States Can Require Internet Tax Collection, Supreme Court Rules • Hacker News Board

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

#561

Post by gwright » Fri, Jun 22, 2018, 4:15 AM UTC

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.

It is way more complicated than just 10,000 jurisdictions:

    - mapping an address to one or more jurisdictions
    - digital deliveries might not have a shipping address
    - tax rates often depend on the type of product
    - product types have different definitions in different jurisdictions
    - some taxes are time dependent (back to school tax holidays)
    - some buyers are exempt in some jurisdictions for some products

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

#562

Post by bigtunacan » Fri, Jun 22, 2018, 4:18 AM UTC

wildmusings wrote: post #544

Tloewald wrote: post #289

Earlier quoted context omitted.

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.

This is so true. I'm not a smoker, but cigarettes are a great example of this as they are often sold as "tax priced in" because they are taxed at such an extra high rate compared to standard sales taxes.

As an example; the sales tax rate in my region is 7%, but cigarettes are then flat taxed $1.36 a pack so roughly 20% tax at the state level, plus often times there is an added "local option tax" which adds on top of this.

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

#563

Post by snuxoll » Fri, Jun 22, 2018, 4:20 AM UTC

SubiculumCode wrote: post #559

mikeash wrote: post #537

Earlier quoted context omitted.

Seems to be the shipping address.

Then is shipping to an intermediary low-tax address (as a service) followed by a separate shipping event to your home an illegal circumvention?

Yes, you owe use tax to your home state on the difference in sales tax.

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

#564

Post by Terr_ » Fri, Jun 22, 2018, 4:21 AM UTC

pessimizer wrote: post #441

testvox wrote: post #417

Earlier quoted context omitted.

The free market types I know are generally opposed to requiring tax be included because they think it would hide the "true" cost of the tax from consumers. They seem to like when a consumer is disappointed by the difference between the base and "plus tax" price because they think it will motivate people to try to get sales taxes reduced or eliminated.

I agree, but only if they don't include the merchant's profit margin in the price, either.

Exactly: If someone wants to argue that there's a dollar-amount that represents a "deeper truth" -- as opposed the amount the customer actually has to pass over the counter -- then why stop halfway at taxes?

A rhetorical question, since obviously because it serves the agenda of the merchants, who want to set up a "let's you and him fight" situation between consumers and government.

If we really start peeling the onion, we can talk about the merchants' profit margins, and then also externalized costs in the form of stuff like pollution and bankruptcies (and the tax money spent to clean those up.)

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

#565

Post by curun1r » Fri, Jun 22, 2018, 4:23 AM UTC

mikeash wrote: post #539

Dylan16807 wrote: post #516

Earlier 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.

I don't think the proper solution to that is to just declare that you don't have to pay taxes at all when you sell to someone far enough away. Simplify things if needed, but don't give a nonsensical advantage to certain businesses.

The proper solution is to put the onus on the payment networks. They're large enough to build out support for this issue without it being overly burdensome. Internet retailers should only be required to report what customers bought and whether taxes were collected. Then payment networks can report to the states who can send taxpayers a report of the use taxes they owe.

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

#566

Post by snuxoll » Fri, Jun 22, 2018, 4:27 AM UTC

Dylan16807 wrote: post #545

scarface74 wrote: post #530

Earlier quoted context omitted.

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.

They aren't interested in improving their rates because providing a competitive credit card in the US isn't cheap. You've got cards that provide 2% flat cash back (Citi Double Cash, for example), or cards that provide even higher benefits on rotating or fixed categories. Interchange fees aren't going to drop unless American cardholders are okay with dropping these benefits, and seeing as merchants aren't likely to share the savings I don't see that happening.

The time to lower interchange fees was before reward programs became standard, interest is where card issuers make their money.

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

#567

Post by davidgh » Fri, Jun 22, 2018, 4:34 AM UTC

mikeash wrote: post #537

SubiculumCode wrote: post #533

Earlier quoted context omitted.

How does one legally define where one buys a product? Shipping address? Home address? Point of sale?

Seems to be the shipping address.

Some state sales tax rates are destination-based and others are origin-based. Since sales tax was not designed to consider the internet, things get complicated fast.

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

#568

Post by throwawayjava » Fri, Jun 22, 2018, 4:37 AM UTC

seibelj wrote: post #103

briandear wrote: post #79

Earlier quoted context omitted.

You have no idea what you are talking about. Won’t be much burden on business? If you have physical shipping addresses, it is a bit easier, but what if you sell virtual goods/services? Billing address? But that doesn’t actually have anything to do where the person is actually buying the product. If I go to a masseuse in California but my credit card has a Texas billing address, I am still charged California taxes. So…

If the purchaser has an address in an area with taxes, you then pay it. If they do some weird VPN workaround and billing address in the Cayman Islands, then you don't pay the taxes. It's self compliance. We sent men on the moon in 1969, this isn't rocket science to calculate a tax bill.

It's really interesting to think about this. Very different types of complexity.

The smallest possible correct program implementing a tax calculator is going to be a LOT bigger than the smallest possible correct program for controlling a 60's era manned flight to the moon. The latter is more complex in other ways, of course.

Complexity can be "deep" or "wide". software for rockets is "deep and thin complexity", but calculating hyper-local minimal tax bills is extreme "wide and shallow complexity".

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

#569

Post by davidgh » Fri, Jun 22, 2018, 5:03 AM UTC

Tloewald wrote: post #289

beberlei wrote: post #273

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…

While I appreciate the simplicity of “tax-inclusive pricing”, I think that “tax is added” vs. “tax is included” pricing is highly important for transparency. Frustrating as it may be for other reasons, I like that a buyer is reminded every time they walk up to checkout how much they are paying the government for the privilege. I think that’s part of the reason why EU VAT rates are so much higher than US sales tax rates. With tax-exclusive pricing, buyers are very aware of the tax.

I also think it sets it up so that sales taxes are actually paid by the intended target - they buyer. When Ireland changed its VAT rate from 21% to 23%, I suspect very few coffee shops changed the price of their latte from €3.00 to €3.06. So it feels like the tax increase can end up being paid by the seller, not the buyer.

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

#570

Post by flukus » Fri, Jun 22, 2018, 5:20 AM UTC

testvox wrote: post #417

Tloewald wrote: post #393

Earlier quoted context omitted.

Certainly trying to use Truth in Advertising was always my first thought, but Truth in advertising laws are pretty toothless and I imagine any attempt to do something like this using that mechanism would get tied up in the courts for a long time. I would love someone to at least make the case -- it seems like a non-partisan thing, surely the free market types should be in favor of price transparency, while liberals s…

The free market types I know are generally opposed to requiring tax be included because they think it would hide the "true" cost of the tax from consumers. They seem to like when a consumer is disappointed by the difference between the base and "plus tax" price because they think it will motivate people to try to get sales taxes reduced or eliminated.

> The free market types I know are generally opposed to requiring tax be included because they think it would hide the "true" cost of the tax from consumers.

In this case the "hidden cost" would be clearly printed on the receipt.