Veritas, Davc

[Snaggletooth]

and other Oregon people.

What I've heard from border towns such as Vancouver WA, Yakima, Umatilla, etc. is to work in Washington where there is no income tax, and shop in Oregon where there is no sales tax. I don't even live close, but there is a factor that may portend for the rest of us. I've heard that there really IS a sales tax in Oregon, it is just simply not assessed as an "add-on." In other words, the retailer still has to pay a percent of his sales to the state, even though he is not allowed to charge sales tax as an "add on." The effect is the retailer has to charge more for his product, or if the market won't bear the additional increase, he just goes broke. Thus it is possible that a product sold in another state may add a sales tax and still be cheaper than buying in Oregon.

How is this meaningful to the rest of us? Consider internet sales, TWICE upheld by the US Supreme Court as tax exempt for sellers who have no "physical presence" in the same state as the buyer. Hypothetically, if I were to buy online $5000 worth of consumer products from a vendor in Portland, OR: could this vendor report his sale with this percent additive removed from the sale? or would he be obligated to sell to me at full-up price even though I am out-of-state?

Keep in mind that as a Tennessee resident, I am obligated by law (even as a consumer) to remit to MY state some 9.5% sales tax for products imported into Tennessee from outside the state where TN tax was not charged. (Incidentally, no one does this, but the law exists notwithstanding, and the same situation exists in neighboring states)

This has turned into a long post, and I still wonder if I have been clear. But do with this what you can...Thanks.

[veritas]

Interesting you brought this up

Some here believe for instance that we need a sales tax so those visiting our state help pay their share.

Oregon collects billions in income tax as it's main source of income. Where did the tax originate?

I have had this discussion on other forums and people can not connect the dots. Of course some percentage of sales revenue includes income tax in the sales price. From where else could it come?

"Thus it is possible that a product sold in another state may add a sales tax and still be cheaper than buying in Oregon." I agree if all other costs are similar. Washington for instance has a B&O tax, insane workers comp, an unbelievable unemployment tax, ridiculous tobacco tax and a very high fuel tax. Their property taxes are nothing to crow about either.

My apologies Sea-Tax.

[veritas]

How is this meaningful to the rest of us? Consider internet sales, TWICE upheld by the US Supreme Court as tax exempt for sellers who have no "physical presence" in the same state as the buyer. Hypothetically, if I were to buy online $5000 worth of consumer products from a vendor in Portland, OR: could this vendor report his sale with this percent additive removed from the sale? or would he be obligated to sell to me at full-up price even though I am out-of-state?

.

What a wonderful example. Of course we are not going to discount for foreign sales since we still pay the same taxes.

I once had an discussion with someone arguing for a sales tax. His premise was the underground economy and tourists would help pay our bills. I tried hopelessly to convince him that they were paying taxes now because they are factored in the sales price a business charges. He didn't buy it so I asked "where does the income tax withheld from wages come from for the individuals working at the Portland Airport?". The response was "the airline". I gave up.

[David1980]

Sales taxes do help get some funds from tourists, but realistically how much of an average retailers sales is to local people versus residents? I think it's just convenient to use it as an argument in order to get an additional tax.

Maybe if you had it targetted on tourist heavy goods such as hotel stays.

I think the main argument for not adding a sales tax, is that those proposals never include cutting other taxes. I personally feel an income tax is a better system than a sales tax due to the regressive nature of sales taxes. Here in WA we don't have one, but we do have a sales tax. I'd love to lower the sales tax in exchange for an income tax. That's not what tends to happen though, if they talk about an income tax they talk about adding it to the already existing taxes rather than replacing some portion of them. Does not take many smarts to figure out that this isn't a popular idea with people.

[taxmandan]

We will have a sales tax IF the voters agree to it on January 26th. It is measure 67 on the ballot and most folks don't understand that it is a sales tax. The legislature calls it a corporate income tax, which is a lie, it's tax on the gross sales not net, the very definition of a sales tax. It will not be an add on at the register, it is paid on corporate gross sales by the companies when filing their income tax returns with Oregon.

Oregonians have rejected a sales tax 9 times over the years, and this is the only way the legislature can dupe the voters into it.

[DaveO]

Years ago I was the National Distribution Manager for a telephone directory publisher. We had a directory in Bellingham WA just about 50 miles south of the Canadian border. Part of our delivery area was Point Roberts, a small community part of the US, but only accessible through Canada or by water. We based our delivery projections on the information from the USPO and printed directories accordingly.

Upon the actual delivery we found we had several thousand more books for Point Roberts than we needed. Upon investigation we found that the Point Roberts Post Office had a couple thousand more Post Office Box Holders than it had residents. The boxes were rented to Canadian citizens living in nearby cities so they could receive mail order goods free of duty or the VAT from American companies. Since they didn’t have to cross the border to get to the US they avoided having to “smuggle” their purchases back in.

On the weekends the parking lots of the local malls and hospitals were packed with cars sporting Canadian plates.

[veritas]

Sales taxes do help get some funds from tourists, but realistically how much of an average retailers sales is to local people versus residents? I think it's just convenient to use it as an argument in order to get an additional tax.

Maybe if you had it targetted on tourist heavy goods such as hotel stays.

.

Oregon does have a tax on all lodging in Oregon. So does most localities. They love to put taxes on rental cars. Multnomah county just raised theirs.

[Davc]

What I've heard from border towns such as Vancouver WA, Yakima, Umatilla, etc. is to work in Washington where there is no income tax, and shop in Oregon where there is no sales tax.

How many Washington resident tax cheats do you know?

http://dor.wa.gov/content/FindTaxesAndRates/UseTax/

[Snaggletooth]

Goods imported

Davc, most states have a similar statute, which legally obligates citizens to remit state sales taxes on items purchased in another state and imported, plus sales taxes on internet purchases. Nearly all states have passed legislation such as this to stop the drain of sales tax revenue.

Enforcement of these statutes is practically impossible. The effectiveness of these laws remind me of the scene from "Dumb and Dumber."

The thug shows up and opens the attache case looking for his $5MM and finds nothing but scraps of paper. Jim Carrey assures the thug not to worry, because he and his partner have stuff the case full of IOUs, and every cent is accounted for.