Supreme Court Set To Hear Landmark Online Sales Tax Case (gizmodo.com)

An anonymous reader quotes a report from Gizmodo: On Tuesday, the U.S. Supreme Court will hear arguments in a case that could at least somewhat clarify Donald Trump's complaints about Amazon "not paying internet taxes." It will also decide if those cheap deals on NewEgg are going to be less of a steal. The case concerns the state of South Dakota versus online retailers Wayfront, NewEgg, and Overstock.com in a battle over whether or not state sales tax should apply to all online transactions in the U.S., regardless of where the customer or retailer is located. It promises to have an impact on the internet's competition with brick-and-mortar retailers, as well as continue to address the ongoing legal questions surrounding real-world borders in the borderless world of online.

Comments

Re: Wtf is wayfront?

[AK Marc]

Reporting isn't the issue. Collection and distribution is. If the online companies were allowed to "report" the shipping location of an item for sales tax reasons, and that appease the state, then the problem would have been solved years ago. The states want the retailer to collect taxes without providing the retailer with a map. it's simply impossible. So, as was settled in the 1800s, mail order companies don't collect sales tax. Period. Whether your mail delivery is from a mail order (the old days, you mailed a check, or ordered C.O.D with a physical letter), or Internet order doesn't change the hundreds of years of practice.

I've lived in Dallas. There are towns were a street can have 4 different tax rates. All in the same zip code, on the same street. Only with a full tax-map could a retailer hope to keep up. And almost none do. Those required to collect often (illegally) collect only the state rate. Theoretically, and often legally, they are required to collect the separate rates for every residence (Texas kept it as a simple list, a tax rate for every address), but the states don't like sharing that. Those that have it would be mocked for having it in a simple text file, and with no actual intelligence behind it, other than someone manually typed in a tax code for every address. The others often don't know, themselves, so how could they tell anyone else?

The rules were written around a physical store. They figure out their tax code once, and it never changes.

The online retailers are objecting so much because there are literally millions of tax locations in the US, and they'd need to know them all all the time. Someone changes a mass transit tax, or collects a special local tax for a new school or sports stadium, and every online retailer on the planet must update their system.

More rational is to notify the State of the delivery address and pre-tax value. Then the sate will have a better path to enforcement of the "use tax" that already applies. That's the real complaint. It's too hard for the state to enforce their own laws, so they want the online retailers to bear the expense and trouble.

Tax incidence

[sjbe]

All of them (in practice). If you are rich, you don't pay sales taxes. You get tax credits and deductions for them. You are too poor to understand, or you'd already know that.

Well I'm an accountant and I'll disagree. Rich people pay sales tax too and it's easy to prove that they do. The difference is that sales tax amounts to a rounding error in their overall financial picture. A sales tax of 6% on groceries affects someone making $20K/year a LOT more than someone making $200K/year. Rich people don't get a special rich person discount at the grocery store or at the car dealership. In some they can run some expenses through a corporation which gets some deductions (not credits) but most of what they buy they pay sales tax on too, same as anyone else.

That's the stupidest argument ever. Yes, you aren't the first I've heard say that. If people, not corporations pay taxes, then my employer, a corporation, pays all my taxes, not any people.

Not only is that not a stupid argument, it's got a name and it's a well understood concept. It's called tax incidence and it's demonstrably correct. Let's use an example. If we tax gasoline sales the oil companies are going to be able to pass most or all of that cost to consumers so the party bearing the burden of that tax isn't the shareholders of the oil company but the car owners.

You should be in politics. Yes, that's an insult.

If you disagree with his argument fine but no need to be a dick about it.

Re: Wtf is wayfront?

[Curunir_wolf]

Interestingly, the document you "linked" indicates that you are wrong. Here's the relevant quote, right in the Introduction: (emphasis mine)

In general, local sales tax is based on the location of the seller’s place of business. Local use tax is based on the location where the customer receives the item. If you ship or deliver goods to your customers, you may have to collect local sales tax, local use tax or both.
The local tax due cannot be more than 2 percent, so the most tax you can collect is 8.25 percent. Both state and local sales and use taxes are reported on your Texas Sales and Use Tax Return.
Use the Comptroller’s Tax Rate Locator to search for sales tax rates by address.

So it's more complicated than you claim. Especially with 50 states, all with varying rules.