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

"...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"

Again, buyers are required by law to pay the sales tax on out-of-state purchases (in those states that charge sales tax). The local merchants are not at a disadvantage at all, if everyone follows the law. Local merchants actually already have an advantage (they don't need to incorporate shipping costs into the price.)

Now if buyers are breaking the law and not paying the appropriate sales/use tax on out-of-state purchases, then that's an enforcement issue for the state IMO. They might want to do a better job of communicating the law, flagging questionable returns and ramping up their audit activity.

But they shouldn't be allowed to force me, without representation or recourse, to do that work for them.

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

We do have good interstate highways and a decent postal system. Our Military is the absolute best! I'm probably living better than Kings did a few years ago...(certainly have a lot more stamps to collect). I can't complain, but sometimes I still do. Taxes though, should leave a distasteful toll on "philately" after all!
So am I going to see a charge on every little E-bay purchase?

Ken,
I agree that a seller should not have to collect sales tax from the buyers state location, they should simply be able to charge sales tax from their own state location on ALL purchases.

Ozwald,
Some would argue that our interstate highways and infrastructure are in terrible shape. And that our postal system is in the red by billions of dollars (Postal Service reported a net loss of $2.7 billion last year). And some would also point to the VA as a very badly run organization that does not serve the Vets well at all.
Don

I agree , everything can be improved even the very best has room for improvement! I have lost 3 pieces of mail in my life but I have heard tales of much worse elsewhere! I don't think the post was ever meant to be so involved with pensions and health care, but to go to every address in the U.S. in 1 day...it seems amazing to me! And the roads in Arizona are quit good, but we don't have the weather extremes! And the Military is still the best, yes we can treat the Vets better!

The military is the best but the waste by the DoD is colossal. Therein lies the rub.

Yes, ever since our first Postmaster General started printing $ in his basement, we have had trouble with the waste! Everybody wants his picture too?

So I wonder how the Foreign sales will be dealt with? Some will surely try and set up some kind of off shore shipping scheme!

Foreign sales are not affected as exports cannot be taxed - Constitution says so.

Washington State has a web page https://webgis.dor.wa.gov/taxratelo...alesTax.aspx where you can enter an address and the purchase amount and get back the tax due and the location code. Presumable you would need to keep track of the sales taxes by location code so that the monies can be allocated to the correct governmental unit. Not too hard to manage with a spreadsheet program such as Excel. One problem, though, it that it cannot manage addresses which are just PO Boxes.

Going to a web page and entering an address and the purchase amount to get back the tax due and the location code is a royal pain, even before filling out the tax form at the end of the year.

Eric,

The amount of the sales tax is needed when the item is paid based on the shipping address selected at checkout. Only ebay or PayPal can do that. I don't believe that ebay has support for a destination-based sales tax. Currently ebay and SixBit (an ebay desktop database application) crudely set one statewide sales tax amount. A fix would be for ebay, PayPal or the credit card payment processor to code captured shipping addresses with the sales tax information. Location determination can be done once for each new address. Sales tax rates can be looked up when payments are captured. Neither process would be particularly feasible or convenient with Excel. Currently ebay exposes only three months of past sales data. Users would require access to at least three complete years of past sales and shipping data. Most users do not have an external database application that captures and retains ebay and other sales site transactions.

But even if ebay develops an address lookup, correctly establishes the proper taxing district, and integrates it perfectly into their checkout (I'm 100% confident, given their long history of IT successes, LOL...) that's still only the tip of the iceberg. They need to determine precisely WHAT you're selling, then determine whether it's taxable and at what level in that particular district.

For instance, Texas taxes plain deodorant at 6.25 percent but does not tax deodorant with antiperspirant. Illinois categorizes Twix and Snickers bars as food and candy, respectively, and taxes them differently (Twix has flour in the recipe, Snickers doesn't). You get the idea. How does ebay figure all THAT out real-time?

And again, not every seller who hits 200 transactions in a state sells on ebay or Amazon. Those sellers will need to do everything themselves (either manually looking it up or programming it into their website).

This is why I think it would be best to simply use the sales tax rate for just the seller's state.

Why is it that the transaction is considered as being in the buyer's state vs. the seller's state?

I guess if they insist on making it complex as Ken points out, then companies and services like TaxJar will do well.
Don

"Greed," if you're a taxpayer, or "scale," if you're a legislator: there may be thousands of merchants per state, but there will always be millions of consumers per state. The aggregate value of transactions on the buyer's side will virtually always be higher than for merchants. There's also the problem of determining what state a merchant is situated in for tax purposes. Is it Delaware, where almost all large multistate companies are incorporated? The state of their headquarters? The state of a regional fulfillment center?

Hi Chris,
I guess I do not fully understand, looking at all 50 states it seems to me it would come out in the wash (in terms of buyers vs. sellers). If some states have lower sales taxes, then they would attract more sellers to live there.

But I agree that people (and companies) will always play taxation games. Here in NC we had an annual 'inventory' tax for many years, companies had to pay a tax on the total amount of inventory they had sitting in their NC locations on Jan 1st. Retailors would allow their inventory to drop greatly and most offered big sales after Christmas to lower their inventory.

But we also had some companies doing some incredible things to dodge this annual tax. For example Eastman Kodak had a very large warehouse in Charlotte full of dyes and chemicals. Each year on December 29th, they would pay to load the entire warehouse into semi-trailers, send everything over the state line to SC and sit there until Jan 2nd. This was cheaper to for them over just paying the NC inventory tax.

No one should wonder why we have complex tax laws and plenty or accountants and lawyers to support them. I fear even if we came up with a simple flat tax, people would still scheme and stay up at night figuring out a way to play games.
Don