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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

#241

Post by mark-r »

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…

It's not just rates, it's product categories that matter. The rules separating one product category from another can get incredibly arcane. Here in Minnesota, a pizza ordered from Papa John's is taxed but from Papa Murphy's it isn't - because the Papa Murphy's isn't cooked. Clothing isn't taxed, but determining what is or isn't considered clothing isn't always easy out at the margins. If you live in a state you can get guidance on this stuff, but if you don't you might not even know to look.

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

#242

Post by NeonVice »

jonknee wrote: post #208
magduf wrote: post #42

Earlier quoted context omitted.

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.

What if each state has a different set of product types?

IMO, the federal government's responsibility to regulate interstate commerce should include creating a standard of product categories. States can then tax those categories at whatever level they see fit.

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

#243

Post by walshemj »

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…

VAT (Eu sales tax) is a tax on the seller it is not a tax that individual residents pay at all.

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

#244

Post by jethro_tell »

datamingle wrote: post #226
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.

The business isn't paying the tax though? If the people paying the tax don't want it, they should replace their reps or move to a state that doesn't have that tax.

So we could think of it from the point of the business but that wouldn't be based in fact.

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

#245

Post by thebluehawk »

Kerrick wrote: post #149
DINKDINK wrote: post #134

Earlier quoted context omitted.

>Isn't this at some level taxation without representation? I'm not a fan of the ruling but I would expect the answer to your question would be: "No because you aren't forced to buy the product from a retailer in that state"

From the perspective of "the retailer is being taxed," then this _is_ taxation (of the retailer) without representation. But of course, almost every retailer passes sales taxes right along to the consumer, so "the retailer is beng taxed" is only true in a theoretical sense.

And if the retailer really doesn't like it, they can just not sell to customers in the state. But we know that's not going to happen. Like you said, the customer is the one paying the taxes, and the customer is the one who votes to elect those who make the tax laws that affect him.

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

#246

Post by j79 »

mullingitover wrote: post #116
Spivak wrote: post #101

Earlier quoted context omitted.

Cleaning up a loophole that evens the playing ground for different types of businesses is a good thing. If you have a problem with sales tax or taxation in general that's a different issue.

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.

Interesting. One thing I've noticed is that certain on-line sellers exempt purchases to certain states. I wonder how long before they start exempting residents of states that force online sales tax collection.

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

#247

Post by s73v3r_ »

ncallaway wrote: post #174
s73v3r_ wrote: post #156

Earlier quoted context omitted.

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…

Congress has had decades to step in. They declined to, largely due to an anti-tax sentiment among a large block of them. Absent a resolution from Congress, and no indication that they'd do anything, the courts had to work with what they were given.

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

#248

Post by cosmie »

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…

> In places like Tennessee, the tax rate can change if your item is a grocery or isn't a grocery.

That's not even the half of it. Grocery vs. non-grocery changes the rate. Some services that are tax exempt in other states are not in Tennessee.

And in Tennessee, you have the state level of 7%, and the ability for it to rise up to 9.75% based on a whole lot of inter-dependent local tax overlays.

The 2.75% difference comes from county, state, school district, transportation district, and "special purpose district" levies. All of which are optional to levy and voted on at the local level, and which may or may not overlap with each other to "stack" up to that cap at 9.75%.

Avalara, which is the de-facto owner of the sales tax calculation software space, has a good write up[1].

[1] https://www.avalara.com/taxrates/en/state-rates/tennessee.ht...

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

#249

Post by jethro_tell »

honest_george wrote: post #45
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.

While I can't speak for US law, most of the time it's the delivery address that matters - if the location you're at when purchasing matters, you could do all of your expensive on-line shopping when on holiday in some place with low taxes (or using a VPN...).

Soon:

AWS launches new 'Guaranteed to be in Oregon' VPN endpoints! Free for use while shopping on Amazon.com.

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

#250

Post by walshemj »

moomin wrote: post #224
Retric wrote: post #218

Earlier quoted context omitted.

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.

There's a lot of similar problems with having sets of 52 plus federal employment laws.

Its not surprising that one US right wing think tank thought the UK with its "socialist" NHS and higher income tax was a freer place to business.

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