Supreme Court Sales Tax Ruling

[A26B]

Talk about a kill shot of small businesses who sell on the web. The Supreme court ruled last Thursday that States could collect sales tax from Sellers who are not residents.

In practice, a web business could be required to collect & remit sales tax to each individual state where sales occur, based on each state's sales tax rate.

On first thought, one would think, well, this is going to cost me (the consumer) an extra 4~6% now to cover the sales tax. However, considering the impact from the Sellers side, just imagine the time & expense to remit sales tax to potentially 50 different states. That is a BIG deal and is going require an increase in sales price to cover the additional G&A (General & Administrative) cost burden. That aspect alone could be multiples greater than the sales tax alone.

In summary, this could spell complete disaster for web based businesses and the self-employed individuals who own & operate them. Its a bad deal with no easy solution. It is in essence taxation without representation. Anyone recall that statement? A small business owner in New Mexico could be required to pay tax to a state he is not a resident of and can't vote in that state for representation. Think of eBay, RockAuto, etc.

Some states have already passed a "use" tax which requires residents to pay their respective state's sales tax. In simpler form, anything you buy through the internet from a Seller in another state, requires you to pay your state sales tax on the purchase amount. Sounds like the states are staking a claim on the internet, which before now, didn't belong to anyone.

Here's a link to read about it, if you're interested. It's going to affect all of us.

[URL="https://www.forbes.com/sites/howardgleckman/2018/06/26/what-will-happen-to-online-sales-taxes-in-the-wake-of-the-supreme-courts-wayfair-decision/#71635b333bad"]

[lfalzarano]

The reasoning for prior to this was there were only catalog sales that didn’t amount to much, now sales are in the billions. Your local merchant can’t compete against internet sales that don’s collect taxes.

There is lots of cheap software to calculate the sales taxes for these internet sellers and track what states get their taxes.

Don’t panic.


Lou

[A26B]

Originally Posted by lfalzarano

The reasoning for prior to this was there were only catalog sales that didn’t amount to much, now sales are in the billions. Your local merchant can’t compete against internet sales that don’s collect taxes.

There is lots of cheap software to calculate the sales taxes for these internet sellers and track what states get their taxes.

Don’t panic.


Lou

No panic..... Calculating the tax is no big deal. Accounting & Remitting tax to 50 different states is.

It's not sales tax that hinders equal competition with internet sales, its the cost of a brick & mortar storefront.

Having been self employed for the major portion of my 45+ year career, I have a pretty good handle on business.

[Ronstar]

would be easier to make seller collect and pay tax to their own state just like any other business. No matter where a person who walks into my business lives I charge him Michigan sales tax. If one buys something over the internet where does the sale “take place”? My opinion it takes place in the sellers home state.
I am not a fan of the government or taxes but seems unfair if I have to pay sales tax on a hammer I buy at the local hardware but one doesn’t if they buy online.

[efnfast]

What about international sales?
I can see where this would be a real problem for a business like your's Jerry. What a logistical nightmare.
I can also see that the States are loosing revenue because of on line sales, they rely on sales tax to help run the joint.
Although, in NH we have no sales tax, but our property taxes make up the difference.
Just kinda thinking out loud and bouncing stuff around in my little brain.

[DRM500RUBYZR-1]

Charging, collecting, accounting for, and paying federal, state and local taxes, wherever applicable, are simply part of doing business, regardless of size or location.
While admittedly a burden, I prefer a level playing field where we all get blessed or beaten the same as each other, regardless of size or domicile.
A sale is a sale.
Matters not if it is over the counter or over the internet.
In each case something was purchased, and value exchanged, therefore a taxable event.


In the words of our 39th President, Ronald Reagan:

“Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”



Marty

[efnfast]

Marty, when you sell a car to a person from ?, do you figure out what their home state tax is, collect it, report it and pay it to that State?

[bhedberg]

Perhaps the 1992 Supreme Court decision that exempted internet sales from state sales taxes was wrong. None the less, that was their decision. As Jerry pointed out, numerous state enacted "use tax" obligations on residents to report and pay this "use tax" equivalent to the sales they would have paid for an in-state purchase. The point everyone is missing, the "Supremes" included, is to level the playing field, all we need is a simple federal statute that says (in regulating interstate commerce, as the commerce clause to the constitution says) " Purchasers shall pay the appropriate sales tax,if any, to the jurisdiction in which they make a purchase and all other states are precluded from taxing such purchases or otherwise attempting to assess "Use taxes" upon purchases which have already paid sales taxes in the appropriate jurisdiction. A simple legislative solution at the federal level. Consumers get their states off their backs, and small business gets the burden of the recent supreme court decision off their backs, and anyone that thinks internet sellers are getting over and purchasers are escaping taxation need only shut up.

[DRM500RUBYZR-1]

Originally Posted by efnfast

Marty, when you sell a car to a person from ?, do you figure out what their home state tax is, collect it, report it and pay it that State?

New Jersey does not require an automobile dealer to collect and pay tax for any jurisdiction other than the state that the sale takes place in.
Tax collection on the sale of an automobile goes hand in hand with the titling and registration process.
We have title companies that would be happy to perform this service for us, for a fee of course, but we are not, required to collect the tax due from the purchaser.
We must issue a 20 day "non-resident" tag that upon it's expiration requires the purchaser to title and pay the tax to the titling state. If the purchaser fails to do so, then, once discovered, must pay the tax and any penalties due, to the state where the vehicle is titled.
States want to make certain that they get what is due them on the purchase, and the best way for that to be enforced is by making it part of the titling process by their own hand.
It would make little to no difference to me to collect and forward it to the titling company, as it would actually save me a step. We spend quite a bit of time at motor vehicle, just dropping off and picking up.
I would have no objection to outsourcing that entire activity to a general agency that would handle all states.
I am currently required to complete and file a detailed affidavit completed by the out of state purchaser, sending same to New Jersey with a copy of the sales agreement.
Marty

[EvanZR1]

I would bet this drives a lot of small businesses to use Amazon Marketplace or something similar that will take care of the sales tax calculation and collection for them.