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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

#501

Post by michaelmrose »

scarface74 wrote: post #396
lightbyte wrote: post #331

Earlier quoted context omitted.

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

So any service that makes it easier to do business is a “rent seeker”? Does that include Square? AWS? Every site that does e-commerce web hosting?

I think its a rent seeker when uncle sam either dictates you give them money or buries you in shit you have to pay acme shovel co to dig yourself out of.

I think its more tenable for governments to provide an optional sales tax as a service and remit the money to the states. One singular report to file one party to pay.

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

#502

Post by bluepeter »

nkurz wrote: post #135

The actual (quite readable) Supreme Court decision is here: https://www.supremecourt.gov/opinions/17pdf/17-494_j4el.pdf Most of the coverage I've seen downplays it, but it should be noted that the question is not whether tax is owed on these out-of-state internet purchases, but whether the retailer should be required to collect it and submit it to the state. Currently, the purchaser is (in 45 of 50 states) legally re…

> If a locality can enforce its local tax laws, what other custom crafted local laws can it enforce in return for access to customers?

Obscenity, for one.

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

#504

Post by [deleted] »

mikeash wrote: post #456
lightbyte wrote: post #331

Earlier quoted context omitted.

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.

[deleted]

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

#505

Post by jjeaff »

ballenf wrote: post #390
ajross wrote: post #380

Earlier quoted context omitted.

$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…

It's a win for a part of Amazon's business, the part that stocks and sells its own products and is already collecting taxes. It's a loss for the other, larger side that gets paid to stock and ship products from 3rd parties who by and large do not collect tax.

This makes it tougher for these small businesses to compete and since Amazon takes 15% of those sales AND makes money off them for fulfillment services.

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

#506

Post by michaelmrose »

omfg wrote: post #344
arbuge wrote: post #337

Earlier quoted context omitted.

That's just the exemption SD chose to apply, and which they could change at any time. Other states may choose to not have such an exemption. You are also now open to tax audits from all other states, since you may need to prove you are below any exemption limit. It's a bad deal for small business no matter how you slice it. I think that if your revenue is below ~$100m annually, the future is beginning to look bleak.…

That’s a bit of a leap. It looks like fully automated compliance from the existing services. From collection to remittance is about 3-5k a year. With more competition it will likely become cheaper.

Why would it? Why in particular wouldn't the fact that you are required to pay for their services allow the entire industry to jack up prices substantially?

Why wants to win by being the asshole who did it for $500 instead of say a percentage of revenue?

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

#507

Post by michaelmrose »

bluepeter wrote: post #491
gnopgnip wrote: post #306

Earlier quoted context omitted.

There is a threshold in the South Dakota bill for $100k in sales in the state. Small online sellers are not affected

100k or 200 transactions... that 200 bar is pretty easy to hit w/ monthly subscription SaaS providers.

17 people for 1 year or 9 people for 2 years whichever comes first.

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

#509

Post by opo »

donbright wrote: post #494

I've lived in many a city in "flyover country" and I think it's long overdue. The result of plunging sales tax revenue due to online shopping, for a lot of places, is bridges falling apart, underfunded police agencies, teachers leaving the profession because they don't want to live in poverty, schools without supplies, without music programs, without art programs, let alone STEM programs, colleges shrinking, faculty…

>... is bridges falling apart, underfunded police agencies, teachers leaving the profession because they don't want to live in poverty, schools without supplies, without music programs, without art programs, let alone STEM programs, colleges shrinking, faculty not being hired, roads going unrepaired, homeless population growing, libraries being gutted, social programs and social service agencies facing layoffs and shortages, and on and on.

Non one can seriously claim the lack of sales tax revenue from out of state shippers has that big of an impact on state and local revenue.

According to the article:

>...Broader taxing power will let state and local governments collect an extra $8 billion to $23 billion a year, according to various estimates.

As a comparison in 2012:

>...Tax revenues increased in all but five states in fiscal year 2012, with some recording noticeable gains. In all, states collected $794.6 billion, a record-high that represents a 13 percent increase from 2010 totals

http://www.governing.com/gov-data/state-tax-revenue-data.htm...

So even using the high estimates of 23 billion, that would be a small fraction of total state/local tax revenue. The extra few percent of revenue from taxing out of state businesses isn't going to solve the huge list of problems you listed (nor is it obvious that the money will be spend on any of those issues).

The real question with this ruling is how much it will cost all the Internet retailers to comply with the law.

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

#510

Post by skybrian »

coldseattle wrote: post #459
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.

Unless it can be outsourced? Companies providing an Internet storefront that takes care of sales tax should do well. Could Stripe do this?
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