Supreme Court Set To Hear Landmark Online Sales Tax Case (gizmodo.com) 248
An anonymous reader quotes a report from Gizmodo: On Tuesday, the U.S. Supreme Court will hear arguments in a case that could at least somewhat clarify Donald Trump's complaints about Amazon "not paying internet taxes." It will also decide if those cheap deals on NewEgg are going to be less of a steal. The case concerns the state of South Dakota versus online retailers Wayfront, NewEgg, and Overstock.com in a battle over whether or not state sales tax should apply to all online transactions in the U.S., regardless of where the customer or retailer is located. It promises to have an impact on the internet's competition with brick-and-mortar retailers, as well as continue to address the ongoing legal questions surrounding real-world borders in the borderless world of online.
How about NO sales tax? (Score:5, Insightful)
Regressive taxes ought to be illegal anyway. There's really no good reason for them to exist, only bad ones.
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Regressive taxes ought to be illegal anyway. There's really no good reason for them to exist, only bad ones.
What state do you live in that sales tax is lower on something more expensive?
In any case, only sales tax puts the tax bill at an individual which is where all wealth resides and is therefore the final stop for all taxes anyway. Taxes at other levels such as corporate taxes are passed on to the customers (individuals) and personal income is too subject to manipulation.
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A few states have a cap on sales tax for cars, so a "more expensive" item pays a lower percentage of sales tax. E.g. "South Carolina collects a 5% state sales tax rate on the purchase of all vehicles. The maximum tax that can be charged is 300 dollars. "
Tax incidence (Score:5, Informative)
All of them (in practice). If you are rich, you don't pay sales taxes. You get tax credits and deductions for them. You are too poor to understand, or you'd already know that.
Well I'm an accountant and I'll disagree. Rich people pay sales tax too and it's easy to prove that they do. The difference is that sales tax amounts to a rounding error in their overall financial picture. A sales tax of 6% on groceries affects someone making $20K/year a LOT more than someone making $200K/year. Rich people don't get a special rich person discount at the grocery store or at the car dealership. In some they can run some expenses through a corporation which gets some deductions (not credits) but most of what they buy they pay sales tax on too, same as anyone else.
That's the stupidest argument ever. Yes, you aren't the first I've heard say that. If people, not corporations pay taxes, then my employer, a corporation, pays all my taxes, not any people.
Not only is that not a stupid argument, it's got a name and it's a well understood concept. It's called tax incidence [wikipedia.org] and it's demonstrably correct. Let's use an example. If we tax gasoline sales the oil companies are going to be able to pass most or all of that cost to consumers so the party bearing the burden of that tax isn't the shareholders of the oil company but the car owners.
You should be in politics. Yes, that's an insult.
If you disagree with his argument fine but no need to be a dick about it.
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Some years back, the CBO produced a report "THE INCIDENCE OF THE CORPORATE INCOME TAX" in which it states
"A corporation may write its check to the Internal Revenue Service for payment of the corporate income tax, but that money must come from somewhere: from reduced returns to investors in the company, lower wages to its workers, or higher prices that consumers pay for the products the company produces."
And it goes on to say
"Although economists are far from a consensus about exactly who bears how much of th
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You just arbitrarily stop at the point you want, without logic or reason. You know, asserting false facts to support your opinion. You should be in politics. Yes, that's an insult.
It's too hard to roll a BA Econ degree into this little text input box. Please feel free to learn on your own about the impact of taxes on prices and where taxes all ultimately are paid.
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If you are rich, you don't pay sales taxes.
You're right! I was in Best Buy the other day, and when the woman in front of me shower the clerk her platinum AmEx card, the cashier immediately waived any sales taxes for the 4K TV she was buying.
Are you really that stupid?
How do you imagine a "rich person" itemizes their sales taxes for the year to get those "tax credits and deductions" you claim they get? What line, on what tax form captures that total?
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That not true unless you are just talking per purchase. The rich also buy more things so pay more taxes.
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Well, I can accept the first part of this statement (Taxing online retailers == more local shops open up).
I could even buy the next piece (== less megacorps) though there's not really a good reason to believe it's a foregone conclusion.
It's the last piece (== more spending power for the middle class.) I have a problem with. No, there's not really a good reason to believe that more Mom&Pop
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Not really. I suppose to a point it depends on where you live and the number and quality of local shops. Amazon, to use the current target of the establishment charges a sales tax. They also charge shipping and handling (whether directly on a purchase or as rolled into their Prime service). When I'm going to look for some non-food or more rarely food item I want to buy, I look there (or occasionally at some other retailer with a big online presence like Walmart or Target to see how they compare). If there
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Yep. I'm good for eliminating sales and payroll taxes, although I have a plan for a public option that levies a payroll tax if an employer doesn't provide affordable care or if the employee doesn't buy into the employer's healthcare and goes on the PO (it shouldn't be cheaper for your employer to offload to the taxpayer). For the unemployed, self-employed, or employed without any healthcare offered, the individual doesn't pay the premium at all; if the individual has affordable care through the employer
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We also need a flat tax that's paid by employers, so "regular employees" don't ever have to file taxes on their wages.
Then everyone thinks government services are "free" since they never see their own bill. It's bad enough that even with filing taxes means some people think that "getting a refund" is their total tax bill.
Re:How about NO sales tax? (Score:5, Insightful)
Exactly. If you really want to change the way people see taxes and the cost of government services, stop taking taxes out of everyone's paycheck before they get them and make them write a check each month.
It would be amazing the shift in public opinion once the cost of all those "free" things they get from the government became more visible.
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It would be amazing the shift in public opinion once the cost of all those "free" things they get from the government became more visible.
Let's think this through:
Nearly half of all tax filers pay no net income taxes;
Slightly fewer tax payers collect refunds from the tax system in excess of any currently withheld amount;
and the top 20% of tax filers pay about 80% of all income taxes collected.
Half of Americans will have the concept of "Free Stuff" actually being free for them confirmed on a monthly basis.
Some fourty percent of Americans would actually see payments from the government as their monthly "obligation" ON TOP OF getting free stuff.
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I've got a better tax system in the works [google.com], designed to automatically lower your effective tax rate if you don't get rich as fast as the Nation gets rich.
It also has the top tax rate as its final factor, meaning you can raise taxes...on everybody. Go from 40% to 50%? The richest of the rich might pay 50% in taxes (a 25% proportional increase); the poorer folks who were paying 8% are also now paying 10%. We decide the shape of our progressive curve, and then we're all in it. I like this tax social cont
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People already think that unfortunately
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We also need a flat tax that's paid by employers, so "regular employees" don't ever have to file taxes on their wages.
Welcome to the rest of the developed world where we have pay-as-you-earn (PAYE). It's utterly stupid to make people do their own taxes if they're on wages/salary - It's one of the first things commercial computers were designed to do for us - payroll. Could you imagine utilities companies making customers calculate their bills themselves?
Re:How about NO sales tax? (Score:5, Insightful)
Welcome to the rest of the developed world where we have pay-as-you-earn (PAYE). It's utterly stupid to make people do their own taxes if they're on wages/salary - It's one of the first things commercial computers were designed to do for us - payroll.
And computers do do that. That's why taxes are withheld from your paycheck. But your employer can't possibly know about all your deductions or other income so the withholdings are sort of a guess. That's why you have to file taxes: so the exact amount of taxes can be calculated, and you either receive a refund or pay depending on whether your employer's computers over or underestimated your taxes. Think about it: how can your employer know about your earnings on investments or part-time work or about your real estate depreciation deductions, etc., etc. Would you even want your employer to know all that stuff? That's why people are responsible for doing their own taxes.
Automating tax collection (Score:2)
And computers do do that. That's why taxes are withheld from your paycheck.
Not good enough. There is genuinely zero reason why essentially the entire tax system could not be automated. Sure it would look a bit different than it does today but that's not a bad thing. 99% of it could be completely automated. For people with more complicated tax situations we have them file some paperwork but the vast majority of the public should never have to pay an accountant or a tax software company. I'm accountant and it's just not that hard.
But your employer can't possibly know about all your deductions or other income so the withholdings are sort of a guess.
Sure they can. You just have to tell them. Or
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Not good enough. There is genuinely zero reason why essentially the entire tax system could not be automated.
Whose tax system? No seriously that's the fundamental flaw in anyone thinking their tax system can be automated completely. There is no agreed international tax system or transfer of private information between countries.
For people with more complicated tax situations we have them file some paperwork but the vast majority of the public should never have to pay an accountant or a tax software company.
That I agree with. I have income in multiple countries, depreciating assets in multiple countries, shares in multiple countries some subject to deferral schemes, and my own business on the side. Taxes are actually quite simple to do yourself, though I wish I didn't have to file 4 tax return
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But your employer can't possibly know about all your deductions or other income so the withholdings are sort of a guess. That's why you have to file taxes: so the exact amount of taxes can be calculated, and you either receive a refund or pay depending on whether your employer's computers over or underestimated your taxes. Think about it: how can your employer know about your earnings on investments or part-time work or about your real estate depreciation deductions, etc., etc. Would you even want your employer to know all that stuff? That's why people are responsible for doing their own taxes.
The flip side of that though is that the government does know that stuff, for most people.
If we're going to tolerate all the mandatory reporting that makes the government know all that for most folks, then I see no reason that "doing your taxes" shouldn't be reserved for those few in special situations. We might as well get some benefit from big brother knowing all.
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In Sweden, all of your earnings/losses (selling units of stock, mutual funds, interest on bank accounts/loans, wages, etc) are reported directly to our version of the IRS by your employer and banks. At the end of the year, you login and accept taxes. Most deductions that you would think you would need to input yourself are also reported directly (such as hiring an electrician or painter to work on your house). Some additional deductions you may input yourself (for example if you cannot use public transport and need expensive travel to work or if you sold a house), but everything is then automatically calculated.
Yes the US requires all that reporting too so they know what people make and what they should be taxed and could easily do the same thing... provide a simple to use website to confirm your income was recorded properly and to request some deductions... but they don't. We in the US can't even file online except by using third party paid websites or a free third party website which merely puts the existing forms online and isn't that user friendly.
In my state of Massachusetts a few years ago they actually too
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It's as if you've never heard of the concept of withholding.
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Sure, just raise the standard deduction so most people pay no income taxes. Then throw out the tax tables and make it just one tax rate, say, 50%.
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That'll kill the housing market for sure.
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As we have found out during the last tax session bill, California pays higher state and local taxes but then gets to deduct them at the federal level.
So the rest of the country is subsidizing California while California gets to pretend it's the other way around.
Now that this scam has been outed, California is looking at no longer calling their taxes taxes but instead forced charitable contributions
https://www.reuters.com/articl... [reuters.com]
Trump comments were clear (Score:3, Insightful)
" The #AmazonWashingtonPost, sometimes referred to as the guardian of Amazon not paying internet taxes (which they should) is FAKE NEWS!
— Donald J. Trump (@realDonaldTrump) June 28, 2017"
Presumably the tweet that this will clarify? But it's clear enough already, Trump is pissed at Bezos for owning Washington Post, and attacks Amazon because Bezos is the CEO. He doesn't even disguise the motive here.
What Trump's done of course is make any attempt to attack Amazon using the Executive powers open to court challenge. He cannot use executive powers to attack political enemies.
And what Trump's failed to do, was to get the Washingtom Post to censor its criticisms of Trump in exchange for not attacking Amazon. Hence the attacks continue.
Split (Score:2)
Fundamentally, the justification for the tax is that it costs money maintaining the infrastructure and system that facilitates said sale. When the sale happens at a distance... both locations bear the burden, so.... both locations could reasonably demand sales tax. Sender's sales tax vs state's sales tax. Of course, this is handled internationally with customs, fees, import taxes and such, and the fed is specifically tasked with removing that sort of barrier to trade between states. And rightly so. And i
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So to simplify the whole issue, have a Federal sales tax and 80% money is to be distributed to the states on a per capita basis and the other 20% to be distributed to the states upon a need basis (some US states simply lack revenue sources and need to be economically stabilised, to promote development of revenue sources) and zero exemptions from that federal sales tax. This would help to end the corrupt practice of state tax free bidding wars by corporations, which has to come to an end, as it is extremely
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So to simplify the whole issue, have a Federal sales tax and 80% money is to be distributed to the states on a per capita basis and the other 20% to be distributed to the states upon a need basis
Uh, no. People don't spend money equally, so a high-spending state like CA has a high per-capita tax collection level, and is reimbursed at the same rate as low-spending Montana? Why would any Californian think that was a good idea?
Money spent in California is taxed to benefit Californians, end of story.
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have a Federal sales tax and 80% money is to be distributed
That would be simpler, but it would remove an important aspect of why we have states. They're places to try experiments with different government and to match rules with their situation.
You probably committed tax evasion (Score:2)
Illinois has a use tax. By order from California, you are obligated by the state use tax law to collect from yourself the corresponding Illinois sales tax and include it in your income tax filing.
Many Illinois taxpayers are unaware that a Use Tax exists in Illinois. Do you know about Use Tax?
In 1955, the General Assembly passed the Use Tax Act. Use Tax is a sales tax that you, as the purchaser, owe on items that you buy for use in Illinois. If the seller does not collect at least 6.25 percent sales tax, you
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We don't want people sitting on land without using it. If you can't afford it, SELL IT. There's only so much of it where people want to be, and it's very zero-sum.
I never quite understood the connection between property tax and school budgets though. Why did that happen?
Irony (Score:5, Interesting)
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Can we force SD to obey Georgia gun laws? (Score:3)
If we follow this line of reasoning, were a state can force vendors and citizens located wholly in another state to comply with the first state's sales tax laws, why can they not be forced to comply with another state's gun laws, abortion laws, marriage laws, pollution laws, welfare laws, ...?
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Not really. Say someone from South Dakota goes to Vegas to get married. SD is expected to honor the NV marriage license (and Obergefell forced that to apply to even gay marriages). What if Goergia were to offer easy-to-get carry permits for out-of-staters? Then people could come to Atlanta for a permit like they go to Vegas to get married.
Or say California passed a $10 per gallon gas tax, which includes gas bought out-of-state but carried into California either in your vehicle or in any container. Once peop
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If a state can force an out-of-state business to collect sales taxes, can they force out-of-state individuals to pay income taxes? Take a week vacation in California...can you be forced to pay income taxes to California for the wages you earned during your time there (assuming it was paid-time-off)?
Here's an extreme sales-tax issue I outlined elsewhere.
Assume California passed a $10/gallon gas tax. Obviously Californians near a border with another state will quickly start crossing the border to get their ga
South Dakota can't get citizens to comply with tax (Score:2)
SD citizens, like citizens in most states, generally are ignorant or simply ignore the states use tax laws.
SD is unsatisfied with the perfectly justifiable actions of simply attacking its citizens with audits for not not paying their use taxes and just think it would be easier and less likely to make their citizens angry by forcing out-of-state vendors to be SD sales tax collectors like they force SD vendors.
The issue here is, then what else can a state for out-of-state entities to do?
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The Sout
interstate commerce clause (Score:3)
Re:interstate commerce clause (Score:5, Insightful)
The Commerce Clause *needs* to be readjudicated (not thrown out per se), and Wickard v. Filburn overturned.
Re:interstate commerce clause (Score:5, Interesting)
Overturn Wickard and the BATFE just lost almost all of its power to regulate firearms.
And the FBI also loses a ton of power... its amazing how that one case allowed Federal gov't to expand into every State and into your home.
I agree Wickard is bad law, but the gov't and law enforcement as we know it would almost cease to have power if they significantly modified it (which they should).
Wonder how SD will handle it if they win? (Score:2)
If SD wins, the first question every one of those online merchants will have for them is "What's the contact point for authoritative real-time-response data on what the applicable tax rate is for any address in South Dakota?". Because if SD expects those retailers to collect sales tax, SD has to be able to tell those retailers what tax they should collect for any given transaction. For a physical retailer it's easy, the tax is determined by the retailer's physical location and the buyer's address is irrelev
Uh (Score:2)
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And then SD will have to hire 10,000 new auditors to handle the sales tax cases from millions of small e-tailers.
Now we see the true purpose...
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I don't see why SD will have to compile all that information in one place for online stores. They don't for physical stores.
Because, as the parent poster said, for physical stores the tax rate is based on the store's physical location -- which makes it a single tax rate for all customers.
If the tax rate is now going to be based on the location of the buyer the rate is going to vary on a per-customer basis. A retailer shouldn't have to be burdened with figuring out the rate for every single person in a state separately.
You know lots of these rural people don't even know their physical location? That's not a joke. I deal with them
Global coordinates (Score:2)
You know lots of these rural people don't even know their physical location? That's not a joke. I deal with them every day. They have a P.O. Box for getting letters and they only know their physical location from rough driving directions. If you asked them to state the actual standard identifying information they couldn't tell you. Even the ones that can have disagreements about what city they are really considered a part of or if they are an address on the highway -- things that will definitely come into play when computing local taxes.
This is true. You'd basically have to have to use some sort of global coordinate system perhaps combined with a GPS to really make it work. Some parts of the world are actually doing something along those lines because street addresses have some pretty significant limitations.
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Sounds like my father's parents. I know how to get there, but the only reason I could even tell you which county they live in is because they've told me....
R'Amen (Score:2)
If they do it will be the death of (Score:5, Insightful)
Each one is different, each one has it's own crazy rules. Here is one in the state of Minnesota. Say we sell a pair of gloves. If the user uses them to keep their hands clean they are taxable. If the user uses them for a safety purpose. handling glass with sharp edges, they are not taxable. How does the seller know? So they always tax!
The entire sales tax code, nation wide in the 1000s of taxing districts are a fuddled mess of crap.
Big online sellers like Amazon are all for it, they want to force all small independents in to Amazon stores where they skim 8% - 15% off the top of all invoice.totals as their cut.
Amazons master inventory system is a complete mess. They are always moving your products from the lower groups in to the 15% cut group. You call them up argue with them for a week and they will move that product back to the proper group. Next week they move 2 more up, rinse and repeat.
If the government wants a sales tax they should be clear concise and honest. Just set one rate, one reporting entity, once per year settling up. Which they never do, everything government does is a complete convoluted morass of crap..
How is a one-two person small shop supposed to file sale tax reports in all 9000+ taxing districts? Let alone quarterly reports/payments.
This will go through because the big operators want to force all the small online retailers to pay them a cut.
You may ask how I know, I run a business, have a state sales tax number. I also support other online sales sites from a tech stand point. I am in the trenches!
Just my 2 cents
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Re:If they do it will be the death of (Score:4, Insightful)
The point is small margins become very small. The only way it pays is if you can do some volume sales. But Amazon always makes their cut
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Not to mention that Amazon probably has multiple copies of an item (from Amazon and from re-sellers) and the item the customer gets may not be the item the seller sent to Amazon (and may not even be identical to the item the seller sent to Amazon)
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You don't know shit (Score:2)
You should probably try a bit harder, then. http://taxcloud.com [taxcloud.com]
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So how do you answer the OP's question about Minnesota. No software can actually know what the user is "planning".
Each one is different, each one has it's own crazy rules. Here is one in the state of Minnesota. Say we sell a pair of gloves. If the user uses them to keep their hands clean they are taxable. If the user uses them for a safety purpose. handling glass with sharp edges, they are not taxable. How does the seller know? So they always tax!
The second issue which the OP doesn't go into detail is that YES, you can use software to help with sales tax. However that software isn't free. For a small business that may be thousands of dollars. For a large corporation it's trickier but not impossible to collect sales taxes.
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On top of that. It makes more sense for the seller to pay the tax front their location.
If the tax is on the seller (which is the entity that pays), it's the seller's location that has the burden of supporting the seller.
If a resident of another stayed buys something, why should that other state collect the money? The shipping company that moves the object should cover the states affected by the movement of goods, the seller should cover the infrastructure that their state provided, I see no reason what the
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So if the purchase is being made from the person's home, it makes sense for the sales tax to be collected by the state where the person's home is located, since sales tax is a tax on money leaving the person at whatever location it's leaving him/her. If the jurisdiction where the busin
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Here is one in the state of Minnesota. Say we sell a pair of gloves. If the user uses them to keep their hands clean they are taxable. If the user uses them for a safety purpose. handling glass with sharp edges, they are not taxable.
Uh, so what if the gloves are used to keep hands warm? Surely that is a common use case in Minnesota?
Re:If they do it will be the death of (Score:5, Insightful)
The problem is none of these services will indemnify the business against their screw ups. If their database gets a sales tax rate wrong, and the business ends up collecting insufficient sales tax for some of their transactions, the business has to pay for it, not the company providing the sales tax database.
What really needs to happen is for the government to set up a central database of these sales tax rates. The burden would then be upon state and local governments to update this database with any changes they make to their sales tax rates. Any business in the country could then query this database for each sale, and be guaranteed that they are charging the correct amount of sales tax. If there's ever any error in the database, then the fault lies with the state or local government which should've made sure their database entry was correct. And thus the penalty for such errors falls directly upon the party making the error. Not the crazy system we have right now where the penalty is passed on to businesses who have little to no capability to verify thousands of sales tax rates across the country.
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There are services small businesses can subscribe to which will provide a database of sales tax rates for different zip codes and addresses
That's not good enough though:
Baltimore City has a special sales tax called a bottle tax [baltimorecity.gov]. (Lots of municipalities are doing this - the money goes to cleanup & recycling efforts.) Under that law fruit juices with 10% juice fits the tax. So a Baltimore City resident goes to Amazon.com and orders a case of soda from the Spanish Manufacturing Corporation (SMC) located in Seville, Spain. Who is responsible for determining if the bottles sold in that meet the description of the Baltimore City bottle cap t
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"The more numerous the laws, the more corrupt the government." -- Tacitus
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His point is this: the rules are different everywhere. Not all states make clothing non-taxable. Some have different rates for different categories of things - and those categories differ (or don't exist) in other districts. It's not just the tax rates that differ, it's what they apply to. On top of that, the seller would have to find, fill out, and file forms for all the different districts. For a small company, that is a pile of work. If you think that's even possible, you haven't worked with many governm
Avoiding taxes (Score:2)
People could use digital stores to avoid taxes and reduce the power of the state.
Less corruption of society.
no (Score:2)
that could at least somewhat clarify Donald Trump's complaints about Amazon "not paying internet taxes."
It doesn't matter as Amazon already collects state sales tax for every state that has a sales tax, unlike say...Trump's own business which only collects sales tax for 3 states. The only clarity needed for Trumps comments are: he's an idiot that doesn't know what he's talking about.
https://www.washingtonpost.com... [washingtonpost.com]
17,000+ sales tax jurisdictions? (Score:2)
Not to mention that the items taxed are taxed differently in different states. Food may not be taxed at all in one state, but taxed fully in another.
For example, a bagel in NYC is not taxed, but a sliced bagel is taxed as prepared food.
In Washington, a candy bar containing flour (a Milky Way Bar or Kit Kat) is not taxed, while one without flour (a Milky Way Midnight Bar or 3 Musketeers) is. The only way for a consumer to know what's taxed before heading to the checkout counter is to read the ingredient lab
Use taxes...states are mad that citizens dont pay (Score:4, Interesting)
Most states *already* tax internet and catalog purchases, indeed all purchases made out-of-state for goods brought into the state. They just currently cannot force merchants outside those states to comply and act as proxy tax-collectors for them.
These are called Use Taxes.
The thing is, States are upset that no one pays Use Taxes and now want to force businesses in *other states* into servitude as tax collectors.
What right does one state have to force a brick-and-mortar retailer in another state to collect sales taxes from border-crossing customers? None.
Why then should they be able to force an out-of-state retailer of the virtual sort to collect sales taxes from virtual border-crossing customers?
If I lived in North Dakota and I hopped across the border to Montana and bought a book at a shop there (no sales tax in Montana) then took it back with me to ND, I would be responsible for paying any use tax owed, not the book shopkeeper in Montana. Same rules should apply to the Montana shopkeeper if he mails my books to me at home.
Technology not the answer (Score:2)
This Streamlined Sales Tax idea is about allowing states to force businesses residing completely in *other states* to become proxy tax collectors, not to mention that those businesses will be forced into audits and liabilities from any state or tribal tax that can be passed completely without representation.
People act as if technology will solve these "problems"...the equanimity of sales taxes are not simply a matter of rates. A software database would be huge to encompass the differences between states. Co
Border-jumping shoppers (Score:2)
Brick-and-mortar Main Street vendors in Delaware have no obligation to collect and remit Maryland use taxes for Marylanders frequenting their stores. Even if the Marylanders are jumping across the state line to take advantage of Delaware's 0% sales tax. Even if the Marylanders then fail to report and pay their state's use taxes.
Internet vendors should continue to have the same right to not be forced into acting as a tax collector proxy for some state in which they do not have a physical point-of-presence.
Wh
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The issue here is that Maryland would and should have zero chance of enforcing its will on Delaware business to force them to act as proxy tax collectors for Maryland, even if hoards of Marylanders rolled into Delaware everyday to stock up. It is the Marylanders who are violating (I assume) Maryland's use tax laws. Why is it the responsibility of a store in Delaware to enforce Maryland's use tax laws?
There's no difference between Marylanders driving to Delaware to shop compared to them ordering from a store
Birck and mortar? Who cares?... (Score:2)
Even paying sales tax, I'd still come out ahead on most online purchases. I don't look at something online and say "uh oh, they charge sales tax, I might as well get in the car and buy it from some big box store".
Border-crossing taxes? (Score:2)
Imagine a mom&pop store in a state with 0% sales-tax, say, Delaware. Further assume it is close to the border with a state that has a high sales tax, like, hmm, Maryland which has a 7% rate.
By reputation and the lure of 0% sales tax, people from Md make the short trip to mom&pop to buy their wares. Mon&pop do not care nor ask where their customers are from, there is no question *at all* where the transaction takes place. It is subject to Delaware sales tax: 0%. Being a brick-and-mortar store in
Amazon, et al. are NOT "not paying taxes" (Score:2)
Bear in mind that what are being discussed are sales taxes, which are paid by customers.
Businesses merely collect and remit these taxes. They are forced to act as proxy tax collectors because it is more efficient for states for force a few thousands of businesses to account for their sales than it is to force a few million citizens to do so individually (which is already a proven utter failure as per use taxes).
Please bear that in mind before going of on a "these online corporations are skipping out on taxe
Which location to use? (Score:3)
In a brick-and-mortar case, we know the location to use for the transaction as the entire transaction occurs between people located within a single state and subject to the laws of they state they are all physically in. So the state can force a store to collect sales tax from its customers who come into the store and make purchases.
For an online purchase, it's not so clear?
Purchaser's location? What if the purchaser is in a hotel room far from home, maybe even out of the country? Or on an airplane?
Shipped-to address for the purchase or Purchaser's mailing address? I foresee a lot of Montana mailing addresses once someone in Montana realizes the business opportunity inherent in sales-tax avoidance arbitrage.
Purchaser's home address? What if the item is shipped elsewhere, e.g. a gift to an aunt in a 3rd state? And why would I tell anyone my home address instead of my mailing address?
Sender's address? Which one, the HQ? The warehouse? The fulfillment center?
Will states be able to force out-of-state brick-and-mortars to quiz customers and collect and remit use taxes on the assumption that their citizens temporarily in another state just bought something that they *should* have bought at home, thus depriving the home state of revenue?
Re: (Score:2)
Wouldn't it just be simpler to use the state that the company is incorporated in?
(And for fairness, this should apply to B&M and online stores.)
I 100% agree this is a complete clusterfuck. e.g. Web Servers can literally be all over the world, so you can't use the location of those.
An online store is akin to having a salesclerk personally visit you while taking your order.
* It shouldn't matter where geographically the buyer is located,
* Which leaves the question: Isn't the fundamental problem: Where is t
Re: (Score:3)
Many businesses are incorporated in Delaware.
Delaware has no sales tax, and does not allow cities or counties to assess any type of sales tax.
Let's be equitable (Score:3)
If states force online retailers to collect their sales tax - thus burdening the online retailer with knowing about all tax jurisdictions, having common descriptions of items country wide so you know what is even taxable and its particular rate on any given day then....
make all non-online retailers handle the sales tax rates the purchaser would pay at their home and remit them to their home states as well! You make a purchase, show your ID and then the sales tax rate will be whatever it would be for your home address. If you come from a state that is sensible and doesn't collect sales tax - you wouldn't have to pay it anywhere. If you come from a state that is nuts - then you're equally repressed everywhere in the United States you shop.
Seems fair to me. Your opinions will probably vary.
No such thing as 'internet taxes', Donny (Score:3)
Also could you grow the fuck up and accept that Jeff Bezos is just a better and more successful businessman than you are? Seriously.
Nobody but Amazon could comply with this (Score:2)
There's a good piece in the WSJ about this and the insanity of it all. In one tax district, a Twix bar is taxed at a different rate than a Snickers bar because one of the ingredients in a Twix bar is flour. Snickers, on the other hand, is considered candy. Nobody but outfits as big as Amazon could comply with all the taxation because only they have the army of people necessary to deal with it.
I, myself, have to deal with the paperwork nightmare in different states and different government agencies. It t
Re: Wtf is wayfront? (Score:4, Interesting)
My impression is that this case is misleading. No matter who you purchase from, you owe sales tax. The only question is reporting. I, with my reseller license in California have to pay California Sales Taxes I collect for products sold to people in California. I report on a city and county basis to the BoE (Board of Equalization), and pay them quarterly, all the taxes I collect. Since I don't have a filing with any boards in any other state, I don't collect or report, but my customers are still obligated to self-report. You don't get to not pay taxes because you bought from someone outside the state. Besides, if you buy from overseas, you still owe sales tax. They just don't report it because they don't have a filing requirement with the boards. This is a case where the states want to enforce resale license filing requirements on every reseller in every state. In a decade, they will want every reseller who ships to the us to file
Re: Wtf is wayfront? (Score:5, Informative)
I've lived in Dallas. There are towns were a street can have 4 different tax rates. All in the same zip code, on the same street. Only with a full tax-map could a retailer hope to keep up. And almost none do. Those required to collect often (illegally) collect only the state rate. Theoretically, and often legally, they are required to collect the separate rates for every residence (Texas kept it as a simple list, a tax rate for every address), but the states don't like sharing that. Those that have it would be mocked for having it in a simple text file, and with no actual intelligence behind it, other than someone manually typed in a tax code for every address. The others often don't know, themselves, so how could they tell anyone else?
The rules were written around a physical store. They figure out their tax code once, and it never changes.
The online retailers are objecting so much because there are literally millions of tax locations in the US, and they'd need to know them all all the time. Someone changes a mass transit tax, or collects a special local tax for a new school or sports stadium, and every online retailer on the planet must update their system.
More rational is to notify the State of the delivery address and pre-tax value. Then the sate will have a better path to enforcement of the "use tax" that already applies. That's the real complaint. It's too hard for the state to enforce their own laws, so they want the online retailers to bear the expense and trouble.
Re: (Score:2)
This doesn't seem like an insurmountable problem. Just get the states to simplify a bit, maybe by having a single mail-order tax rate, or at least a free zip-code to tax rate database.
Re: (Score:2)
That way the retailer would know what to collect.
Then there has to be a simple system to pay said taxes. If you've ever had to file sales tax reports you would know that
Do you have to file in 50 states? and how do you handle the multiple tax jurisdictions in each state?
NYS has multiple jurisdictions, not simply NYC and the rest of the state.
Purchases above $110 are subject to a 4.5% NYC Sales Tax and a 4% NY State Sales Tax. The City Sales Tax rate is 4.5%, NY State Sales and Use Tax is 4% and the Metropolitan Commuter Transportation District surcharge of 0.375% for a total Sales and Use Tax of 8.875 percent.
How do you handle the different catego
Re: (Score:2)
I've lived in Dallas. There are towns were a street can have 4 different tax rates. All in the same zip code, on the same street. Only with a full tax-map could a retailer hope to keep up.
I found this:
Texas imposes a 6.25 percent state sales and use tax on all retail sales, leases and rentals of most goods, as well as taxable services. Local taxing jurisdictions (cities, counties, special purpose districts and transit authorities) can also impose up to 2 percent sales and use tax for a maximum combined rate of 8.25 percent.
Source: https://comptroller.texas.gov/... [texas.gov]
And the state comptroller helpfully provides a 12 page booklet regarding tax collections: https://comptroller.texas.gov/... [texas.gov]
Texas has a 6.25 state sales tax (remember, no state income tax) and up to 2% local taxes. When I checked my address, I saw that one percent went to the local transit authority, one percent went to the local gov't BUT Sales Taxes are calculated based on the SELLER's address/location, not the buyer's location, in most cases.
Re: (Score:2)
Where are you, actually, when you do an online sale with the website server in one place, the warehouse the goods are shipped from another, the customer's computer (or possibly cell phone) in a third place, their ISP in another, the customer's on-line account from which the money is withdrawn in yet another server, and the delivery to yet another address?
And why should I expect a mom and pop store in Texas
Re: (Score:2)
You are typically taxed based on the location of the seller's location, not yours.
In NJ Ikea has a storefront in an "enterprise zone" where sales taxes are half the normal rate, 3.25% instead of 6.5% (those were the numbers a few years ago, it may have changed slightly), and when you drove to Ikea in Newark you paid 3.25% on your purchase, not 6.5% - no matter where you lived in NJ.
The issue is when you don't have a storefront in the state, what address is used to calculate the tax rate? Using the ship-to a
Re: Wtf is wayfront? (Score:4, Informative)
Interestingly, the document you "linked" indicates that you are wrong. Here's the relevant quote, right in the Introduction: (emphasis mine)
So it's more complicated than you claim. Especially with 50 states, all with varying rules.