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

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

#581

Post by wildmusings » Fri, Jun 22, 2018, 10:45 AM UTC

michaelmrose wrote: post #558

wildmusings wrote: post #546

Earlier quoted context omitted.

> 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. Yo…

Please see the price of epi pins

That is a government-granted monopoly. There is no such dynamic here.

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

#582

Post by saas_co_de » Fri, Jun 22, 2018, 10:47 AM UTC

saugnsckuigfh wrote: post #138

rossdavidh wrote: post #20

I 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.

I find it highly unlikely that mom-and-pop stores will have to collect and remit taxes to other states. From they very start of Quill they said: "we ruled that a "seller whose only connection ... is by common carrier ... lacked the requisite minimum contacts with the State." So the issue was: how substantial does the seller's contact have to be? The court ends this decision by saying "the first prong ... asks whether…

In order to enforce this ruling a State Attorney General would have to file a lawsuit against a company and get an injunction requiring them to collect taxes and get a judgement for back taxes.

Small businesses will just ignore this because there will be no enforcement unless you are operating at a scale large enough (millions in taxes) to justify enforcement.

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

#583

Post by koboll » Fri, Jun 22, 2018, 11:00 AM UTC

delinka wrote: post #365

koboll wrote: post #283

Earlier quoted context omitted.

>The taxation is on the person living in that state. Right, and before this decision, it was that person's responsibility to remit. Now it is the business's. So the burden of remittance has shifted to the disenfranchised party.

"...the burden of remittance has shifted..." And the party paying the tax has not shifted. The party paying the tax votes on representation.

>The party paying the tax votes on representation.

Technically the business is "the party paying the tax", in the sense that they are the party sending money to the government. If I drop ten dollars on the counter and sprint out of a store carrying an item that costs ten dollars plus tax, the store is still responsible for paying tax on that item to the government.

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

#584

Post by techsin101 » Fri, Jun 22, 2018, 11:03 AM UTC

SubiculumCode wrote: post #534

Maybe the problem is sales tax. Its regressive. Its complicated in the multi-jurisdictional context.

Exactly

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

#585

Post by nickjj » Fri, Jun 22, 2018, 11:51 AM UTC

I don't understand how this can be enforced for selling digital goods online.

Right now you can process a credit card transaction with only needing the number, exp date and CVC. You do not need the card holder's billing address. You don't even need the card holder's name.

So what's stopping someone from buying your digital item (let's say an ebook or course where you use Stripe / PayPal to handle the transaction) but put in a fake address, or an address they don't live in. I don't think Stripe / PayPal will halt the transaction. Instead they might flag it as questionable but the transaction will still go through.

In this case the business owner has no idea where the customer actually lives to tax them properly and the customer has no incentive to put a real address in because they are not getting something delivered to an address.

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

#586

Post by techsin101 » Fri, Jun 22, 2018, 11:53 AM UTC

gnicholas wrote: post #572

techsin101 wrote: post #571

There should be no sales tax to begin with, Or income tax or property tax.... Most taxes can be simplified and reduced to a 1 simple wealth tax. If you look at this matters with some attention you realize system works against poor... Only income taxes are progressive. And Rich don't get richer because of their income. Whether you're a trillion dollar company or about to make your first sale to pay rent you owe same a…

This disincentives savings and is in many ways the opposite of VAT taxes, which many tax scholars hold out as one of the most efficient ways to raise revenue without distorting desirable economic behavior.

The incentive to be wealthy is far more greater than 4% tax on wealth could be a disincentive. Beauty of this is you only pay if you are rich, not if you are poor or even if you earn a lot and still have lot of expenses (medical, live in nyc, or have children etc)

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

#587

Post by pas » Fri, Jun 22, 2018, 12:04 PM UTC

azinman2 wrote: post #528

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.

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.

Yeah, and it makes a barrier to entry, so a lot of potential economic activity does not take place, or it takes place off the records, and generates no tax revenue.

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

#588

Post by tallanvor » Fri, Jun 22, 2018, 12:19 PM UTC

myrandomcomment wrote: post #335

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…

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.

Here's the problem with that $100k/200 transaction law. Small businesses have to do one of three things:

1) Assume that they will hit one of those limits and collect tax from the start. Once they've told the customer that they've been charged tax, they will have to file anyway. I don't see anything that says the first $100k/200 transactions are exempt from the requirement. And if you hit the limits this year, you'll have to collect taxes no matter what from my reading of the bill.

2) Keep track of how much has been sold to South Dakota residents and stop selling if they hit the limits.

3) Give up and tell South Dakota residents that they're out of luck and that a state with less than 900k residents isn't worth putting up with the filing hassles.

If I'm not sure if my business will take off, I'm probably not interesting in paying taxjar or someone else $5000/year just in their filing fees (to make sure I'm covered), so I'm most likely to go with option 3 and start by limiting sales to my home state, those with no sales tax, and those that aren't going to try and make me collect the sales tax for them.

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

#589

Post by halr9000 » Fri, Jun 22, 2018, 12:44 PM UTC

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…

> Now, it's just a giant subsidy for Amazon.

But it's not. This line is reasoning is very outdated.

They have built a massive network of warehouses all over the country, and that's the physical presence that a state sales tax collection clause needs to come into effect. Amazon has been charging people sales tax in many states for a few years now. (I wish I had a number of states, but top jazzy to look it up.)

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

#590

Post by verelo » Fri, Jun 22, 2018, 12:47 PM UTC

tallanvor wrote: post #588

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.

Here's the problem with that $100k/200 transaction law. Small businesses have to do one of three things: 1) Assume that they will hit one of those limits and collect tax from the start. Once they've told the customer that they've been charged tax, they will have to file anyway. I don't see anything that says the first $100k/200 transactions are exempt from the requirement. And if you hit the limits this year, you'll…

This ultimately comes down to the fact that each state in the US behaves like an individual country in many ways, especially when we talk about taxation. It doesn’t jive well with the current lay of the Internet, and it will be interesting to see the reaction here. In Australia a single GST was introduced (long ago, July 1 2000) and it’s a big simplification for online transactions. The catch: everyone would need to agree to a number.