States Can Require Internet Tax Collection, Supreme Court Rules • Hacker News Board

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

#371

Post by dsr_ » Thu, Jun 21, 2018, 7:33 PM UTC

michaelt wrote: post #360

eli_gottlieb wrote: post #336

Earlier quoted context omitted.

So the internet imposes a moral requirement for all states/provinces to have uniform sales taxes or value-added taxes?

Not moral, but some would say being a single country imposes a certain practical requirement that the taxes not be too complicated, if we agree commerce is a good thing and waste is a bad thing.

The United States of America is, in the terms of other countries, 50 states that have given up certain powers and responsibilities to a federal government but retain their own powers, including the ability to set tax policy inside their own borders.

The Commerce Clause gives Congress the power: "To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes." This has been widely construed as meaning that states cannot make taxes that affect other states' citizens unless they are doing business in that state.

The Supreme Court has just ruled that their earlier ruling (that Store A had to have some physical presence in State S in order for S to require A to charge sales tax) is wrong, and no such physical presence is required.

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

#372

Post by tgb » Thu, Jun 21, 2018, 7:35 PM UTC

mlindner wrote: post #356

myrandomcomment wrote: post #335

Earlier quoted context omitted.

Read the story... "...South Dakota, whose law requires retailers with more than $100,000 in sales or 200 transactions annually in the state to pay a 4.5 percent tax on purchases" "..Kennedy’s majority opinion strongly suggested the measure was constitutional, in part because it has the $100,000 threshold and doesn’t try to impose retroactive taxation." A clear bar is set for what is covered here and what is a burden.

$100,000 in sales is a very low bar. That's equivalent to a business with a single employee, the owner, and they're probably not making a livable wage yet.

That's not their entire sales, that's their entire sales to people in South Dakota.

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

#373

Post by rbritton » Thu, Jun 21, 2018, 7:36 PM UTC

dumbfoundded wrote: post #349

eric_h wrote: post #332

Earlier quoted context omitted.

As someone who grew up in a house who's mailing address and zip code were for a different town and county from the actual physical location of the house (it was just past the border) - I can't even begin to imagine how to actually do this completely correctly.

Honestly, the state doesn't expect anyone to get this completely right except the largest companies. If you make a good faith effort to comply with laws, in the vast majority of cases, you're fine.

I don't find that to be a valid excuse. If a law is worded in such a way that companies or individuals will frequently get it wrong, it's probably a bad law. Call me paranoid, but that seems like it just sets a person up with an easy reason to audit.

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

#374

Post by munk-a » Thu, Jun 21, 2018, 7:36 PM UTC

dumbfoundded wrote: post #349

eric_h wrote: post #332

Earlier quoted context omitted.

As someone who grew up in a house who's mailing address and zip code were for a different town and county from the actual physical location of the house (it was just past the border) - I can't even begin to imagine how to actually do this completely correctly.

Honestly, the state doesn't expect anyone to get this completely right except the largest companies. If you make a good faith effort to comply with laws, in the vast majority of cases, you're fine.

No! Selective enforcement is terrible, if there's a revenue threshold bake it into the law, otherwise you'll see large companies crying foul on some up-and-coming competitor that then gets bogged down in legislation, along with all the other terrible thing inherit in selectively enforced laws.

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

#375

Post by sseveran » Thu, Jun 21, 2018, 7:37 PM UTC

panda888888 wrote: post #292

rbritton wrote: post #270

Something like ten years ago now, Washington State changed their sales tax requirements in a way that required the seller to look up the four-digit rate code of the buyer, both for determining the rate to charge and later for remitting to the state. The quarterly file they provide with this information is ~150000 rows. Prior to that date, you just reported for the jurisdiction in which the business was registered. Be…

Yep. The most annoying part is that tax jurisdictions don't correspond to ZIP codes. If they did, this would be so much easier.

That's because zip codes don't really align with anything in the general case. There are even zip codes that span multiple states.

https://gis.stackexchange.com/questions/53918/determining-wh...

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

#376

Post by eli_gottlieb » Thu, Jun 21, 2018, 7:38 PM UTC

michaelt wrote: post #360

eli_gottlieb wrote: post #336

Earlier quoted context omitted.

So the internet imposes a moral requirement for all states/provinces to have uniform sales taxes or value-added taxes?

Not moral, but some would say being a single country imposes a certain practical requirement that the taxes not be too complicated, if we agree commerce is a good thing and waste is a bad thing.

It looks like people are downvoting @dsr for, I dunno, being a pedant or something, but I think their point is important: Americans really do seem to value the extreme heterogeneity, and even outright waste, of having 50 different jurisdictions to do business in, rather than passing uniform laws at the federal level.

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

#377

Post by tathougies » Thu, Jun 21, 2018, 7:38 PM UTC

test6554 wrote: post #325

rbritton wrote: post #270

Something like ten years ago now, Washington State changed their sales tax requirements in a way that required the seller to look up the four-digit rate code of the buyer, both for determining the rate to charge and later for remitting to the state. The quarterly file they provide with this information is ~150000 rows. Prior to that date, you just reported for the jurisdiction in which the business was registered. Be…

It sounds like Avalara costs $50 per year for small businesses, but scales up for larger companies. So compliance is trivial if it truly works.

If compliance were required to this new extent, then avalara could likely raise prices

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

#378

Post by DanielBMarkham » Thu, Jun 21, 2018, 7:42 PM UTC

This decision has effectively killed the "internet lemonade stand", where a person with a bit of web knowledge could go online and a day or two later have a store that sold something.

Oh sure, you can still do that. But now it's going to all be channeled through gatekeepers that will ensure regulatory compliance. And run their own little walled gardens. Better not tick them off. (This is a nice little website you have here. Are you sure you're happy with that tweet you sent one night after heavy partying seven years ago? Be a shame if somebody made a fuss about that and started harassing your gateway provider)

There should also be some interesting macro changes. At some certain price and weight points, it's probably going to be easier to buy overseas and avoid taxes, at least for some residents. I would expect international shipping to tick up a bit.

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

#379

Post by noonespecial » Thu, Jun 21, 2018, 7:43 PM UTC

dumbfoundded wrote: post #349

eric_h wrote: post #332

Earlier quoted context omitted.

As someone who grew up in a house who's mailing address and zip code were for a different town and county from the actual physical location of the house (it was just past the border) - I can't even begin to imagine how to actually do this completely correctly.

Honestly, the state doesn't expect anyone to get this completely right except the largest companies. If you make a good faith effort to comply with laws, in the vast majority of cases, you're fine.

Unless some enforcement agent somewhere happens to disagree with your politics, religion, or shoesize and decides to charge-stack your fines and penalties into the millions.

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

#380

Post by ajross » Thu, Jun 21, 2018, 7:43 PM UTC

mlindner wrote: post #356

myrandomcomment wrote: post #335

Earlier quoted context omitted.

Read the story... "...South Dakota, whose law requires retailers with more than $100,000 in sales or 200 transactions annually in the state to pay a 4.5 percent tax on purchases" "..Kennedy’s majority opinion strongly suggested the measure was constitutional, in part because it has the $100,000 threshold and doesn’t try to impose retroactive taxation." A clear bar is set for what is covered here and what is a burden.

$100,000 in sales is a very low bar. That's equivalent to a business with a single employee, the owner, and they're probably not making a livable wage yet.

$100k of South Dakota revenue is either an almost exclusively local single-owner business or a much larger internet shop.

But regardless, that kind of number is a full time job. If you're selling over the internet and making a full time job out of it, you can handle computing sales tax for SD residents. Yes, it's burdensome. Yes, it would be good to have a simpler federal framework for this. No, it's not the end of the world.

"No tax on the internet" sort of made sense in 1997 when it was a new and exciting market and we wanted to see what would happen. Now, it's just a giant subsidy for Amazon. We can put that money to better uses.