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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

#381

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.

Congress has the ability to nationalize sales tax collection and remittance for online purchases. In fact, there have been bills introduced in the past that proposed to do just that.

We might actually see some movement in this direction now.

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

#382
post #372

Earlier quoted context omitted.

$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.

If you do business nationally, with a million in revenue, $100k for South Dakota might not seem too bad, but $100k for California or Texas starts to feel really claustrophobic.

It's an interesting precedent.

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

#383

Earlier quoted context omitted.

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.

[deleted]

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

#384

Earlier quoted context omitted.

suddenly the EU VAT system looks awesome :-)

The US system of local sales taxes doesn't look awesome ever. If there were one economic reform I would push in the US it would be advertised price is final price (i.e. if you say "I'm selling this for $9.99" then that's all you pay, and the taxes are all inclusive) this would pretty much force underlying tax reform as businesses lost their shit having to deal with the insanity. Note that the disaster area that is US…

And unless you are extremely familiar with local tax law you have no idea which purchases are even going to be taxed. If you go to the grocery store and buy the following:

tampons

raw chicken

rotisserie chicken

prepared sandwich

bread and cold cuts

toilet paper

condoms

20 oz soda

12 pack soda

juice

milk

prepackaged donuts

donuts from the bakery

cat food

beer

DO you know which of those items are going to be taxed and at which rate? Me neither!

>Note that the disaster area that is US regulatory overlap means passing a law like this is probably impossible without constitutional amendment.

I actually don't think so. The FTC covers truth-in-advertising laws.

https://www.ftc.gov/news-events/media-resources/truth-advert...

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

#385

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.

I spend $1000/yr in effort and fees on my federal income tax return. There's nothing especially practical about letting the feds take care of things.

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

#386
post #370

Earlier quoted context omitted.

That’s great until one has customers living in Los Angeles City vs. Los Angeles County. The city charges its own sales and use tax, I believe it’s an additional 0.25%. And then factor in “Enterprise Zones” where even different portions of cities have different tax rates.

There buildings where the taxes change depending on where in the building you are in. The level of complexity surrounding taxes is amazing

Duty-free for example!

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

#387
IF this is as burdensome as it sounds, I think Amazon will create an even-larger competitive advantage for their marketplace and start collecting and remitting taxes for all sellers in all states.

Since January 2018, Amazon has started collecting and remitting taxes for all orders / all merchants in the state of Washington and Pennsyvania, and Oklahoma will join in July.

They already do it. Why wouldn't they expand that program?

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

#388

Earlier quoted context omitted.

The support for this has been there on Shopify for quite some time. With a tool like https://www.taxjar.com/ I was able to easily pay all the state, county and city taxes in a few minutes for my wife's small online shop.

Still, tested correctness is different from guaranteed correctness. Either the taxation is unambiguously defined in law (howver scattered within the law) or it is not and we have void for vagueness. The people who define the taxation are payed by taxes, so why not require the deliverable to include a cryptographically signed algorithm? Then all the shops can have free peace of mind: https://news.ycombinator.com/item?…

What is likely to happen is Congress will finally pass the Marketplace Fairness Act which requires states to comply with the Streamlined Sales and Use Tax Agreement before they can collect the sales tax. 23 states already fully comply with the agreement.

As part of the agreement those entities without a physical presence in the state pay only a single state agency all sales tax and not have to pay tax to individual localities within the state. For each state the type of products subject to tax and the rates of tax on them are uniform across the state.

The states are also required to make available free of charge databases with boundaries and the tax rate on goods within each boundary. States must not hold any businesses liable for the under or over collection of taxes based upon any errors in their database. In addition the Streamlined Sales Tax Board of Governors certifies service providers. If a busines uses a certified service provider they are not liable for under or over collection of taxes based upon an error by the service provider. There are currently 7 certified providers. The certified service providers provide data regarding what taxes need to be collected on a transaction, will collect the tax on behalf of the business and submit it to the state on behalf of the business. Many e-commerce platforms already integrate with one or more CSPs. I imagine those that don't today will quickly do so or if large enough become a CSP themselves.

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

#389

Earlier quoted context omitted.

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 lic…

You aren't being forced though. You can just choose not to sell to anyone in that state if you don't like the terms. The only place you can't do that is the place where your business actually is, and in theory you get to vote there.

So he's totally wrong -- you're not being forced to do anything. You're choosing to pay the tax.

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

#390
post #380

Earlier quoted context omitted.

$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 t…

I think you've got it kind of backwards. The absence of tax collection is what allowed Amazon to become Amazon and this change is now a barrier to a new entity challenging Amazon.

Amazon voluntarily started collecting taxes nationwide without a blip to its bottom line.

The new law will in fact put Amazon's first-party goods in parity with 3rd party sales. Third party sellers could often undercut Amazon's own pricing due to the disparity.

This tax change is a huge win for Amazon on many fronts. Any protests they make to the contrary are strategic, imo.

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