Posted on 06/21/2018 7:58:37 AM PDT by Reno89519
WASHINGTON (AP) — The Supreme Court says states can force online shoppers to pay sales tax.
The 5-4 ruling Thursday is a win for states, who said they were losing out on billions of dollars annually under two decades-old Supreme Court decisions that impacted online sales tax collection.
The high court ruled Thursday to overturn those decisions.
snip
“Each year the physical presence rule becomes further removed from economic reality and results in significant revenue losses to the States. These critiques underscore that the physical presence rule, both as first formulated and as applied today, is an incorrect interpretation of the Commerce Clause,” he wrote.
(Excerpt) Read more at apnews.com ...
I do the quarterly sales tax for my husband’s business here in upstate NY. It sucks! They want to know:
1. Your gross sales
2. Total sales not subject to sales tax
3. How much in debit/credit sales
4. Sales tax broken up by county (in our case 4 different counties)
Not once did I ever state that. I stated what the laws were and who the actual burden to report and pay the tax was on. I also stated it was the fact that the consumers actually do not report and pay this tax that drives the states to shift the burden to the online retailers.
Amazon loves the idea of a mandatory Internet sales tax. It’s the same reason why the medical insurance companies loved ObamaCare. Small mom-and-pop Internet retailers like me will be forced to sign up with aggregators like Amazon to deal with all the paperwork (which will then get a cut of my sales).
I don’t want to sign up with Amazon. But I can’t afford to hire a full time accountant to to fill out all the paperwork for 45 state tax agencies and track the sales rates in 9,300 different tax juristictions. (Even if it is electronic you still have to spend hours to sign up with 45 states and make filings and track their law changes).
It is just like ObamaCare and how the insurance companies were drooling at the thought of forcibly signing up all those new insureds.
Hah. Small retailers like me are over a barrel on this. 45 states, 9300 tax jurisdictions, the legal liability. Think Amazon Store. It will be more like 10-30%.
Absolutely not good. Taxation without representation; every single business in America just got possibly 49 new jurisdictions to have to deal with if they sell anything via delivery.
Possibly 49 new jurisdictions to track sales taxes for, all of which will have arbitrary and differing rules; the exemplar state in this suit wants to force those who do 200 sales or $100,000 to addresses within the state to collect sales taxes.
How does that work? If you make 199 sales, are you supposed to not collect sales tax, then on the 200th, they get to pay the taxes? Are you supposed to charge sales taxes on the possibility that you might actually meet the requirements?
I personally advocate making tea bags with the letters FU imprinted on them and mailing them to each state with a demand for all requirements for 2019 to be provided as well as a remittance of no less than $78 per hour of anticipated time to fill out forms plus a 5% premium for all electronically collected sales taxes to cover fees. Any overage will be remitted with the sales tax forms, or any underpayment by states deducted from the sales taxes paid.
I don’t work for free. I especially don’t work for free for governments which are utterly and completely unrelated to any of my business interests. This is perhaps the worst SCOTUS decision I’ve seen yet. Ill conceived, an utter violation of the concepts of taxation without representation as well as a violation of the prohibition of slavery without conviction or seizure of private property without proper compensation.
Obviously, the court failed to anticipate real small business objection to these concepts. Congressional action to prohibit remitting sales taxes across state lines without any business representation within the state really needs to be established.
I think back to when our state had no sales or income tax & less problems than it has now. It all seems to boil down to nothing more than politician’s greed. Sales taxes go up;when do they ever go down?
I wonder what they are going to do with all the chinese operators on Ebay and Amazon who mail order into the US. I admit, I am guilty of buying dozens of little gadgets from them.
I didn’t see the court explain WHICH sales taxes would be collected:
The tax at the location of the seller? Or the tax at the location of the buyer?
On a practical basis for bookkeeping purposes, the sales taxes being collected at the location of the SELLERE amkes the most sense.
IIRC, there are 3346 counties in the 50 states. My accounting software prints 50 lines per page. IF I were doing cooks for a client who did any online sales out of state, I would be creating 3346 new Liability accounts to record the collection of such taxes, which would take up 67 pages of Liability accounts on the books. In some states, I would have to file forms quarterly-—in some states I would have to file forms MONTHLY. That would be 50 different state forms filed 12 times a year at the most. 600 forms filed.
On top of that, the company would have to ALWAYS know the correct sales tax for every customer. That would require each customer to know exactly what county they live in. I know people that have absolutely NO IDEA what county they live in or what the sales tax is for that county. The burden to provide the correct county status would be on the customer, but the company could be fined if they don’t have the correct information. NOT fair. I predict the courts will have problems with that alone.
Now-—all the 3346 counties in the country who actually do have a sales tax also have to provide that information to EVERY company in existence & every new company when formed.
All of this is beyond a bookkeeping nightmare.
It would ONLY make sense to me that the sales taxes would have to be collected at the site of the SELLER. With companies like Amazon, who have different sites, they would have to be very careful. Summit Racing has 3 different locations—Ohio—Georgia—and Nevada. I can order a part from the call lady in Georgia, but the part is available at Nevada, so they will ship it. This structure isn’t uncommon for large companies.
The court case referenced ONLINE sales. I personally do not do ANY ONLINE buying. I do call Summit & a company that sells horse supplies & I work out of their catalogs——NOT ONLINE. I actually talk to a person who fills my order. (Summit also has a great tech group that answers my questions.) So-— IF I am buying with a phone call——NOT online—do I escape sales taxes ????
I don’t know how fast this Supreme Court decision is supposed to be implemented, but there is hard work ahead for these companies.
There is also the fact that there are some states which have NO sales taxes. Oregon for one (but they have horrendous property taxes). I do NOT know if there are individual counties within those states that DO have sales taxes.
While all the younger people are believing that “computers can handle all of this”, it still remains that software has to have the capacity to isolate each locality collecting sales taxes. AND the coding has to be correct.
The SALES into each county also has to be isolated...so there will have to be 3346 different income accounts. This is a software & accounting nightmare.
Why? Because the forms I have filled out for years in California for clients has the ‘sales’ as part of the form. Then the sales tax is calculated off the gross sales for that location.
I can also see states having to add MANY more staff to audit the return forms for accuracy.
I am glad I no longer have clients who have to fill out sales tax forms.
As a small business, this is frightening. While South Dakota law has $100K threshold before requirement to collect taxes, will other states?”””
As a bookkeeper for many small businesses over the past 38 years, I need a clarification on this S Dakota law.
Are they saying that is you are small enough-—under $100K in gross annual sales, you do not have to collect any sales taxes?..........
OR are they saying that if you are over $100K in sales-—a fact that you know on Jan 1 each year, you must collect sales taxes on everything ????...........
OR-—Are they saying that if you are more successful than you think, you can skip the taxes on the FIRST $100K in sales, and only collect taxes on everything above that? ......
OR.... IF you go over the $100K in sales, you now owe for all the year’s gross sales & attached sales tax, and IF you didn’t collect that tax from your first $100K in customers, you now have to pay it out of the company profits?
Perhaps S Dakota has you make a declaration at the beginning of each year, and if you become really successful, the next year’s declaration will place you into the ‘collect sales taxes’ category???
The devil is in the details, people.
Also, the questions about having to collect taxes for both ends of the sale can really hammer this ruling.
Before any implementation of this ruling can be put into place, these questions have to be cleared up.
Again-—glad I no longer have clients who have a sales tax status.
That is what is unclear in the ruling-—
Collect on the location of the seller?
OR-—Collect on the location of the buyer?
IF it is the location of the BUYER-—you will have to know the county the buyer is in, and you will face the possibility of filling out sales tax returns in 49 states. I think there are some states without sales taxes—Oregon—but I don’t know if there are more.
Some states have no sales taxes-—Oregon for one, I don’t know what others might no have sales taxes.
And it’s STILL safer than risking your property and life by shopping in local retail. Carjackings, robberies, drive-by’s, violence in large venues-vs- comfort and safety of home plus delivery, hmmmm... Do I want to go to out in 98 degree heat, park and hike to buy sheets or go online? No brainer!
A HUGE issue is the fact you have deal with over 44,000 sales tax jurisdictions. That could make accounting a very messy issue, to say the least.
Now, if we have each state designate a single sales tax rate for online sales, then it would be easy to implement.”””
NOT EXACTLY-—You would still have to isolate your sales to each state & the tax you collected for each state-—even if the rate was the same. You would have to file forms in each state. Some require monthly-—some quarterly—some annually.
Not easy. I have completed sales tax forms for clients for over 48 years. Not easy with this sea change in the rules.
Yep, agreed. This ruling will enhance tax revenues but will not save local businesses. And less respect of the 2nd amendment, more empowering of criminals because we are disarmed, even less reason to use a local business.
IF someone establishes a source to use for the taxes owed, then IF that source makes an error-—WHO pays for the error??
A seller would be relying on the accuracy of such a source.
Sometimes sales taxes change in mid-year. County taxes especially.
When you fill out the Calif form, you have to fill out the 2nd page as to WHICH county you collected WHICH taxes for.
Local businesses wanted this to create a level playing field years ago—in the early days of on-line shopping.
Now it is too late for them to get back the shoppers lost.
The convenience of on-line shopping will rule even with the sales taxes.
What I see happening is that states will be motivated to raise their sales taxes much higher to take advantage of the new ruling.
Time will tell.
I have a friend who bought a truck in Nebraska-—with a Vet pack on it. She had to pay the sales taxes in Nebraska, where she picked it up-—
Then Nevada charged her Nevada sales taxes when she registered it here. She effectively paid 2 sales taxes. The only way she could have avoided doing so was to have the truck SHIPPED to her in Nevada.
Large $ accounting systems already have that. The real problem though is that generally each state requires that a quarterly sales tax return be filed. Automate that.””
There are 3346 counties in the 50 states. There are some cites that also collect sales taxes. One poster here says it adds up to more than 9000 taxing entities.
I seriously doubt that ‘software already exists’ that covers 9000 sales taxing authorities.
Each sale (Income)would have to be isolated for each of those 9000 authorities, and 9000 Liability accounts for the taxes collected. A state like Calif has 58 counties & more cities on top of that. You have to break down your numbers on page 2 of that form. Been there. Done that. My client did almost all of his business in Los Angeles County, but we were careful of any sales out of LA County. Had to be split on the quarterly form & paid.
Have done his bookkeeping for over 48 years & he had to file quarterly forms.
Tell that to a small business who relies on a software & isn’t a bookkeeper.
I can only say-—I am glad that I no longer have ANY clients who have to collect sales taxes.
True. The goods aren't getting a tax on export...you're getting taxed for importing them.
FYI, the original clause I sited, U.S. Const., Art. I, Sec. 9, Cl. 5, was incorrectly applied here.
The correct clause is Art. I Sec. 10, Cl. 2.
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