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Supreme Court Rules States Can Require Online Retailers To Collect Sales Tax (npr.org)
New submitter zippo01 shares a report: Online shopping will soon become more expensive after the U.S. Supreme court ruled Thursday that states can require internet retailers to collect sales taxes. The 5-4 decision broke with 50 years' worth of legal rulings that barred states from imposing sales taxes on most purchases their residents make from out-of-state retailers. The decision was a victory for South Dakota, which had asked the court to uphold its recently passed law imposing an internet sales tax. "Our state is losing millions for education, health care and infrastructure, and our citizens are harmed by an uneven playing field," said Marty Jackley, South Dakota's attorney general.
You'll, of course, make it illegal to use this money for anything else, right?
Care killed the cat, but satisfaction brought it back.
Also known as the Accounting Software Developers And Consultants Permanent Employment Act.
Don't disappoint your bird dog. Go to the range.
The vote breakdown on this decision was really weird. Voting in favor of requiring online retailers to collect sales tax were Justices Kennedy, Alito, Thomas, Ginsburg and Gorsuch. Justices Breyer, Sotomayor and Kagan joined Chief Justice Roberts in the dissent.
I wonder if Trump ever foresaw his boy Gorsuch and Ruth Bader Ginsburg joining on a 5-4 decision.
You are welcome on my lawn.
Remember this the next time Samuel Alito, Neil Gorsuch or Clarence Thomas talk about the following the original text of the constitution.
The real "Libtards" are the Libertarians!
You mean to tell me that the residents of South Dakota didn't self-report and pay the state use tax as they are obligated to do?
All this is doing is placing the burden of collecting those taxes on out of state taxes on the merchant instead of on the South Dakota residents as previously. This isn't imposing any new taxes on residents, merely making it impossible for them to avoid paying those taxes. If you already lived in a state where the retailer (Amazon) was incorporated or had a business presence, you were already paying sales tax and nothing will change for you.
This probably isn't too much of a burden as long as its limited to a single value for each state. If county or city level taxes start getting involved or any kind of fuckery involving different tax rates for different categories of products, then this is going to become an absolute nightmare for online retailers.
After this? A lot potentially. All Amazon needs to do is put up a 800 number where you can call in to pay. Could be 100% automated.
"Have you ever thought about just turning off the TV, sitting down with your kids, and hitting them?"
In general I am OK with states charging sales tax for online purchases. As Sales Tax takes advantages of both Progressive and Regressive taxing. Being that the Rich will in general buy more so they will be funding more to the government, while taking the simplicity of a fixed rate tax.
Online Purchases still need to be shipped to the sates, thus needing to use its infrastructure to deliver them. So all in all in this day in age Taxing internet purchases is perfectly reasonable.
However the argument that the tax revenue is hurting any particular initiative is more to blame on bad leadership, or misaligned priorities. If the state wants more money to Education, then they would find a way to fund it better. Even if it means cutting money on services it deems as lower priority, and the leadership will need to take the responsibility of saying that that service doesn't deserve the money over Education. Also their are other taxing methods that can be applied to help better fund thing, all at their own tradeoffs as well.
Sales tax on internet is an easy win with low political repercussion. Because the extra cost of sales tax, isn't going to hurt the economy. because if they want the product and it is prices closer to a local store. They may want to go to the store to buy it and get the convince of getting it now, and returning it the same day. If it is a hard to find item in the area, you can still get it online, just for 5-10% more.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
The constitution doesn't grant states power, it *limits* federal power.
Guns don't kill people; Physics kills people! - John Lithgow as Dick Solomon on Third Rock From The Sun
Its certainly possible it could happen, but what incentive would Amazon actually have to do so? That would represent a cost to them for no gain, vs using their existing sales tax calculating and remittance systems.
In the odd event phone and fax orders make a big comeback, I'm sure a state would seek to tax it like SD did here... and I'm sure SCOTUS would follow the precident they set here.
Help Brendan pay off his student loans
The constitution doesn't limit federal power, it grants only specific powers to the feds. Of course, they ignore that (10th amendment) and do whatever they want.
"National Security is the chief cause of national insecurity." - Celine's First Law
Unless you're reshipping high value items with a super cheap carrier and no insurance, I wonder if the economics of that works out..
Sales taxes and use taxes are two sides of the same coin. Use taxes are not collected by the retailer, but sales taxes are. And in this case, South Dakota was suing Wayfair, not the consumers.
Use taxes are very common... though not often paid.
Here in WA we have places that have a 10% sales tax rate, and it is not uncommon for people to take a drive down to Portland for some big purchases, were there is no sales tax.
Hell, a neighbor of mine used to have their cars registered there to avoid WA taxes.
Help Brendan pay off his student loans
And if a retailer isn't located in a state, they're not under that state's jurisdiction.
"The constitution doesn't limit federal power, it grants only specific powers to the feds"
By granting only specific powers to the Feds the Constitution is limiting their powers.
Remember this the next time Samuel Alito, Neil Gorsuch or Clarence Thomas talk about the following the original text of the constitution.
Heh... Yes this is a solid example of why originalists are so full of shit. It's almost always an excuse to justify some sort of behavior that is abhorrent under current social norms or to try stem the tide of political change that some people (usually conservatives) disapprove of. Originalists tend to ignore this principle when it is convenient for them but shout loudly about it when it helps whatever cause they are pushing at the time.
In this case internet commerce has changed the game dramatically and the laws were written in an earlier era with different circumstances. I haven't looked closely enough at this case to decide whether I agree with the decision but it seems clear enough that the old understanding regarding sales tax collection between states no longer makes much sense in the internet era. Change has to happen one way or another so such a decision isn't surprising even if it ultimately turns out to be a poor one. Maybe this will force Congress to actually address the elephant in the room and establish a new framework for States to collect sales tax that makes sense. (Dare to dream...)
The only problem I see with the state taxing online purchases is that small online retailers will have extra overhead to meet tax requirements for all states.
Small businesses now have to navigate several hundred different tax schemes (states have multiple tax zones, etc), That's going to be expensive. This ruling only benefits the big players such as Amazon by placing another burden on their smaller competitors. That's why Bezos dropped his opposition to it.
It's not nearly that simple.
There is an area in Illinois (around Chicago + some) where a Snickers bar gets taxed less than a package of Starbust, because anything that contains flour does not qualify for the "candy" tax. There are strange laws on sales taxes in many municipalities all across the country. Don't think for a second that they don't expect those to all be followed to the letter.
This ruling makes collecting sales taxes in America just as complicated as managing tariffs for international shipments. Hopefully minus most of the corruption.
Bzzzt.
Zip code does not translate into tax rate.
You need complete address information, there are websites that do it as a web service.
But more realistically, 3 person company can safely ignore any other states tax authority. The worst that will happen is a harshly worded letter, which can be ignored. Just make sure it's incorporated, or owners are liable to get a surprise when on vacation.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
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Doesn't make a whitelist the same as a blacklist. Government powers are whitelisted, but the commerce clause is too vague. Deal was broken by FDR.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
They have not ruled that states can require online retailers to collect sales tax in general. They have overturned the argument that there is no nexus because of No Physical Presence, and Nexus can be established in other ways for large National retailers such as Quill or Amazon, for example. The court ruled there --- This quantity of business could not have occurred unless the seller availed itself of the substantial privilege of carrying on business in South Dakota.
And respondents are large, national companies that undoubtedly maintain an extensive virtual presence. Thus, the substantial nexus requirement of Complete Auto is satisfied in this case
You will also need a table that lists every item to determine if it is taxable or not. Every 'item' is not taxed the same in every state/county/city. This table is going to get really, really big...
And that needs to be implemented correctly by every online business with a presence in the US.
Not necessarily. I'm fine with a state being able to collect sales tax on online purchases, but it's the state's responsibility to provide a simple mechanism that the seller can use to determine what the sales tax should be. A different API for different states would explicitly be considered not simple. There would have to be something like a web service hosted by e.g. the FTC, where the seller just submits address and item name/description and gets back the tax rate. If the state can't provide the necessary information, then they'll have to simplify their tax code before they can collect sales tax from online purchases.
They have been collecting sales taxes in every state for over a year.
http://money.cnn.com/2017/03/2...
Amazon already offers sales tax calculation services to marketplace sellers
https://sellercentral.amazon.c...
Bet they offer it to external ones too soon
The only problem I see with the state taxing online purchases is that small online retailers will have extra overhead to meet tax requirements for all states.
The South Dakota statute in question only required collection/remittance of South Dakota sales tax if the online retailer had more than $100k in sales in South Dakota and/or more than 200 annual transactions in South Dakota. The Supreme Court specifically discussed those thresholds in its analysis, which will be a signal to other states that if they follow suit, they'll need to have some sort of reasonable minimum threshold as well. It would be hard for a truly small retailer to exceed that threshold in a single state in the first place, and then if they did it would only apply to transactions in that state.
But more realistically, 3 person company can safely ignore any other states tax authority. The worst that will happen is a harshly worded letter, which can be ignored. Just make sure it's incorporated, or owners are liable to get a surprise when on vacation.
This is false. Do this at your own risk.
I'm thinking the solution is to dust of the U.S. Robotics 56K Fax modem and on-line retailers can accept fax orders.
This opinion has nothing to do with how the orders are submitted. All it did was do away with the prior requirement that a business had to have a brick-and-mortar presence in a state to be required to collect/remit sales taxes for transactions in that state. Mail order retailers fell under the same exclusion for a long time before Internet retailers hit the mainstream.
When politicians designate new tax revenues as going towards some worthy cause (lottery profits for education, for example), rather than increasing the money spent on education, the lottery money instead offsets other tax revenues, freeing them up to be spent on politicians pet projects.
If the lottery generates $20M for education, the net result is that $20M in lottery money takes the place of $20M that used to come from property taxes.
Politicians expect you to think that the new revenue is in addition to what was already being spent, but it isn't.
Ken
I really can't find fault in collecting sales tax across the internet for ecommerce, now that commerce is the major function of the internet and is no longer needing the protection from taxation. There are numerous services that can provide tax calculation and payment on behalf of small companies; not everyone needs to build their own tax engine.
Have a Day!
Which means that an online retailer will have to be able to prove he/she/it doesn't meet those minimums anytime the government of South Dakota requires them to. It'll be interesting to see the reaction the first time the State of South Dakota audits a resident of, say, Maine....
"I do not agree with what you say, but I will defend to the death your right to say it"
You will also need a table that lists every item to determine if it is taxable or not. Every 'item' is not taxed the same in every state/county/city. This table is going to get really, really big...
I hope states will take a hard look at their tax code and look to make them uniform with other states.
> considering states have direct financial motivation to have this data accurate and available, I don't expect it would be that difficult to implement, or use.
How have you loves this long and never dealt with a government agency?
In my experience, agency employees are wrong in what they think the law is, as often as not. For example in Texas the statute states very clearly "X service is not taxable", the taxing authority told me it was taxable. It took several hours to get one of their employees to simply look at the tax code, look at the section I was pointing out to them, and see that plain as day it's not taxable. Even then, the employee didn't know what to do because "yeah the law says it's not taxable, but my boss says it is. I can't fix this."
If their own employees can't even see what's taxable when you point out the specific code section to them, it seems rather optimistic to think they'll:
A. Figure it out, for all items and services
B. Make that info available in an easily parseable way
AND
C. Keep it up to date
Actually I'm not sure that B is even possible. Others have pointed out the tax rate can depend on the ingredients, the size of the package, etc.
The burden of following the law will fall onto the business. If you sell enough stuff over state lines and draw attention to yourself, the state will want their share. It's your responsibility to pay them or otherwise face legal consequences.
All these reasons are why cross state sales tax should not happen. It is definitely a burden for small timers.
Over-burdensome regulation was a listed reason as to why there are fewer startups, as mentioned in an article posted earlier.
They won't make it uniform because each state uses taxes to try and implement it's agenda. For example, a state that wants to try and cut down on the consumption of sugar snacks and drinks for health reasons will heavily tax them. Another state that isn't interested in such a program will tax them at the standard rate. Some states may tax bottled water because it's a convenience item but other's won't because water is a necessity.
Voters don't have a say in the state and local tax laws?
You're thinking of the wrong group of voters. The ones affected by these laws are exclusively out of state retailers who obviously have no representation in the states where the laws are being passed.
It's sad that the USSC justices on both sides of this ruling focused exclusively on the burden sales tax collection places on retailers and "lost" tax revenues to the states. Policy matters such as these are properly the domain of Congress, not the courts. The issue for the courts to decide is whether the states have the necessary legal jurisdiction to impose their sales tax laws on out-of-state retailers, and the only sensible answer to that question is that no state has any authority to impose tax collection or reporting requirements (or any other requirements) on anyone who is not a resident, a citizen, or physically located within the state.
"The state is that great fiction by which everyone tries to live at the expense of everyone else." - Bastiat
It's much worse than you think. Such software would have to keep up with every state, municipality, and local government in the US. You're going to have to know which items are taxed at what rate, and whether sales tax applies to certain types of items when combined, and what rate they're taxed at. I bet if somebody took any statistics on these, they'd probably find there are multiple sales tax code changes daily in all of the US.
All of the major tax software companies are no doubt salivating over this. It will cost a lot, and if any rules are proposed to try to even standardize reporting alone, you bet your ass that their lobbyists will kill it, just like what happened with the IRS's proposal to do everybody's taxes for free (mainly because they already have all of the information they need.)
I'm coming around on Trump. He's still an idiot, but he might not be an awful president.
No, it's not a net benefit to the economy to spend more of your money on taxes. If that were so, the ideal situation to "boost the economy" would be to raise tax rates across the board to, say 99%. That would really boost the economy, right?
IOW, no, raising taxes isn't a "net benefit to the economy". Taxes are necessary. But "higher" doesn't automagically translate to "better"....
"I do not agree with what you say, but I will defend to the death your right to say it"
The problem with the commerce clause isn't the clause itself as much as the case Wickard v. Filburn. That court case was a direct assault on the 10th Amendment by greatly stripping the individual states of their ability to regulate intrastate commerce. That case is also a significant foundation piece for most of the regulatory basis of the US Federal government.
Overturning Wickard v. Filburn or amending the Commerce Clause would have the same effect of collapsing significant portions of the US Federal government. As such, we can practically guarantee that the case will never be overturned by the Supreme Court because no set of justices would ever want to be responsible for collapsing that much of the government. We can also practically guarantee that Congress will never instigate the Amendment process to revise the Commerce Clause because there's no reasonable expectation would be willing to give up the power granted to them. We can also practically guarantee no convention of states to address the issue because while they stand to gain power from the strengthening of the 10th Amendment, the overall gravy train of government money would shut down pretty heavily.
"Lack of speed can be overcome. In the worst case by patience." --Znork
It's adorable that you actually believe the elected representatives in my municipality have any interest in speaking or voting on my behalf.
It's adorable how you think that condescendingly using words like "adorable" in a fit of lazy ad hominem to avoid the topic is somehow persuasive. I live in a state that is totally gerrymandered by the Democrats, and so I too am not satisfied by my local state legislature's reflection of my own views. But if I can be persuasive enough and join up with enough like-minded people, there is a structural, functional mechanism in place for people in this state to impact the way that this state charges sales and use taxes. There is no such path for me to alter who sits in YOUR legislature or governor's office and sets/executes your local sales tax laws.
When I travel to another state in person they often charge sales tax on purchases I make while there and I didn't get any vote on that tax rate
But YOU are making the choice to physically enter that state and subject yourself to those tax laws. And their local traffic laws. And their local recycling ordinances. And whether and how you have to pick up after your dog. So what? When in Rome. But this is about the people in that state saying that the people in ANOTHER state have to act on their behalf and serve an out of state government's tax collection wishes.
I suspect you'll see a lot of internet businesses start to warehouse products in states where there isn't a sales tax if states get too greedy.
You are completely, 100% not understanding what this is about. It doesn't MATTER where the goods are warehoused. With this new situation, it's where you SHIP it to that suddenly becomes the issue. You could operate your business in Delaware where there is NO sales tax. But if you ship to South Dakota, you in Delaware now have to act as a tax collection agent for South Dakota, collecting, filing, and remitting money according to every little twist and turn of that state's tax code on its own in-state buyers. If you ship, from your Delaware business, a stick of deodorant to Texas, you need to know that means collecting 6.2% sales tax on that item, and where (and how often) you need to report that TO TEXAS and pay them. But you also need to know that if it's a deodorant-antiperspirant product, the sales tax on that, in that state, is 0%. Got it? Now recognize that there are over 10,000 taxing authorities you'll have to interact with, on millions of products that have different rules in each of them, and which also have the tax rules change on different days depending not on when you ship the goods, but on the day they are delivered.
Don't disappoint your bird dog. Go to the range.