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...

• 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...

Comments

Even worse than you think...

[bradley13]

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...