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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

#521

Post by smallnamespace »

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…

All this would do is create an opportunity for a SaaS startup or existing payments provider to offer collecting the correct amount of tax for you.

I personally worked on this sort of problem for a large company; most of the work is in figuring out what the business logic ought to be; turning it into code is (largely) trivial.

Figuring out the logic only needs to be done once, and the payments provider is the natural place for it to live.

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

#522

Post by mullingitover »

ScottBurson wrote: post #430
mullingitover wrote: post #320

Earlier quoted context omitted.

- 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.

I'm strongly supportive of the LVT, but I'm not sure it can be the only tax strategy for every locality in a large and extremely heterogeneous country. Not every locality is seeing rapid appreciation in real estate values.

It doesn't have to be the only strategy, but sales tax isn't the only tax either, and LVT doesn't depend on appreciation.

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

#523

Post by astura »

RobAtticus wrote: post #493
anonymous5133 wrote: post #466

Earlier quoted context omitted.

You just use tax software to do it. Then you can just classify each item. Most small businesses only sell a few thousand products and others sell less than a hundred. How does it take to classify all of those? A few hours tops. After that the software does the rest....condoms going to 32932 zip...taxable...raw rice going to 92322 zip...exempt. very easy for a computer to do. The software provider would do all the res…

I think his point was as a consumer it is difficult to know your final bill since some items are exempt, some are taxed at a lower rate, etc.

Yes, exactly.

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

#525

Post by megy »

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.

For one state, so 50x that, which is $5m.

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

#526

Post by PrimHelios »

ajross wrote: post #380
mlindner wrote: post #356

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…

>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.

But it isn't just SD, it's hundreds, if not thousands of jurisdictions. One person doesn't have that kind of time.

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

#527

Post by nickjj »

Unless I'm totally misunderstanding this, doesn't this mean the following:

If you sell a few thousand digital goods (let's say video courses or ebooks) to people spread across 30 states in the US over the year, you will be responsible to collect sales tax and do the paperwork to pay each of those 30 states sales tax every quarter (or per year)?

When dealing with a low priced item, it's not difficult to accumulate a high number of transactions.

Not only are those fees a huge financial burden but I imagine the act of filing all of that is going to kill any motivation to do anything. For me, I'll end up either stop doing what I love (creating educational content to help other developers while making enough $ to live on) or move to a different country with a better tax system.

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

#528

Post by azinman2 »

Dylan16807 wrote: post #516
mikeash wrote: post #456

Earlier quoted context omitted.

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

The problem is not the general idea of paying sales tax. It's the complication of having ten thousand different sales tax jurisdictions. Complying with the law should not be such a nightmare you need to hire a middleman.

Why not? We pay for all kinds of professionals to help us navigate what’s required to run a business, pay taxes, and follow the law.

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

#529

Post by azinman2 »

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.

Until you pay one of many existing SaaS providers a modest fee to do this for you.

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

#530

Post by scarface74 »

Dylan16807 wrote: post #519
scarface74 wrote: post #517

Earlier quoted context omitted.

So how do you purport to have a global electronic payment network?

If the EU can manage instant bank transfers that cost less than a penny, the US can manage it too.

Bank transfer fees have nothing to do with the fees charged when taking payments via credit cards.

While the average EU interchange fee for taking credit cards is cheaper than in the US, it’s not “less than a penny”

https://www.valuepenguin.com/interchange-fees-na-vs-eu

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