Supreme Court rules states can collect sales tax for online purchases nationwide

[Kujako]

I'd imagine that is going to be changed as well.

Congress should really pass a law regulating this. This is literally the reason Congress has the power to make laws in the first place (interstate commerce clause).

I just hope they have their traditional States Rights underoos on when they do.

[Antiganon]

Ha, ha. Good fucking luck.

I just fucking hate sales tax compliance, and federal legislation to simplify it would be incredibly welcome in my professional life.

Did you know that California alone has DOZENS of different tax codes? If you sell products to California customers, which pretty much every online business is going to do, you need a separate tax code for every municipality. It is incredibly asinine to expect businesses in Maine to just, like, know all the intricacies of California tax law when they don't do any business in California whatsoever aside from shipping that one thing to that one guy in LA that one time.

Federal law simplifying the whole thing would be incredibly welcome.

[jazen]

Thankfully computer programs can sort out the myriad of tax rates across the states. City, county, and state tax rates vary tremendously.

[Antiganon]

Thankfully computer programs can sort out the myriad of tax rates across the states. City, county, and state tax rates vary tremendously.

I'm aware. I literally implement and provide end user support for them.

Those things cost money. They have subscriptions. Many SMBs have a REALLY hard time justifying the cost if 90% or more of there business is local (which is the case for most of my clients).

The problem comes in where some CFO wants to pinch pennies by not buying a sales tax compliance solution, then wants me to do ridiculous things like manually update ALL the sales tax rates. Or even worse, I tell him that's not feasible and would cost me eleventy billion dollars to hand key the values, and he tries to do it himself, making it far, FAR worse than reasonable people would think possible.

Fucking users man, they are the worst.

[Elegiac]

I just fucking hate sales tax compliance, and federal legislation to simplify it would be incredibly welcome in my professional life.

Did you know that California alone has DOZENS of different tax codes? If you sell products to California customers, which pretty much every online business is going to do, you need a separate tax code for every municipality. It is incredibly asinine to expect businesses in Maine to just, like, know all the intricacies of California tax law when they don't do any business in California whatsoever aside from shipping that one thing to that one guy in LA that one time.

Federal law simplifying the whole thing would be incredibly welcome.

I live in WA and work in a healthcare system with clinics and hospitals in several different municipalities.

Believe me, I'm aware. I'd also like them to roll sales tax into the sticker price.

[Aerisot]

This will actually help the local retailers a lot, as that is one reason they go out of buisness is that online had no tax and in stores do.

[petej0]

I'm aware. I literally implement and provide end user support for them.

Those things cost money. They have subscriptions. Many SMBs have a REALLY hard time justifying the cost if 90% or more of there business is local (which is the case for most of my clients).

The problem comes in where some CFO wants to pinch pennies by not buying a sales tax compliance solution, then wants me to do ridiculous things like manually update ALL the sales tax rates. Or even worse, I tell him that's not feasible and would cost me eleventy billion dollars to hand key the values, and he tries to do it himself, making it far, FAR worse than reasonable people would think possible.

Fucking users man, they are the worst.

Yea, one company I worked at paid $150k for the software and $75k a year for quarterly tax updates. Small businesses will be at the mercy of companies who offer a nationwide tax software solution.

[Elegiac]

This will actually help the local retailers a lot, as that is one reason they go out of buisness is that online had no tax and in stores do.

It won't stop the principle reason being that brick and mortar shopping is still more expensive, and still hella annoying.

[Svifnymr]

Don't you already pay VAT with online purchases ?

Most states have a sales tax on items sold. This tax varies by state and some states have additional fees in some areas. As an example, Florida charges 6% sales tax. Dade adds 1% I think, and Orlando (think Disney) adds 4% I think. Meanwhile, New Hampshire has no sales tax.

Previous rulings meant that a business only had to collect sales tax within a state where they did business. If a business in Florida sold to a person in Florida, they collected Florida tax. If a company like Walmart sold something to someone in a state where they had a store, they collected that sales tax. If I bought something from some place in another state, they did not collect sales tax.

Each state also had a rule about uncollected sales tax, some giving it a different term. This was to be submitted by the buyer to their state when they purchased something from out of state and did not pay tax to the vendor. Other than cars or similar high dollar items that were easily tracked, I cannot imagine anyone ever actually paid this tax.

Most large retailers already do this, at least Amazon and Walmart and similar. I do wonder how enforceable this will be on smaller vendors anyway. Will Florida chase every vendor that has ever sold an item on Ebay? What about non-corporate types?

This does make it easier for the states that have been pursuing individual deals for years under threat of lawsuit. I do think it will still come down to states chasing down vendors though, so little folks will still be forgotten.

[Tech614]

There is still ways to make the tax lower with this rule.

If I order something from walmart online I'm going to get hit with 10% tax rate because of my address meanwhile, I can go to the walmart a town away and only pay 7.25% just as an example for good ole CA tax rates by area.

[Antiganon]

Most states have a sales tax on items sold. This tax varies by state and some states have additional fees in some areas. As an example, Florida charges 6% sales tax. Dade adds 1% I think, and Orlando (think Disney) adds 4% I think. Meanwhile, New Hampshire has no sales tax.

Previous rulings meant that a business only had to collect sales tax within a state where they did business. If a business in Florida sold to a person in Florida, they collected Florida tax. If a company like Walmart sold something to someone in a state where they had a store, they collected that sales tax. If I bought something from some place in another state, they did not collect sales tax.

Each state also had a rule about uncollected sales tax, some giving it a different term. This was to be submitted by the buyer to their state when they purchased something from out of state and did not pay tax to the vendor. Other than cars or similar high dollar items that were easily tracked, I cannot imagine anyone ever actually paid this tax.

Most large retailers already do this, at least Amazon and Walmart and similar. I do wonder how enforceable this will be on smaller vendors anyway. Will Florida chase every vendor that has ever sold an item on Ebay? What about non-corporate types?

This does make it easier for the states that have been pursuing individual deals for years under threat of lawsuit. I do think it will still come down to states chasing down vendors though, so little folks will still be forgotten.

You can't retroactively pursue sales tax for people that bought things that were sales tax exempt due to lack of nexus at the time of purchase.

I mean, theoretically you could, but consumers would appeal all the way up to the supreme court, probably win (in that there is a compelling state interest in settling the online sales tax dispute in a manner that doesn't result in hundreds of millions of Americans owing an unspecified and indeterminate amount of tax, plus penalties, for purchases made since the mid 90s).

Initially, SMBs (those who haven't had to worry before) are going to get whacked big time with noncompliance fees.
Then they will get whacked with the fees they pay to FinTech companies to outsource this crap.

Consumers will pay a bit more, but will be expecting sales tax because they pay it in stores.

Consider that being audited by the IRS is incredibly damaging to a small business, even if you have done everything 100% legit - just to get the required financial reports to prove it, you are spending dozens if not hundreds in employee or contractor hours working with auditors. Either this means you cut profit to hire more people to deal with it, or you squeeze more productivity out of your workers and try not to underservice your customers.

Like I said earlier - I agree with this ruling, I agree with paying appropriate sales tax on all purchases, but the implementation and adjustment period is going to SUCK for SMBs.

[Svifnymr]

There is still ways to make the tax lower with this rule.

If I order something from walmart online I'm going to get hit with 10% tax rate because of my address meanwhile, I can go to the walmart a town away and only pay 7.25% just as an example for good ole CA tax rates by area.

Just make sure you remit the difference to your local government as a good tax-payer should!

Really I'd think the best option would be a federal law saying every vendor needs to collect and submit the sales tax for out of state sales, but at the sales tax rate for the destination state, not any smaller municipalities inside it. If you're in state, then sure you might get forced to pay whatever random fees.

But yeah, the one thing the Federal government is supposed to do (regulate interstate commerce) is just not on their plate.

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You can't retroactively pursue sales tax for people that bought things that were sales tax exempt due to lack of nexus at the time of purchase.

I'm not positive which part you're discussing, I didn't mean that they were going for past taxes, but that they've been going after folks for years.

That said, the store (in Florida) I worked at was audited by Florida Sales Tax folks. They assured us it was a random audit, and had nothing to do with the change in volume that resulted in tax collections being cut in a third. They audited, looked for items that they could conceivably say we should have collected tax on but didn't or didn't get enough or something. They then charged us that X the audit period X interest for the audit period + penalties and fees.

So, they won't go after the buyer, sure, but they will collect their sales tax from the seller. Their defense is that it's up to the seller to find the buyer if they want to get more money from them. It's the sellers responsibility to collect and submit it.

Consider that being audited by the IRS is incredibly damaging to a small business, even if you have done everything 100% legit - just to get the required financial reports to prove it, you are spending dozens if not hundreds in employee or contractor hours working with auditors. Either this means you cut profit to hire more people to deal with it, or you squeeze more productivity out of your workers and try not to underservice your customers.

Though the premise is the same, you wouldn't be audited by the IRS (without an applicable federal law). The individual state would need to build a case, and it'd need to be big enough to warrant them bringing a lawsuit against you for perceived lack of sales tax collection. As part of this, they would gain access to your sales records to determine how much you owe them from your sales. It would cost $ and time to defend the lawsuit, but it wouldn't be an IRS audit/ jail time type stuff.

Like I said earlier - I agree with this ruling, I agree with paying appropriate sales tax on all purchases, but the implementation and adjustment period is going to SUCK for SMBs.

Yeah, this ruling Makes Sense, even if I don't want to pay more money for my online purchases.

[Doctor Funkenstein]

This will actually help the local retailers a lot, as that is one reason they go out of buisness is that online had no tax and in stores do.

"A lot." LOL! Do you honestly think people shop online because it's even remotely noticeably cheaper? (Hint: No, that's not why most people do it.)

[HawtFist]

We don't have VAT in the states. That being said depending on where you are buying from sometimes there is sales tax for online purchases and sometimes there isn't. Now it looks like there will be for all online purchases.

I got 80% of the way through setting up a little online store selling some boutique items. The rule, per my state when I set up all my tax stuff with them, was that if I sold to a resident of that state I had to collect the tax. If they bought from literally anywhere else in the world, I didn't have to worry about collecting it.

[Tech614]

"A lot." LOL! Do you honestly think people shop online because it's even remotely noticeably cheaper? (Hint: No, that's not why most people do it.)

Actually, yes... yes it is.

Do you think Amazon became what it is today by offering high prices? The company itself never even turned a real profit until recently, and even now those profit margins are really tiny.

They bought their way into the market by offering cheap prices, free and fast shipping and now that they are a behemoth that can't be touched are slowly increasing their prices, cutting costs on quality of shipping and everything else to turn profits hoping no one notices the small increases each year.

[ShimmerSwirl]

Im curious how this will affect all the chinese sellers that flood ebay with dirt cheap items. You can literally buy things from china for under 25 cents, shipping included. I don't know how taxes on people like that would ever be enforced. But as a longtime user of ebay, im hopeful this change will shift it somewhat back to a marketplace for small sellers rather than just another storefront for massive companies and resellers.

[Elba]

Good. Pay Your taxes.

[Doctor Funkenstein]

Actually, yes... yes it is.

Actually no... no it isn't.

Do you think Amazon became what it is today by offering high prices?

Nope! They became what they are today (along with every other online shopping resource) because they had comparable prices with SIGNIFICANTLY improved convenience and the ability to find exactly what you want just by typing in a few words.

If you think them having to support local taxes is going to crush them and make "brick and mortar" stores popular again, well, I look forward to the impact that reality check is going to have on you.

[Derpleton]

Well that sucks, while it's been a long time coming, I just don't like having less money

[Tech614]

Actually no... no it isn't.


Nope! They became what they are today (along with every other online shopping resource) because they had comparable prices with SIGNIFICANTLY improved convenience and the ability to find exactly what you want just by typing in a few words.

If you think them having to support local taxes is going to crush them and make "brick and mortar" stores popular again, well, I look forward to the impact that reality check is going to have on you.

So much wrong in this post.

Comparable prices my ass, yea they are comparable NOW, now that amazon is finally starting to turn profits. You're clearly young and didn't actually live through the rise of Amazon when they where offering the same CDs as FYE for $3 cheaper or the same DVDs/Blu Rays of best buy for $5 cheaper ON RELEASE DAYS. I know, I know though you're too young and are probably wondering what a CD or DVD is but that's part of the reason I chose this comparison.

There was a time when no one would compete with amazon, and no one would price match them for a reason, congrats on being young and naive to how the company was built I guess?

Amazon and Walmart are the only 2 retailers that matter for most of the US. Both where built the exact same ways, albeit in different ways. They both pushed out their competition by making shit cheaper then anyone else could.