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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.
This is potentially much broader though -- say you buy a domain on some registrar, do you pay taxes on that now? Every such place then needs your address, too. And going down this road, p2p barter on the internet of any kind might be subject to a tax regime soon.
e.g. If I buy a sandwich I do not give my name and address to the deli.
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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 tha…
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?
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Payment processing services will most likely provide a solution to do this automatically. Charging credit cards is already pretty complicated, and they abstract it away already, so it would make sense for them to provide this as an additional service.
Agreed. I envision "tax compliance as a service" being offered by processors or third parties. My only question is then whether individual municipalities in states that allow them to have their own sales tax will also now be able to force compliance. If that's the case, what a nightmare for online retailers.
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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…
I was on an automatic payment with them, and they announced that they were adding 911 taxes.
I canceled the automatic payment and started getting refills at pincheap.com (a dealer with no presence in either Iowa or Illinois), avoiding both sales tax and the 911 tax.
There is no "delivery" of any physical product, so I wonder if the tax status of that arrangement changes.
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.
In Colorado you're already asked when filing state taxes what the value of the goods you bought online that haven't been taxed yet, so the onus is on the filer to look up receipts from the year for tax purposes. Amazon already collects tax in Colorado, but a few smaller retailers will send you a letter at the end of the year totaling up your untaxed purchases. Since different counties and localities collect different…
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.
There are companies that already sell massive lookup tables or API access to calculate a lot of this stuff. I think for most retailers, this won't be that big a change.
Most mom-and-pop online stores have disappeared too. Gone are the days when you went to Pricewatch.com and Pricescan.com. Now all the individual shops just create a store on Newegg, Amazon and eBay. I'm pretty sure the big players will start offering up tools to do these calculations for them as well.