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States Can Require Internet Tax Collection, Supreme Court Rules

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Re: States Can Require Internet Tax Collection, Supreme Court Rules

#61

Post by URSpider94 »

himom wrote: post #32

First, random trade wars, raising prices for all those clueless, provincial consumers whom don’t realize what made Walmart prices cheap. Next, cuts to MedicAid for tax breaks for the very rich that are literally blood money by killing people, throwing them off health insurance and sentencing them to bankruptcy. Then their genius band of self-destructive nincompoops hurls some more arbitrary taxes onto the people whom…

This “genius band of self-destructive nincompoops” is the Supreme Court, including Ruth Bader Ginsburg.” Your narrative doesn’t quite hold together.

Re: States Can Require Internet Tax Collection, Supreme Court Rules

#63

Post by braythwayt »

kevin_thibedeau wrote: post #50
zdw wrote: post #38

I tend to view the avoidance of paying local taxes as one of the internet's original legislation workarounds (1). The entire wholesale (you buy for resale, pay taxes when that happens) vs retail (you sell to the end user) division was abused to allow the historical "nobody pays taxes on the internet, so buy there and avoid them" logic many people used. It would have been interesting to see how differently retail sale…

This wasn't invented by the internet. Interstate mail order sales delivered by railroad in the 19th century were always tax free. E-commerce inherited that system.

Then there was this thing called mail-order. Comic books seemed to rely on advertising mail-order novelty items as their revenue model.

Re: States Can Require Internet Tax Collection, Supreme Court Rules

#64

Post by wolco »

hoveringcto wrote: post #28

This is great news for Amazon. They already collect sales tax on everything they sell in most states (47 I think?). Now that smaller sellers (marketplace sellers, eBay, etc.) also have to collect tax, that hurts the ~8% discount built in, so why even shop around?

The problem with Amazon is that shipping can take months for non-prime users. In most cases you are better off buying from walmart if they carry the item.

Sent from someone outside of the US

Re: States Can Require Internet Tax Collection, Supreme Court Rules

#65

Post by throwawaylalala »

hoveringcto wrote: post #28

This is great news for Amazon. They already collect sales tax on everything they sell in most states (47 I think?). Now that smaller sellers (marketplace sellers, eBay, etc.) also have to collect tax, that hurts the ~8% discount built in, so why even shop around?

Most of Amazons sales are through third parties, most of them dont collect.

Re: States Can Require Internet Tax Collection, Supreme Court Rules

#66

Post by Retric »

wolco wrote: post #64
hoveringcto wrote: post #28

This is great news for Amazon. They already collect sales tax on everything they sell in most states (47 I think?). Now that smaller sellers (marketplace sellers, eBay, etc.) also have to collect tax, that hurts the ~8% discount built in, so why even shop around?

The problem with Amazon is that shipping can take months for non-prime users. In most cases you are better off buying from walmart if they carry the item. Sent from someone outside of the US

US sales tax is not relevant if you're not in the US.

Re: States Can Require Internet Tax Collection, Supreme Court Rules

#67

Post by Retric »

URSpider94 wrote: post #53
anoncoward111 wrote: post #13

More compliance and regulation for us to deal with. How about you just tax property? It doesn't move. And also, how about the state stops spending money?

Thankfully, we have computers! Any online sales program worth paying for includes automatic sales tax collection by jurisdiction. Note, this ruling doesn’t mean that all businesses will immediately be taxed. The law over which this suit was filed requires collection if your annual business in the state is $100,000 or >200 sales, which means you’re already doing a sizeable business.

A computer program can't tell what category your product falls under.

Does a smock qualify as an Apron and thus it's free from sales tax? What if I print 'kiss the cook' on a smock?

Sales tax has a single set of rules that if you are in a specific physical location, but it becomes 50,000+ wildly inconsistent rule sets when you look nationwide.

Re: States Can Require Internet Tax Collection, Supreme Court Rules

#68

Post by rahimnathwani »

dtech wrote: post #44
rahimnathwani wrote: post #8

The situation for retailers shipping to states where they have no physical presence reminds me of the situation of foreign retailers with significant online sales to customers in the EU. In each case, the seller (who has no physical or other presence in X) is required to collect tax from the buyer (a resident of X) and remit it to the tax authorities in X. The tax is owed by a resident of X, to the tax authorities in…

That is the price of doing business with customers of the EU, similar to how you must comply to EU regulations if you want to sell physical goods. In return, you get access to the EU market and can deal with a single ruleset for the whole EU instead of each country individually. Also, this is only for consumers, to business customers you can reverse-charge the VAT so they have to handle it.

Anything can be construed as 'the price of doing business'. If the EU instead required every retailer with at least one customer in the EU to get a tattoo of the EU flag, in return for getting access to the market, would you also consider that just 'the price of doing business'?

My objections to this are:

- If an EU country is owed tax by people resident within its borders, then perhaps the country's tax authorities should arrange for it to be collected, rather than relying on some foreign entity (e.g. Chinese company) to collect it.

- There are ~200 countries in the world. Should any company who wants to sell over the internet need to know about the sales tax or VAT registration thresholds in each of those countries? If so, this gives a huge advantage to large retailers over small ones.

Re: States Can Require Internet Tax Collection, Supreme Court Rules

#69

Post by nolta »

rossdavidh wrote: post #20

I have a hunch that this will, in the end, be a massive win for large retailers vs. small ones. The task of figuring out how to calculate tax for all states is more or less the same amount of work regardless of size, which means for someone like Amazon it's more or less trivial, but for a mom-and-pop store it's a major hassle.

The South Dakota tax only applies if you sell more than $100k or send more than 200 shipments, which factored into the decision:

Respondents argue that “the physical presence rule has permitted start-ups and small businesses to use the Inter­net as a means to grow their companies and access a national market, without exposing them to the daunting complexity and business-development obstacles of nation­wide sales tax collection.” These burdens may pose legitimate concerns in some instances, particularly for small businesses that make a small volume of sales to customers in many States. State taxes differ, not only in the rate imposed but also in the categories of goods that are taxed and, sometimes, the relevant date of purchase. Eventually, software that is available at a reasonable cost may make it easier for small businesses to cope with these problems. Indeed, as the physical presence rule no longer controls, those systems may well become available in a short period of time, either from private providers or from state taxing agencies them­selves. And in all events, Congress may legislate to ad­dress these problems if it deems it necessary and fit to do so.

In this case, however, South Dakota affords small mer­chants a reasonable degree of protection. The law at issue requires a merchant to collect the tax only if it does a considerable amount of business in the State; the law is not retroactive; and South Dakota is a party to the Streamlined Sales and Use Tax Agreement, see infra at 23.

Re: States Can Require Internet Tax Collection, Supreme Court Rules

#70

Post by dsfyu404ed »

One of the nice benefits of the US system of government is that the ability to relatively easily pick and choose where to live, where to work, where to do business, etc forces the states to compete with each other to some degree. This ruling runs counter to that because using online retailers to avoid local taxes is a very low effort way to avoid local taxes or avoid funding a local government you disagree with and this ruling paves the way for states to prevent that.

I have no problem with sales tax. I have a problem with states getting a cut of transactions that did not result in transfer of money to an entity within their borders.

Sales taxes generally follow the location where the money was received, not where the goods were used. If I buy something at a brick and mortar store then I'm subject to the sales tax where that store is located. Why should the state of buyer be getting a cut of the transaction when the state of the merchant is the one that is responsible for the environment in which that commerce happened?

If I live in MA and drive to NH and buy fireworks then MA has no claim to tax the transaction because it's obviously the environment of NH that made that commerce possible at all (you can't buy fireworks in MA). What if I live in CA and want to buy some special paint or cleaning product not for sale in CA so I drive to NV to buy it? What if I want to buy a widget and my home state taxes it and some other state subsidizes it (not necessarily at the retail level, the tax/subsidy could be anywhere in the supply chain) so much that I drive to the other state. In that case my home state still has no claim to tax the transaction since it happened out of state. What if the price is so much better elsewhere I'll be willing to pay shipping from half was across the country? How does the fact that the a 3rd party (shipping company) is responsible for getting the goods to their address change the situation? Does the fact that the transaction originates online affect anything?

I have no problem paying state sales tax as long as it goes toward the state of the merchant. The state of the merchant is responsible for creating the environment that facilitated the commerce. They should be the ones getting a cut.

Edit: I genuinely would like to know what the reasoning of those who disagree with me is. I see no good that can come from allowing states to exert authority on businesses outside their jurisdiction.

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