Why don't we get rid of taxes altogether?
States Can Require Internet Tax Collection, Supreme Court Rules
311–320 of 613 posts
Re: States Can Require Internet Tax Collection, Supreme Court Rules
#312> 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.
It is so significant of a claim that brings the question...does norquist know how sales/use tax even works?
If a state the business doesn’t operate in imposes the requirement to collect sales tax on your business out of state, you do have a multitude of costs and issues as a small business. If the federal government wished to circumvent this with a VAT split amongst the states, that is one thing, both sane and constitutional in the face of this, but this invites a mess.
First, if you are required to possess a sales tax license with that state, and potentially municipalities or jurisdictions within the state that require the fees and paperwork yearly, there is one huge cost, both in time and fees. No software will absolve your liability of this if you mess it up or dont pay the fees, you as the business own it.
If you are required to file monthly or quarterly statements with the state along with any remittances, there is time and costs there. File late, file incorrectly, fees and interest on top of the tax obligation. Refuse or forget to pay the tax to a jurisdiction in backwater Alaska, time and money to wrestle with tax auditors from another state if they pursue action. How will the states negotiate auditors and tax authorities stepping all over eachother within their jurisdictions.
Need to purchase extra services to juggle the spiderweb of compliance, reporting, and remittance issues, there is also more cost, whether in your additional time ($), accountants ($), or third party services ($). Keep in mind, none of these things absolve you of liability if you mess this up.
He is absolutely right.
Re: States Can Require Internet Tax Collection, Supreme Court Rules
#313Yet another tenuous stretching of nexus by lawyers who have little interest in how technology works, but do have every incentive to justify increasing their own scope. This is the equivalent of telling New Hampshire stores that they're responsible for collecting Massachusetts sales tax for people coming over the border to shop. A business collecting taxes for the state they are in, even for orders shipped out of stat…
>holds the state governments to a modicum of honesty.
Coffee almost came out my nose.
Governments in southern New England are only regarded as legitimate because people in MA and CT bury their heads in the sand and RI compares itself to NYC and Chicago (that's not to say that useful or good programs don't exist within these governments).
>This is the equivalent of telling New Hampshire stores that they're responsible for collecting Massachusetts sales tax for people coming over the border to shop.
I fully agree that state tax should follow the state of the merchant. If a state's cost of doing business (through taxes, cost of living or some other reasons) is so high that businesses that have to pay to ship their good can out compete them then it's that state's problem. If it wants a cut it's going to need to change things so that more business happens in its jurisdiction. Sales taxes are regressive anyway so they should be a race to the bottom.
Re: States Can Require Internet Tax Collection, Supreme Court Rules
#314Earlier quoted context omitted.
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.
We should differentiate between 1) standardizing the tax calculation algorithm, and 2) standardizing the taxation rates
As long as the two are conflated nothing will change. Irrespective of political/personal/ideological position on nr.2) I think most of us can agree on nr.1)... (except for the bigger chains, and the FUD navigation services.
Re: States Can Require Internet Tax Collection, Supreme Court Rules
#315I run a little side project that sells a small software tool for $12/customer (forever, not recurring). It generates about $1200/month. Should I care about this? I use Stripe to collect payments, if it matters.
If I were a lawyer, I'd be able to tell you with great certainty and precision what all the reasons are why you shouldn't look for an answer to that question here.
True, but there probably aren't many lawyers who can answer the question either.
Re: States Can Require Internet Tax Collection, Supreme Court Rules
#316Fascinating mix of justices on this one: > The vote was 5 to 4. Justice Anthony M. Kennedy wrote the majority opinion and was joined by Justices Clarence Thomas, Ruth Bader Ginsburg, Samuel A. Alito Jr. and Neil M. Gorsuch. I can't imagine we're gonna see RBG agreeing with the Alito/Gorsuch/Thomas clan too often.
The media focuses on the most controversial cases. There's less headlines for court orders signed by all nine. Between even two of the most ideologically/philosophically different justices, they concur 67% of the time.
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Re: States Can Require Internet Tax Collection, Supreme Court Rules
#317Earlier quoted context omitted.
We’ve been looking at tech solutions for calculation / remittance. So far only found Avalara. I’d be surprised if PayPal, Stripe, and others won’t step into this now that it’ll be fairly profitable.
Besides Avalara, I'm aware of taxjar.com, taxify.co, taxamo.com. Avalara and Taxamo don't list prices on their sites as far as I managed to find. Googling turns up comments saying that Avalara is expensive. TaxJar and Taxify do list prices. For a small business (up to 1k transactions/month) is $17/month if you pay for a year up front ($19/month on month-to-month). A transaction is either giving them an order and havi…
Avalara's pricing is here:
https://www.avalara.com/trustfile/en/pricing.html
Re: States Can Require Internet Tax Collection, Supreme Court Rules
#318Earlier 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.
The most reasonable and fair replacement would be land value taxes. See: https://en.wikipedia.org/wiki/Land_value_tax
Re: States Can Require Internet Tax Collection, Supreme Court Rules
#319Earlier quoted context omitted.
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 s…
Also, SCOTUS did not strike down the nexus requirement, only the specific physical nexus requirement of Quill.
Yes, this is important to note. Still, much of logic involved in the decision makes it sound like in the future nexus may be defined quite loosely, based largely on the states' desire to collect the tax and the practical difficulties involved, rather than just being a redefinition of "substantial nexus". Consider this part:
Under this Court’s decisions in Bellas Hess and Quill, South Dakota may not require a business to collect its sales tax if the business lacks a physical presence in the State. Without that physical presence, South Dakota instead must rely on its residents to pay the use tax owed on their purchases from out-of-state sellers. "[T]he impracticability of [this] collection from the multitude of individual purchasers is obvious." [[cite]] And consumer compliance rates are notoriously low.
This might be good change socially, but it feels more like the court is pushing a policy change rather than offering a reinterpretation of the constitutional requirements. In this part of the logic, there's no change of the interpretation of nexus (since it's based on only the customer's failure to obey other existing laws), and yet it's used as justification for why the state has a right to demand action from an otherwise out-of-jurisidiction company. Same nexus (or lack thereof), but different constitutionality.
While one would hope for a balance between burden and benefit, I think it points to a much more inclusive concept of nexus. In the absence of a clear national law, until there is a case showing the limits in the other direction, I'd guess that states will pass more and more inclusive laws on who is required to collect on their behalf. We'll likely end up in a situation where a multitude of state laws technically require most retailers to collect, but selective enforcement means that only the large (or unpopular) players are pursued. I didn't like this previous approach of on-the-books but unenforced use taxes, but I'm uneasy about this outcome too.
Re: States Can Require Internet Tax Collection, Supreme Court Rules
#320Earlier quoted context omitted.
"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.
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- I don't live in SV
- I don't hate taxes
- I wasn't babysitting this thread
- The idea that, of all things, regressive sales tax is the only conceivable and fair thing to get state tax revenues from is ridiculous.
Tax land value, most of the appreciation in land value is windfall gain.