Posted on 03/06/2018 2:50:44 PM PST by Kaslin
In fairly short order, the Supreme Court is going to begin hearing arguments in the case of South Dakota v. Wayfair Inc. This case is being closely watched around the country because of the potential impact it will have on consumers as well as retailers, both traditional and online. The state of South Dakota is asking the Supremes to overrule their 1992 decision in Quill Corp. v. North Dakota, which held that states could not force online retailers to collect sales tax in other states where the company didn’t have a physical presence.
Now the White House has weighed in on the side of the states. The administration filed a friend of the court brief urging the justices to take a fresh look, placing the current sales situation in context while considering all the changes which have taken place in the retail space over the past 26 years. (Wall Street Journal, subscription required)
The Trump administration on Monday urged the Supreme Court to expand states’ authority to collect sales tax on internet transactions, joining a chorus of state officials seeking to overrule a 1992 precedent exempting many online retailers from having to add taxes to a consumer’s final price.
In 1992, the justices “did not and could not anticipate the development of modern e-commerce,” Solicitor General Noel Francisco wrote in a friend-of the-court brief. “In light of internet retailers’ pervasive and continuous virtual presence in the states where their websites are accessible, the states have ample authority to require those retailers to collect state sales taxes owed by their customers.”
South Dakota is leading a charge to overrule 1992 case, Quill Corp. v. North Dakota, with arguments scheduled next month. Some 35 states and the District of Columbia, as well as organizations representing retailers from booksellers to shopping malls, have filed briefs supporting South Dakota’s position. Catalog mailers and online retailers have opposed the state, arguing that it is too burdensome for many businesses to comply with 50 or more separate state taxing regimes.
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. While consumers remain obligated to pay sales tax, few know of this duty and fewer still voluntarily comply, robbing state treasuries of billions of dollars, officials say.
This drags us back into a long-running discussion we’ve had about the Marketplace Fairness Act and whether or not Congress should act on this subject before the courts can get around to it. There are two ways to view this which have always left me a bit conflicted, but it’s not hard to see the merit in each side.
Arguing against any sort of change from the status quo is quick and easy. First of all, most people don’t want to pay even more taxes or to have the cost of all of their online purchases go up. But even more than that, when the courts originally ruled in Quill it was pointed out that the Constitution vests in Congress the power to regulate interstate commerce. 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.
And considering how the Founders actually pictured the country operating (with the various states being highly independent to the point of possibly conducting trade wars against one another), the clause became obsolete almost immediately. But in the era of online sales, this may be that rare unicorn of a case where the interstate commerce clause actually applies.
But we can have some sympathy for the other side of the argument as well. Brick and mortar retailers have a legitimate gripe in saying that their competitors are able to sell cheaper by virtue of being given a free pass in states where a sales tax is charged while they have to impose the tax. It’s also true that consumers are supposed to be paying the tax on such transactions, but basically, nobody does.
Will Trump’s friend of the court brief have any impact on the court’s decision? Color me skeptical. They get piles of those briefs fed to them in every case they hear and even if they bother reading them I highly doubt there’s any critical information within that they didn’t already know if they planned on taking it into account. But it also leaves room for Congress to reconsider the MFA. If Quill is overturned with no legislative action taken, every single retailer, including the smallest, could be hit with this requirement. Intervention by Congress could at least carve out some space for small businesses and start-ups. It’s something to consider anyway.
Not by zip code. Sales tax is by county and city location.
“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
“They need a way to balance the books.”
Open up the 1960 books and read how to run a state more cheaply.
They had prisons and public schools back then.
I’m tired of my meager income being drained to pay pensions of over $50,000/year.
Trump acting like a Democrat again. Gotta have those taxes. Why buy things without sixteen taxes on everything?
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.
Try pensions of 80 to over 100K a year.
Trump has done nothing to stop the savagely high medical insurance deductibles imposed by Obamacare, has raised taxes on the middle class, and now wants to stick it to people trying to buy and sell online.
All of this is completely Unconstitutional I might add.
Oh bloody hell. Are the people in the White House off their meds?
Not a good week for freedom
That's not what people's pay slips are saying.
And you want him to do something (unconstitutional, apparently) "to stop the savagely high medical insurance deductibles imposed by Obamacare"?
Obamacare didn't impose those deductibles—they are simply a natural result of what Obamacare did to the insurance market. And you can blame Congress for failing to act on that. The President has done just about as much as he can EO-wise on the issue, and has worked his butt off to try to get Congress to do something as well.
And now your whining that he wants to "stick it to people trying to buy and sell online"—simply by beginning a conversation about what mega-corps like Amazon are doing to game the system?
Take your ridiculously self-indulgent #NeverTrump armchair quarterbacking elsewhere. You Nervous Nellie prognosticators have been proven wrong in your apocalyptic predictions at virtually every juncture for the past two years—both domestically and in foreign policy.
"All of this is completely unconstitutional", you might add? Yes, you might add that—if it were true—but it's not...
Congress gets to determine taxation on interstate commerce.
Correct. And the President isn't even allowed to broach the topic?
I seriously doubt that the President will be usurping Congressional taxation powers, inasmuch as the entire Democrat minority—as well as the GOPe majority— are looking for any chance to claim he's exceeding his Constitutional bounds.
After all, isn't the thesis around here that Congress wants to weaken this Swamp-draining President every way they can?
To advocate for State usurpation of Congressional authority? Are you serious? When Trump made that crack about gun confiscation last week, I let it slide. I'm now starting to wonder about his grasp of the Constitution.
Unfortunately there could be other zip codes within a ZCTA - the zip code of a ZCTA is just the dominant zip code. I am not sure how many exceptions there are.
Good idea, though.
sales tax information for every zip code in the country
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Such a product already exists. And it is more precise than zip code.
Sales tax can vary within a zip code because of various boundaries, and other issues.
It would cost-prohibitive for many small businesses.
I know. If only there was a way for state’s to cut spending so that revenues from in state sales were enough to fund the expenses they are earmarked for.
Don’t mind me. I get crazy ideas.
Yes, that is my understanding of this mess.
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