The U.S. Supreme Court ruled Thursday that states can require retailers to collect and remit sales taxes on out-of-state purchases. The 5-to-4 decision reversed decades-old decisions that protected out-of-state vendors from sales tax obligations unless the vendor had a physical presence in the state.
Those earlier decisions, one half a century ago, the other a quarter-century ago, date back to a time when mail-order sales were relatively small and online sales were all but nonexistent. As the justices acknowledged Thursday, however, the court back then "could not have envisioned" a world in which e-commerce sales have revolutionized the dynamics of the national economy.
Writing for the five-justice majority, Justice Anthony Kennedy said that the previous decisions "were flawed," and in the modern economy, they "create, rather than resolve market distortions." In today's context, he said, the physical presence rule is "an extraordinary imposition by the judiciary on the states' authority to collect taxes and perform critical public functions."
Furthermore, Kennedy said, the previous decisions effectively functioned as a "judicially-created tax shelter" for out-of-state retailers, and put local businesses at a "competitive disadvantage."
The problems with these earlier decisions, Kennedy said, were made "all the more egregious" by technological innovation. "The Internet's prevalence and power have changed the dynamics of the national economy," he wrote in the majority opinion.
[...] The decision was a victory for South Dakota, which, like some other states, has no income tax and relies on sales taxes to fund most of the state's services. Because of dramatic fall-offs in state sales taxes, the state in 2016 enacted a law to test the physical presence rule. Three large online vendors, Wayfair, Newegg, and Overstock, challenged the law in court, and lost on Thursday.
[...] "The chessboard just looks a lot different now," said Stephanie Martz, general counsel for the National Retail Federation, which includes 18,000 businesses large and small. "Now our members are going to be able to figure out how to construct their businesses without worrying about whether putting a distribution center on this side of a state line or that side of the state line will result in a different tax implication."
While the court made clear that the states do not have unlimited power to require sales tax collection, "The court blessed South Dakota's law," said Carl Davis, research director for the Institute of Taxation and Economic policy.
The law specifically protects small businesses from collecting sales taxes if they have less than $100,000 in sales or fewer than 200 transactions in the state. The state also provides sales tax collection software for free for any business that wants it, and using that software immunizes the business from audit liability. Perhaps most importantly, the state law does not permit sales tax collection for past purchases, meaning that businesses don't have to worry about a huge tax bill that they never anticipated.
(Score: 0) by Anonymous Coward on Friday June 22 2018, @07:55PM (27 children)
... present decisions might also be flawed.
A 5–4 split suggests this is not a rock solid position.
Also, the court systems practice rhetoric, not logic.
(Score: 4, Funny) by frojack on Friday June 22 2018, @08:08PM (24 children)
Sales tax varies by jurisdiction (city, county, state).
If you sell a widgit to Bob in East McKee's Port how would you know what tax to charge Bob, and where to pay that tax?
In the past there was no source of tax information that covered every tiny town with sales tax, not way to monitor that actual sales that took place, and no way to know where to send the collected tax. The exemption made sense.
Even with a mountain of computers available today, this is a daunting task. No commercial software exists that handles more than a few locations. (Big companies have proprietary system that do this, and the maintenance of these is a nightmare.)
The internet is the only way to make the necessary information available to every seller.
What could POSSIBLY go wrong with that?
No, you are mistaken. I've always had this sig.
(Score: 0) by Anonymous Coward on Friday June 22 2018, @08:21PM
> No commercial software exists that handles more than a few locations.
There will be damned soon! If QuickBooks doesn't do it, maybe one of the payment operations like PayPal or large credit-card processors will step up?
(Score: 5, Interesting) by VLM on Friday June 22 2018, @08:33PM (7 children)
I do consulting some of which can be sales taxed and in the state I live in, thankfully the state collects all the tax and documents the hell out of it, but you almost need a lawyer to go over the rate info as it is NOT 1:1 with counties, postal addresses, or zip codes.
Over my lifetime the total amount of fines I've accumulated from the DoR is $20 so I guess I'm doing well?
Also you forgot another category of taxation which is "F the tourists" where the tax rate varies by season in some locales.
Amazon collects a big slice of the take, but they do make all your problems go away, and they have AmazonServices and I've considered billing thru them for all sales taxable transactions, although I've never gone to the effort of serious research.
Adding to the fun, some software and IT type stuff is taxable; some is not. Depending how the contract is written up, regardless of the actual work I do, I might owe big brother a couple percent or not. This is also hilarious. If I "service your prewritten software" by rewriting it because its a piece of shit, then I owe sales tax, but if I "write custom software" then its tax free. The language on the contract determines the tax not the physical work done. Also if I provide you a printed tangible copy of the source code that skirts mighty close to tax evasion... here's an attachment to an email is definitely tax free. If you've ever seen contractor-types doing really weird shit like refusing to submit paper documents of their work, well, now you know why.
This may be overly doxy because all states have weird tax laws, but I shit you not, if I do something on spec and try to sell it to someone I didn't know before I wrote it, its sales taxable, but if we have any sort of agreement even as minor as a documented business meeting (like a business lunch with IRS approved dated restaurant receipt?) then custom programming work done for a specific customer is non-taxable.
Its to the point where I have to check state law every time I do something. If I install some back end support stuff that I didn't write to help a customer out, I donno, Putty for SSH, thats taxable, even if everything else I do WRT my personally written software is not taxable. So if you ever wondered why a contractor is like "You install MySQL for me, then I'll touch your server" its all to avoid a tax audit. I'd literally rather help you install some pre-written software for free off the books than have to deal with the tax and audit bullshit if 99.9999% of my work is my own software.
(Score: 2, Insightful) by Anonymous Coward on Friday June 22 2018, @09:30PM (6 children)
Why do we put up with this obvious crap?
The amount of lost productivity due to such poorly defined bureaucratic red-tape is unthinkable. The other AC's comment resonates with me: Maybe taxation is a bad way to organize society.
(Score: 4, Interesting) by VLM on Friday June 22 2018, @09:47PM
Well, the state I live in pulled in about $3K per head per year, about $1500 from income tax and $1500 from sales tax.
The sheer quantity of frictional bullshit in my opinion is about 10x greater for sales than income tax, so theoretically the highest quality of life would come from slashing sales tax (which is usually regressive to the poor) and boosting income tax (which is usually progressive to the poor). It seems like a no brainer, don't really know why its not done.
Several options have been tried.
Financing via printing money works until it doesn't then you get hyperinflation and 1920s Germany leading to 1930s Germany etc etc. In theory the government would be voted out and .. handled by the populace, but in practice the economic collapse is far too fast for voters to influence so it always ends in disaster, even though "in theory" if we limited govt spending to a long term average of long term average economic growth it would be stable. In practice its not dynamically stable at all.
We could chop the size of .gov in half, but a lot of people exist merely to provide votes for government types to provide services to... this option would be chill in the 'burbs, not so much in the blue hell cities. Essentially we would have to send the national guard to occupy the cities for awhile, its not gonna be free. Low tax rates are a white privilege.
There's not many other options if you're gonna run a welfare state. Improve the demographics of the population? Well, we're working hard as possible in the opposite direction, so thats a non-starter.
It might be a shitty way to organize society but it seems to be the least shitty of the alternatives.
(Score: 3, Informative) by Grishnakh on Saturday June 23 2018, @01:36AM (4 children)
No, it's not. Taxation is absolutely necessary to fund government.
What *is* a bad idea is having ridiculously complicated tax schemes that cause a huge amount of overhead in being compliant. Taxes should be simple. Just look at the IRS forms needed for various Americans, especially regular W-2 wage- earners, and then compare to the utterly simple 1-page pre-filled-out forms that typical western European wage-earners get from their governments each year. This crap, while making TurboTax and H&R Block rich, imposes a huge cost on society at large.
Same goes for this sales tax crap. There should not be 10,000 different jurisdictions in the US for sellers to keep up with and remit to, all with different rules on what can and can't be taxed, and how much. It's too fucking complicated. Worse, sales tax is a regressive tax, hurting the lower classes the most.
Here's a few proposals (some are mutually exclusive):
1. Eliminate sales tax except on luxury purchases, and only have income taxes. For states like South Dakota, that means they can go bankrupt if they're too fucking stupid to just implement an income tax like other states.
2. Forbid localities from implementing sales taxes, so sellers only need to remit to 51 or so entities (do territories have sales taxes?), not 9000-something.
3. Enact a federal law that sales tax is collected based on the location of the *seller*, not the buyer, and remitted to the jurisdiction the seller is located in, since the seller is the one using government services for their business and warehouse.
4. Enact a federal law homogenizing the sales tax laws across states, so it's easy for sellers to figure out, and they only need to figure different tax rates.
(Score: 1, Touché) by Anonymous Coward on Saturday June 23 2018, @05:11AM (1 child)
Just sayin'.
(Score: 1) by anubi on Saturday June 23 2018, @12:36PM
Unfortunately, no matter how we organize ourselves... its gonna be a guv'mint.
"Prove all things; hold fast that which is good." [KJV: I Thessalonians 5:21]
(Score: 2, Interesting) by Anonymous Coward on Saturday June 23 2018, @12:39PM
I would go the other way around: forbid the federal and state governments from taxing individuals. Make all of that done by the locality, and have federal funds collected from states which collect them from counties, which collect from cities/towns/individuals. Go a little bit further, and make nearly EVERYTHING local, down to all laws beyond the constitution. Makes things harder for businesses, but not radically, and it would simplify things quite a bit while weakening the bureaucratic expansion of the federal government and other malignant entities.
(Score: 0) by Anonymous Coward on Saturday June 23 2018, @05:46PM
of course this dumb bitch was going to come shilling for government.
(Score: 2) by bob_super on Friday June 22 2018, @08:35PM (13 children)
The people who sell you stuff in a brick-and-mortar store (or a multi-location chain) have to figure it out. Why would the internet sellers be excused, just because they cry that it's too hard ? Can't handle it ? stop selling there !
Of course, some jurisdiction may find that websites stop shipping to them because their tax system is too obscure, which would, if politicians were logical, result in them simplifying things for everyone ...
One solution to lessen the pain is to stop being stupid, and follow the rest of the civilized countries in showing the customer tax-included prices, which correspond to the average tax expected to be paid for the product. That removes the real-time requirement, and you can figure out remittances over the next few days/weeks based on actual shipping location. If your business absolutely depends on a +/-2% local discrepancy, you're already in trouble anyway.
(Score: 4, Insightful) by Anonymous Coward on Friday June 22 2018, @08:56PM (7 children)
Yes, those stores do, but there is one huge simplification they enjoy that an internet retailer does not enjoy.
Those brick and mortar stores exist in only one locality and only have to collect sales taxes according to the rules of that one locality.
Now, yes, that one localities rules may be a byzantine maze of twisty passages, that all look the same, but it is only one set of rules.
Now multiply that one rule-set by 50 (for 50 states [*]) and then by 100 (for 100 counties in each of 50 states [*]) and then by 20 (for 20 separate local cites/towns/etc. in each county [*]) and you now have a morass of 100,000+ different tax rule-sets, any one of which can change on the whim of a politician, without warning, and with no notification to anyone that they are changing. And all 100,000 of which can result in fines (or worse) for failing to follow them to the satisfaction of the auditor who just stuck his nose deep up your accounting books.
That's the problem with internet stores collecting sales tax. It rapidly devolves into a nightmare mess of too many twisty passages, all alike.
I predict the outcome of this decision will be a handful of companies cropping up offering the service of monitoring these 100,000+ taxing localities for changes and keeping their master rule-set in sync with the political winds of the day in each locality, all for a fee (likely percentage based) of sales. Which in effect will simply amount to yet another tax for the customer to pay. Only this time, it is to a "tax-processor" company instead of a local government office.
* - Yes, I know not states or local govt's charge a sales tax, but I don't have all of those rules in front of me now, so this is a simplifying approximation
(Score: 2) by bob_super on Friday June 22 2018, @09:03PM (6 children)
Two things, which should have been obvious before you went redundant:
1) Physical stores can have many locations across many tax areas, and they keep track. Car dealerships around here (CA) have to figure out your tax based on your home already. It's not like it's a new concept. It's been going on for decades, pretty much a couple centuries. "On a computer" should actually be the easiest part.
2) Nobody is forcing anyone to sell their wares in places where they don't understand the tax rate.
(Score: 0, Flamebait) by Anonymous Coward on Friday June 22 2018, @09:32PM
The AC is right. Your points are stupid.
(Score: 1, Interesting) by Anonymous Coward on Friday June 22 2018, @09:33PM
Almost never as many as online stores. I'm more worried about small businesses; the large ones will be able to handle this just fine.
(Score: 1, Insightful) by Anonymous Coward on Friday June 22 2018, @09:53PM
Yes, but each store only considers one set of rules, that of the specific locality where that physical store is located.
If you travel from AZ to WA and make a purchase at a Seattle Best Buy, you get charged Seattle, WA sales tax, not your home AZ sales tax, in the Best Buy physical store.
So that physical store in Seattle WA only has to worry about Seattle WA sales tax rules.
You are often responsible for paying AZ their "double dip" sales tax when you return to AZ with your Seattle WA Best Buy booty. Few folks actually pay this part, however.
But, the Seattle WA Best Buy does not need to know anything about the sales tax rules in your home state of AZ.
Not so with internet retailers. They are now going to be expected to know that you are presently in AZ, and charge you tax against current AZ rules, while simultaneously knowing all the other rules for all the other localities, plus the location of each purchaser, so they can charge each purchaser the local tax rules of that purchaser.
This is where it begins to become untenable. Tracking one rule-set per physical store, based upon the physical locality of the physical store, is trivial vs. knowing all of the rule-sets in every possible taxing locality, and then tracking the location of the purchaser to match up the proper twisty rule-set to the correct purchaser location, is the nearly untenable task. Espically for small startup operators. Which is why the big boys (Amazon, etc.) supported this. It puts a huge barrier up against the formation of the next "Amazon" that could grow to rival the current "Amazon". The current Amazon is big enough they can afford to keep track of all the rules. The small internet startup (who could become the next Amazon if allowed to take root and grow) will find it much harder to take root and grow to challenge the current Amazon.
(Score: 4, Insightful) by VLM on Friday June 22 2018, @09:55PM (1 child)
Because they usually only have one tax rate, which varies slowly. Even high school kids can be taught to add 5.5% or whatever to every bill, or just hit the "tax" key on the register which is very easy to program with a constant rate.
Internet businesses serving a large area, especially small ones, will have a different tax rate and different remitting authority for quite possibly literally every single customer.
If you have 100K customers my state DoR will let your AS/400 minicomputer talk directly to theirs which I'm sure is very convenient for everyone except the AS/400 sysprogs, anything smaller and they're like F-off do it by hand on their website. So that's what I do. Its actually not that hard, although if I had to do it 49 times for other states I'd be getting pissed off. Its possibly the weirdest website I've ever used. They do have on-shore tech support although they only work 9-5 for password lockouts. My favorite feature is I have to submit annually (almost wrote anally) at my small scale and my account is locked after 6 months without a login, hilarious every friggin time. So I log in at the start and end of summer to reset the clock, just did that recently in fact. Looking forward to doing that 49 more times, gonna be such fun.
(Score: 0) by Anonymous Coward on Saturday June 23 2018, @11:58PM
It is function of the people who own the addresses... USPS. Check an address and USPS will tell you the rate. Ship with FedEX or UPS or USPS and tell them the value, they will check the address and tell you the rate and amount, and added to your the shipping "cost". Then they are collecting the tax, since they are actually the holding the product and giving it to the consumer. simple and easy.
PS: dod this on AS/400 that was validting the address with USPS and have a tax table from a big 4 company, with taxes rate by city, county and zip, updated monthly. We were good at it, the states' auditors all 50 states and terrioiries gave us flying colors. We ven built in error corrections, in cases of areas being re-zipped or rename - average simular names in near same zip for exmaple. We tested every address at least once every 90 days to update any zip+4 or new names, hence new tax rate possible. To us and the law... the "cash register" was in the truck in front of house. Just like any delivery truck.
Mostly good. screwed up on MTAs like Washington State that follow elementary school districts. But in the end it is, owner of the land that affects the tax rate. The land is know by addresses and those are owned by USPS.
OH. about 3 man-months to general case. Even if USPS was to handle it fully (and they should!
Federal Land do not pay State taxes
State Land do not pay County taxes
County Land do not pay City taxes
So in Arkansas where a city incorpates all the surrounding land. If the land is own by a "higher" authority... City Sale tax do not apply.
(Score: 1) by khallow on Sunday June 24 2018, @01:00AM
While plenty of people have pointed out the problems with thing #1, there's a huge problem with thing #2 as well. Namely, you completely ignore the problem and why it is a problem. It's like observing that people weren't forced to run through the death maze of the Cold War era Berlin Wall, and thus concluding that the Berlin Wall was fine (ignoring details like the 140 deaths from people killed either through cold-blooded murder or accident, or the fact that East Germany would have completely depopulated, if they didn't have this policy of killing escapees).
These many, obscure tax districts act as an unnatural barrier to entry for any would-be mail order business. It's great for Amazon to have such obstacles in place. It's not great for everyone else.
(Score: 0) by Anonymous Coward on Friday June 22 2018, @08:59PM (4 children)
Yes, but each physical location has to only figure out one set of tax rules per location. Internet sellers have to know the rules for all potential areas in the country, even if only to figure out which places aren't worth it to them to sell to.
Besides, is it legal to refuse to sell to, say, Chicago, Illinois, while you do sell to Springfield, Illinois? I honestly don't know.
(Score: 2) by bob_super on Friday June 22 2018, @09:08PM (3 children)
> is it legal to refuse to sell to, say, Chicago, Illinois, while you do sell to Springfield, Illinois? I honestly don't know.
Stores do it all the time. Go back twenty years and try to get a mattress store to deliver 5 miles, let alone 200 miles away !
(Score: 0) by Anonymous Coward on Friday June 22 2018, @09:56PM
Deliver != Sale
If you are willing to cart the mattress away on top of your car (or in your truck) they do not care where you live, and will sell you as many mattresses as you wish to buy. All of the sales, however, will be charged the sales tax rules of the locality within which the physical mattress store resides. They don't have to worry about the oddball tax rules at the location where you plan to haul and install the mattress.
(Score: 0) by Anonymous Coward on Saturday June 23 2018, @12:32AM (1 child)
Wow. I've been reading your posts in this thread, and I must say there is nothing super about you, Bob.
(Score: 0) by Anonymous Coward on Saturday June 23 2018, @01:34AM
I think you are confused. Super is his _last_ name, came from his family (at least conceptually). If he was pretending to be "super", he would pre-pend the word, ala, Super_Bob, like SuperMan.
(Score: 0) by Anonymous Coward on Saturday June 23 2018, @05:50PM
IT IS VERY SIMPLE to do. I set up and maintained a system for home service company.
SALES TAX is consumer CONSUMPTION Based. Where is it consumed for food, light bulbs, whatever.
Consumption with low traffic volumes is ASSUMED to be at the point of change of ownership (the place you bought it).
It is FOB is used in business. It is saying owner ship changed on sell loading docks. So, the buyer has to get it from there to their location so shipping and the like are the buyers problem.
SALES is hard to manually do, since if you ship with in a state and rate is different every where then a SMALL would have to know every rate with-in the state. In California r around Houston TX. that is bitch.
Trucking industry is "ownership" of the goods in the truck is ASSUMED to be driver's. If it catches on fire, is harzardous, or what not, it is the drivers fault.
SALES TAX varies based on address location. So Federal land in State cannot be taxed, State land in County can not be taxed, County Land in a City cannot be taxed. Then toss in MTA and other local taxing authoruty... you get the picture.
ADDRESS are OWNED by the Post Office. They know what is right and what is invalid. They know the correct zip and zip+4.
So the fix is cheap (mostly) and easy (mostly)...
1) Change laws so ownership changes as each person/carrier takes procession. (normalizes trucking assumption)
2) Sales Tax Rate will be part of Address validation by the Post Office. It would take about 1 month and 3 people to do it. Post Office already knows the type of land and it actual location. It is setting up the filling system by State, COunty, City, MTA, ... to define the geo-coded tax information. Also processing laws. But there are databases out there that do it today. Those table are sold by subscription from large accounting firms. Make it part of the Postal System.
3) since the item changes hands at the front door of buyer. Then the last mile delivery service (they have physical presences, would "collect" the tax and would be audited on the collections.
So how would this work?
Buyer buys and item. During check out the delivery address is checked and validated. That is done to determine the cost of shipping by FedEX, UPS, USPS ... That check will also return the tax rate for that location. Hence two charges, shipping and sales tax. Both of these funds are turned over to shipping company. Now every website can "collect" sales tax without knowing a damn thing about it.
If I walk in to FedEx or UPS, or USPS, ... I want to ship a goods, I declare value, type and source (used vs new (retailer shipment)), they would determing shipping and tax at the delivery point. They would collect that tax there. You as business can fill for return of taxes paid, since it changed ownership.
IF you go to USPS site to validate an address, the tax rate would would be returned with the zip+4 and other information. So you can charge the correct amount to consumer and get it shipped at the post office.
Other things to do...
1) LAW the tax rate suplied by the USPS is "the valid rate". Even if it is wrong, it is right of legal reasons. So everyone that follows the correct method, validate address get a rate back is protected.
2) LAW USPS can subcontract / assign others to also provide the service, FED or UPS for example. Allows for more equipment to handle the work load. Also sinceFedEx and UPS will be collecting taxes too, they would be good partners in the process.
3) LAW Sales Tax what it applies to is normalized items. So if a state allows sales tax on Items: Food, Labor, Alcohol, ... then each of those taxes are returned as separate lines.
Hard part of TAXES in general is intent. Worked with international restaurants years ago. In one city, they implemented a tax on beverages. The issue was the intend consumption of beverage. A glass of milk, to drink in resturant area was 15%, in the bar area 3ft away 25%, but you pour either place over your food is was 10%. This why normalization is important.
(Score: 1, Insightful) by Anonymous Coward on Friday June 22 2018, @09:48PM (1 child)
For all practical purposes, it is rock solid. The Supreme Court will have to overrule itself for the situation to change. Quill vs North Dakota kept online trade open for the last 25 years, but now "things have changed because internet", and states can now effectively levy import tariffs.
It is the stupidest possible resolution. A federal sales tax or sales tax being paid according to the rules of the seller's site would have been more logical and preferable.
This will be a drag on 2nd and 3rd tier commerce sites and a gift to giants like Amazon who can afford to negotiate with states on taxation.
(Score: 2) by HiThere on Saturday June 23 2018, @06:10PM
They don't just need to negotiate with states, they also need to negotiate with cities, counties, utility districts, etc.
The last time I checked the local sales rate is was the sum of about 5 different agencies, each with a quite small share, and, of course, the state with the largest share. But the local rates only apply locally, not outside the areas served by the particular agencies.
I don't like sales taxes, but they're a whole lot better than bonds, where you end up paying endless interest.
Javascript is what you use to allow unknown third parties to run software you have no idea about on your computer.
(Score: 1, Insightful) by Anonymous Coward on Friday June 22 2018, @07:58PM
That is, there are other ways to interpret what's going on.
(Score: 3, Interesting) by VLM on Friday June 22 2018, @08:05PM (24 children)
One of the benefits of being late is the whole things been hashed out elsewhere.
1) The decision was based on equal punishment, if locals have to pay, remotes should have to pay.
2) However there are two other criteria for taxation which are not being discussed. One is equal representation "no taxation without representation" I have no ability to influence ... South Dakota ... if they have stupid tax policies, yet I'm being farmed for taxes. Kinda like the colonies and Great Britain and tea taxes back in the old days.
3) The other criteria carefully being ignored is if I live in ... Illinois (which I don't, although I visit for business "often"), then the state "deserves" a cut of sales revenue for facilitating the sale via those beautiful roads and professional police supervision and so forth. But I ship some stuff to ... South Dakota, what has SD ever done for me, especially pre-sale? If I use a private carrier like UPS, the government of SD ha done approximately NOTHING to help me, thus deserving no tax revenue. IRL I just got back from a nice business lunch and my state deserves a cut of the restaurant's revenue because the gov provided roads and police and fire coverage and restaurant food inspections mean its unlikely I'll die of food poisoning and the EPA keeps the air clean around the restaurant and all kinds of useful big government things... now I ship some ebay crap to South Dakota, what exactly has SD done for me to facilitate the transaction... nothing? The feds invented the Zip Code decades ago, thats about it? This is mobster style protection money, not fair taxation.
(Score: 2) by VLM on Friday June 22 2018, @08:13PM (1 child)
Oh and a side dish of previous discussion is the court stated the feds can't tell the states how to apply state taxes.
The feds were applying a common sense rule to all states.
The ruling does not mean states MUST implement stupid laws, it merely means the feds can't stop states from implementing stupid laws.
You KNOW what poorly governed states like CA or IL or NY will do, vs intelligently governed states, now that the feds leash is off. So the real effect long term is likely to be increased rate of capital flight and job loss in nanny / leftist states. And that's where most of the politicization comes into play in the discussion. IL will be declaring bankruptcy "soon" regardless what they do for a variety of interesting demographic reasons, and the auditors will not permit them not to tax the hell out of any victims left in IL, so expect massive economic growth in neighboring states, and thats where the discussion turns into boring bashing politics. The usual suspects doing boosterism for C(r)ook county and Skokie vs the usual suspects doing boosterism for Milwaukee or Lake Geneva or whatever.
(Score: 2) by frojack on Friday June 22 2018, @08:40PM
Well there are constitutionally mandated ways whereby the Feds can tell the state how to apply taxes. Article 1, section 10 for example.
No, you are mistaken. I've always had this sig.
(Score: 1, Interesting) by Anonymous Coward on Friday June 22 2018, @08:26PM
Which is older--mail-ordering or local sales tax?
Mail order (pre-internet) has been going on for a good while, the Sears catalog used to deliver to the local railroad depot before there were were interstate roads.
Any guesses if the big mail order companies lobbied for this type of sales tax "exemption", way back when?
(Score: 2) by Alfred on Friday June 22 2018, @08:34PM (8 children)
But then I think a little it sounds more like a tariff than a sales tax really. And can I argue I am being taxed if I don't cut a check to the state? On any receipt there is a line item for sales tax but I am still paying the vendor, not the state. The vendor pays the taxes later, it is still an indirect tax upon me though. In that normal sales tax that line item is really more of a "sorry customer, the state requires me to rape you this way so don't blame me" line item. It just depends on where you want to say who is responsible for what transaction so they can take credit for being taxed.
Yeah I wouldn't want to live in Illinois either.
(Score: 2) by frojack on Friday June 22 2018, @08:48PM (1 child)
Several states already demand taxes on things purchased out of state. See https://dor.wa.gov/find-taxes-rates/use-tax [wa.gov]
Buy a lamp in Oregon: Pay Washington when you bring it home to Seattle.
Buy a Desk from your Neighbor in Seattle, take it across the hall to your apartment: Pay the state of Washington a use tax.
Of course everybody ignores it, but its on the books. Register your car as you move into the state? Oh, you have to pay a use tax too. That one you can't escape.
No, you are mistaken. I've always had this sig.
(Score: 3, Informative) by AthanasiusKircher on Friday June 22 2018, @11:27PM
It's not just "several" states. It's basically every state that has a sales tax. If you aren't already paying use tax on goods you order from out-of-state (and live in a state with a sales tax), you likely are in violation of tax law in your state.
I think I've paid use tax every year. I'll admit I'm not crazy diligent about it, but I estimate the goods I import and pay tax as required.
This ruling does very little in most states in terms of your required tax obligation -- it's just shifting the burden of collection to retailers (who are less able than consumers to cheat and just not pay the taxes as required).
(Score: 3, Funny) by VLM on Friday June 22 2018, @09:17PM (5 children)
Yeah and the sophistry against it is already spinning up along the lines of if you don't want South Dakota to screw you over, just refuse to do business with South Dakota residents. The "taxation without representation" should only apply to your local unavoidable environment.
I got a guy on another site to explode in rage against me by running along the lines of "OK don't do business with SD" "Well, what if a gay couple in SD ask you to bake them a wedding cake so now you can't legally refuse to do business with them?" and the guy went freakin nuts, which was kinda funny. Maybe he was half of a gay couple living in South Dakota, I donno, I certainly didn't intend to be personal.
When I was a kid "no" was something you said about drugs, sex was fun, and nobody much cared who did what with who for businesses. Now drugs are legal, sex requires verbal and written consent "yes", and businesses are not allowed to say "no".
(Score: 2) by AthanasiusKircher on Friday June 22 2018, @11:40PM (3 children)
What are you going on about? You aren't paying the tax; the buyer is. The buyer is paying for the privilege of getting goods from out-of-state and importing them.
Before, the buyer likely had the same obligation to pay use tax, but the majority of people cheat and don't pay it on imported goods. So, before if you were an internet vendor, you might have gotten an apparent price advantage over a local vendor due to the tax evasion of some of your customers. Now, you just have to help them pay their taxes, like all responsible citizens should always have been doing.
(And no, I'm not a huge advocate for sales taxes or use taxes. I think they're mostly stupid and regressive. But I do obey tax law.)
(Score: 2) by VLM on Saturday June 23 2018, @12:38AM (2 children)
Ah I think I see some of the confusion between people who pay tax on the DoR website and others.
No, at least in my state, I calculate and pay the tax based on calculations of each transaction. Its a paperwork nightmare. Brick and mortar get services from the state in exchange, and being local they have representation in government however minimal. An internet reseller gets no representation and no government services, just the paperwork nightmare, in exchange for... well... nothing, really.
Perhaps a good analogy would be, I am totally chill with what services the state DNR provides and my elected official oversight of the DNR so I'm chill with paying for a fishing license. Now if I give you a fish sandwich for dinner and you live in another state, what is this BS of now I have to register and pay a fishing license for YOUR state, merely because your house is on one side or another of some arbitrary line that doesn't really mean anything to me? Certainly I have no representation in your state and your state provides me no service, and its really none of its business that I sold you a fish sandwich. If YOUR state doesn't like you buying fish sandwiches from me, YOUR state should fight you, not me, after all, it is YOUR state, not mine. YOUR state and where YOU live has nothing to do with my business of making fish sandwiches over here in MY state where I happily cooperate fully with my state. I mean, by definition, YOUR state is YOUR state, I should have no interaction or care about it. I'm all good with MY state, but now I need to get involved with rando orgs that I have nothing to do with directly, merely people I do business with are somehow related to them so that mysteriously obligates me, like the transmission of a bad STD. Like a bad mafia movie.
Actually I can make an even more horrific analogy. Lets say I have a restaurant and its 100% legal and inspected, because, sure, why not. Now, because you live in ... (making this up) NYC, you visit and eat a fish sandwich. Supposedly its a great idea that I now have to register with and cooperate with the NYC restaurant inspection department; after all, you live in NYC so somehow that means I need to follow their laws even though I don't live in their jurisdiction, have no election control over them, they provide no useful service to me... other than you happen to live there.
Oh even worse, lets say you visit my house which is compatible with all local building codes. But you're from NYC so that means I'm in serious legal trouble unless my drywall is inspected by the NYC housing inspectors, merely because you live there.
(Score: 2) by AthanasiusKircher on Saturday June 23 2018, @12:53AM
That's all a fair point and expressed more clearly than before, but you're still a bit odd for bringing up the "representation" thing when you're seeking as an outsider to export goods into another state.
The paperwork is most certainly a valid issue, which is why the appropriate response now is for Congress to finally act and make some basic uniform policy governing this stuff for small businesses that will make this work without an undue burden.
As much as I'm for federalism and leaving things to local government when appropriate, this is actually for once a direct on-point example of "regulating interstate commerce" that Congress is not only empowered to act on, but I'd say woefully neglecting its duty in not dealing with sooner.
(Score: 2) by frojack on Saturday June 23 2018, @06:46AM
I've heard it said that California is crazy merciless about this sort of thing, and will pursue you across state lines for licenses and taxes for even the remotest connection to California.
Buy a house in Arizona, and move there, but visit a customer in California, and they will be after you for income tax in Arizona for years. Just don't get picked up for speeding, because they will fins that bogus tax bill enough to hold you.
No, you are mistaken. I've always had this sig.
(Score: 2) by Alfred on Monday June 25 2018, @03:40PM
"I'm refusing service based on geography not a protected class."
Bonus points for trolling that wouldn't have been trolling without their ignorance.
(Score: 2) by frojack on Friday June 22 2018, @08:35PM
Both States (and, arguably, some of the in-between states as well) have done about the same to enable your sale.
However no state or city justifies taxes based on services they provide. They don't need to. They can tax absolutely anything they want.
Same is true of the small communities in which buyer and seller are located. Its not just STATE taxes, its also about LOCAL sales tax.
The exemption was purely of practical basis in the past, as I've posted elsewhere in this thread. Both ends see a taxable event.
But the seller can't be expected to know rates and rules of all tax jurisdictions.
Part of the original reasoning for such exemptions goes back to Article I, Section 10, clause 2 [wikipedia.org] of the United States Constitution, which limited the imposition of taxes upon the exports of one state by another state. However, there is no language or history defining exactly what Exports mean. The courts way back in the past applied the prohibition to all sales between states as well as exports.
Only later (the 1960s did they suddenly decide it only referred to EXPORTS from the US to a foreign country, (which from an interior state would necessarily have to flow through another state).
However that interpretation made no sense at the time the constitution was written because there were no land-locked states at that time. Clearly the framers meant that tariffs and taxes could not be imposed at state borders upon the exports from other states to the taxing state.
If such were imposed for inspection of cargo purposes, the money was to flow to the US Treasury, and not the taxing state. The wiki article explains the evolution of this clause over a hundred years. There were ties to slavery issues as well. Historically it has been ignored, as the issue never really arose.
States and cities tax sales. It never mattered where the buyer lived until now. But now Both ends want to impose taxes on the same sale.
No, you are mistaken. I've always had this sig.
(Score: 2) by bob_super on Friday June 22 2018, @08:43PM (3 children)
> If I use a private carrier like UPS, the government of SD ha done approximately NOTHING to help me
Are you shipping to a person who has water/electricity/internet, using a carrier which uses an airport, storage facility, and local roads ?
Maybe, just maybe, some of those actors paid less tax than the state needs to maintain this infrastructure they use (as low taxes or tax breaks), based on the idea that whatever they buy will be taxed to maintain the infrastructure that allows the sale to happen. Maybe. Hypothetically. In a non-narrow-minded world not too far from you, it has been known to happen.
(Score: 2) by VLM on Friday June 22 2018, @09:35PM (2 children)
Naw I am shipping to someone who has less utility for a stack of money than for the thing I'm shipping them. I didn't ask for an analysis of their DNA or religious beliefs before deciding them worthy of permitting them to bid on ebay or WTF.
If their DOT is poorly run such that they got potholes, 1) they should fix that, not feed the beast by taking my money 2) they theoretically have representation to fix that, but I don't.
More concretely and realistically, Chicago is a shitty and expensive place to live, yet its not my fault nor do I have any influence at all whatsoever over the Chicago government's mismanagement. No matter how many hoops I'm forced to jump thru at the point of a gun, making my life miserable far far away from Chicago isn't going to give the citizens of Chicago the better leadership they deserve. Where you can substitute any other blue hell for Chicago, it doesn't matter other than its the closest blue hell to me.
Its possible to consider that laws should depend on reality and technology. The fact that saloons don't have hitching posts to tie up your horse while you drink after a long day of cowboys and indians is not a legal disaster to be fixed and patched up, its an anachronism. Likewise if your government is dumb enough to try to finance itself and its infrastructure based on a 1950s economy while the calendar is 2018, that should entirely be their problem not mine.
This "sales tax thing" isn't a problem for all states, only a problem for poorly run states stuck in the past. The more they try to duct tape and baling wire dumb ideas to keep operating like its 1950 despite it being 2018, the worse the crash will be when they inevitably fail and capitulate into modern reality, meanwhile a lot of effort is wasted by people who don't deserve the punishment and don't even live there.
(Score: 2) by bob_super on Friday June 22 2018, @10:46PM (1 child)
Nice near-offtopic rambling. Couldn't quite figure out how to mod that mess.
In a nutshell, for the government to get money, they can tax three things:
1) What people have
2) What people earn
3) What people spend
The balancing and tradeoffs between those three does fill a mid-size library. Any suggestion that there is a simple answer, and anyone not on your side is mismanaging and dumb, flies in the face of reality.
(Score: 2) by VLM on Saturday June 23 2018, @12:24AM
"Willful lack of cooperation with inevitable technological progress is ..."
There comes a point where a government need to cooperate with modern reality.
If brick and mortar is dying along with sales tax revenue, being part of the problem by being a PITA to everyone living in the future instead of the past, simply isn't smart management.
"The old ways don't work anymore, so I'll just give everyone not living in the past a headache, that'll fix the problem"
(Score: 2) by Immerman on Friday June 22 2018, @08:52PM (2 children)
>3)...
Except if you're selling online to someone in another state you're still NOT going to be paying any taxes - sales taxes are levied on the *customer* not the business. The business is just responsible for collecting them and delivering them to the appropriate governments in exchange for being allowed to do business in the region. In fact, any time you buy something from out of state online or by mail you are legally required to pay the appropriate sales tax to your local governments - the fact that nobody actually does this is the reason for the push to make internet retailers collect the taxes as the cost of doing business.
(Score: 2) by Spamalope on Saturday June 23 2018, @12:02AM (1 child)
Before this, I could sell to someone out of state without a problem.
Now... I know my state has literally thousands of sales tax districts. Thousands. The tax rate varies. You have to track and pay taxes to each entity. If you're a fixed business, then it's just your local tangle of 2-5. But if you sell across the state, you must have some sort of automation just to figure out who the hell to pay. And you get audited.
So I just want to sell some old crap out of the house. I have to know in detail the sales tax laws of all the tens of thousands of sales tax districts because I don't know who the hell will bid on the ebay auction? WTF?
(Score: 2) by Immerman on Saturday June 23 2018, @01:23AM
Which in turn is the reason there's pressure to normalize the sales tax, at least for interstate sales. If the states all agree to set an interstate sales tax of, say, 8.45%(the current average combined state and local rate) for transactions that don't otherwise require the seller to collect tax, then it would simplify things immensely, and everyone could potentially win (well, except the buyers who are currently illegally dodging sales tax)
As a private seller selling a few things, you probably wouldn't have to worry about it - you're probably technically required to collect sales tax at a yard sale too, but nobody does, and nobody cares. Do you currently make sure to collect the appropriate tax when the auction winner ends up being from your own state? But if you make a business out of it, then yes, you need to deal with collecting the appropriate taxes. Presumably ebay and others would step up and offer automated tax handling. Perhaps for a modest fee, or perhaps because they're pressured by states to do so automatically on all tansactions. It's not exactly difficult anymore, just tedious and a little time consuming to collect the information and keep it up to date. I could even see the fallout of this ruling being establishing a (legally) definitive federal database with sufficient information to translate any delivery address into a breakdown of the state (and possibly local) taxes due. Sync your bookkeeping app to it every so often, and actually pay the taxes due on time, and you've covered your ass.
(Score: 3, Insightful) by NewNic on Friday June 22 2018, @09:35PM (3 children)
You are not *paying* the tax. You are merely collecting it. The buyer is paying.
lib·er·tar·i·an·ism ˌlibərˈterēənizəm/ noun: Magical thinking that useful idiots mistake for serious political theory
(Score: 2) by VLM on Saturday June 23 2018, @12:18AM (2 children)
The cost of compliance is NOT free...
(Score: 2) by NewNic on Saturday June 23 2018, @12:55AM (1 child)
Just another cost of doing business. Not a tax.
lib·er·tar·i·an·ism ˌlibərˈterēənizəm/ noun: Magical thinking that useful idiots mistake for serious political theory
(Score: 0) by Anonymous Coward on Saturday June 23 2018, @08:06AM
Since today you owe me 50% of your income. It's not a tax, just a cost of doing business.
(Score: 5, Interesting) by jmorris on Friday June 22 2018, @08:26PM (16 children)
So much stupidity here. Having to agree with a minority opinion by Roberts and three of the morons on the court. ARGH!
The big e-retailers all supported this. It is another example of big business happy to get in bed with big government to squash competition. Of course this is going to be a frickin' disaster. Anyone with half a brain can see multiple ways this is going to fail.
1. How the heck does a smaller retailer even know what tax each product sold should have applied? The rules vary wildly by jurisdiction. We will end up with a similar situation to accounting where all accounting software pretty much has to run on Windows because the one "in bed with the government" vendor selling access to updated payroll tables and forms is on that platform. A couple of firms with deep government connections will spring up to "solve" this problem for e-commerce... for a "small fee."
2. It won't stop online, the exact same logic will be quickly applied to brick stores as well, especially once systems are in place to semi-efficiently remit sales taxes back to the taxpayer's home taxing authority. How many NJ residents shop in NYC? How long until New Jersey gets the idea it can claw back sales tax? Then New York will, rightly, complain that those taxes maintain the infrastructure those shoppers are using. They will, again rightly, argue that they deserve to keep that money to maintain the city those shoppers prefer to do business in. But unless the court is willing to do another unprincipled exception the clear logic of this decision is not disputable. Sales taxes are a tax levied on the shopper and must be collected by the merchant and paid to the shopper's home territory.
(Score: 0) by Anonymous Coward on Friday June 22 2018, @08:31PM (10 children)
It'll be a web app, ad supported. Maybe you go to eBay or PayPal to figure the tax to any particular address. Google could add it to their maps.
No need to get all excited.
(Score: 2) by Alfred on Friday June 22 2018, @08:39PM (5 children)
(Score: 3, Informative) by Anonymous Coward on Friday June 22 2018, @09:14PM (4 children)
It might be a little bit more complex.
Different items are taxed differently, so you'll also need to provide the tax rates for each type of product. Some products are exempt from taxation, but that varies by location, so you'll have to track all the products that aren't taxed, too. Perhaps 10,000 different categories might do it. Eh, maybe more.
Also, some taxes aren't the same all the time. You'll have to include, for each product and each location, an array of dates where the rates may vary, and how much the rate is during that time. Again, some states do things like give a few days of tax-free buying for back-to-school items a bit before school starts, so you'll have to track all that too.
Some states have inter-state agreements about taxation between neighboring states. So you not only have to track where it's going, but where it's coming from.
Oh, and any of it can change at any time a legislature or town council decides to change it. So you get to track all that, too.
As a now retired data analyst, good fucking luck.
(Score: 2) by Nerdfest on Friday June 22 2018, @11:01PM
I've worked on code to do something very much like this nationally, and it's a fucking nightmare. Doesn't help when it's badly done, and in the wrong language for the job, but even so it's nutty. Last I checked, the rules (in this system) for alcohol and tobacco were especially complex, based around amount, percentage alcohol, litres of pure alcohol, etc, with lots of special cases for extra spaghetti goodness. Expecting small companies to deal with this stuff will end badly. Is this the corporate equivalent of the cycle where poor people get a lot of fines, etc? Seems a bit like it.
(Score: 2) by Immerman on Saturday June 23 2018, @03:17AM (2 children)
It could be simplified immensely if a definitive federal database was established, with each state responsible for keeping their section up to date. You put in an address, it gives you a tax breakdown for out-of-state sellers. Ideally something easily downloadable and open source, so that instead of notifying the federal government of every transaction, you can download the program, keep the database synced every [legally mandated time interval], and it'll tell you what combined tax to charge any address, and spit out a list of tax totals and recipients for you to pay every sales-tax day.
Maybe local taxes are included, maybe you have by-product-class taxes, maybe those are details that get compromised away in the name of expediency. This is all firmly in the domain of politicians after all - they all know how the sausage gets made.
And quite likely, every major sales portal, shopping cart provider, etc. offers to do all the work for you for a modest fee.
(Score: 0) by Anonymous Coward on Saturday June 23 2018, @01:11PM (1 child)
Likely organized by zip code?
Each zip code has a certain tax rate associated with it, along with payees?
This is one of the problems we run into when our government has grown so large as to micromanage everything like this. From what I see, the cost of complying is greater than the tax itself. The net result being just a bunch of busywork. Same problem we have in healthcare/insurance. Its like having highly inefficient power couplings in a system... so much overhead and the thing barely runs - and from what I can tell, it looks like the system is almost ready to stop.
(Score: 2) by Immerman on Saturday June 23 2018, @02:49PM
Hey, if there's reliably(enough) only one tax jurisdiction per zip code, that sounds like a wonderful idea. As for the cost of compliance - if you sell things you already have to collect and remit taxes, unless you refuse to do business with in-state customers? It costs you what, 2ms to have your online store front look up and apply the appropriate tax rate during the order, and add a bookkeeping entry to remit X taxes to Y? Yes, the storefront software needs some added features, but how many people actually write their own storefront software rather than using a commercial product?
It's only keeping the database updated that's any sort of issue - and even that's trivial if you avoid local taxes. Or have a centralized database where the information is stored. No micromanaging - just a single location you can go to to get all the data at once, in a standard-format data file that any storefront software can reliably read.
Personally, I think the ideal solution for "full taxation" would be to set a flat "interstate sales tax" rate, at least for local taxes within a state, and a streamlined way to remit all the taxes at a per-state level (e.g. here's a check for total state and local taxes, and a breakdown of purchase amounts by zip code so that the state can distribute local taxes appropriately) As a seller you already collect all that information anyway.
If you want to simplify it even further, just leave out local taxes altogether - you just collect and remit taxes for each state at a flat per-state rate - no variation based on product categories,etc. and you only have to keep track of 50 tax rates (plus all the category and local stuff within your own state) Let each state decide for itself if they want to charge a higher interstate rate and distribute some of it to localities according to whatever policy they want.
The thing to keep in mind is that this isn't establishing new interstate tax policy - it's just opening the door for such a policy to be created. Everyone involved on all sides will be politicians well-versed in compromising to ensure their pockets get lined.
(Score: 3, Informative) by jmorris on Friday June 22 2018, @08:44PM (1 child)
You have to know WHAT you are shipping WHERE on behalf of WHO and WHEN it is ordered and WHEN and WHERE it is probably delivered. Sales taxes vary wildly based on what is sold, how it is sold, etc. Buy a 2L bottle of cola and pay one rate, buy a fountain drink and pay another, get it with a meal and pay a third rate. Many places exempt items like food from some/all sales tax, but sometimes not if it packaged or sold for "immediate consumption. So having a box delivered would be one tax rate, 1HR delivery can trigger a different rate. Some jurisdictions have tax holidays on school supplies during "back to school" season, there are calls to make "feminine hygiene" products tax exempt, other products have special surtaxes, like the "soda taxes" becoming popular in Blue Hells. The list of special taxes and exemptions is as limitless as the ever growing list of genders because it all springs from the diseased mind of the same Progs.
(Score: 2) by Immerman on Saturday June 23 2018, @03:35AM
Of course the law remains to be settled, but it's a good bet that the geographical tax will be based on where it was bot (the shipping address), and not much else. I mean, when you're visiting Sonoma, California and buy a bottle of wine for your friend in Wisconsin, nobody cares where you're from, or where your friend is - the purchase was made in Sonoma, California you pay the taxes for Sonoma, California.
And conveniently, as the seller you already know the mailing address.
As for categories especially the fact that category boundaries can vary from place to place - I would expect that presents a sufficiently complicated problem as to be recognized as intractable, with the result being the establishment of a single "interstate mail order" tax rate. Heck, charge the highest rate across the board, good for encouraging people to keep their money local.
(Score: 2) by choose another one on Saturday June 23 2018, @12:31PM (1 child)
> It'll be a web app, ad supported.
Yeah, but it'll only work with one particular version of Internet Explorer because that was what was written into the ten year govt. outsourcing contract.
(Score: 0) by Anonymous Coward on Saturday June 23 2018, @01:52PM
And will run on Cold Fusion.
(Score: 3, Interesting) by VLM on Friday June 22 2018, @09:02PM (2 children)
Varies by state. Not where I live, not for IT/software type stuff. As a gross generalization where the trade happens is where the tax is paid. My state is even kinda forward thinking and has a cloud "good faith" exception written into the text of the law where if a client later moves software that I have a maintenance contract for from locale A at tax rate X to locale B at tax rate Y and doesn't tell me, as long as I keep paying tax rate X I am legally not in bad faith WRT dodging taxes until formally notified they moved (registered postal mail every time some vmware admin does a vmotion? Damn if know).
On the other hand the same jerks are not so forward thinking about prewritten bundling laws. Any prewritten contamination means the whole product is contaminated into taxable prewritten status. If I write you custom software and provide it alone, thats tax-free. If I include a copy of prewritten FOSS "for your convenience" then that is explicitly under the law turning the whole project into providing prewritten software and I have to tax the whole product at full rate unless I do some hair raising invoicing. So its not like I live in a paradise.
I'm pretty sure the universal legal phrase you're looking for is "Sourcing Rules"
(Score: 2) by Immerman on Saturday June 23 2018, @02:54PM (1 child)
I would think it would be easy enough to give the FOSS as a free gift - explicitly NOT bundled, because you are explicitly NOT selling it. Since it's FOSS you could even make it conveniently available even to non-customers, as further evidence that you are definitely not selling it.
(Score: 0) by Anonymous Coward on Saturday June 23 2018, @05:44PM
I'm not sure that would fly if the FOSS stuff was an integral or important part of the system he's building for them.
(Score: 2) by AthanasiusKircher on Friday June 22 2018, @11:56PM (1 child)
To point #2: this is generally already the case, except the responsibility falls on the consumer in form of "use tax" that should be reported on your income tax each year.
If you buy goods in anothet retailer in another state and then import them to your home state, you generally owe taxes unless you already were charged them at the point of sale. (Most states have reciprocal agreements covering such cases, though if you didn't pay as much tax when you bought it as you would have in your home state, you may have to report it for use tax and pay that tax. Depends on state, I think.)
(Score: 2) by jmorris on Saturday June 23 2018, @03:06AM
You were supposed to report online sales as well. Nobody did, which is why they got so hellbent on making out of state merchants collect and report. Expect the same thing to be pushed to physical retail as soon as the infrastructure is in place to permit it. Which means shopping destination cities / states are going to lose a metric assload of money and start agitating for "something" to be done.
Of course this ain't done in the courts yet. Just wait until somebody actually tries to enforce this bullcrap SCOTUS just dumped in everyone's lap. So CA gets to send auditors over to TX to go over some e-retailer's books? And if they find irregularities they do what? Extradite em to CA? Charge them in TX? Work out a reciprocal agreement with TX? Good luck in states without a sales / use tax. All those questions and more will quickly start working back up the courts. There is a reason courts have left mail order exempt from sales tax, it is a legal and regulatory nightmare.
But in the end everyone will have the rules of the worst (i.e. CA) state rammed down their throat unless they explicitly and publicly refuse business from the worst offenders. Which will trigger escrow shipping companies to suddenly take on a new importance. People in the shunned States will pay in crypto, ship to a blind address with an account code, etc. Wonder which state will become the haven state the escrow companies end up setting up shop in? Or will it be Canada?
(Score: 0) by Anonymous Coward on Friday June 22 2018, @08:49PM (6 children)
Just got an email from eBay about this decision -- with a pointer to a petition they are sponsoring:
https://www.ebaymainstreet.com/petition/internet-sales-tax-buyers [ebaymainstreet.com]
(Score: 1, Interesting) by Anonymous Coward on Friday June 22 2018, @09:05PM (2 children)
I'm not surprised. My first thought on learning of the decision was if it would still be worth the bother to sell anything on eBay. I'm an infrequent seller there, and if I really have to worry about sending taxes on purchases to who the hell knows where, I won't bother selling anything at all. No amount of money I earn on my trinkets is worth the risk of some state on the other side of the continent deciding I'd make a wonderful test case.
This is a direct threat to eBay's business. At best, they're going to have to offer to calculate, deduct from payments received, and send any tax due, from whatever your stuff sold for, or buyers in the U.S. will plummet.
(Score: 2) by Immerman on Saturday June 23 2018, @03:39AM
Of course, as a financial intermediary eBay is also well positioned to automatically collect and distribute the requisite taxes on behalf of sellers.
(Score: 2) by shortscreen on Saturday June 23 2018, @07:49AM
You mean sellers in the US would plummet. Buyers still have the option to buy from sellers outside the US and avoid the whole ordeal.
(Score: 0) by Anonymous Coward on Friday June 22 2018, @09:39PM (2 children)
The time to fight has passed. The supreme court has decided and it can take decades until they overrule themselves again.
(Score: 2) by hemocyanin on Friday June 22 2018, @10:20PM (1 child)
I haven't looked at the ruling -- is it constitutional based? If not, the matter can be resolved by the legislature passing a law the president signs addressing the issue.
(Score: 0) by Anonymous Coward on Friday June 22 2018, @11:09PM
It was based on the imperative "we must give the states more money". But watch the states cry, when the mail order vendors based in their states go out of business, and they lose all the income tax from the former employees.
How far will they now have to crawl up Amazon's ass to get them to hire a few people in their state?
(Score: 0) by Anonymous Coward on Friday June 22 2018, @09:33PM (1 child)
This subject is probably of great interest to all of us, but on the green site it's fallen from the main page already.
(Score: 0) by Anonymous Coward on Friday June 22 2018, @09:44PM
TFA is from yesterday. Get over it.
(Score: 4, Interesting) by Dale on Friday June 22 2018, @09:37PM (3 children)
I deal with sales tax at work. Trying to figure out what is and isn't taxable isn't the easiest thing and it is literally part of what I do. It will be even more complex for out of state businesses. Figuring out what the rate is for a given address is still more complex than it needs to be. There is the state portion, city, county, and upward of 3-5 special districts that can all hit a single address (up to the state max of 8.25%).
My compromise position would have been that states can "force" outside entities of a certain size/transactions/dollar-amount to collect the state portion of sales tax but not the other parts. This would give all vendors a single rate for the entire state which should be a small enough burden to meet.
Small enough burden that is until you consider the crap that is the monthly filing and audits. It eats up two days a month for me to do our monthly filing. I can't imagine having to keep up with a dozen or 50 state filings. Then after all that you'd have the fun of audits from each state......no thank you.
(Score: 0) by Anonymous Coward on Saturday June 23 2018, @04:51AM (1 child)
I deal with health care payers at work. I wish my problem set was as simple as out of state sales tax.
(Score: 0) by Anonymous Coward on Saturday June 23 2018, @09:31AM
You poor bastard. Just remember, suicide is not the answer.
(Score: 2) by Immerman on Saturday June 23 2018, @03:12PM
An alternate compromise if local taxes are desired - let states set a "mail order tax rate" that includes some compromised "local interstate" tax rate, and when you remit the taxes you've collected, you include a breakdown of tax amount collected by shipping area code, so that the state can distributed local taxes appropriately
(Score: 2) by Arik on Friday June 22 2018, @09:57PM (3 children)
I perhaps naively assumed that any applicable sales tax on mail order was collected where the transaction took place - which is at the sellers. Yes, this certainly gives an unfair disadvantage to retailers in ares which charge sales tax, but there's a simple remedy for that, just repeal your own sales tax. That's not so hard, and it's your sovereign right!
If laughter is the best medicine, who are the best doctors?
(Score: 0) by Anonymous Coward on Friday June 22 2018, @11:02PM
Yes and no. I'm a couple hours south of Chicago. If I drive to Chicago and go shopping on Michigan Avenue I pay their higher sales tax. If someone from Chicago comes to downstate Illinois and buys a car here, they still pay Chicago sales tax on it. This may vary in other states.
(Score: 2) by AthanasiusKircher on Friday June 22 2018, @11:53PM
Generally no.
Previously, most states with sales taxes already had use taxes that required their citizens to report goods they purchased out of state and pay taxes on them (generally equivalent to sales taxes). If you didn't, you've likely been evading taxes.
Most states that do this already have in place reciprocal agreements with other states that say "If you already paid tax in state X, and then take goods home to state Y, you don't need to pay sales tax again." OR they have a similar policy that states you only owe tax if the sales tax you were charged in another state was less than the tax you'd have paid at home. (Some states calculate a credit based on all sales taxes payed elsewhere.)
There are some exceptions and complications for this for big purchases (like importing cars), but generally in most states there are already mechanisms to avoid double taxation.
(Score: 2) by VLM on Saturday June 23 2018, @12:58AM
Sourcing rules are very complicated inside states, every nuance of an activity is different. Sometimes the state appears to make stuff up WRT the 'location' of some obscure activities and situations, something just had to be chosen.
This is in addition to the different rate of taxation based on location.
I think a somewhat more precise definition of your specified problem is what if the sourcing rules for your state and another state are incompatible at the protocol level, like local state A says bill the source and remote state B says bill the destination. I believe you have to pay both in practice to stay legal.
(Score: 2) by deimtee on Saturday June 23 2018, @12:25AM
Add two optional fields to your checkout screen.*
- A numeric ($)** one with the legend "Amount of Sales Tax payable at your location" This instantly adds to the total at the bottom.
- A free text field with the legend "Authority to pay this Sales Tax to." Make this mandatory if they fill in the numeric field.
Each business period (month/quarter/year?) you add up the amounts to each authority that your customers entered and send them a check.
Anything with an unidentifiable authority, you hold in a separate business account called 'unallocatable sales tax' or similar. If your state has an 'unclaimed monies' authority or similar, remit it as soon as you can. In some places you get it back if noone claims it for long enough, and then it is legally yours. Keep good records of everything.
The reason you need a stubborn bastard is you may end up in court, and you want a good lawyer arguing you have fulfilled your obligations, and dragging in all the stuff about people being responsible for what they post online.
* I am not a lawyer. Talk to your lawyer before you do this.
** Don't let this be negative, or people are going to work out how to get free stuff. :)
If you cough while drinking cheap red wine it really cleans out your sinuses.
(Score: 0) by Anonymous Coward on Saturday June 23 2018, @06:19AM
10% on all purchases anywhere in the country. Tax goes to the ATO.
All posted prices must include GST
Easy
(Score: 2) by shortscreen on Saturday June 23 2018, @07:55AM
Mr. President, the activist judges are at it again, trying to raise our taxes and kill jobs. Can you please do something about this? kthxbye
(Score: 0) by Anonymous Coward on Saturday June 23 2018, @05:52PM
this is why we need decentralized applications with private crypto as payment. the leeches only have power because these centralized companies are bootlicking whores who do what they are told.