Posted on 06/24/2018 12:56:31 PM PDT by Tolerance Sucks Rocks
One question before the Supreme Court this term was a big one: As technology evolves, how do our laws governing commerce evolve with it?
The answer, issued in the ruling held in a 5-4 decision on Thursday, is a bad one for taxpayers.
Many proponents of an online sales tax have argued that we must completely revisit what we know about interstate commerce, and create illusory tax regimes to contemplate a brave new order of online transactions.
In reality, none of this is true. For one, while it has been 26 years since the Supreme Court visited the issue in Quill Corp v. North Dakota, the principles outlined in that decision translate easily to today’s retail environment. In that decision, the Supreme Court declared that a business must have a physical presence inside a state in order to be exposed to that state’s tax authority. This "physical presence" doctrine requires no further clarification when applied to today’s online era.
It did, however, prevent states from taxing outside their own geographic boundaries. And for good reason — politicians should not be granted the power to tax citizens who cannot hold them accountable for that leaching.
South Dakota, chafing at these restraints, attempted to flout the Constitution’s obvious deference to Congress on matters of interstate commerce and crafted a law in 2016 that required all businesses with effectively any business nexus with South Dakota to pay taxes to the state. As the National Taxpayers Union stated in its amicus brief to the court: “This obligation apparently attaches regardless of the location or domicile, domestic or foreign, of the seller and even of the purchaser. An Illinois resident may purchase a product in New York for delivery to South Dakota that would trigger this monitoring requirement.”
(Excerpt) Read more at washingtonexaminer.com ...
this decision helps the giants like amazon and google, only they can afford to have their business platforms be compliant. Sell stuff yourself out of you home on a basic website? now you need to know if it is taxable and at what rate for 10,000 different locations, that change all the time.
Now to avoid the liability you are gonna have to use one of the big boys storefronts.
And the brick and mortar stores or those internet retailers with a physical presence in the state don't have to do this also? The playing field has been leveled and you are upset because your advantage was taken away. If you are a mom and pop corner store, you would be saying "about damn time."
WRONG. the alternative is simply to have government spend less. How much do you think is too much for the government to take? 70%. 80%. 90%? Fed Income tax. Up to 38%. State income tax. Up to 9% or more. SS Tax 16%. Now sales tax again up to 9%. So 38+9+16+9. Now we’re up to 70% and that doesn’t count property tax motor vehicle tax etc. the supremes are part of the government. It is unlikely that they will restrict the selfsame government that plunders the citizens and pays the supremes.
I wonder how bad those blackmail pics of Justice Roberts really are?...sarcasm off now....
ML/NJ
In a perfect world, there would be no China.
A more feasible scenario would be one where you never collect the $2.06 at all.
Stop, take a breath and start using your brain.
#1 No new taxes are being created. The sales taxes already exist, just some retailers are using a loophole to dodge them.
#2 This is a sales tax, the consumer pays it not the business. The business is only obligated to collect it and forward it to the correct taxing entity. So your taxation without representation is a bunch of non-sense. If I want Texas to exempt out of state businesses from sales tax requirements, I get to vote for the Gov., Lt. Gov, a senator and a congressman with that in mind. I am fully represented.
#3 The sales tax level varies from state to state based on the tax policy of the state. States like Texas actually have a very business friendly tax structure. We don't have an income tax, so our sales tax is one of the highest in the country. Our property taxes tend toward the high end also. However, from an overall standpoint we are a low tax state. Overall, it's the bottom line that counts, not the individual line items.
Defining the location of a sale as happening where the merchant is would requires no additional burden for compliance. They are already set up to pay local and state sales taxes.
Defining the location of a sale as happening where the customer is puts no merchant at a disadvantage just for being in a high sales tax state.
But underlying both remains the notion that the State must be funded and that loopholes must therefore be closed.
This is kinda like Kelo: the government’s need for taxes justifies it taking something from one who pays less in taxes to give to another.
That too depends on the notion that our basic role in society is to fund our government.
And of course you only get there because government is providing services most people could under unexceptional circumstances provide for themselves, or which could be reasonably provided by more local government rather than more centralized. Government that seeks to do good ultimately demands we are here to fund it. Everything becomes a shakedown. They take freedoms and license them back to us, regulated, and the only thing that can’t be touched these days is pretty much sex ... you’re some fascist if you want to do things like outlaw homosexual acts (and soon sex with young children or animals too).
We don’t own our land, our possessions and our our income ... governments appoint themselves to have a claim for all of these, even makes themselves to have the rights of a heir ... really a sales tax was always the best choice compared to those that might be in the hand of local and state governments.
But we will not have balance while government is doing good.
This is just wrong. I presume you don't run your own small business, else you would already know this.
There are over 10,000 taxing jurisdictions in the USA today. Different jurisdictions also treat identical products and/or services differently - so what is a taxable sale in one jurisdiction isn't in another. Further, tax boundaries often, if not usually straddle taxing-jurisdiction boundaries. For example, here in North Carolina, zip-codes straddle county lines, with different counties applying their own tax rates (on top of the state's uniform 4.75%). Ditto for city boundaries, where there are local-option sales-taxes that might apply to fund public transportation. Correctly calculating, collecting, and remitting the correct and appropriate tax with the tax-return itself is anything but trivial. And placing this responsibility on the merchants is not only burdensome on a work-effort level, but then subjects the merchant to review, audit, fines, etc. in the even of an error, late-filing, or incorrect application of tax rates.
They don't have to go after the it directly. The federal tax fraud charges you would face could be quite compelling.
Do what the tech companies do. Break the business into different entities. Sell the online sales rights to an entity in a foreign jurisdiction, and separate out the fulfillment division in the US from any other (manufacturing, procurement etc). Every online sale is processed overseas, but pays a royalty to the licensing company and a fulfillment fee to the warehouse. Nobody pays sales tax except those in a state with a physical nexus since they are most likely to attack the scheme. North Dakota would have a harder time piercing such a structure.
There may also now be other tax benefits. Corporate profits are now taxed at 20%. Personal income taxes for some people will be 2x that or more. Now there is disincentive for some people to take profits out of a corporation and instead take profits in the corporation, pay 20% rate instead of personal income rate, and turn the corporation into a loan outfit, a leasing company, a travel agency, an employment agency etc for the benefit of its owners.
This is not legal or tax advise, Just hypothetical entertainment.
In a more perfect world, there would be no Islam.
If they sell used stuff as a private sale its not a business sale.
They do, but only in the single jurisdiction in which they conduct their business. One set of rules to know; one rate to apply; one report to file. Totally different situation.
Further, if this brick-and-mortar enterprise wants to sell on the internet and take full advantage (if there is one), they're free to do that as well.
Don't get sucked into the notion that what the States need is more access to your money. Let capitalism and the "invisible hand" of the market sort it out.
Well this is going to drive more people to become Amazon and Shopify and other aggregation type sellers if it is cheaper than calculating or filing 50 (or more) tax returns.
I saw that the ND law allows for use of 3rd party software to collect and remit the tax, and use of that software waives liability to the taxpayer. I don’t like the ruling but as long as there are competitive software providers and all the states have this kind of provision it won’t kill the little guy.
There is such software available - TaxJar & Avalara to name 2. Guess what? They're expensive! The States' argument that they can't enforce their existing "Use Tax" laws against their own, already-obligated citizens falls on deaf ears when they gleefully are passing on the collection responsibility and COST to small businesses. If THEY can't afford to collect, why do them presume the internet merchant can?
Big on-line sellers like Amazon won't be affected in the least. Small on-line sellers will get killed. It isn't the small guys that are killing brick-and-mortar. Strengthening Amazon isn't going to save brick-and-mortar.
On another note, I wonder how much USG and State Tax assistance will be given in the form of Tax Credits to small businesses???
True, the businesses are not being taxed.
They are effectively being enslaved. They are made into forced labor without compensation. They are forced by the full might of The State to be unpaid tax collectors.
At least the local brick and mortar stores theoretically get some benefit in the form of roads and other local infrastructure, distant entities get nothing.
Local mom and pop stores also theoretically get elected representation as to whether they must be unpaid tax collectors for their state, county/parish, and municipality.
obamacare was forced purchasing, this abomination is forced labor and effort.
If you love this, to be intellectually honest, you must also love obamacare.
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