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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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The Commerce Clause *needs* to be readjudicated (not thrown out per se), and Wickard v. Filburn overturned.
Small business on line sales. There are over 9000+ individual taxing districts in the US. Each requiring quarterly or if your sales are small yearly reports filed.
;)
Each one is different, each one has it's own crazy rules. Here is one in the state of Minnesota. Say we sell a pair of gloves. If the user uses them to keep their hands clean they are taxable. If the user uses them for a safety purpose. handling glass with sharp edges, they are not taxable. How does the seller know? So they always tax!
The entire sales tax code, nation wide in the 1000s of taxing districts are a fuddled mess of crap.
Big online sellers like Amazon are all for it, they want to force all small independents in to Amazon stores where they skim 8% - 15% off the top of all invoice.totals as their cut.
Amazons master inventory system is a complete mess. They are always moving your products from the lower groups in to the 15% cut group. You call them up argue with them for a week and they will move that product back to the proper group. Next week they move 2 more up, rinse and repeat.
If the government wants a sales tax they should be clear concise and honest. Just set one rate, one reporting entity, once per year settling up. Which they never do, everything government does is a complete convoluted morass of crap..
How is a one-two person small shop supposed to file sale tax reports in all 9000+ taxing districts? Let alone quarterly reports/payments.
This will go through because the big operators want to force all the small online retailers to pay them a cut.
You may ask how I know, I run a business, have a state sales tax number. I also support other online sales sites from a tech stand point. I am in the trenches!
Just my 2 cents
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.
Learn to love Alaska
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).
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.