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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

#71

Post by ghaff »

Nasrudith wrote: post #59
ghaff wrote: post #3

I find it hard to argue with from a fairness perspective. Clearly, retail is in a much different place from when Quill was decided. My concern is more in how a mom & pop online shop operating independently complies as a practical matter, which means not only collecting the right amount for different types of items but presumably remitting and filing with a huge number of different tax jurisdictions.

There are two against it on fairness grounds I can see but your mileage may vary on practically and definitions of fairness. One is that they don't use the infrastructure in the state. Shippers are either already taxed for their use if private or self funding government in the case of UPS. The second is a more slippery taxation without representation which also gets into all sorts of semantic issues with who is reall…

On the other hand, local businesses are paying other types of taxes anyway (such as property taxes) and they're actually employing local people--so there's almost an argument that local businesses should be paying less sales tax rather than more. And then you're almost in why have a sales tax at all territory given that they're mostly regressive.

There's certainly a good argument for a flat national sales tax but that doesn't really fit with federalism and, anyway, good luck getting New Hampshire and New York to agree on a number.

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

#72

Post by toast0 »

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.

Jurisdictional boundaries are very complex. The city field in an address really identifies the post office that serves the address, not the city that the address is in. Many people live outside of city boundaries, and "simple" processing may charge them city sales tax surcharges.

From experience, the city of San Jose barely knows what its border is, so I wouldn't expect others to either.

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

#73

Post by irrational »

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?

Note: the states where Amazon doesn't collect sales tax are those states that don't have a sales tax.

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

#74

Post by MBCook »

supertrope wrote: post #60
URSpider94 wrote: post #53

Earlier quoted context omitted.

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.

Compliance is far more complex than a simple look up table. Rates vary by state, county, city, school district, mass transit zone, water district. And each of these political subdivisions and the sales tax they assess changes with every ballot issue! There's a lot of faxing, forms to fill, etc. So most of the value is the vendor doing the legwork in keeping up with details and fixing corner cases. And leveraging thei…

Don’t forget type of product, if it’s a sales tax holiday, phase of the moon...

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

#75

Post by sidlls »

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.

What's to stop the powers that be from lowering those threshold requirements, though, now that this has happened?

Also, "jurisdiction" is terribly complicated when it comes to sales taxes. A jurisdiction can be defined by the type of goods sold, date of sale, location, and sometimes (often?) there are overlapping jurisdictions. Full compliance is incredibly hard to achieve without a relatively pricey sales tax software solution that is actively maintained and updated every time a city, township, county, state, etc. decides to adjust something. If applied strictly this would essentially work to lock-in established, wealthy concerns and stifle entrepreneurship.

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

#76

Post by irrational »

dsfyu404ed wrote: post #70

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 t…

In what way? I choose to live in Oregon. Oregon doesn't have a sales tax. So the Supreme court ruling has no bearing on me. There is nothing stopping anyone from moving to one of the states that don't have a sales tax.

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

#77

Post by vixen99 »

Retric wrote: post #67
URSpider94 wrote: post #53

Earlier quoted context omitted.

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.

'category' / 'fits in' (no possession or abbreviation involved so no apostrophe)

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

#78

Post by BorgHunter »

honest_george wrote: post #45
chasil wrote: post #35

Earlier quoted context omitted.

I live in an Illinois border community, and work in Iowa. I wonder what tax would be collected if I close an Ebay transaction in Iowa, but have the products shipped to my address in Illinois.

While I can't speak for US law, most of the time it's the delivery address that matters - if the location you're at when purchasing matters, you could do all of your expensive on-line shopping when on holiday in some place with low taxes (or using a VPN...).

This is one of those "it depends on the state" questions. In general, a seller is going to calculate and remit tax based on the delivery address, but the laws are actually a bit more complicated than that. chasil, who lives in Illinois but is close to Iowa, might start having packages delivered to a P.O. Box in Iowa, for example. However, legally speaking, s/he must still pay Illinois use tax on that item provided it is "for use or consumption in Illinois" and less than the current Illinois use tax rate of 6.25% was collected originally. See http://www.revenue.state.il.us/Individuals/FAQs-Use-Tax.htm

Practically speaking, of course, few people keep detailed enough records to even calculate the correct use tax owed at the end of the year, and any tax that might have been owed goes uncollected and unnoticed. Which is the problem that led to this Supreme Court case in the first place.

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

#79

Post by briandear »

seibelj wrote: post #22

Software engineers and entrepreneurs are extremely clever, numerous solutions will arise to integrate with all of the major ecommerce platforms to automate this. This won't be much of a burden on business. As long as regulations are clearly defined (unlike GDPR) the industry will deal. Uncertainty is always the biggest risk.

You have no idea what you are talking about. Won’t be much burden on business? If you have physical shipping addresses, it is a bit easier, but what if you sell virtual goods/services? Billing address? But that doesn’t actually have anything to do where the person is actually buying the product. If I go to a masseuse in California but my credit card has a Texas billing address, I am still charged California taxes. So the precedent of using billing address for tax calculation is a bit ridiculous and innaccurate. What if I have a foreign billing address? So do we use IP address? My IP address routinely has me in the wrong city and sometimes wrong region. When I lived near Avignon, France, my IP would always show me as being in Corsica. Then there is VPN that could make us all in Oregon and avoid taxes completely. Oregon-as-a-Service.

Engineers are clever. Sure that might be true, but now that cleverness is going to be wasted building tax compliance solutions which aren’t even close to being “not much of a burden.”

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

#80

Post by ghaff »

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.

That's just one state. There's nothing to keep the 49 other states from passing laws that apply it to any dollar amount.

ADDED: Though the decision has some language that would seem to imply there has to be some lower bound.

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