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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

#231

Post by gowld »

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…

$100K can be quite a low number, if it's revenue not profit.

Consider selling 100x$1000 computers at $50 profit per each, vs 1000x$100 jewelry at $50 profit per each.

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

#232

Post by gmiller123456 »

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.

And that "someone" should be whoever is requiring the tax to be collected. If such a process is too complicated or expensive for a state to offer, that should be the first clue that it's too complicated or expensive to require every single business across the country to implement.

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

#233

Post by nkurz »

gamblor956 wrote: post #190
sbov wrote: post #150

Earlier quoted context omitted.

> 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…

The ruling is technically limited to states which do not impose burdensome restrictions on interstate commerce. The ruling specifically notes that South Dakota streamlined its sales tax process. It doesn't matter what Westlake Village wants to charge in sales tax to Amazon. In order for the sales tax to survive South Dakota v. Wayfair , it must be minimally restrictive on an out-of-state vendor. This means that it ca…

In order for the sales tax to survive South Dakota v. Wayfair, it must be minimally restrictive on an out-of-state vendor.

While the outcome you describe might be a good one, I think you are greatly overstating when you read into this decision a new standard of "minimally restrictive". Major vendors already charge local sales taxes to the best of their abilities, and almost certainly will continue to do so.

This decision merely says that there is nothing inherently unconstitutional about a particular South Dakota law requiring a retailer without a physical presence to collect sales tax on behalf of the state. This does mean that a law in another state with similarly restricted characteristics is likely to survive review as well. But it doesn't (yet) create any line that says all of same characteristics must be met.

If New York City were to attempt to enforce the same law, it might find enforcement difficult, but it likely would not have constitutional impediments. If another state were to choose some wider scope, it too might well be judged constitutional. At the least, we wouldn't know until more cases have been decided: it's not yet clear how much 'stare decisis' has been thrown out here.

Instead, this case sets a standard for what is clearly constitutionally allowed, saying that there no longer a requirement of physical presence, but doesn't say much about what else would be required. It gives Congress an opening to pass a clearer national law about what the standards need to be, but doesn't create such a standard itself.

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

#234

Post by joeldg »

Is it where the item is shipped to? or where you claim residency? Obviously you can open an EarthClassMail box in Oregon with it's zero sales tax and use that and then ship wherever. If it is based on something like geoip, again just set up a proxy in AWS Oregon region.

Seems easy to get around.

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

#235

Post by wonderwonder »

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.

I agree. The most challenging task for smaller in house built sites is going to be figuring out how to stay up to date with the hundreds of tax rates especially in CA as well as modifying their systems to handle blended tax rates when a customer orders both a digital and physical product.

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

#236

Post by redbeard0x0a »

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.

The taxation is on the person living in that state. Most states require that a person buys something and doesn't pay sales tax, they are supposed to self-report and pay the tax. (Most people don't).

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

#237

Post by LyndsySimon »

Spivak wrote: post #109
ransom1538 wrote: post #9

Earlier quoted context omitted.

Yes. But it is too late. AMZN has already wiped out all local retail. AMZN not enforcing local taxes was a huge win - in the early days.

Yeah, but the irony is that Amazon can't compete with its own marketplace a lot of times now that they're collecting tax. The prime markup with tax is almost always more expensive than the 3rd-party seller without.

In most cases, I much prefer to buy the Prime product at a small markup. I'm confident that it'll get there faster and that Amazon will stand behind it if there's something wrong.

I hate dealing with individual sellers on Amazon, and I really don't think I'm alone in that.

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

#238

Post by joeldg »

irrational wrote: post #76
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…

In what way? I choose to live in Oregon. Oregon doesn't have a sales tax. So the Supreme court ruling has no bearing on me. There is nothing stopping anyone from moving to one of the states that don't have a sales tax.

you can virtually move there also, EarthClassMail has multiple mail boxes there.

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

#239

Post by mullingitover »

Spivak wrote: post #215
mullingitover wrote: post #203

Earlier quoted context omitted.

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.

I mean even if we lived under a monarchy we would still be one country, the two things aren't really related. That is the worst possible reason to enact a law. It should be obvious why making people's lives worse purposefully for political posturing is a bad idea, and you run the risk of your plan backfiring and having to live forever in the now-worse world.

This isn't enacting a law, though. This is changing the interpretation of the constitution. Prior to this, the interpretation was that the framers' intent was for citizens to be governed by the laws of their own state, now it's not. Let the chips fall where they may.

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

#240

Post by windows_tips »

emaginniss wrote: post #205
windows_tips wrote: post #188

Earlier quoted context omitted.

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.

>"Under color of law" means that you're a law enforcement official.

No.

Collection of taxes is done to enforce law, unless the state is compelling people with something else?

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