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Tech Giants Urge Congress To 'Protect Entrepreneurs' From Supreme Court Ruling (theverge.com)
U.S. states can now require online retailers to collect local sales taxes, according to a recent Supreme Court ruling that could affect thousands of third-party sellers on top tech sites. An anonymous reader quotes The Verge:
In fact, Amazon, which last year started collecting sales tax in all 45 states that require it by law, may have a substantial amount of work to do to help its Amazon Marketplace sellers stay compliant. Yet we don't know if that burden will fall primarily on Amazon or if it will be the responsibility of the sellers. More than 50 percent of all sales on the site are conducted via third-party sellers, some of which use Amazon for fulfillment but otherwise operate independent small- to medium-sized businesses... Etsy, eBay, and others are in similar boats. According to the US Government Accountability Office, as much as $13 billion in annual sales tax revenue is at stake....
Etsy is concerned about what it sees as "significant complexities in the thousands of state and local sales tax laws" and that by overruling the Quill decision, the Supreme Court has put the ball in Congress' court. "We believe there is now a call to action for Congress to create a simple, fair federal solution for micro-businesses," Silverman added.
The Verge writes that "the case may be litigated for years to come to figure out how to account for the over 10,000 state jurisdictions that govern sales tax across the country. That is, unless congressional legislation supersedes the state court decisions... Even groups that were in favor of the ruling, like the nonpartisan research institute the Information Technology and Innovation Foundation, are imploring Congress to act."
eBay has already mass-emailed many of their users urging them to sign an online petition "to protect entrepreneurs, artisans and small businesses from potentially devastating Internet sales tax legislation." The petition presses state governors, U.S. lawmakers, and president Trump to "support the millions of small businesses and consumers across the country."
Keep reading to see what eBay is urging legislators to do...
Etsy is concerned about what it sees as "significant complexities in the thousands of state and local sales tax laws" and that by overruling the Quill decision, the Supreme Court has put the ball in Congress' court. "We believe there is now a call to action for Congress to create a simple, fair federal solution for micro-businesses," Silverman added.
The Verge writes that "the case may be litigated for years to come to figure out how to account for the over 10,000 state jurisdictions that govern sales tax across the country. That is, unless congressional legislation supersedes the state court decisions... Even groups that were in favor of the ruling, like the nonpartisan research institute the Information Technology and Innovation Foundation, are imploring Congress to act."
eBay has already mass-emailed many of their users urging them to sign an online petition "to protect entrepreneurs, artisans and small businesses from potentially devastating Internet sales tax legislation." The petition presses state governors, U.S. lawmakers, and president Trump to "support the millions of small businesses and consumers across the country."
Keep reading to see what eBay is urging legislators to do...
- Keep the Internet as free from government taxation and regulation as possible.
- Protect entrepreneurs, small businesses and artisans from new taxes, audits or collection burdens because they can least afford the added costs.
- Continue to prohibit states and localities from applying and enforcing sales and use tax laws on small, remote local businesses who have no political or voting connection to the taxing state.
- Reject tax policies that raise prices on consumers who shop online with small businesses for artisan, craft, religious, vintage or other niche products because they should not be paying more taxes.
Do you agree with the Supreme Court -- or with the tech companies who want a new federal solution?
Leave your thoughts in the comments...
They have the infrastructure and the tech in place already. If they want to complain that it's too hard to pay their taxes, let someone else start a business that can.
A win-win for the United States of America
Sorry, but the inconvenience of doing a little more work isn't a valid excuse for not paying your taxes. Lack of preparation on your part does not excuse being a deadbeat.
eBay, etsy, and Amazon can have millions of items for sale, and millions of customers, but can't keep track of a few thousand tax jurisdictions? That's bullshit.
There are plenty of services that do it already. We like Taxcloud.com. A quick Google pulls up quite a few more.
I don't respond to AC's.
They handle the over 110,000 US tax rules for us, and we give them roughly half of our profit.
I love how America is so anti-tax, then they struggle to wonder why they are such a shithole.
Number 1 in health? No. Number 1 in public transit? No. Number 1 in air quality? No. Number 1 in citizen happiness? No. Number 1 in weatlh equality? No. Number 1 in education? No.
American exceptionalism, lololololol
Is it me or does this sound like buzzwords intended hide tax avoidance.
It sounds to me that some want the benefits and access to society without making any contributions.
If it's not OK for online stores to collect sales tax when doing business in a jurisdiction why is it OK for brick and mortar? Local shops are at a disadvantage since they have to contribute to the infrastructure that makes online commerce feasible while the online merchants consider it "unfair" to make any contributions.
DRM? No thanks, I'll just get it somewhere else...
In Communist Russia no tax to stand in line for you.
In Capitalist USA new online tax for you.
Time for an IoT party. Go full Taxachusetts. Let the states tax tea. Enjoy some tax free coffee.
Domestic spying is now "Benign Information Gathering"
and I don't buy a lot that isn't food, shelter, healthcare or my kid's education. Now, we still manage to add sales tax on a lot of that (hooray for regressive taxation) but it's usually less and tax deductible on my federal return.
What I'm saying is, go for it. Tax me. It'd be nice if I wasn't looking to a third rate pizza joint to fix pot holes. But while you're at it how about some new _Progressive_ taxes? Our country's best years (economic growth wise) were when marginal rates were in the 90% for income over $22/mil/year (inflation adjusted). How about if I'm gonna pay my dues the uber rich do too. They benefit more than me anyway.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
I'm tired of getting these emails from eBay.
No i will not sign the petition. If you don't want to pay taxes, you can fuck off. Protect entrepreneurs? Laughable, what from selling online? Lul
If you don't want to pay taxes, then resort to crime, otherwise contribute like the rest of us do.
Really, screw them. In the past I would buy from amazon because I knew who I was buying from. There was a guarantee of the quality of the item, of the processing, of the handling of my personal data.
Now that amazon has allowed third parties to plague their site, I have none of these. So screw them for screwing something that was good. It no longer is
You are buying it from them, where they are located. Anything else seems retarded.
...
people pay taxes on their income, then they are taxed again when they spend it, and those that have something for sale are taxed too, i think the whole tax system needs to be thrown out because the government is is corrupt and uses taxes like a criminal racket
Politics is Treachery, Religion is Brainwashing
From here, does Amazon actively help search for, turn in and prosecute every little online seller? Breaking tax laws usually results in disproportionately harsh penalties. If you are a few months late on a state's sales tax, a nice deputy of the law will lock your doors.
At the same time, if you sell everything through Amazon, they will ensure compliance with the 1000's to 10,000's of state sales tax rules and quirks. In some cases, even within the same zip code, you have to know what side of a road someone is on to know the correct state sales tax rules to apply.
There are already services that will let you purchase goods through US companies and ship them internationally via a mail forwarder in Oregon, to avoid paying the sales tax. Depending on the jurisdiction, this could be a decent discount. What"s stopping a bunch of these companies from popping up? There's likely a lot of things where this would save money, as long as you don't care about shipping speed.
Nothing in the constitution lets states tax other states.
From what I've been reading, being liable to pay sales tax is even worse than you think. It's not just a matter of keeping track of the 10,000 or so different jurisdictions. It's much worse than that. Here's a quick overview of the issues as I understand them:
- Every jurisdiction has different rates (a combination of state, country, city, and possible other taxes).
- Different jurisdictions categorize products differently. Pre-prepped food? Food containing flour? Cloths? Work clothes? Every jurisdiction has an accumulation of exceptions and special considerations, and they are all different. So it's not only the tax rates by jurisdiction, it's the cross-product of the tax rates and the categorization of the particular products that you sell.
- You can't just send off a random check, and expect it to get cashed. If you are paying sales tax somewhere, you need to register so that they know who is paying them, and why. Of course, once you are registered, you have to file summary reports of how much you paid, for what sales, etc.. This report is typically due monthly, maybe quarterly in some places - and once you are registered, you have to file every period, even if you had no sales in that area. The specific reporting requirements also vary by jurisdiction.
- Finally, as a registered entity, you may be subject to other taxes and fees in addition to sales tax.
The court decision will have no immediate effect, but it will eventually lead to a completely untenable situation for all but the largest of businesses. This is a situation that only Congress can resolve: it is precisely interstate commerce, and precisely their responsibility to devise a fair and simple interstate solution. For example: set state-level average sales taxes, with zero variation and zero special categories, and require reporting only for periods where products are actually sold. Let the states distribute the taxes internally, however they see fit. Of course, that won't happen, because Congress is incapable of actually doing its job ("Go do nothing somewhere else"). Watch the lobbying dollars flow...
Enjoy life! This is not a dress rehearsal.
Screw the little guy...
Income tax is much fairer - the rich pay a higher rate.
The only sales that should be taxed are tobacco and other smokes, and motor fuels (to pay for roads and bridges etc)
The decision requiring taxation of internet sales is just another step in the direction of the coming complexity collapse. You just cannot keep doing good-sounding things that layer on more and more complexity without knowing that sooner or later things must start to unravel.
E Proelio Veritas.
You subscribe to a service that takes the 9-digit zipcode and the Dept of Commerce product classification and returns the appropriate tax amount. Such services are available as single-transaction web pages up to 1,000,000 transaction/hour back end services. At the end of the quarter the service provides you with a list of what counties and how much tax to remit (sales taxes, including state sales tax where applicable, are typically collected at the county level and redistributed). It is part of doing business if you are selling stuff.
I see no reason why an online "entrepreneur" should not have to pay sales tax the same as a gal who sets up a food truck that drives around a county selling hotdogs.
Seriously, the only way to do this is to have a single easy rate, such as 10%, applied to any retail that moves over a border , and have the shipping company collect it. Then 9% ( or 9.5 ) is turned over to the feds who then gives 8-9.5% to the end state. At that point, the end state has to decide how to split it out. This is a simple approach that is manageable by retailers and shipping companies.
I prefer the "u" in honour as it seems to be missing these days.
Simple software already exists for computing sales tax due in each zipcode. What everyone is afraid of is not collecting the tax, but the complexity of submitting the renevue to each state. States will be forced to come up with a simplified signup scheme, now that all these fistfuls of money are about to be thrust upon them. Because it means getting proffered money faster, simple signup will be magically accomplished in a twinkling.
Use taxes are calculated and paid by the buyer. Sales taxes are calculated by the seller, paid by the buyer, collected by the seller and remitted to the state. The problem is that brick and mortar companies only need to know the sales tax rules in the community their building is in. An online business now potentially needs to know tax rules for thousands of jurisdictions.
It is onerous.
If they want to charge tax on the internet. Then just come up with a single standard tax across all 50 states(say 2%). Having to figure out 2000+ sets of complicated rules is just crazy. Make it payable to the states so no one has to figure out any local tax BS.
https://www.fsf.org/associate/support_freedom
Wait, you do realize it is not the seller who has to pay more taxes right? It is the buyer. The buyer gives the sales tax to the seller who then gives it to the state. Sellers are not complaining about having to pay. They are complaining about having to track sales tax rules across thousands of jurisdictions so they can calculate, collect, report and remit the correct amount on the right forms, etc.
The Supreme Court created a MESS.
Thanks for everyone writing above saying this is easy shit and 3rd party sellers can do the work ... well I don't plan on charging any sales tax, paying any sales tax, claiming any sales tax, deducting any sales tax. Whatever. If they want to calculate it for me, take it from my customers, who the fuck cares? Do they want me to code a pricing solution that calculates the tax based on where the customer is? Nah, fuck that. The internet is for guerrilla capitalism. Pike Road Alabama, I care not that your sales tax is 11%, go fuck yourself or come to nicaragua and find me and take your $0.11 from my cold dead hands.
You are supposed to pay the taxe on the state where you are living and ordering the object the catalog. That nearly nobody bother paying it, and it isn't cost effective for the state to pursue such taxe from private person ordering item, does not mean you are obligated to pay the sale taxe locally.
It would cost me thosands of dollars to try to become compliant with the tax regulations of each state. Screw that. It is much easier to setup a fly by night operation and ignore the ruling.
Fix the costs with compliance or experience a new wave of companies no longer providing goods or services.
> Why would a business with less than a million dollars of annual (revenue?) be selling to every city in the world? That doesn't sound viable.
There is this cool new thing called the "Internet". You can put your homemade gourmet popcorn, or clipboard app, or photography for sale on the "internet" and people all over the world can buy it.
To know how much sales tax to charge, you now need to read the tax code for each buyer's state, county, city, school district, and utility district. Then mail off checks to each entity, or maybe to the county - sometimes the county divides it up. Well sometimes the state does.
These are state sales taxes being applied to interstate commerce.
In a manner entirely legal by the Constitution. They are applied equally and fairly, and not to goods merely passing through, but being delivered.
It's the reason why sales taxes have never been applied to out-of-state catalog sales.
Wrong. Even Quill did not come to that conclusion. Read it again.
Your inflammatory rhetoric is just that.
I would say your inaccurate claims are a problem myself.
If you sell 5,000 distinct products to 5,000 jurisdictions, how much time does it take you to run through the 25 million (product, jurisdiction) tuples?
Probably a few man hours. But if you've got 5000 items that you sell to 5000 jurisdictions, the time should be negligible. It's certainly not impossible.
I'm confused. Through what process does one blow through these 25 million combinations in "a few man hours"? Please help the rest of us figure it out so that the rest of us can stop whining about it.
And, why not just use a sales tax service, like TaxCloud to take care of it all for you for $10/month?
Because TaxCloud hasn't been doing enough to make the existence of its service known to the public.
Huh?
A business whose officials do not know that TaxCloud exists cannot use TaxCloud. Through what means has TaxCloud been informing businesses that it exists?
Dude, if you can't figure it out, then you shouldn't be in business. It's not the government's job to hold your hand and show you how to run your business. That's not how it works in the US, at least.
I don't respond to AC's.
What this will do is put independent sellers and entrepreneurs out of business. The largest companies, like Amazon and Wal-Mart, with the infrastructure to cope, won't miss a beat. Everyone else... won't be able to comply. eBay will fall farther behind, if not collapse entirely, because they don't sell anything themselves and aren't configured to be in the business of selling anything themselves.
This is bad for consumers and bad for the economy. And it will lead to large firms with regulatory capture dominating e-commerce. It's one more step in the centralization of the 'net as a deeply controlled profit source for a handful of megacorporations.
STOP . AMERICA . NOW
Worrying about taxes while the bourgeois own the means of production.
How can a small business handle this? Please tell us. That's why it is unfair. If they made it simple like 1 tax % across the board, then I'd agree with you.
You cannot expect small companies to follow these rules, they don't have the cash or manpower to. And I suspect, many will have to shut down, or lie.
An online business now potentially needs to know tax rules for thousands of jurisdictions.
Not only do they have to know the rules, they have to potentially send the payment to thousands of jurisdictions. Imagine that you sell something for $20 to a thousand people in a thousand different cities. You just grossed $20k and maybe made a profit of about $10k. You need to submit sales taxes of about $2k. No problem except that you have to send $2 to 1000 different addresses. Most of these likely require a business license to submit a payment. Some likely require an online account and they all probably each have slightly different dates, rules, etc.... I would be ok if you could submit that $2k to a federal agency and let them distribute it but expecting small merchants to do it is going to either kill them or make them dependent on a third party like Amazon to handle it for them.
> We've been doing it successfully (and legally) for years, and we're a tiny company.
If you've been collecting and remitting sales tax for all 50 states, without a nexus and sales tax license in each state, you've been doing it wrong, and illegally. In Texas, for example, collecting sales tax without a license is illegal, and you need a nexus in Texas to get a sales tax license in Texas.
Until this decision it was ILLEGAL for states to collect sales tax from out-out-state sellers. So you've either been doing that while it was illegal, or you've been legally not doing it. You can't have been doing it and doing it legally, while it was illegal to do.
Answer his questions. Why did you dodge them? Is it because you've been proven wrong over and over and over again. You are a proven liar. We don't believe you. Answer his question, anything else you say has no relevance as it's already been debunked.
Dude, you own a small brick and mortar with 14 customers. Stfu, no one cares. Your advice means jack shit.
Your small shitty business isn't even in the same ballpark as creimer affiliate business. You are a god damn poser. Stop pretending what you say matters, it doesn't. You have no expertise on this situation.
If only we all had brick and mortar shops with 14 customers; but alas; we all can't have it as easy as dogdude who says "anyone can do it"
What a fucking turd. I wouldn't even waste my time shitting you out.
If you sell 5,000 distinct products to 5,000 jurisdictions, how much time does it take you to translate tax codes and product data into a machine-readable form so that your computer can run through the 25 million (product, jurisdiction) tuples?
Through what means did you "figure it out"? In particular, through what means did you discover TaxCloud?
https://www.quora.com/How-do-I...
I don't respond to AC's.
Your property taxes are crazy high because you have no sales tax.
I don't respond to AC's.
From the linked answer: "Type a series of alphanumeric characters via your physical or digital keyboard"
So let me rephrase: What keywords in Google Search led you, and would lead others in a similar situation, to TaxCloud? (Reminder: These search terms have to be written from the starting point of not knowing that TaxCloud exists.) I read the top 20 Google Search results for the query interstate sales tax calculation, and none of them led to TaxCloud. In addition, none of the top 20 results appear to have been updated to reflect this Supreme Court ruling.
A nationwide sales/consumption tax that is generally same for imports would simplify and be more consistent with competitive international commerce practices. Delivery companies like Fed Ex collect and remit. Sales below a small level should be exempt from further local municipal taxes. Local municipal taxes are
And the shipping company gets to decide what the value is? How will it determine the 10%? Open every container, box, envelope, check what's inside, have a bit table to look up the price of literally everything. How much will that cost? You are kidding yourself if you think half a percent will be enough to cover it. Unlikely even the full 10% would be enough to pay for it all.
Maybe a small business can't handle it, or they need to hire a couple of people to assist. This is no different than any other mail order company, and we've definitely had many small businesses that handle interstate deliveries and were able to comply by the rules. Being on the "internet" should not create special exemptions.
Why is this a mess? How is this in any way different from pre-internet catalog sales, where the rules were essentially identical, and rules that still apply today to catalog sales?
You didn't like those goal posts so I'll set you up another pair. The IRS has no problem knowing all this shit.
"This shit" is the lifeblood of the IRS. They damn well better know it. They've had centuries of practice doing it. Online retailers have not.
As he (and others) have said, the government needs to provide an API for this shit, and an easy way to file taxes over hundreds of thousands of jurisdictions. Since the IRS "has no problem knowing this shit" it sounds like they would be the ones best positioned to implement such a system. Get them to do it and the whole mess goes away.
We've had over a century to figure this out and yet it hasn't happened yet. Why should it change now?
Because it would massively ease the burden on small businesses, allowing them to operate in more jurisdictions, encouraging competition and entrepreneurship, thereby benefiting consumers and the economy.
Set a flat percentage for all internet sales ---5% should do it-- that way it would make it easier for everyone to file ... right now the states arent seeing any of that money Im sure 5% might not match high tax states but will keep the incentive to buy online
Add to it that you have to know the tax code of every country too. And be up to date on it. Sweden has three VAT levels depending on purchased object/service.
Also - what decides when which tax is applicable? Moment of purchase, purchasers residency or shipping address? Might be that the tax code there differs too so the purchaser is resident in country A, orders while in country B and gets it delivered when in country C and has to pay three taxes due to tax legislation.
If builders built buildings the way programmers wrote programs, then the first woodpecker would destroy civilization.
Why not just move to Somalia? Libertarian paradise.
Because I can't conceive of the idea that my bizarre political ideas result in chaos and piracy.
Obviously they're good, or I wouldn't think of them!
I sell fish online. Maybe 1000 a year.
With the way that things are currently done, each sale would create about 7 hours of paperwork for me, done again for each new city. That's about 7,000 hours a year of paperwork. That's more than three full time employees.
To pay $260 in taxes.
Oh wait, no, I'd also have to file $0 reports with every area I've ever done business with every month for the rest of time. So it's more like 5 full time employees.
With the current setup, paying $260 in taxes will cost me about $150,000 in labor.
If you genuinely can't see a problem here you're probably just stupid.
It doesn't matter, he's lying because people literally can't recognize problems anymore.
It doesn't matter. The Supreme Court could say it's ok for politicians to eat babies and this moron would be out here frothing about how politicians deserve it and how it's the parents fault for not keeping them inside
It is different because they don't have to do it.
Mail order companies only collect sales tax for intrastate sales, not interstate sales. Exactly how internet sales were... Until now.
In some instances, one needs license as well to sell
Even businesses who were buying tax free supplies will be hit. Here comes higher prices regardless
Any time a community, state etc increases tax the business has to load that in.
All the reason forflat simple tax
IRS is a federal agency and doesnâ(TM)t know all the details of state level taxes
Ok, dude.
I don't respond to AC's.
No, by law mail order companies are required to collect use tax for interstate sales depending upon each particular state.
My issue is not that the tax is good or bad, but that it's fundamentally unfair for online companies to be exempt from such rules when other companies that ship to other states are not exempt.
Getting rid of that sales tax seems like the opposite of what eBay would want. A small business -- especially a very small business -- would have a hard time justifying selling out of state, unless they went through an intermediary who would calculate the sales tax. A company like eBay would be well suited for this.
Maybe they don't want to do it.
After all, it would mean the calculating sales tax of several dollars or several dimes or several cents, and then cutting a quarterly check to, say, the state of Missouri and some large and some dinky municipalities in St. Louis County and/or the Kansas City metro area counties, plus the county itself. The cost of sending the funds with supporting documentation might be many times the amount of the tax. Not for the county or state payments -- there would likely be quite a chunk of change for them, dwarfing the cost of making the payment -- but there might be only a handful of taxable transactions for some of the dinkier municipalities. And low-population counties. There are some with fewer people than a medium-sized StL municipality.
There might be ways to reduce that cost -- perhaps the counties can or always handle the money for some or all municipalities.
Is there a tax accountant or tax lawyer in the house?
There's no time like the present. Well, the past used to be.
So a state would have the right to compel the owners of a business in a completely different state to act as their uncompensated agents, and collect and remit taxes to them?
This is not slavery...how exactly?
Don't forget to order some roads, firefighters, emergency medicine and schools while you're about it.
I think we all know it's just a matter of time. Politicians hate not getting their piece of the money pie. They'll say think of the Children, or some such BS. I have a feeling they'll have to make it easy and do away with all the other taxes, such as city, county, district, etc. Make it easy to pay and go away instead of what we have to do now. I used to own a business and it was a frickin' PIA. Every quarter it's a crisis. Sales, payroll, social security, unemployment... and it seems like it just keeps on going and going. Things people who associate themselves with the left have no idea about because they never see nor hear about them. Until they try to open a business and find out what reality is all about. I know a guy that just tried to open a T-shirt business. Seemed like a home run. Yes, not so fast buster. He can't believe how much he's had to pay out.
Dealing with the state and county isn't easy. They are unforgiving money grabbing vampires. I've had trouble getting them to admit I've even paid taxes before, even with a check. Just pay them again it seems, with penalty of course.
Knowing the people I know in the sales tax division, I wouldn't be surprised if they were drinking champaign and wooping it up on Friday anticipating what they'll be getting soon. Money is probably already spent.
Why do you need to file in locations you've never paid taxes in? Why should you be able to sell anywhere with impunity? Maybe national web stores are not a sustainable small business model.
Cheap storage VM.
Why should you be able to sell anywhere with impunity? Maybe national web stores are not a sustainable small business model.
Exactly.
I don't respond to AC's.
It would be much simpler to come up with standard online sales tax.
Right now interstates online sales aren't taxed. So instead of saying you need to comply with local taxes they should come up with some average. Make it a set state % and municipal % for online sales, no matter where the buyer is. I say ignore the types of services and tax all online sales - no need to track that either.
Or, the other simplification would be to require it only if you move more than $X worth of sales. So the little guy doesn't get bent over, but the big guys pitch in.
I refuse to sign
If Vertex Inc was public, I would buy their stock.
Also, sounds like a business opportunity. Charge 8% higher, and give 8% to some escrow company who pays all the tax for you.
Mail order companies only collect sales tax for states in which they have a physical presence.
https://www.nolo.com/legal-encyclopedia/sales-tax-internet-29919.html