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 ...
What would we eat fancy dinners off of? (to use a preposition to end a sentence with...)
If I was selling in my own state, like brick and mortar, fine. But my customers are all across the US.
Looks like another opportunity for Trump and the Republican Congress to create another win. It would make a lot, a lot, a lot of people happy.
I always thought it was fair that the no sales tax offset the shipping costs.
Don't know about Amazon but Ebay has a single checkbox to collect taxes based on the destimation. An online service The STC dot com provides the same for other vendors for about 10 cents per sales. Might be cheaper ones than that one. I have not checked around.
That means filing taxes to more than obama’s 57 states which is complicated
You file with the 50 states plus territories if applicable. You do not file with each jurisdiction.
Yes, the sales tax compliance will eat into your profits. It's easy but you have to pay for convenience.
You do not need to know anything if you pay about 10 cents per transaction. That does not include filing for the 50 states.
10 cents per transaction. That does not including filing to the 50 states, probably quarterly.
>>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.”
The advantage of the internet store is not sales tax. It is price, service, and availability. When Amazon started charging sales tax in Florida a year or two ago, I didn’t blink an eye. It had no effect on my purchasing habits since the 6.5% was nothing compared to having to drive across town and waste my time searching for a mom and pop that actually stocks what I need. I assign a value of $75 to my spare time, so an hour of driving around pays for a lot of internet sales tax.
The b2c mom and pops claim to offer better service, but in my experience, they simply do not. They just don’t keep the staff necessary to be much more than a cash register. All they do is move merchandise. (This is only for retail sale mom and pops. Service-only businesses are a different case altogether.)
Plus, they buy from the same internet that I do, mark up the merchandise, and then sell it. If a “special order” is involved (and it usually is because inventory is expensive), the wait time is longer than the 2 days wait for Amazon Prime, or even the 3-4 day wait for Jegs, Summit, American Muscle, B&H, etc.
You are all missing the point. Many of us have stand-alone business that have absolutely nothing to do with Amazon, eBay, etsy, and all. We sell directly. We now are facing taxes to about 10,000 jurisdictions. Sure, maybe some state filings will work but how will we know? If I sell to someone in NYC, they want tax, the state wants tax, and, if I recall correctly, they want my company to register as a foreign corporation. Other states, like Texas, require similar to sell to customers in their state VIA THE INTERNET. Been easy to ignore but now that we are risking tax issues, this becomes a lot more serious.
Most states collect sales tax using monthly reports.
Only the state wants the tax. The other juirisdictions get the money from the state. They do not get it from you. You have to file in 50 states and I am by no means trivializing that. It will be time consuming or you will have to give up a chunk of profit for some service.
As you collect tax for those 10,000 (actually 7,000) jurisdictions, there are services that will tell you how much to collect. Those services cost about 10 cents per transaction. There is no effort involved, just that fee. Then, like I said, you have to file in 50 states, probably quarterly depending on amounts which will be time consuming unless you pay for a service to file for you.
VA and MD which I am familiar with are quarterly. I think WV is monthly. A month with no sales to a state like that means no filing.
You assume incorrectly. I am economically conservative as they come. I find nothing conservative about rules which give one player an advantage over the other in what should be a free and fair game.
Other than the IRS and equivalent state and local agencies, who is a paid tax collector?
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.
Impressive hyperbole, but hardly persuasive. If you aren't smart enough to handle this requirement which literally hundreds of thousands of businesses do on a regular basis, then both Darwin and Adam Smith say you shouldn't be in a competition you can't handle.
I live in Idaho, and most the states out here still require a monthly filing, even if no sales tax is collected. Too bad businesses will have to learn the laws of all 50 states and territories, to avoid penalties that will usually exceed the tax for a small volume seller.
Then at a monthly or quarterly interval you will have to file (probably e-file) in 50 states with the empty list or list of one or two sales. The list includes the jurisdiction and amount collected. To file in potentiallly 50 states and not lose your sanity, you will need to pay a service to do it for you. Some states make it easy to e-file, but not all and it is still time-consuming. I don't know how much those services cost. I have not seen a lot of open pricing info on the web for those.
It has nothing to do with smarts. It has everything to do with it being another in a long-list of government imposed burdens on my time, and an un-reimbursed direct expense that I must carry. This is an unfunded mandate - all because they choose not to enforce their existing laws. Large corporations can more readily absorb this expense or, like Amazon, already are so omnipresent that they calculate, collect, remit and report today. Small businesses cannot simply adapt to the time burden or new expense.
If these States want the tax revenue due on interstate transactions, then they should just go after the ones that are already obligated to pay it - their own residents. What they should NOT do is violate the Commerce Clause of the Constitution.
Your solution to a town imposing a draconian tax on its local merchants is to require all merchants everywhere to knuckle under to their rules.
Apparently the term “economically conservative” has been redefined beyond all recognition by the university you attended.
To paraphrase Lincoln, calling it economic conservatism does not make it economic conservatism.
It’s a gross over-simplification to say it’s only 10-cents per transaction. I have more than 1000 products and services I sell. It will be my responsibility to determine which of them are taxable and which aren’t - at least in every state, if not each jurisdiction. I can’t simply go to their site and enter a zip-code & sale price - I have to know whether what I’m selling is taxable or not at the address to where I shipped or provided the service.
Also, I have multiple “channels” for selling: my own web-store; an in-house order-management system; Amazon; & eBay. For reporting & remittance, I would have to combine activity across all platforms first, THEN report/remit. If I integrate with a service directly, then it’s integration expense x2, if not expense x4.
Plus, I checked out The STC (dot) com - not exactly confidence inspiring:
- They state there are some 7000 unique tax jurisdictions in the US, while the Tax Foundation reported it as 9,998 back in 2014. Tax-calc vendor Avalara states there are more than 10,000 today.
- I looked up a sample zip-code here in NC (27012). It straddles 2 counties. STC reported only 1 county, meaning I’d be filing wrong for any transactions shipped to the other county.
- It’s June 2018, yet their web-site copyright date is still showing 2017.
You may not realize this, but small business sellers on-line have as much trouble competing with Amazon as brick-and-mortar sellers. They don’t have the buying power that Amazon does, nor teams of techies managing the marketplace. This Supreme Court ruling is being sold under the populist notion of saving local merchants. Hogwash. It won’t help them in the slightest, and it will help Amazon by eliminating a large number of SMB online sellers.
Sooooo who pays the difference between the state tax; the state tax plus the county tax; the state tax, plus the county tax, plus the city tax; the state tax, plus the county tax, plus the city tax, plus any special assessments?
Hint, it isn't the state.
For bonus points, guess who gets stuck with the fines, penalties, and interest for any missing or late taxes.
For full credit, guess which court claims jurisdiction and demands your physical presence in their court, tomorrow at 9:00 AM, if you don't drop everything, and bend to their will, you loose everything in a summary judgment.
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