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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

#171

Post by tzs »

omfg wrote: post #5
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.

We’ve been looking at tech solutions for calculation / remittance. So far only found Avalara. I’d be surprised if PayPal, Stripe, and others won’t step into this now that it’ll be fairly profitable.

Besides Avalara, I'm aware of taxjar.com, taxify.co, taxamo.com.

Avalara and Taxamo don't list prices on their sites as far as I managed to find. Googling turns up comments saying that Avalara is expensive.

TaxJar and Taxify do list prices.

For a small business (up to 1k transactions/month) is $17/month if you pay for a year up front ($19/month on month-to-month). A transaction is either giving them an order and having them figure the tax, or looking up a rate with their API.

That will get you reports for each state, ready to file. If you want them to actually file for you, that costs more. If you have to file in all 45 states that have sales/use tax, with a monthly filing in each, it would come to $5000/year at TaxJar.

Taxify is $47/month for up to 1k transactions, and it would be $14580 to have them handle filing under the same 45 state/monthly filing assumption.

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

#172

Post by RightMillennial »

xienze wrote: post #122
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.

Technically you're supposed to pay your state's tax, even for a purchase where you were physically in another state. Even if that other state actually charges its own sales tax!

I thought with use taxes you owed the remaining difference in tax. Say I purchase a $100 widget in Kenosha, WI with a sales tax of 5.5%, and I live in MI with a sales and use tax of 6%. I would owe MI the 0.5% difference on the $100 which would be $0.50.

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

#173

Post by jedberg »

sbov wrote: post #150
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…

> Keep in mind in California, sales tax changes per county. More than that. Sales tax in California can change arbitrarily, not just by county. E.g. different cities in the same county can have different sales tax. To further complicate things, shipping address may have a city on it but they might not actually "live" in that city. E.g. in SoCal there is a city of "Westlake Village", which spans the Ventura-LA county…

As a fellow former resident of the county-spanning Westlake area, I can tell you that even the people that live there don't know where they live. I was debating with a friend of mine just the other day, and her and her mom couldn't even agree what city they lived in. Then I looked it up on the map, and different maps gave different answers. And they keep building new houses, so who the hell knows which tax jurisdiction each individual house is in? The people that live in them can't even keep track!

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

#174

Post by ncallaway »

s73v3r_ wrote: post #156
nacho2sweet wrote: post #132

Earlier quoted context omitted.

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?

When I launch a single brick and mortar store, I have to worry about the tax jurisdiction that store is in.

When I launch a single small web app, I have to worry about everything single tax jurisdiction in the country.

I'm super not opposed to taxes, but I do think this is an area that the federal government should step in. If only to provide a standardized system for different jurisdictions to report their sales tax laws.

It seems like a very very clear use of the commerce clause and regulation of interstate commerce.

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

#175

Post by cpburns2009 »

secabeen wrote: post #169
cpburns2009 wrote: post #148

Earlier quoted context omitted.

An exemption such as this is one of those things that I'd say is not worth supporting unless you're based out of TN, or do enough of sales there to make it worth your while. Sure, I'd implement it if it's required but every special case is just another point of failure.

But if you don't support it, are you liable for collecting more tax than required? How do you "not support" it? Just reject purchases from people in TN during the holiday?

Disclaimer: I am not an accountant. I would figure tax holidays are optional and might even require an application to take advantage of. So you would charge the regular sales tax and remit it to the state.

UPDATE: Out of curiosity I looked it up. And it looks like sales tax holidays depend as usual on the state. The MO back to school one is optional if less than 2% of merchandise is affected. But the TN one doesn't look optional.

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

#176

Post by s73v3r_ »

mullingitover wrote: post #19
sdhgaiojfsa wrote: post #2

This is good news for the country, even if it's bad for my wallet. The prior state of affairs was absurd. Online retailers already have major advantages in terms of convenience and inventory. Getting a N% discount vs. brick and mortar by not charging taxes was completely unnecessary.

Exposing consumers to more regressive sales taxes is in no way good for the country. What would be good for the country is to abolish sales taxes entirely.

"What would be good for the country is to abolish sales taxes entirely."

In favor of what, exactly? Don't pretend that sales taxes could just be abolished, and states would just go without that revenue. Kansas tried gutting their tax revenue; it failed miserably.

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

#177

Post by j79 »

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?

> 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?

Because the more I learn about Amazon and their warehouse employees, the less I've been shopping on Amazon.

Having choice is a good thing.

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

#178

Post by Symmetry »

swsieber wrote: post #161
Symmetry wrote: post #157

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 an…

I would think the same way any national chain does it.

That's true but stores have an advantage in that if they mess up it's harder for regulators to notice. But I'd bet the way this actually works is that companies mess up on this all the time and regulators will yell at companies to fix it before they start resorting to fines.

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

#179

Post by psetq »

xoail wrote: post #97

Sales tax has one of the most complicated structures. Recently ADP built logic to tax according to counties and sub-zones (not just states and cities) to save millions on taxes for its customers. I doubt small start-ups can afford their software. It will be great if Stripe can come up with an API to simplify this. Or else, its clearly a win for large retailers and not as much for small ecommerce stores.

Automated Tax Calculations in the Orders API:

https://stripe.com/docs/orders/tax-integration

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

#180

Post by gascan »

Retric wrote: post #31
nlh wrote: post #14

Fascinating mix of justices on this one: > The vote was 5 to 4. Justice Anthony M. Kennedy wrote the majority opinion and was joined by Justices Clarence Thomas, Ruth Bader Ginsburg, Samuel A. Alito Jr. and Neil M. Gorsuch. I can't imagine we're gonna see RBG agreeing with the Alito/Gorsuch/Thomas clan too often.

So how exactly is this a constitutional question where a new court can have a different opinion? Quill now harms states to a degree far greater than could have been anticipated earlier. That hardly seems like it changes the Constitution.

The Constitution uses a fair amount of fuzzy language. "Undue burden", "excessive bail", "cruel & unusual punishment", "unreasonable search & seizure", etc.

Thus our perception of what is undue, excessive, cruel, or unreasonable can change, without the Constitution changing a word.

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