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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

#251
post #24
post #10

Earlier quoted context omitted.

In Colorado you're already asked when filing state taxes what the value of the goods you bought online that haven't been taxed yet, so the onus is on the filer to look up receipts from the year for tax purposes. Amazon already collects tax in Colorado, but a few smaller retailers will send you a letter at the end of the year totaling up your untaxed purchases. Since different counties and localities collect different…

>In Colorado you're already asked when filing state taxes what the value of the goods you bought online that haven't been taxed yet Many states do this. I imagine that relatively few individuals (as opposed to businesses) actually comply.

People rarely comply, unless they are tax lawyers that fear the IRS wants to put them up as a trophy:

https://www.npr.org/sections/money/2013/04/16/177384487/most...

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

#252
post #218
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.

Actually, current sales tax software provided by South Dakota and other states does absolve a merchant for liability if used to calculate sales tax due.

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

#254
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 is economic gain for those collecting it. Of course, how much you can squeeze people and businesses is an everlasting question.

Complex tax does not mean greater tax.

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

#255

Earlier quoted context omitted.

It is so significant of a claim that brings the question...does norquist know how sales/use tax even works?

I'm sure he does. He just likes to abuse his position as a "tax expert" to say outrageous things and people believe him. He's very good at it.

He likes to throw gasoline on a fire, ill give him that.

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

#256
post #206

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…

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.

Isn't the same true of TurboTax?

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

#257

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.

The retailer isn't being taxed. They may collect the tax, but it's a transaction between the customer and their state.

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

#258
What no one is talking about here is how this would be handled, especially for a small online sellers. There are almost 10,000 tax jurisdictions (https://www.washingtonpost.com/blogs/fact-checker/post/mccon...) and you're not allowed to collect sales tax unless you register for that jurisdiction. There is also a fee collected by most jurisdictions to register and most make you send in periodic reports, even if you didn't collect any taxes for them.

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

#259

Earlier quoted context omitted.

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.

[flagged]

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

#260
post #233

Earlier quoted context omitted.

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 deci…

Still reading the case in detail, but these quotes address your comments head on and indicate that SCOTUS likely would not support a state scheme allowing for a multitude of local sales taxes (a la California).

EDIT: While it is true that the dissenting opinions wanted Congress to solve this problem for them, the physical nexus rule was (and generally always has been) a construct of the Courts, and should have been struck down by the courts. Having a legislative counterpart is no excuse for letting bad decisions live.

EDIT2: Also, SCOTUS did not strike down the nexus requirement, only the specific physical nexus requirement of Quill. The dicta quoted below strongly suggests that complex sales tax system would require stronger nexus than the South Dakota regime.

"Complex state tax systems could have the effect of discriminating against interstate commerce."

"That said, South Dakota’s tax system includes several features that appear designed to prevent discrimination against or undue burdens upon interstate commerce. First, the Act applies a safe harbor to those who transact only limited business in South Dakota. Second, the Act ensures that no obligation to remit the sales tax may be applied retroactively. S. B. 106, §5. Third, South Dakota is one of more than 20 States that have adopted the Streamlined Sales and Use Tax Agree­ment. This system standardizes taxes to reduce adminis­trative and compliance costs: It requires a single, state level tax administration, uniform definitions of products and services, simplified tax rate structures, and other uniform rules."

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