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

Since I don't really care if ebay makes another billion, I guess I won't sign the petition because it is in my best interest that local retail stores that support my local community have a level playing field against internet retailers. That is the point I was trying to make. I try to buy toilet paper from local grocery stores not Amazon because in the end, keeping the grocery store in business serves my community more than me sending my hard earned dollar to Seattle or some distribution center for Amazon in the next state over. Unfortunately my wife keeps buying from Amazon and eventually Jeff Bezos will have all my money that he invests in places other than my community so I get no benefit.

I hope this will be he case, because if I have to fill out forms for every state I will bail out. But remember ebay wasn't planning on rolling out their new payment processing system real fast, while some states may jump on this ruing real quick.

NC had some proposed legislation pending that had something like if you have $100,000 million in sales or 100 sales to NC you had to collect state sales tax. On NC tax forms, they force the requirement on the buyer to pay the tax.

A family of four may spend over $60 to see a movie. There is inequity everywhere.

Any repetitive task is a good candidate for automation and/or application of technology.
One example of this https://www.taxjar.com/ (quick 90 second video about half way down page)
Don

If transactions are other than case (credit card, pay pal), tax collection can be managed.

Don - good find. I'm glad to see these sorts of solutions already exist with direct ebay integration(and I suspect more will come online if states really do start pursuing small online sellers).

I'll have to see if I can find somewhere that has a good survey of minimum filing thresholds. If there is, say, a 100-transaction minimum in many states that should eliminate lots of burden for small sellers with dispersed transactions.

I thought we fought a war against taxation without representation. It looks like we've come full circle now. Where's the nearest harbor?

So now I have no ability to elect legislators to represent me in other states, no say in how such legislation is constructed, no voice in how burdensome it is on my business. And they can subject me to fines, penalties, and potential imprisonment if I refuse to comply.

But don't worry. I'm sure they'll be very compassionate. They certainly wouldn't make it into a contest to see who can squeeze the most from out-of-state sellers -- the same sellers they feel are taking jobs and revenue away from their constituent businesses...LOL.

Out-of-state sellers, get ready to just sit back and dedicate the time, effort and money required to do whatever other 49 states (and their 10,000+ taxing districts) deem "reasonable" for you. And you'll LIKE doing all their dirty work, because (1) you have no recourse, and (2) if you complain, they'll pass even more burdensome legislation, just because they can (without political consequence...)

Thanks, Supreme Court!

Hi Ken,
I think this was an inevitable evolution from brick and mortar to online commerce; we have enjoyed a 'tax vacation' but sooner or later this obviously was going to happen.

You do have a point, this evolution makes state-based taxation a bit obsolete but I am not so sure that replacing them with a Federal sales tax would be beneficial. Can anyone point to any program that the Feds have taken over and have done a good job? Typically a state sale tax rate had to compete with other states tax rates; they also allowed the tax rate to better reflect the retail sales demographics of a particular state. With a nation-wide sale tax this would not be the case.
Don

"Can anyone point to any program that the Feds have taken over and have done a good job?"

LOL.

"...we have enjoyed a 'tax vacation...'"

I disagree. The current laws (in states that collect sales tax) unambiguously place the burden on the resident to report & pay sales tax on out-of-state purchases. In Ohio, it's called "use tax" and there's a line for it on the state IT1040. Of course, most people ignore it and don't send that sales tax to the state as they should.

But there's no "tax vacation" for anyone. It's residents breaking the law and the states unwilling/unable to properly enforce it.

If states want to collect that money, step up the internal efforts & crack down on those residents reporting $0 for out-of-state purchases when they really have some. California's inability to collect taxes is not my problem, nor should it be.

I don't understand Ken's outrage. Sellers who don't like the tax policy of a foreign state always have the option of not selling to customers in that state and confining their business to the places where they have influence on elections. The states are saying, if you wish to have benefit of our residents, you have to play by our rules.

California does pursue use tax enforcement against individuals when it acquires third party objective data indicating that a purchase was made and tax wasn't paid. A specific area of exposure is when you buy goods overseas and have them shipped home via a customs broker. Don't ask how I know.

ebay got the software to charge and collect the tax for each state . The question is how much are they going to charge you and each state for their services .This is a money making situation for them and you can bet ebay sellers are also thinking how do I profit from this .

I doubt ebay will allow us to chose which States we sell in. I bet I could exclude 40 States and lose only 10% of my sales but only if ebay allows.

I think Ken has made some great points!



Ken

If you owned and operated a local brick and mortar retail store, how would you feel about trying to compete with online sellers who could charge lower prices because they did not have to charge for a sales tax?

Local commerce is now competing with nation-wide online commerce; should not the taxation playing field be level between the two?

I owned a retail store for years, we collected and paid state sales tax on every sale to every customer. We did not get to dodge collecting sales tax for customers who happened to live in another state.
Don

cjpalermo1964, I'm sure American colonists of the 1770's would have no problem understanding my concerns. They got pretty upset about things like this too.

And as states see that big sales tax payday on the horizon, how long will it take before "reasonable" thresholds of $100,000 or 200 transactions start shrinking? ...or they require me to have a special "out-of-state" business license, pay an annual registration fee, etc? I can't vote any of those folks out of office, so why not? It's free money!

Congress should have done something prior to the Supreme Court decision, but now they will probably be forced to act (although I shudder to think what they'll do.) I'm not sure which will be worse, the SCOTUS decision or the Congressional "fix".

P.S. Not everyone sells on ebay or Amazon, uses PayPal, or has the ability to easily integrate (even if it's free) sales tax software into their checkout process. Many "good" small businesses sell from their own simple website, and most payment systems have no idea what category a given piece of merchandise falls into. Just understanding the local tax rates/requirements, let alone integrating a sales tax system into an existing site, will be a tremendous burden.