Supreme Court allows states to collect sales taxes on more online transactions

[Cubo de Sangre]

I dunno I'm not a lawyer. Just a gut feeling, and my gut is usually right.

lol.

Best argument I can think of for states demanding taxes be collected by entities existing outside their jurisdiction would be the supremacy clause. This involves interstate commerce and that's the domain of the feds. Seems like it would need to be a federal regulation to compel the seller to action.

 

[HockeyBjj]

I’m actually surprised it took this long to open up sales tax to apply broadly to online purchases.

Thank you @alanb and @JamesRussler for the details on how this decision is more complex than it would seem at the surface to someone not experienced in law

 

[djacobox372]

Yay! More regressive taxes!

 

[Cubo de Sangre]

@Quipling @JamesRussler

Now I'm bothered by this all of the sudden. Probably due to being preoccupied with enforcement. I'm starting to think SCOTUS had it right to begin with. The crux of it seems to be can a state compel tax collection from a business (located in another state) over activity not taking place in their jurisdiction?

Let's say I give a buddy money to buy me something when he travels across state lines. The cash leaves my state, enters another, a sale is made, and goods are transported across state lines. Can anyone argue that this business has an obligation to collect the tax that would be owed in the other state had the sale taken place there?

Seems like the simple solution to all of this is to have sales taxes collected on all sales within x-jurisdiction at the same rate as any other transactions taking place there. Then businesses can worry about one rate and remittance. In the process, all sales get taxed and collectively the states get their revenue.

 

[JamesRussler]

@Quipling @JamesRussler

Now I'm bothered by this all of the sudden. Probably due to being preoccupied with enforcement. I'm starting to think SCOTUS had it right to begin with. The crux of it seems to be can a state compel tax collection from a business (located in another state) over activity not taking place in their jurisdiction?

Let's say I give a buddy money to buy me something when he travels across state lines. The cash leaves my state, enters another, a sale is made, and goods are transported across state lines. Can anyone argue that this business has an obligation to collect the tax that would be owed in the other state had the sale taken place there?

Seems like the simple solution to all of this is to have sales taxes collected on all sales within x-jurisdiction at the same rate as any other transactions taking place there. Then businesses can worry about one rate and remittance. In the process, all sales get taxed and collectively the states get their revenue.

There needs to be a "nexus" between the seller and the state. I believe the crucial factor for imposing an obligation to collect and remit taxes on sellers is that they have a presence in the state somehow, whether it's a physical or virtual presence. On top of that, the business transaction would probably have to take place in the state too. So in your hypothetical, I don't believe your home state would be successful in arguing that the seller should have an obligation to collect and remit sales tax. Of course that won't necessarily stop your state from making the argument in the first place (and forcing the business to hire an attorney).

You can probably divine a situation which exposes the flaws with the Court's ruling. When those situations come up in the real world, that's the only time the Court ever addresses those problems.

 

[Cubo de Sangre]

There needs to be a "nexus" between the seller and the state. I believe the crucial factor for imposing an obligation to collect and remit taxes on sellers is that they have a presence in the state somehow, whether it's a physical or virtual presence. On top of that, the business transaction would probably have to take place in the state too. So in your hypothetical, I don't believe your home state would be successful in arguing that the seller should have an obligation to collect and remit sales tax. Of course that won't necessarily stop your state from making the argument in the first place (and forcing the business to hire an attorney).

You can probably divine a situation which exposes the flaws with the Court's ruling. When those situations come up in the real world, that's the only time the Court ever addresses those problems.

Isn't "virtual presence" just another way of saying advertising (i.e. free speech)? Me mailing you my catalog across state lines wouldn't be a "presence".

 

[JamesRussler]

Isn't "virtual presence" just another way of saying advertising (i.e. free speech)? Me mailing you my catalog across state lines wouldn't be a "presence".

That's a good question. Take a look at the statute at issue in the SCOTUS case (it was a North Dakota statute IIRC); it probably defines it in there somewhere. To justify a sales tax, the online store would have to be analogous to a brick-and-mortar formerly occupying the same niche. So it would have to be more than just advertising – they'd need to have a way to search through the inventory, accept / process payment, and deliver the product. I suspect there will probably be some litigation about this. But at the end of the day, I'd wager these e-stores just collect the taxes without issue.

I wonder how it will work with a site like E-Bay, where it's a bunch of second-hand junk. I haven't thought about it at all.

 

[Cubo de Sangre]

That's a good question.

Exactly. I'm back to thinking SCOTUS overturned a good ruling just because more money was involved.

 

[JJSBUR]

@Quipling @JamesRussler

Now I'm bothered by this all of the sudden. Probably due to being preoccupied with enforcement. I'm starting to think SCOTUS had it right to begin with. The crux of it seems to be can a state compel tax collection from a business (located in another state) over activity not taking place in their jurisdiction?

Let's say I give a buddy money to buy me something when he travels across state lines. The cash leaves my state, enters another, a sale is made, and goods are transported across state lines. Can anyone argue that this business has an obligation to collect the tax that would be owed in the other state had the sale taken place there?

Seems like the simple solution to all of this is to have sales taxes collected on all sales within x-jurisdiction at the same rate as any other transactions taking place there. Then businesses can worry about one rate and remittance. In the process, all sales get taxed and collectively the states get their revenue.

If this happens a bunch of people doing internet sales will move to one of four states that charge no sales tax but make it up in other forums of tax.

As states see these businesses leave their state some will increase income, property, or some other form of tax and drop sales tax.

This would be quite a change and it would be a cost for state government to make the changes.

In the mean time Montana, Oregon, Delaware, and New Hampshire, may get gain from this so long the benefit is greater than the new income tax or property tax they would have to pay.

 

[Cubo de Sangre]

If this happens a bunch of people doing internet sales will move to one of four states that charge no sales tax but make it up in other forums of tax.

If every internet business moved to just four states then overhead in those areas would rise substantially. Between that and customer experience, a 5% (or so) tax isn't shit. But hey, the feds could step in with the commerce clause and charge a federal tax in those jurisdictions.

 

[JJSBUR]

If every internet business moved to just four states then overhead in those areas would rise substantially. Between that and customer experience, a 5% (or so) tax isn't shit. But hey, the feds could step in with the commerce clause and charge a federal tax in those jurisdictions.

Montana is pretty empty outside of the some areas in the Western part of the state. Plenty of room for growth.

 

[Cubo de Sangre]

Montana is pretty empty outside of the some areas in the Western part of the state. Plenty of room for growth.

A buncha infrastructure and labor just waiting there with open arms?

 

[JJSBUR]

A buncha infrastructure and labor just waiting there with open arms?

Can be cheaper to build new there than buying used real estate in many places.

It would not take much for delivery services to grow since it is small packages outbound and large ones inbound . It is doable. Do you own a business?

 

[Cubo de Sangre]

Can be cheaper to build new there than buying used real estate in many places.

It would not take much for delivery services to grow since it is small packages outbound and large ones inbound . It is doable. Do you own a business?

That's only a small part of growth.

Shit don't deliver itself and I have plenty of business experience. Especially when it comes to mailorder. I actually prefer it over retail. Fuck retail. But that's just my opinion.