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Supreme Court Declines Case On Making Online Retailers Collect Sales Taxes
thomst writes "Robert Barnes of the Washington Post reports that the US Supreme Court has declined to hear petitions from Amazon.com and Overstock.com requesting that a decision by the New York State Supreme Court permitting that state's 2008 law requiring sales taxes be collected on Internet sales, even if the seller has no 'business presence' in New York. The New York Court of Appeals ruled that Amazon's relationship with third-party affiliates in the state that receive commissions for sending Web traffic its way satisfied the 'substantial nexus' necessary to force the company to collect taxes, and New York's Supreme Court had affirmed the ruling. The Federal high court's refusal to hear the petitions leaves the state law in effect, even though it appears to conflict with the Court's 1993 decision in Quill v. North Dakota."
I think this will drive omnichannel commerce and remove the 10% price advantage that companies like Amazon and Overstock enjoyed with respect to Brick and mortar stores. Competition will increase - and it can only be better for consumers.
Just a note, the UK is also going after tax avoiding, not just Italy, and the same goes for the US.
If you sold something, you pay taxes.
Nuff said.
-- Tigger warning: This post may contain tiggers! --
There seems to be a mistake with which court ruled and which court affirmed.
The New York Court of Appeals is their highest court; the New York Supreme Court is its "appeals court." Hence, the NY district court ruled, NYSC then affirmed, whereby the high court (NY Court of Appeals) then affirmed once again. Counter-intuitive, I know; but that's the way it is.
that's what the NY court ruled, the quill test is satisfied and there is no conflict
i can buy from lots of websites in NY that won't collect sales tax because they don't have any affiliates here
SCOTUS fails to act against government's financial overreach! We could NEVER have predicted THIS!
I've fallen off your lawn, and I can't get up.
Every business collects sales taxes according to the location of the sale, not of the buyer's home address.
If the seller is based in California, then that seller collects California sales taxes as the selling party of the transaction. It's their tax burden, and they're represented in California, so there's no representation issue. All other states can go punt, since they don't have that seller based in their state.
State "use taxes" are not an excuse, and are a type of double taxation. The state taxes UPS or FedEx for their selling their services (sales tax) and they try to tax the recipient of that package for "using" the state's infrastructure. That tax, theoretically, should have been covered by the tax on the shipping service.
tl;dr - Simple fix: seller collects sales tax, use taxes go away, states quit bitching about loss of revenue that isn't theirs to begin with.
Haven't heard much about MFA since it passed the Senate. Studies I've read say it's a non-starter for the majority of constituents. That means it's going to take some extra palm greasing by corporations. Congressmen don't act against the will of people for cheap!
Here's a collection of citations. If you accept the summary provided, it has no precedent in this case. Quill was charged because their software was in use by North Dakotans, while this case is about retailers that have business arrangements to avoid the letter of the law in regard to 'business presence'.
The first sentence is missing a word.
The most invasive Government power grab that exists in the US* today!
*soon to be more exploited by a Corporation near you
Get ready for amazon.ag and overstock.ag.
At least, if I were in charge at Amazon.com or Overstock.com, I'd be looking to move the business out of the USA. As a bonus (outside of avoiding overly-burdensome US tax/regulation bureaucracy and costs), they could offer any US copyrighted work for sale from Antigua without any consideration for US copyright holders.
Strat
Progressivism (aka US 'Liberalism'): Ideas so good they need a police/surveillance-state to enforce.
FTFA: As is its custom, the court gave no explanation for turning down petitions from Amazon and Overstock.com
Explanation is, more money got put into the lobbying coffers of the side screaming "Yes!Yes! More glorious cash!"
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guess what! taxes were not collected before 1913 in the way they are now - the IRS did not exist.
Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.
—Benjamin Franklin, in a letter to Jean-Baptiste Leroy, 1789
Source: Death and Taxes
Quite psychic of that Benjamin Franklin, predicting 125 years in advance of 1913 that tax collection would be such a big problem.
Companies move to states that have low taxes, good infrastructure, where people need the jobs, etc. That sounds like a win to me - it works better for everyone except maybe the bureaucrats who did a crappy job, having high taxes but not using it to build strong infrastructure, a strong workforce, or anything else that attracts business.
We are the fucking supreme court. We don't have to wait our turn in the restaurant, and we certainly don't have to give a reason for our arbitrary decisions. Not even the decision not to decide. There is nobody who can touch us, bitch.
Impeachment? BWAHAHAHAHA!
Washington has sales tax paid at purchase. (Local to me it's 9.2%)
Oregon has a state income tax -- so save those receipts.
Thus both states tax their goods, just one more delayed than others, with the benefit that Washingtoninans love shopping in Oregon since they don't pay sales tax and Oregonians (like Alaskans) say "no tax" when purchasing stuff in Oregon.
Laughter is the Spackle of the Soul.
Unless I'm mistaken, sales tax is determined by the states and enforced by the states. This is a state's rights issue. Even "good Republicans" should want this kept out of the courts.
Sales tax is stupid, we already pay state income tax. Some states don't sale tax food, some don't. Some states like Ohio only do food sales tax if you eat-in. Sigh. ...and unless I'm crazy, some states make you pay sales tax on online purchases anyway....
Yes, my comment above is predicated on these companies being taxed where they primarily operate, not where they file incorporation. That shouldn't be too tough.
Perhaps you reside in an alternate universe where Amazon, Google, American Express, etc are located in Mississippi. In fact why don't you move there and try to get a decent education of medical care.
First, of course the supreme court won't here it because it would get in the way of government money.
Second, NO the law is NOT in effect. Other states laws and court rullings do not apply across state boundaries. Any corganization selling something to somebody in New York (or anyplace else) that is not in the same state, needs to simply ignore it, as I do. Make the state take it up with the resident, and don't share any information with New York.
New York doesn't like to obey ANY federal law, such as the right to keep and bear arms, the right to be free of unreasonable search and seizure, the right to peacefully assemble, etc. etc.
The State of New York, and New York City, do not stand behind the law, and so they do not have the weight of law. They have become gangster organizations, and nobody is obligated to obey ANY law they claim.
I'm a Washington resident so I'm in the statistical minority that do pay tax on Amazon's goods. The ruling doesn't help those who live in the place where the business is located, understandably, only those who do not -- and in the case of Amazon, since the source can be anywhere, that list of "nots" is rather subjective or narrow in light of 'substantial nexus'.
Laughter is the Spackle of the Soul.
Ignore New York and make THEM take it to the supreme court.
Amazon should just stop selling in New York to protest the taxes.
What's that? New York has more than 20% of the nation's population? So what? You mean that Amazon might prefer to collect and pay the taxes, rather than lose ~20% of their business? Imagine that . . . .
"Windows is like the faint smell of piss in a subway: it's there, and there's nothing you can do about it." - Charlie Br
American Revolutionary War was started over taxes.
It depends on where you are. Some states tax property, some sales, some income, some intangibles (stocks/bonds). Each state has a mix it feels is the fairest and/or most effective for them.
This is a case of interstate commerce. And for 100 years the standard has been no tax is collected by the retailer unless they have a nexus in the state. The purpose for the nexus rule is that if you are actively serving customers intrastate, you have to obey the laws of the state. The implication is that if you have enough people here to have a store, you have enough to figure out local sales tax.
This is EXACTLY the kind of issue the Feds should be deciding, as the states all have different regulations regarding it. Of all the things that matter in interstate commerce, this is one of the truly important ones where the representatives of the collection of states should agree on a standard.
Is it just my observation, or are there way too many stupid people in the world?
guess what! taxes were not collected before 1913 in the way they are now - the IRS did not exist.
While the 16th Amendment indeed changed the way taxes were collected, I assure you the IRS has existed since the Civil War and the first income tax.
Well, that is the current dream of many.. find ways to have all the benefits of operating in the US without paying for it. Taxes are something that it is in one's best interest to have other people paying.
I don't mind paying taxes, and wouldn't mind paying a standard VAT to sell anywhere in the US. But the local US sales tax laws are a complete clusterfuck. When I'm selling books in various locations, I have to dig up the tax rate for that location It's a hassle, but doable, but some states are really fucked up.
New York is one of them.
Sales tax varies depending on which county, in some cases which city or which part of the city you're in. Tax rates coded to zip codes don't work...some zipcodes span localities with wildly varying sales tax rates. I'lliinois is better, but still, rates vary depending on whether you're in Chicago proper, one of the suburbs, or one of the localities downstate.
Multiply this complexity by 50 states and you begin to realize what a complete clusterfuck it is for any small online buisiness to try and cope with. Shipping a package to Bumblefuck, Nebraska? What's the sales tax? How about Buttfuck, New York? Good luck.
Impose a national VAT of x percent, and kick back some or all of it to the states, and ban local sales taxes of any kind. This needs to be vastly simplified. Even if it were 50 states and 50 different sales tax rates that would be doable, but with many dozens of different sales tax venues with varying rates in New York alone, and plenty of states like Illiinois with a few cities that impose their own surtax to the state rate, figuring this crap out is a nightmare on the best of days. If every state is allowed to impose its taxes on all online folks, only the big players like Amazon will be able to cope. The rest of us, and most new startups, will crumble under the burden.
The Future of Human Evolution: Autonomy
North Dakota /vs/ Western Electric said any business presence in the state meant they need to pay sales taxes. that was upheld in federal district court, and WE had to pay oodles of tax on building the Safeguard ABM sites' electronics.
if this is supposed to be a new economy, how come they still want my old fashioned money?
In the usual dose of sweet-yet-bitter irony, your attempt to use big words and play the Grammar Nazi card have backfired on you.
"If you're use the" doesn't even make sense (with a long S of course). Go home loser! (also with a long S whether is needs to be there or not)
I'm guessing myself, like many people put up with the 2x day delay in getting something (delayed gratification) due to not having to pay sales tax on orders from Amazon.
I'm up in Canada. Around here, if you order something online and the store doesn't collect the provincial sales tax you're actually supposed to fill out a form and send it in yourself. I've never actually heard of anyone doing this though....
What the heck are you talking about? None of those companies is in Mississippi, in terms of business operations or where they are incorporated. That's for the exact reasons I mentioned - MS doesn't have the internet infrastructure, the skilled workers wanting the jobs, etc.
They are in fact in California and Washington state, so it makes sense for them to pay taxes in California and Washington.
Their "telecommuter tax" is just as bad. NY should be slapped down. It's a HORRIBLE state run by HORRIBLE politicians. Went there once - never again. NYC is just as bad as London with all the cameras watching you. 1984 anyone!
The Truth is a Virus!!!
Amazon just needs to say "no more affiliates based in New York" and they wont have to pay the tax.
American Revolutionary War was started over taxes.
It had many reasons, one being taxation without representation. The Founders were fine with taxation -with- representation.
> https://www.google.com/#q=IRS+Founded
I assure you, the IRS did not exist prior to 1953
6.19%
California has 12%. The last time NY had more than 10% of the population was ~150 years ago. In other words, I don't know what you're smoking, but you should probably start passing it. We all need some and you've done had enough.
Just stop selling in New York. Problem solved.
I know they probably would not want to lose the business, but what if they just declined to sell to the state in question? Then put their presence just over the state line and give lots of benefits to the other state.
Put on their checkout page "Sorry, your state will not allow us to continue to sell MAIL ORDER products without penalty, please contact your state representative. Here are the addresses and numbers to your representatives:"
Oh and by the way, if you wish to continue shopping you can pick you items up just over the state line at X locations or have a third party pick up service deliver.
I know this is a crappy way to make a point, but the law is behind them even if the courts are ignoring decades of case law. They DO NOT have to do business there if they do not want to, but how badly do they want to make that point?
pardon my rant, more coffee needed...
Wow. Your "assurance" is pretty worthless. The Bureau of Revenue Service was officially renamed to the Internal Revenue Service in 1953. They had been using the name for a long time, as you can see on this Form 1040 from 1918. The organization itself has existed continuously since 1862.