Semi-OT: Online Sales Tax Levied by States

[FlashUNC]

Supreme Court just over-turned its own 1992 precedent on online sales tax collection, opening the way for states to collect sales tax on online purchases.

I figure this will has something of an impact on folks here:

http://money.cnn.com/2018/06/21/tech...ota/index.html

[jlwdm]

Most things I buy has sales tax added. Amazon’s own sales have sales tax already.

I think find internet purchases have great convenience and selection value. Tax is not an important issue.

Jeff

[MattTuck]

New Hampshire baby! No sales tax here. Live free or Die!

[veloduffer]

I imagine this is a logistical nightmare for small businesses with the various rates and exemptions. It will probably be a huge waste of resources/cost unless Congress passes a uniform internet sales tax.


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[jrsbike]

Its really amazing what a critical part of the economy that small businesses play yet they continuously get hammered. This will not help.

[Mark McM]

Originally Posted by veloduffer

I imagine this is a logistical nightmare for small businesses with the various rates and exemptions. It will probably be a huge waste of resources/cost unless Congress passes a uniform internet sales tax.

I understand the arguments about competition and fairness. But it is not clear to me under what legal authority a state has to compel a company completely in a different state to collect the first state's sales tax. If a mail order company refused to collect sales tax for a different state, is that other state going to march across the border and arrest the company owners?

Surely, different states can make agreements with each other to collect sales tax for each other. And since this is about interstate commerce, it falls under federal government authority, so the US Congress likely has the power to legislate this. But absence of these, how can the government of one state force a company to do something?

[rnhood]

Well, I guess you do it just like custom fees. Merchandise has a declared value and if taxes were not paid, return to shipper or hold until fees are collected.

Amazon may collect taxes on what they produce/ship but, they are also a pipeline for lots of small businesses, and don't collect taxes on this merchandise.

I have little sympathy for a business that bases their profit model on tax avoidance. If they go down the tube, good riddance.

[muz]

Originally Posted by jrsbike

Its really amazing what a critical part of the economy that small businesses play yet they continuously get hammered. This will not help.

The current SD law SCOTUS found constitutional has exemptions for small businesses (minimum number of employees).

Originally Posted by Mark McM

Surely, different states can make agreements with each other to collect sales tax for each other.

Sales taxes are local and quite complicated. Depending on the zipcode (county), what is taxed and how much varies.

[saf-t]

Sales tax is generally at the bottom of my list when I'm considering where to buy something.

[HenryA]

This does not simply open the floodgates of taxation tomorrow morning. There will be other issues to resolve. Many states are part of a compact agreement that promises simplified compliance methods. http://www.mtc.gov/The-Commission/Mu...te-Tax-Compact. Much of the compact’s process is around resolving tax oddities and normalizing them in a unified ruleset. I think we’ll see some play there where on-line retailers make agreements they can live with. That ruleset and those agreements will likely overcome the need to sue over every single dispute over how much tax to collect on a candy bar in Illinois versus a wheelbarrow in Colorado or wine in New York.

And mostly this opinion does take into account the very different economy we have now as compared to 50 years ago. It may help the small retailers who still exist, simply by leveling the playing field. In high sales tax states (some near 10%) that is a huge consideration. That part makes sense to me.

The dissent makes lots of sense too. But expecting Congress to address this is pretty far fetched. And they still can if they could choose to act.

Finally, this was decided 5-4 so its hardly unanimous and so not much of an indication of where the next case will go.

[pbarry]

Yeah, I'll be more likely to buy from a local retailer on a larger tech purchase like camera gear if sales tax is included either way.. Free shipping and no tax was fun while it lasted. That was a good run. Oh, but, what will happen to eBay purchases from out of state??

[buddybikes]

I bought some parts to build a weathervane today, went to shop 4 guys there, looked like a simple framebuilding shop. He does lot of his business online, all over the country. How will such a specialized small business, probably grossing 500K be able to handle it? Amazon is laughing all way to the bank again, as businesses like this need to use Amazon to handle transactions. Assume tax accountants are also laughing all the way to the bank.

[Frankwurst]

I don't buy online to avoid sales tax. I do it to sit at home and drink beer in my yard.

[jlwdm]

Originally Posted by steveandbarb1

I bought some parts to build a weathervane today, went to shop 4 guys there, looked like a simple framebuilding shop. He does lot of his business online, all over the country. How will such a specialized small business, probably grossing 500K be able to handle it? Amazon is laughing all way to the bank again, as businesses like this need to use Amazon to handle transactions. Assume tax accountants are also laughing all the way to the bank.

Really? They should handle it the way other businesses do - collect the tax. Like Amazon does with its sales. And like they did with the sale to you assuming you live in a state with a sales tax.

Jeff

[ColonelJLloyd]

Originally Posted by steveandbarb1

I bought some parts to build a weathervane today, went to shop 4 guys there, looked like a simple framebuilding shop. He does lot of his business online, all over the country. How will such a specialized small business, probably grossing 500K be able to handle it?

Handle the accounting and tax compliance? POS and accounting software can go a long way. Also, there are third party companies that do this in much the same way as payroll processing companies.

I would expect to see state laws that set floors based on gross sales that would result in many small businesses not being required to collect and remit sales taxes. Or other language that exempts most of the small potatoes businesses.