Court: Borders Web Ops Must Remit CA Sales Taxes

ScentCone writes "A rather quiet appellate court ruling finds that Borders must start coughing up sales taxes to California. Even though Borders spun off their online business to a separate company (now run by Amazon), has no employees, physical facilities, banking, or other activity in the state, the court found for California. While this is at first alarming (unless you write e-commerce software, in which case this may be the Programmer Permanent Employment Act), the court's reasoning was that despite the separate structures, the Borders brick-and-morter presence in CA, some overlapping board membership, common logos, cross-promotion, etc., meant that the two divisions were too entangled to fend off CA's army of hungry revenuers. Ramifications could include good old print catalog operators, store-less biggies like Amazon that have partnerships with CA companies, and more."

Comments

How to do sales tax?

[Antony-Kyre]

If we do sales tax by the location of the business, what happens when the business has multiple locations? What if I order from an online store, which has multiple locations where it's running it's webserver as a whole, and multiple warehouses?

If we do sales tax by the physical location of the buyer at the time of transaction or perhaps the shipping address, does that sales tax go to that relative state? If so, how does the business location get it's tax revenue for itself? But then again, that leads to the first problem I mentioned above.

I think the best solution would be to do sales tax by the shipping address or physical buyer's location, and sending revenue to that state government. Additionally, there can always be property tax on the business property. Residential property is another matter I won't go into.