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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

#451

Post by moomin »

dsfyu404ed wrote: post #300
moomin wrote: post #224

Earlier quoted context omitted.

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.

>here’s zero national economic gain from _any_ variation in law from state to state Yes there is. States compete with each other and this prevents any one of them from having laws that are much crappier and more oppressive than average because when that happens businesses and people leave.

You’ve just described variation as a way of mitigating the effects of variation.

There’s a case to be made for variation, but that ain’t it.

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

#452

Post by slavik81 »

inferiorhuman wrote: post #414
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…

> Between this and similarly far-reaching laws (e.g., GDPR), it's becoming increasingly burdensome for small players to the point where secondary services like Avalara are effectively required. Sounds like a good justification for a federal GST instead of the patchwork of (hyper) local sales taxes. I fully understand why that will never happen in the United States (states' rights), and think that it's the tax patchwo…

My impression from browsing these discussions is that the set of rules governing sales taxes even in a single state are sometimes more complicated than those for all of Canada. It's pretty incredible to see all the fancy tax rules.

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

#453

Post by ubernostrum »

munk-a wrote: post #374
dumbfoundded wrote: post #349

Earlier quoted context omitted.

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.

I spent the last couple years working at a company in a highly-regulated space. I agree with the comment you replied to, and "selective enforcement" is not how I'd describe it.

Think of, say, a teacher. Suppose a teacher gives a complex assignment, provides contact information and says students can and should ask questions, submit drafts for feedback, etc. And there are two students who take different approaches. Student A simply glances over the assignment sheet, goes off and does what they want, then hands it in on the last day. Student B asks questions early and often to clarify anything they're not sure about, runs a draft or two past the teacher, and makes changes in response to feedback.

Student B is much more likely to get a good grade on the assignment. Student A is much more likely to get a low grade out of the blue for making serious mistakes.

And this isn't selective grading, it's just a reflection of the effort each student put into getting the assignment right. Both students had equal opportunity to put in that effort, but only Student B actually did, and it shouldn't be seen as a problem if Student B's diligence pays off.

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

#454

Post by moomin »

scarface74 wrote: post #398
beojan wrote: post #333

Earlier quoted context omitted.

So competition might prevent one of many downsides to different states having different laws? I don't see why this means there's any benefit to that situation over just having one set of laws?

Depending on your political leaning, you wouldn’t want the same laws in GA as in CA.

That’s a relatively unusual leaning. Most people think their values should be universal.

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

#456

Post by mikeash »

lightbyte wrote: post #331
Animats wrote: post #305

Earlier quoted context omitted.

See [1]. Sales tax as a service is available from seven different providers. Shopping cart integration is available. You pay one bill, they handle the rest. [1] http://www.streamlinedsalestax.org/

So this is another needless regulation that creates more useless rent-seekers?

Governments need to fund their operations, and allowing some businesses to dodge taxes because of arbitrary geographical differences is unfair and distorts markets.

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

#457

Post by methehack »

So how is this going to work? Imagine you're a small online retailer and people from every state buy your stuff. Does that mean each state can send you a tax bill? Without knowing what you owe? And what if you ignore it? What recourse does the state (that you don't live in or don't own a business in) have? Seems like none or very little. Plus, the administrative burden could be quite large for any given state. And it's a crapshoot from the state's perspective, since the state has no idea which retailers are heavily used in their states. I wonder if the states will work together on collections and figuring that part out... Seems like in the short term small sellers will be ignored by the states and the large sellers will loose. Mid to long term -- who knows... Obviously, I'm guessing.

And another thing... The idea that the states are "losing out" on revenue seems like a very simplistic way to look at things to me. First, the states have undoubtably already adjusted their tax structure to get the revenue they want/need. Lots of things affect that and the states adjust all the time. The weather (literally) for instance. It's not like there's an unaccounted for shortfall.

Second, the retailers in question are always local to a given state and their online businesses contribute to their home state's revenue. If those businesses have the administrative burden of managing sales tax across fifty states they may contribute less to the given state's revenue. Or -- they raise prices.

I think it probably hurts people starting up the most as it effectively creates a lot more regulatory risk.

In any case, an economic drag as all bad regulation and regulatory uncertainty is. There's huge uncertainty here as who knows what/if congress will do. "Nothing" is a certitude for a few more months at least. Probably a few more years. Just long enough for it not to be worth creating a business around solving the problem.

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

#458

Post by [deleted] »

kccqzy wrote: post #447
inferiorhuman wrote: post #414

Earlier quoted context omitted.

> Between this and similarly far-reaching laws (e.g., GDPR), it's becoming increasingly burdensome for small players to the point where secondary services like Avalara are effectively required. Sounds like a good justification for a federal GST instead of the patchwork of (hyper) local sales taxes. I fully understand why that will never happen in the United States (states' rights), and think that it's the tax patchwo…

Local sales taxes are sometimes earmarked for a specific purpose that improves the local community. For example recently voters in the Los Angeles county approved a sales tax increase to fund new Metro lines [0]. It seems fair that since this Metro line primarily benefits residents in this region, this additional sales tax should only be charged when one buys products in this region (primarily residents). Concentrati…

[deleted]

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

#459

Post by coldseattle »

kels wrote: post #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…

That’s exactly the point. Only the biggest companies with large pools of compliance accountants and attorneys will be able to do business.
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