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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

#591

Post by scarface74 »

Dylan16807 wrote: post #560
patates wrote: post #555

Earlier quoted context omitted.

> Credit cards are mostly supplied by a couple huge companies that aren't interested in improving their rates. This situation is called an oligopoly. I don't think it has something to do with government sanctioned rent seeking.

Government-sanctioned rent-seekers are not the only kind. The comment by User23 was about payment system rent-seekers in general, with no mention of the government.

The original comment I replied to was about a software as a service company that was a “rent seeker” because it helped businesses manage thier tax liability.

At one small company I worked for, we paid SAAS companies for:

- expense reporting and reimbursement (Concur)

- managing payroll

- Managing retirement benefits

- source control hosting (Github)

- Infrastructure (Microsoft Azure)

- Salesforce (I don’t know what they do)

- Training and Compliance

- Chat (Slack)

- Email, Office software (Microsoft Office 365)

- vending services

Etc.

How are these companies any different than the company that helps businesses manage tax collection? They all saw a business opportunity and my company was glad to pay them so it could focus on its niche.

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

#592

Post by Shivetya »

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…

then states need to step in and set "online" rates that trump the local rates. many states already do similar with Ad valorem taxes on automobiles. Taxes aren't your only problem, there local restrictions on items sales that one area considers hazardous or regulated that another doesn't even acknowledge.

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

#593

Post by astura »

anonymous5133 wrote: post #466
astura wrote: post #384

Earlier quoted context omitted.

And unless you are extremely familiar with local tax law you have no idea which purchases are even going to be taxed. If you go to the grocery store and buy the following: tampons raw chicken rotisserie chicken prepared sandwich bread and cold cuts toilet paper condoms 20 oz soda 12 pack soda juice milk prepackaged donuts donuts from the bakery cat food beer DO you know which of those items are going to be taxed and…

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…

1) I was talking about a consumer in a grocery store not having a clue as to what they'll actually pay until they get to the register, not a company shipping products.

2) Zip codes have zero to do with taxing jurisdictions; zip codes merely tell you where the closest post office is.

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

#594

Post by boomboomsubban »

SyneRyder wrote: post #576
tzs wrote: post #410

Earlier quoted context omitted.

> $100k of South Dakota revenue is either an almost exclusively local single-owner business or a much larger internet shop. Note, though, that for South Dakota it is $100k in annual revenue or 200 transactions per year. Consider a company selling a subscription product/service for $5/month. If they had a mere 17 customers in South Dakota, their South Dakota annual revenue would be a mere $1020, but they would have 20…

I think this needs to be upvoted more. The 200 transaction threshold is very low for low priced products - I sell a $20 Photoshop plugin, and $4000 is not much revenue to suddenly have to register for & remit South Dakota taxes. Apparently Vermont will have the same 200 transaction threshold [1]. In practice though, indie retailers will use reseller services that collect & remit the taxes on their behalf, in return f…

> - I sell a $20 Photoshop plugin, and $4000 is not much revenue to suddenly have to register for & remit South Dakota taxes.

I wonder if Adobe publishes how many noneducational Photoshop licenses South Dakotans buys a year. As I highly doubt you're in any danger of needing to pay SD tax.

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

#595

Post by sequoia »

rossdavidh wrote: post #439
sequoia wrote: post #423

Earlier quoted context omitted.

And what would it look like if Mom & Pop were starting an ice-cream shop instead of an online storefront? Would they _not_ have to pay tax then? I get that being subject to regulation or taxation is more burdensome than not being subject to it, of course that's the case. But it does not follow that requiring sellers to pay sales tax is unduly burdensome. If the underlying complication of tax is the problem, fix that.

With a brick-and-mortar storefront, they have to figure out one jurisdiction's salestax (rate and what is taxable), their own. That is quite literally orders of magnitude simpler than this.

Also orders of magnitude fewer customers you're targeting, probably at least 350 million fewer.

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

#596

Post by sequoia »

windows_tips wrote: post #240
emaginniss wrote: post #205

Earlier quoted context omitted.

"Under color of law" means that you're a law enforcement official. Collecting extra tax and then remitting to the state will almost certainly not cause you any issues.

>"Under color of law" means that you're a law enforcement official. No. Collection of taxes is done to enforce law, unless the state is compelling people with something else?

> Collection of taxes is done to enforce law

To _comply with_ law.

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

#597

Post by bordercases »

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…

Thanks for your assertions. Have you ever acted as a small Internet shop employee in close connection to the 'executives'? I have. From what I have seen, because people in small shops have to be generalists you are often splitting the attention of the people with the most comparative advantage to innovate by increasing their regulation burden. It isn't even the fiduciary cost of the tax that is impressive even though that's unfortunate that their mark is so low. It is the labour cost that adds up when people have to take time away from actually manufacturing product during early stage work.

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

#598

Post by riknos314 »

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 could actually be a huge win for Amazon's third party sellers as well, as services such as FBA could handle the tax collection on behalf of the third parties. It just adds to the value that Amazon can provide in its services for sellers.

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

#599

Post by azinman2 »

pas wrote: post #587
azinman2 wrote: post #528

Earlier quoted context omitted.

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.

If you don't start a business because of having to pay a SaaS provider to setup tax payment, then you weren't really serious at all. Note this is only required at over 100k in revenue...

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

#600

Post by gnopgnip »

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.

The case was about whether physical shipments using common carriers constituted a local nexus and required collecting local sales tax. SaaS and other services without a common carrier would not meet that standard.
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