Supremes Voted That States Allowed To Require Internet Sellers To Collect Sales Tax

From my interpretation of important ruling today, if you are a small internet ebay seller you will be required to collect state sales tax and send in to state?

The 5-4 ruling called the current rules "unsound and incorrect." The current rule is that businesses shipping a product to another state where it does not have a 'physical presence' (a store, office or warehouse) are not forced to collect that state's sales tax.

So yes, with this new ruling States can require that online sellers must collect and pay state sales taxes (even without a physical presence).
Don

It will be interesting to see how Paypal deals with this. Will they report the payments by State? Seems like quite the nightmare.

The logistics of this for businesses will be difficult, and will require more accounting.

For general ebay sellers, and Amazon.com, this could change things up significantly.

I cannot even begin to fathom how the compliance/enforcement side of this will work.

The cost of enforcement will over take the value of taxes collected by states quicker than the cost to businesses of collecting taxes for multiple states. I do not think PAYPAL or any financial service is liable to collect sales tax on the transactions they process? That falls on the shoulders of the merchant using the financial service?


The best tax to collect is the one not paid directly by the folks you want to vote for you.

Is there some sort of ceiling where sellers on ebay that sell under a certain amount are exempt? Or will ebay collect directly from the buyer and submit it? Questions to be answered at some date.


edit: In doing a wee bit more research, I doubt any stamp seller except the the largest ones like NYSTAMPS and the like will have to collect any taxes as long as ebay doesn't adopt a one-size-fits-all approach to the issue. Most small businesses will be exempt. The amount of sales one has will vary from state to state, but unless you have sales in the range of $100,000 or more, one shouldn't have to worry. This case was really about large online retailers like Overstock and Wayfair.

wee bit of research links - https://files.taxfoundation.org/201...on-FF579.pdf

http://money.cnn.com/2018/06/21/tec...a/index.html

As for those businesses that will have to comply - the software already exists.

This was a Supreme Court decision (Judicial) and it concerns state controlled taxes (Legislative). A number of states were already requiring the collection of state sales tax for online purchases effectively; this is not rocket science. You can look up existing online state regulations for your own state here
https://www.nolo.com/legal-encyclop...ax-laws.html



They will simply now expand this to 'no physical address' entities if they change the state laws. They know where you live, they know if you sell stuff; they already do it in some situations. Will people be able to break the laws? Of course. But I do not think that this is going to be a new huge logistical issue nor is this ebay's or Amazon's fault. It is simply that commerce has forever been changed and tax laws are trying to catch up.
Don

Don,

Your link shows this:



Jim

It has been a topic for at least 20 years. The GAO estimated that lost tax revenue from online sales was 13 billion last year which is not much in the grand scheme of things. Small business folks and the casual ebay seller will be hurt the most, not Amazon. I cannot remember which State has set an online sales tax trigger of $200 but dealing with the 45 States that have different tax rules and regs will be onerous.

Hi Jim,
Sorry, fixed.
Don

We don't collect Sales Tax from any of our customers but we conscientiously pay the NYS Sales Tax on sales to NYS customers. Each year it takes my wife about 5 hours to pull out the NYS sales and fill out the forms. I can't imagine how we could do this for every state with different rules, different forms and different payment methods. She spends about 5 hours/week packing our ebay sales this would double her workload.

Amazon and ebay stock took a big hit today.

I assume that most people are like me, we do not mind paying a fair amount of taxes. For me, I care far more about how they spend the tax money, not how they collect it.

For example, having more people working in the Department of Agriculture than we have farmers in this country seems to defy logic.

My opinion about online commerce is that most companies are doing a horrible job with it. Not only do they have a slew of issues with the technology, but they have totally failed with return policies and procedures. Costly returns and unwieldly return policies are a far bigger challenge than collecting a state level sales tax.
Don


Ken,
Wow, what accounting program are you using?
Don

I will be changing my ebay name 2 or 3 times a year ,so I stay under the radar . I need to know what the minimum is before they get interested in my totals . So you will see FLOORTRADER 1 ,FLOORTRADER 2 and FLOORTRADER 3 as a seller .But be sure I will collect sales taxes from everybody,it will be a extra profit area for me .

floortrader: But ebay and the govt. will know that all those aliases will equal just you as you have to submit social security numbers for each account. Remember PayPal already has that info and ebay will soon too when they switch to the new payment system.

US Paypal collects social security numbers? Scary.