States Can Require Internet Tax Collection, Supreme Court Rules • Hacker News Board

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

#151

Post by rbritton » Thu, Jun 21, 2018, 4:16 PM UTC

jahewson wrote: post #92

pishpash wrote: post #46

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.

You don’t need people’s address to charge them sales tax. The business is responsible for paying the sales tax - not the customer. e.g. If I buy a sandwich I do not give my name and address to the deli.

You need the address to charge them the _correct_ sales tax. In Washington State, the rate is based on the address where the product is delivered, so in the case of your example sandwich, that's the address of the deli.

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

#152

Post by tgb » Thu, Jun 21, 2018, 4:16 PM UTC

gregrata wrote: post #125

Isn't this at some level taxation without representation? If I don't like how some other state is taxing, I can't alter that behaviour by voting. At least in my current state I might have a chance to do so.

Am I missing how this operates? I see others on the article making the same claim as you, but isn't the ruling that if company X sells to person A then the state where A resides gets to tax the sale? So in any transaction there will be one or more party that can vote on the tax. You can hardly complain about that unless you think it is valid to tax transactions that occur between two people if and only if they live near each other. Edit: and the sales tax was already legal to impose, the only change is whether the purchaser or the seller collects it. So this doesn't change whether anything is taxed, hence not changing whether it's taxation without representation.

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

#153

Post by URSpider94 » Thu, Jun 21, 2018, 4:17 PM UTC

jakejohnson wrote: post #119

cm2012 wrote: post #113

Earlier quoted context omitted.

Shopify/BigCommerce/Authorize.net/eBay/Amazon, etc. will handle it for you. Everyone uses SaaS software at some point in the process nowadays.

Yes, those platforms may handle sales tax calculations automatically for you for their specific platform. That's only the very first step. Merchants will then need to report and remit their sales tax to each state. If those platforms plan to handle the entire process, trust me they have a ton of work ahead of them if they decide to handle it in-house.

Note that popular services TaxJar and AvaTax will do automated filing for you as well.

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

#154

Post by Glyptodon » Thu, Jun 21, 2018, 4:17 PM UTC

djsumdog wrote: post #100

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.

Many online payment gateways already offer some kind of sales tax API. Keep in mind in California, sales tax changes per county. In places like Tennessee, the tax rate can change if your item is a grocery or isn't a grocery. 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 st…

One of the things I've been wondering is if "state sales tax" in this ruling includes cities, counties, other subdivisions, or just full state level taxes only.

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

#155

Post by URSpider94 » Thu, Jun 21, 2018, 4:18 PM UTC

pwned1 wrote: post #39

TheCoreh wrote: post #26

Earlier quoted context omitted.

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.

Already done, Google AvaTax and TaxJar.

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

#156

Post by s73v3r_ » Thu, Jun 21, 2018, 4:18 PM UTC

nacho2sweet wrote: post #132

djsumdog wrote: post #100

Earlier quoted context omitted.

Many online payment gateways already offer some kind of sales tax API. Keep in mind in California, sales tax changes per county. In places like Tennessee, the tax rate can change if your item is a grocery or isn't a grocery. 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 st…

Programming one of these for a Canadian website for provincial tax to hook into another recurring payment script, that hooked into PayPal was an annoying overhead especially when the company was bootstrapped and had like $0 revenue to even care about at that point. I would hope Stripe or people using online services like Shopify will quickly add support for everyone. But the state by state, county by county, grocery…

Brick and mortar don't get to do that either, so why should online ones?

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

#157

Post by Symmetry » Thu, Jun 21, 2018, 4:19 PM UTC

So, if a state has a flat sales tax for all purchases then that's pretty easy to implement. But often you tax different categories of product at different rates. And there are fuzzy edges. The advertisements for Fig Netwons famously were "a cookie is just a cookie, but Newtons are fruit and cake." But is that true, legally speaking? And if it's true in one state jurisdiction does that that necessarily translate to another? How you you avoid having to figure out the tax rate for each product you carry in each of the 50 states?

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

#158

Post by Glyptodon » Thu, Jun 21, 2018, 4:19 PM UTC

nolta wrote: post #69

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…

200 shipments is nothing, and $100k isn't particularly meaningful revenue, either. I don't know what kind of margins people get, but I'd guess $100k yearly revenue isn't even enough for one person to live decently, let alone afford to handle keeping up with a business.

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

#159

Post by hacym » Thu, Jun 21, 2018, 4:19 PM UTC

jahewson wrote: post #92

pishpash wrote: post #46

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.

You don’t need people’s address to charge them sales tax. The business is responsible for paying the sales tax - not the customer. e.g. If I buy a sandwich I do not give my name and address to the deli.

Because you’re in the physical location, so you have to abide by that tax law. You’d need at least the zip code of someone to charge appropriate taxes for where that person physically is.

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

#160

Post by cmurf » Thu, Jun 21, 2018, 4:20 PM UTC

The ruling gives states the power to collect state taxes, but will states require out of state retailers to also collect and remit sales tax for each county, special tax districts, and cities?

It does not level the playing field if a non-local business must collect and remit sales taxes for thousands of jurisdictions while a local business must only collect and remit sales tax for their jurisdiction. It actually flips it completely around, burdening online business more than local business.

As a small business owner, the sales tax remittance is super annoying, it's so byzantine. They often refuse to let small businesses use automated submittal unless you have enough volume, and if you don't, you have to hand write out the forms and send in a check. Per jurisdiction. Separate forms for state+county, and city. I'd rather see the states take back the taxing authority of cities and counties, and dole out funding from the state sales tax revenue based on population.