has changed how we shop and now with the new tax laws, we might even be affected more.  After reading an article from Miyazaki, Will Amazon be the next Walmart?, many questions arise.  Many things have changed since the internet arrived to our lives.  Now tax laws are about to change when purchasing online.  There was no tax charge when one would shop online.  The new tax law in the State of California states to charge as much as 9.75% on internet sales.  This means that consumers will be more aware at the time when shopping.  Consumers will try to find the least expensive way to get an item.  With the new tax law, different taxes will apply to different states.  So the dilemma is, do I shop with an online retailer that is in one state or another? But what about the online retailers that are nationwide in the United States?  How will the new law affect them?  Will it depend on the state that you are purchasing in? or it will depend on the location of the physical business of the retailer?  These are questions that will come to mind when a customer shops online.

Retailers like Omaha Steaks and Harry & David will be affected by them.  How? These online food retailers sell food items over the internet.  Since the creation of internet, the reach for the consumers has gone from local to global.  Will this law change the physical presence of the stores? 

In Florida the Department of Revenue’s Web site says, online purchases are subject to the state’s 6% sales tax, even if the seller does not collect it at the time of purchase.  There is a convenience of shopping online, many people might say that the mall is open 24/7 and you are shopping in pajamas and then having the items delivered to your preferred location.  You would not have anybody bombarding you or a sales person telling you that the item looks great on you.  Online shopping is a new way of shopping without a sales person next to you – yapping.  But still the consumer will be subject to tax charges, free tax haven did not last that much….

What will online shoppers do to get the best deal?  Will this make them shop less online? Now online onsumers have to take into account Sales Tax.
 
Sources
Carrns, Ann. Online Shopping, with Sales Tax Added. April 2013. 
 

3 comments:

  1. Claudia, I think you bring up an interesting point here - the international nature of online shopping. As much as state's rights are very important, it seems ludicrous to charge sales tax on the same website in one state and not another. It feels like a vestige of older times that just doesn't work anymore.

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  2. Claudia, I also think you bring up a very interesting point. However, this is all subjective to how the online shopper values the ability for them to shop online from anywhere they choose to be. For example, I work long hours, study long hours, and basically have very limited time for actual in-store shopping. Because of this, I put a great value on online shopping, regardless of what sales taxes I have to pay. It is a great convenience to me and it is THE BEST THING EVER! :)

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  3. Sales tax presents an unexpected throw ball to online retailers of the food industry and all other industries. When it comes down to it, the cost will be burdened by consumers, not companies. It is difficult to define which transactions fall within the jurisdiction of which state. It is even more difficult for consumers to understand and appreciate this. Companies and online markets and platforms (such as Ebay and Paypal) should launch consumer education campaigns to educate consumers on the pros and cons of having transactions take place in different locations and on the effects state taxing has on consumers and the products they purchase online.

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