Earlier quoted context omitted.
Collecting 'tax' on an untaxed item could be considered acting falsely under color of law.
No you just have to remit the tax.
There is no tax in this situation.
States Can Require Internet Tax Collection, Supreme Court Rules
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Re: States Can Require Internet Tax Collection, Supreme Court Rules
#542Does this mean companies need to file 50 different state returns? How can any company other than a mega-corporation be expected to handle that level of bureaucracy? Even if their are firms that pop up to handle compliance it's probably going to cost a fortune. This will put a huge strain on small companies forcing many of them out of business.
Re: States Can Require Internet Tax Collection, Supreme Court Rules
#543Earlier quoted context omitted.
Think of it from the perspective of the business selling goods. Then the quote makes more sense.
No it doesn't. The business isn't paying the tax. They are only collecting it on behalf of the taxing agency.
The business is paying 3% in credit card fees to collect the tax. Quite a favor!
Re: States Can Require Internet Tax Collection, Supreme Court Rules
#544Earlier 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…
I prefer it the way it is. Invisible taxes will be raised higher than visible ones.
Re: States Can Require Internet Tax Collection, Supreme Court Rules
#545Earlier quoted context omitted.
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
Yeah, that's kind of the point. Credit cards are mostly supplied by a couple huge companies that aren't interested in improving their rates. It's very rent-seeking, even though there are very feasible alternatives that cost an order of magnitude or two less.
Re: States Can Require Internet Tax Collection, Supreme Court Rules
#546Earlier quoted context omitted.
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?
>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?
Basic economic principles. You compete by lowering your price. So more competing providers would make it highly likely that price moves closer to cost, because there is a higher chance that one will defect from the current price structure.
To put it plainly. You run a gas station but the guy across the street gets all the customers. You both charge $3 but your cost is only $2. What do you do to get more customers? Lower the price.
Re: States Can Require Internet Tax Collection, Supreme Court Rules
#547Earlier quoted context omitted.
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.
"It's already complicated" is a very poor argument to justify increasing the complication a hundredfold.
Re: States Can Require Internet Tax Collection, Supreme Court Rules
#548What 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…
I remember a service already available in the 1990s to compute and collect proper tax in every US zip code. Its not rocket science folks.
Well, since zip codes don't map to taxing districts it's pretty much screen doors in submarines. Not possible to compute taxes via zip code for the 50 US states plus territories.
Re: States Can Require Internet Tax Collection, Supreme Court Rules
#549Earlier 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.
One should note that its not the businesses that are dodging taxes, but rather citizens of the state that are dodging taxes (and not reporting them). From The Tax You Probably Forgot To Report ( https://www.forbes.com/sites/ashleaebeling/2013/04/15/the-ta... )
> Think you got a great deal not paying sales tax on your online purchases last year? In most states, there’s a pesky tax called “use tax” that you are supposed to pay in lieu of sales tax if you buy stuff out of state or online--and bring it in state. Theoretically, you’re supposed to root through all your receipts and credit card statements, calculate what you owe and report it on your state income tax return.
Or http://www.pmbusinessadvisors.com/use-tax-reporting-requirem...
> Use tax is a tax imposed on the use of taxable items and services in a state when the sales tax has not been paid. For example, use tax would be due if taxable property is purchased from a seller located outside of New York, the property is used in New York, and sales tax was not paid on the purchase. With online platforms and sales being increasingly popular currently, this concept is significant. Remote retailers that make sales into a state but do not have any presence there (i.e. an office, store, storage, employees) may not be registered to collect sales tax in that state because of the lack of presence there. However, the use tax reporting requirement that has been recently implemented by a number of states requires remote retailers to notify their customers that they may owe use tax on their purchases.
Re: States Can Require Internet Tax Collection, Supreme Court Rules
#550I have a hunch that this will, in the end, be a massive win for large retailers vs. small ones. The task of figuring out how to calculate tax for all states is more or less the same amount of work regardless of size, which means for someone like Amazon it's more or less trivial, but for a mom-and-pop store it's a major hassle.
Thankfully with Shopify it is extremely easy and straightforward to manage for my wife's small online store. Their platform does a great job properly charging taxes by state, county and city in certain situations. Then using an inexpensive plan from https://www.taxjar.com/ the entire filing and paying process is 100% automated. In 10 minutes I was able to file and pay all the sales taxes to several state, dozens of C…
How do you handle knowing what items are taxable vs non-taxable for each item and taxing district? How do you handle customers who are tax-exempt? How do you handle tax holidays and reduced tax on school items in August?