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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

#221

Post by ghaff »

xienze wrote: post #194
RightMillennial wrote: post #172

Earlier quoted context omitted.

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.

No my understanding is that the state wants their full X% -- the whole point of the use tax is "you paid that guy but you're supposed to pay me." If you paid a higher tax rate in another state do you think your home state would be happy with 0% or even reimburse you the difference? IIRC you're expected to get the out of state retailer to reimburse you at a later time and then when you're paying your income taxes you…

It probably depends on the state.

In Massachusetts, oddly, if you paid less than the Mass sales tax rate of 6.25%, you owe 6.25% use tax. It's not the delta you owe, it's the full amount. But you don't owe it at all if you paid more than the Mass rate.

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

#222

Post by raverbashing »

Retric wrote: post #218
esturk wrote: post #213

Earlier quoted context omitted.

So that would be the software companies' liability. And such business practice can differentiate good ones from the bad ones. I'm seeing a new business market here even.

https://en.wikipedia.org/wiki/Parable_of_the_broken_window There is zero economic gain from more complex tax rules. Further, the software does not absolve you of liability. At best they may agree to cover it, but that's unlikely and they can also go broke if they get it wrong.

There is economic gain for those collecting it. Of course, how much you can squeeze people and businesses is an everlasting question.

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

#223

Post by gowld »

vxNsr wrote: post #216
jonathanmoore wrote: post #187

Earlier quoted context omitted.

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…

This assumes these mom and pop shops have heard of these services. Personally I was helping someone get their little internet store off the ground and it was a huge hassle even with woocommerce.

If they accept credit cards online, their credit card solution ought to include tax management feature.

Usually, small shops can ignore stuff like this until they get a bill from an authority, or get big enough for it to matter. As long as they save money for estimated tax liability (approximately equal to their local tax rate), they are fine.

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

#224

Post by moomin »

Retric wrote: post #218
esturk wrote: post #213

Earlier quoted context omitted.

So that would be the software companies' liability. And such business practice can differentiate good ones from the bad ones. I'm seeing a new business market here even.

https://en.wikipedia.org/wiki/Parable_of_the_broken_window There is zero economic gain from more complex tax rules. Further, the software does not absolve you of liability. At best they may agree to cover it, but that's unlikely and they can also go broke if they get it wrong.

There’s zero national economic gain from _any_ variation in law from state to state, but either you’re in favour of state’s rights or you’re not.

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

#225

Post by Spooky23 »

Retric wrote: post #218
esturk wrote: post #213

Earlier quoted context omitted.

So that would be the software companies' liability. And such business practice can differentiate good ones from the bad ones. I'm seeing a new business market here even.

https://en.wikipedia.org/wiki/Parable_of_the_broken_window There is zero economic gain from more complex tax rules. Further, the software does not absolve you of liability. At best they may agree to cover it, but that's unlikely and they can also go broke if they get it wrong.

States want to collect taxes. Now that they have a consistent policy position, you may see interstate agreements to harmonize collection.

There is already a precedent with DMV data sharing agreements, and some states will collect sales taxes for others as well.

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

#226

Post by datamingle »

jedberg wrote: post #165

> Grover Norquist, president of the anti-tax group Americans for Tax Reform, said in a statement, "Today the Supreme Court said yes -- you can be taxed by politicians you do not elect and who act knowing you are powerless to object." That doesn't follow. The people being taxed are the people living in that state, and their representatives are enacting that tax. As usually Norquist is making up BS to scare people.

Think of it from the perspective of the business selling goods. Then the quote makes more sense.

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

#227

Post by RightMillennial »

xienze wrote: post #194
RightMillennial wrote: post #172

Earlier quoted context omitted.

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.

No my understanding is that the state wants their full X% -- the whole point of the use tax is "you paid that guy but you're supposed to pay me." If you paid a higher tax rate in another state do you think your home state would be happy with 0% or even reimburse you the difference? IIRC you're expected to get the out of state retailer to reimburse you at a later time and then when you're paying your income taxes you…

I think it depends on the state. At least in MI, you only have to pay the difference [1] [2]:

> Use Tax on the Difference

> If you paid at least 6 percent to another state on your purchase, you do not owe use tax to Michigan. If you paid less than 6 percent, you owe the difference.

> NOTE: The full 6 percent use tax is also owed on purchases made in a foreign country.

[1]: https://www.taxslayer.com/support/1153/michigan-use-tax

[2]: https://www.michigan.gov/documents/taxes/MI_1040_Instruction...

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

#228

Post by gowld »

deathanatos wrote: post #124
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…

Tennessee also has a "Sales Tax Holiday" on which certain items are tax exempt during certain times (during the holiday). And because we know how much programmers love date and time manipulations, it starts on "the last Friday in July" (I mean, it kinda had to, to be a weekend). [1]: https://www.tn.gov/revenue/taxes/sales-and-use-tax/sales-tax...

The obvious solution here is that TN will not include online stores in the sales tax holiday.

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

#229

Post by lolsal »

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…

Also they vary by time - taxes can be added/removed/changed on any particular item.

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

#230

Post by TheCoelacanth »

Spivak wrote: post #107
magduf wrote: post #48

Earlier quoted context omitted.

Exactly; sales taxes generally just hurt the poor and middle class. A good case could be made for consumption taxes on luxury items, but taxing things like food and inexpensive consumer items (like non-luxury clothing) simply hurts poorer people while not significantly affecting wealthier ones.

Food is already exempt from sales tax. Take Ohio as a rough average for the country, here's the list of exemptions. https://www.tax.ohio.gov/faq/tabid/6315/Default.aspx?Questio... The problem with consumption taxes is it just starts a debate over what is considered necessary/unnecessary. I think you would be better off exempting people rather than classes of items.

> Food is already exempt from sales tax.

From some sales taxes. That is far from universal.

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