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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.
South Dakota wants everyone else to obey their sales tax laws, whether or not they're located in South Dakota, while at the same time benefiting from usury laws not being enforceable across state lines. There's a reason most credit cards in the U.S. are issued from child corporations in South Dakota: South Dakota allows effectively unlimited interest rates on credit cards. They're perfectly fine with state-by-state enforcement when it benefits them.
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My impression is that this case is misleading. No matter who you purchase from, you owe sales tax. The only question is reporting. I, with my reseller license in California have to pay California Sales Taxes I collect for products sold to people in California. I report on a city and county basis to the BoE (Board of Equalization), and pay them quarterly, all the taxes I collect. Since I don't have a filing with any boards in any other state, I don't collect or report, but my customers are still obligated to self-report. You don't get to not pay taxes because you bought from someone outside the state. Besides, if you buy from overseas, you still owe sales tax. They just don't report it because they don't have a filing requirement with the boards. This is a case where the states want to enforce resale license filing requirements on every reseller in every state. In a decade, they will want every reseller who ships to the us to file
Overturn Wickard and the BATFE just lost almost all of its power to regulate firearms.
And the FBI also loses a ton of power... its amazing how that one case allowed Federal gov't to expand into every State and into your home.
I agree Wickard is bad law, but the gov't and law enforcement as we know it would almost cease to have power if they significantly modified it (which they should).
Most states *already* tax internet and catalog purchases, indeed all purchases made out-of-state for goods brought into the state. They just currently cannot force merchants outside those states to comply and act as proxy tax-collectors for them.
These are called Use Taxes.
The thing is, States are upset that no one pays Use Taxes and now want to force businesses in *other states* into servitude as tax collectors.
What right does one state have to force a brick-and-mortar retailer in another state to collect sales taxes from border-crossing customers? None.
Why then should they be able to force an out-of-state retailer of the virtual sort to collect sales taxes from virtual border-crossing customers?
If I lived in North Dakota and I hopped across the border to Montana and bought a book at a shop there (no sales tax in Montana) then took it back with me to ND, I would be responsible for paying any use tax owed, not the book shopkeeper in Montana. Same rules should apply to the Montana shopkeeper if he mails my books to me at home.