US bill to tax online sales

FOR online shoppers in the US the days of tax-free internet shopping may soon be at an end.

The US Senate is scheduled to vote on Monday on a bill that would empower states to collect sales taxes for purchases made over the internet. The measure is expected to pass because it has already survived three procedural votes. But it faces opposition in the House, where some Republicans regard it as a tax increase. A broad coalition of retailers is lobbying in favour of it.

Under current law, states can only require retailers to collect sales taxes if the store has a physical presence in the state.

That means big retailers with stores all over the country like Walmart, Best Buy and Target collect sales taxes when they sell goods over the internet. But online retailers like eBay and Amazon don't have to collect sales taxes, except in states where they have offices or distribution centres.

As a result, many online sales are tax-free, giving internet retailers an advantage over brick-and-mortar stores.

The bill would empower states to require businesses to collect taxes for products they sell on the internet, in catalogues and through radio and TV ads. Under the legislation, the sales taxes would be sent to the states where a shopper lives.

The measure pits brick-and-mortar stores against online services.

As internet sales have grown, "It's putting pressure on the brick-and-mortar competitors and it's putting pressure on state and local sales tax revenues," said David French, senior vice-president of government relations for the National Retail Federation. "It's time for Congress to create a level playing field so that all retailers are treated fairly."

On the other side, eBay says the bill doesn't do enough to protect small businesses. Businesses with less than $US1 million in online sales would be exempt. EBay wants to exempt businesses with up to $US10 million in sales or fewer than 50 employees.

"Complying and living under the tax laws of 50 states is a major undertaking because the process of complying with tax law goes far beyond just filling out the right forms," said Brian Bieron, eBay's senior director of global public policy.

Supporters say the bill makes it relatively easy for internet retailers to comply. States must provide free computer software to help retailers calculate sales taxes, based on where shoppers live. States must also establish a single entity to receive internet sales tax revenue, so retailers don't have to send them to individual counties or cities.

Opponents say online businesses would still have to use resources to account for the taxes they collect and to periodically send the money to each state.

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Car dealer's dodgy quote exposed online

The Hyundai i30. Source: Supplied

Hyundai driver Mail Hannum wasn't happy with this quote from the Wynnum dealership, posting it online. Source: Supplied

HYUNDAI has apologised to a customer who took them to task on social media after receiving a service quote that included hundreds of dollars in unnecessary recommendations.

A photograph of a quote from Bartons Hyundai in Wynnum, posted by Mali Hannun on the company Facebook page, has gone viral and racked up almost 17,500 shares, 10,000 comments and more than 37,000 "likes" since it was uploaded on Friday.

In her post, Ms Hannun accused the service centre of attempting "deliberate fraud", quoting around $700 of unnecessary repairs, including replacement tyres, a brake fluid flush and a power steering flush, which she only discovered after going to two other mechanics for a second opinion.

Ms Hannun was also told that her model, a Hyundai i30, uses electronic power steering and so does not ever require a power steering flush.

"I am extremely disappointed with my experience and simply cannot believe this blatant attempt to deceive me," her post reads.

"Hopefully many people will hear about this incident before their next car service and be more aware of this deliberate fraud."

Ms Hannun said she returned to the Hyundai dealership to complain to staff at the centre about the "blatant rip off".

"He squirmed in his seat for the duration of my rant and all he could offer me in way of explanation was that it may have been a 'typo' on the invoice," she said.

Mark Beitz, the dealer principal at Bartons Holden, Hyundai & Mitsubishi, this afternoon told the Wynnum Herald he has been left "distressed" and fearing for the financial future of his business and family following the viral Facebook post.

Mr Beitz admitted some mistakes were made by staff, but staunchly denied the quote was a case of "deliberate fraud" and said if the service had gone ahead she would never have been charged for it.

"In no way would we have charged for something not performed," Mr Beitz said.

"Our culture and reputation was too important for this to occur.  We pride ourselves on our integrity and service including value to our customers and have done for 67 years."

Read more about the dealer's response at the Wynnum Herald.

In response to Ms Hannun's post, many users also pointed out other charges on the bill they considered to be high, including a fee of $83.05 for windshield wiper inserts.

Hyundai chief operating officer John Elsworth said in a statement that the company had initiated an investigation into the dealership, and it appeared there had been a "breakdown in staff communication" at the service centre.

"We are now in touch with the customer involved and will seek to make things right with her as our first priority," he said.

He said the recommendation for tyre replacement was "appropriate" due to Hyundai's long service intervals, and the company was conducting a review of their charges for wiper blade replacements and other items to ensure they offered better value.

The company is still investigating how the power steering flush was recommended.

Mr Elsworth said the service items were only recommendations, and the customer had received a full refund of labour charges after she made the initial complaint at the service centre.

"We pride ourselves on the quality of service our customers receive," he said.

"I'm determined to make sure something good comes from Mali's post."

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Retailers' cries about online are a 'furphy'

Seventy-five per cent of goods purchased online last year were bought from Australian-based companies . Picture: Thinkstock Source: Supplied

SHOPPERS are flocking to online websites with almost $13 billion spent last year.

But it is domestic retailers rather than international websites that are the biggest winners with almost 75 per cent of goods purchased bought from Australian-based companies at an average price of just $60, according to the latest research.

National Australia Bank chief economist Alan Oster said this exposes as a "furphy" the cries of unfair competition from many local retailers about foreign websites which do not have to charge GST on purchases.

The NAB Online Retail Sales Index released today shows overall online sales are growing fast, rising 27 per cent in the year to January while traditional bricks and mortar sales grew only 0.4 per cent in the same period.

This growth is being driven by domestic retailers - up 28 per cent compared with a 25 per cent lift in international sales.

But online sales still represent just under 6 per cent of the total retail market.

"The increase in sales in January suggests the recent lift in consumer confidence has flowed through to some online retailers," Mr Oster said.

Households in the 30-40 age bracket remain the top spenders with auction sites, department stores, fashion and cosmetics drawing in almost 50 per cent of the $13 billion spent online.

But Mr Oster said the biggest growth in the past year has been in the under 30s age bracket - attracted by the surge in companies offering free delivery with purchases.

The biggest online spenders per capita come from ACT, Northern Territory and Western Australia.

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Memorials for the dead to flourish online

FACEBOOK for the dearly departed? Funeral provider InvoCare is planning to digitally expand its business to the afterlife after announcing a full year profit rise of 65 per cent.

The largest private funeral, cemetery and crematorium operator in the Asia Pacific region, InvoCare in January this year invested $5 million in the HeavenAddress website.

InvoCare says the site already attracts one third of all funeral internet traffic in its three markets of Australia, New Zealand and Singapore, and will use the investment to finance the next phase of development to make HeavenAddress.com a global memorials website.

"Our industry is about as far removed from technology as you can get," said chief executive Andrew Smith.

Younger generations had been alienated from the memorialisation process, he said, and were now able to use social media platforms they were comfortable with to leave a virtual message for a loved one.

"We've seen it grow from next to nothing to a million hits a year, and I can see it hitting two million hits a year before the end of 2013," Mr Smith said.

The company reported its net profit rose to $44.5 million in the year to December 31 from $27 million in 2011, while sales revenue rose 14.8 per cent to $368.7 million.

It said the growth was driven by market share improvements, an increased number of deaths, annual price changes and higher funeral costs.

New Zealand market leader Bledisloe, which InvoCare acquired in June 2011, made a full year contribution of $69.3 million.

Other acquisitions include Geelong-based Tuckers Funerals and Bereavement Services in December 2012, and Auckland operator Resthaven Funerals in February, and plans are on track to open four new sites in Sydney, Adelaide, Brisbane and NZ.

Mr Smith said domestic acquisitions would continue, although breaking into the Asian market has proved difficult.

"Singapore is our foothold into the rest of Asia, but we need to find the right joint venture partner," said Mr Smith.

"We've been looking for one for three years and we've been unsuccessful."

He said markets such as Hong Kong were tough to crack as mainland Chinese operators charge commercially unviable prices.

The positive profit result came despite the company reporting increased funeral prices late in 2012, along with scheduled cemetery and crematoria price rises during the first quarter of 2013.

The number of deaths for the first six weeks of 2013 has been flat year on year, but Mr Smith said the overall death rate would rise.

"Populations are ageing in and the baby boomer generation is coming through in larger numbers every year," he said.

"We're currently at a death rate of around one to 1.4 per cent, and that will see an increase to 2.7 per cent by 2033."

Subject to the death rate, InvoCare expects to continue growth of six to seven per cent in general revenue and eight to nine per cent in earnings before interest and tax.

Invocare declared a final fully-franked dividend of 19.0 cents per share, up from 16.25 cents in 2011.

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