Nobody argued sales tax when mail order catalogs was the ‘Internet’ of its day................
As you should know by now, the interstate commerce clause is probably the most badly abused, archaic clause in our founding documents. It’s the cheap excuse that Congress uses to pass all manner of federal laws, doing verbal backflips to dream up ways to portray any given scenario as having an impact on commerce between the states.
I have often said that the Interstate Commerce Clause, using their logic, could be used to easily NULLIFY every State Gun Control Law across this country.
I sell on Etsy. Sales tax is now collected from my customers who live in Washington because their state law changed. I live in VA. Thankfully, Esty agreed to hold and pay those taxes to WA otherwise I would need to start filing them. X50 states... every month, I get sales from most of the state’s. Terrible.
“The 1992 case held that constitutional provisions assigning Congress authority over interstate commerce prohibited states from requiring out-of-state retailers to collect sales taxes without congressional assent.”
Obviously, states lack Congressional assent.
Roberts pledged to uphold precedents during his conformation.
The sales tax is called a sales privilege tax.
Obviously, a Floridian needs no privilege from California to mail something to California.
California’s greedy hands should not reach outside of the state.
In 1949, Florida got its own sales tax, of 1%.
Is the education of its children now six times better than in 1950?
“In National Bellas Hess, Inc. v. Department of Revenue of Illinois, 386 U.S. 753 (1967), it was held that a business whose only contacts with the taxing state are by mail or by common carrier lacks the “substantial nexus” required under the Dormant Commerce Clause.”
https://en.wikipedia.org/wiki/Quill_Corp._v._North_Dakota
how is it that this president can do,such a great job in some areas and totally mess up in others.?
I can’t imagine having to collect sales tax plus any local options for every state a sale is made in. That would push online prices up and defeat the reason why many shop online.
The states then should be required to compensate the online retailer for the amount of work required to act as their revenue agent. There’s no such thing as a free lunch.
I think the issue revolves upon when the ownership of the item goes from the seller to the purchaser.
If ownership goes from the seller to purchaser at the shipping point then any sales tax should be collected at the shipping point’s location/state rate. FOB Dock.
If title transfers from seller to purchaser at the purchaser’s location then the sale occurred at the purchaser’s location/state. FOB Destination.
States with high tax rates, notably those with higher population like New York and California, will shed alligator tears over this because most sellers ship from states with low to no state sales tax. Tough doo-doo.
I think that the SC will decide this question along these lines........”Where does ownership title transfer?”
States have made tens of billions of dollars off Internet stock gains.
“No Tax or Duty shall be laid on Articles exported from any State.”
Article I, Section 9
If states want to tax interstate sales, they need to call for a Constitutional convention and amend the Constitution.
I have a small company, in from Nevada I sell to people potentially in all 50 states. I have trouble of doing my own returns here in Nevada, the challenge to have to file returns in 50 states for small business is overwhelming. I don’t have the time or staff to do that. We sell directly, not through Etsy, eBay, or other sites that can take my money charge me a fee and take the money out
Another challenge, is that some states charge tax on services, what others charge that’s only on goods. A lot of Internet commerce, is services. That means we either become an expert in state by state taxes, or hire an accountant that is. They would have to carve out an exemption for small businesses grossing under $5 or $10 million, maybe even $25 million, to avoid putting businesses out of business or creating a whole generation of tax scaflaws.
The states have made a mess of things by creating different tax rates for different areas of their own states.
Oh bloody hell. Are the people in the White House off their meds?
Or more? How about over a thousand.
If they do this I want every B&M store to have to check the id of all customers, collect and remit the appropriate sales tax to the tax areas where that person resides.
No more driving to another tax district avoid paying taxes on your pop.
You want this, you are going to get it, good and hard.
“Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”
Ronaldus Magnus The Great
I understand both the States’ and the brick-and-mortar merchants’ dilemma. When the Commerce Clause was conceived, the idea behind prohibiting taxes and duties on interstate trade was to prevent States from being protectionist by discriminating against out-of-state merchants in favor of in-state merchants. The founders believed this would stifle economic growth and competition.
The e-commerce marketplace has turned that original rationale on its head, where online interstate commerce is now so easy and common it is the in-State merchants that have a competitive disadvantage - specifically because they have to collect sales taxes on their transactions.
While this article is better than most in sizing up the situation, it still lacks several key points.
First, although Quill did prevail in the US Supreme Court, the Court did find that Quill had a sufficient nexus under the Due Process clause. The decision in Quill’s favor ultimately hinged on the burden placed on out-of-State merchants, and that burden being substantial enough as to violate of the Commerce Clause. I’m not persuaded at all that the burden is any less today. By some estimates there are more than 6,000 taxing jurisdictions in the USA. Expecting on-line merchants to register with each, collect properly for each, and to report and remit for each is a monumental task. It also opens up questions of whether the merchants would then also owe other taxes to the various States, such as gross-receipts, personal-property taxes, income taxes, etc.
Another issue barely even acknowledged is that there already is a requirement for each States’ residents to pay a “use” tax on items acquired out-of-State, and where sales tax wasn’t already collected. The States will have to prove to the Court’s satisfaction that all of these on-line merchants should and can do what the States themselves are unable or unwilling to do on their own. More succinctly, why is it the responsibility of out-of-State merchants to collect taxes that the States won’t collect directly?
Third, if they were to accept the “Economic Nexus” theory, having the out-of-State merchant be responsible only when revenue or transaction counts exceed certain thresholds, might that violate the Constitution’s Due Process Clause and/or Equal Protection? Why would Wayfair have to register, calculate, collect and remit, while Joe’s Bait-Shop doesn’t?
Every “solution” introduces new problems, so really aren’t solutions at all. Congress hasn’t acted because they can’t agree themselves which of the many possible “remedies” is better than the status quo.