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

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

#201

Post by msbarnett » Thu, Jun 21, 2018, 4:50 PM UTC

briandear wrote: post #79

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…

> 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.

Orrrrr a couple of companies will step into this problem space, solve it, and everyone will offload their tax compliance to those companies, in exactly the same way that we don't all waste 1,000,000 engineering hours on the arcana of banking and credit card networks and just offload that concern to payment gateways with nice APIs.

This is already the way it works in most of the world. HN is showing its provincialism by convincing themselves this is some kind of impossible-to-solve problem.

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

#202

Post by rconti » Thu, Jun 21, 2018, 4:51 PM UTC

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…

The US system allows you to easily pick and choose where to live, from which where you work and where you do business generally follows.

Except in the case of living close to a border (which is a bit of a hack), you generally live, work, and pay sales taxes in the same jurisdiction in which you vote and receive services.

You're right that it forces states to compete with each other, which is great.

Your example runs completely counter to your stated narrative. Your example is one in which you live and collect services in one place, but refuse to pay taxes to support your chosen lifestyle by instead "supporting" with your dollars a system you don't want to live under.

Apparently you DO have a problem with sales tax.

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

#203

Post by mullingitover » Thu, Jun 21, 2018, 4:52 PM UTC

Spivak wrote: post #186

mullingitover wrote: post #116

Earlier quoted context omitted.

States not having jurisdiction outside of their borders isn't exactly a loophole. If California wants to punish people for buying from Oregon, a state free from sales taxes, it should use its existing use tax and take it up with its own citizens. This ruling is saying that California can tell Oregon businesses what to do.

Sure, but there's no point in getting bogged down in strict adherence to jurisdiction when we're all one country. Would you feel better if the ruling was that an online retailer in Oregon has to get a business license in every state which would come with the same requirement to collect sales tax? Same effect, but now businesses have to do more paperwork.

If we're all one country, how did the President get elected when the majority of the country voted for someone else?

..and yes, I'd prefer that the ruling was that the online retailer had to get a business license in every state. That ruling would create such a torches and pitchforks situation from citizens suddenly having their lives disrupted that we'd quickly return to status quo.

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

#204

Post by jonknee » Thu, Jun 21, 2018, 4:52 PM UTC

reaperducer wrote: post #114

Someone1234 wrote: post #88

Earlier quoted context omitted.

That sounds harder and more expensive for the business than simply having a standard system to collect and pay the sales tax.

Paying sales taxes online for the one state where I have a business that does retail sales takes between 10 and 30 minutes, depending on how complex that quarter's sales were. Multiply by 50 states, and it's up to 25 hours a month of work. For those of you who have never done this, sales taxes are a lot more complicated than they seem. In the three states where I've had retail businesses, different types of products…

Or you could just outsource it to companies like TaxJar that specialize in this and pay a few bucks to have to all done automatically. After this ruling I expect more and more platforms will have this sort of thing built in. One or two more fields to fill out for your products, but otherwise completely automated.

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

#205

Post by emaginniss » Thu, Jun 21, 2018, 4:53 PM UTC

windows_tips wrote: post #188

cpburns2009 wrote: post #175

Earlier quoted context omitted.

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 l…

Collecting 'tax' on an untaxed item could be considered acting falsely under color of law.

"Under color of law" means that you're a law enforcement official. Collecting extra tax and then remitting to the state will almost certainly not cause you any issues.

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

#206

Post by Retric » Thu, Jun 21, 2018, 4:53 PM UTC

jonathanmoore wrote: post #187

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.

Thankfully with Shopify it is extremely easy and straightforward to manage for my wife's small online store. Their platform does a great job properly charging taxes by state, county and city in certain situations. Then using an inexpensive plan from https://www.taxjar.com/ the entire filing and paying process is 100% automated. In 10 minutes I was able to file and pay all the sales taxes to several state, dozens of C…

So you assume. As a small business you are unlikely to be audited, but that software could easily be wrong creating a huge minefield and potential liability.

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

#207

Post by jdhn » Thu, Jun 21, 2018, 4:55 PM UTC

nkurz wrote: post #135

The actual (quite readable) Supreme Court decision is here: https://www.supremecourt.gov/opinions/17pdf/17-494_j4el.pdf Most of the coverage I've seen downplays it, but it should be noted that the question is not whether tax is owed on these out-of-state internet purchases, but whether the retailer should be required to collect it and submit it to the state. Currently, the purchaser is (in 45 of 50 states) legally re…

>If a locality can enforce its local tax laws, what other custom crafted local laws can it enforce in return for access to customers? Should it be allowed to enforce its local environmental and labor standards as well?

This is pretty much what happens with California and car manufacturers. Even today on certain aftermarket car parts (primarily exhaust systems), there are explicit notices that they are legal anywhere in the US except California.

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

#208

Post by jonknee » Thu, Jun 21, 2018, 4:55 PM UTC

magduf wrote: post #42

zchrykng wrote: post #18

Someone needs to develop a service to make calculating and paying the sales tax easier. Something like plugin an address and it spits out the tax percentage and where to remit the payment to. Ideally the states would get together and create a centralized service so companies don't have to be mailing checks to every single county government that has a sales tax.

The problem with this is: how do you know what the tax rate is for the product you're selling? For instance, if you're in New Jersey and you're selling a clothing item like a pair of socks, then there's no tax. But if you're selling a fur coat, then there's full sales tax. There's different tax rates for different products, and it varies wildly across almost 10,000 different jurisdictions in the US.

In general you would identify the product type from a list of a lot of product types and then let your sales tax calculator as a service provider sort out what needs taxed and at what rate.

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

#209

Post by buzer » Thu, Jun 21, 2018, 4:56 PM UTC

rahimnathwani wrote: post #68

dtech wrote: post #44

Earlier quoted context omitted.

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…

> - 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.

As far as my experience goes, that is the case when seller is outside of EU. Buyer needs to pay customs the taxes on the item. In Finland it's common that when package outside of EU arrives in Finland, customs will hold and send buyer a message to declare item and pay taxes on it, especially if the value was declared on it (though they won't tell you what value was declared on it which can get tricky with things such as mixed electronic & physical goods on Kickstarter). It has it's own share of problems, like that buyer needs to figure out the TARIC code of the item (which are extremely specific, like "Waterproof footwear with outer soles and uppers of rubber or of plastics, the uppers of which are neither fixed to the sole nor assembled by stitching, riveting, nailing, screwing, plugging or similar processes - Other footwear - Covering the ankle but not covering the knee - With uppers of plastics").

Within EU it used to be that seller collected local VAT if their sales didn't exceed certain threshold to the buyer's country (100k IIRC). There has been some talks about modifying it so that seller would always need to collect buyer country's VAT, but I don't remember what is the current state of it is.

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

#210

Post by mbesto » Thu, Jun 21, 2018, 4:57 PM UTC

zchrykng wrote: post #18

Someone needs to develop a service to make calculating and paying the sales tax easier. Something like plugin an address and it spits out the tax percentage and where to remit the payment to. Ideally the states would get together and create a centralized service so companies don't have to be mailing checks to every single county government that has a sales tax.

It does.

https://www.taxjar.com/

https://www.avalara.com/

Lots of ERP's have it built in.