AndyH Loc: Massachusetts and New Hampshire

It isn't.

It is much simpler than that. The role of SCOTUS is to determine the constitutionality of existing laws. As the Constitution clearly gives the federal government the power to regulate interstate commerce, the question of whether the states have the power to impose and collect taxes is within their purview. This ruling actually enhances the powers of state and local governments to impose taxes on commerce.

It really isn't a new thing - the justices had an earlier precedent to rely on. And the range of justices who supported the decision is impressive.

What taxes state governments impose, how they collect them, and what they do with them is a matter for the states individually to decide. This ruling doesn't change that, it just makes it easier for the states to collect them. The federal government has no role in this.

Diocletian

Typically a single check is cut to the state along with a form that indicates the allocation of the funds to be disbursed.

SusanFromVermont Loc: Southwest corner of Vermont

Too many pages of responses for me to read them all, so forgive me if someone has already given you the same response as mine.

Regardless of how you feel about sales tax, most states do collect it. And there is usually a part of the state tax return that asks you to declare what you have bought online without paying sales tax. So if you do NOT declare, you are essentially violating some state law. Most ignore this, and will feel "cheated" because now they will have to pay it when they purchase the product.

Even with state tax collected, if you order from for instance California, at least you do not have to pay their high sales tax rate! I order from New York which has a higher sales tax than Vermont. So you may possibly be saving money over what you would pay if you went to that state instead of purchasing near home. Vermont is right next to New Hampshire which does not have sales tax, so lots of people go there for certain purchases. Of course having to pay sales tax for online purchases hurts because you are also paying for shipping in a lot of cases, and for amateurs it is even more frustrating because they will not be claiming deductions against income from photography the same as a professional photographer would.

I guess it was inevitable, with many states having budget shortfalls. They want more money to work with.

Kingman

How about this: In light of the fact the trend is towards more online sales but what if there is a flat (use) Internet VAT 5-6% tax on only all Internet, mail order and such items. This is payable to the resident State. Sales tax in this case would go away for only these transactions and save a lot of cost for small businesses. There would probably be a lot of loop holes I can't think of right now, but this is no different than simplifying the income tax with a flat tax. Note: the tax preparation lobby probably wouldn't like this.

AndyH Loc: Massachusetts and New Hampshire

Nice idea, but it would change the basic distribution to the states by a great deal.

I live in a state with no sales tax. Across the borders, Maine, Massachusetts, and Vermont all tax at different rates and with different exemptions. So my costs would go up, my state's revenue would go up, and revenue from the three bordering states would all go down, and go down without any control or action on the part of the states themselves. That would go over like a lead balloon.

Further, I can't imagine this, or any other congress for that matter, imposing a new national tax that does not contribute to either reducing federal deficits or covering federal expenses.

Often, the things that make sense and the things that are politically possible are not the same.

Andy

xt2 Loc: British Columbia, Canada

Correct. It is the redistribution of wealth that is at the core of what is, in my opinion, what’s wrong here.

AndyH Loc: Massachusetts and New Hampshire

You mean the way the states spend their tax revenue? Because this federal action has nothing to do with redistribution at all.

I'm not sure that sales taxes are the best method of state and local taxation, but they certainly don't inherently redistribute anything, do they? If anything, they hit the poor much harder than the rich, even more so in states where the tax is applicable to necessities like food and clothing. There are numerous studies showing that the percentage of income spent on sales taxes drops as incomes rise. That's one of the reasons I dislike the method.

Kingman

How often has the government passed laws or have tax laws that actually are simple and make sense? There's always a chance to try. Draining the swamp can ultimately be accomplished by term limits. There are just too many lifetime politicians feeding at the trough.

kd7eir Loc: Tucson, AZ

I am heavily involved with the eCommerce division of my company as one of my duties as the Six Sigma black belt, if you think they will not catch you you are living in la la land. There are already several systems in place to track eCommerce shipments via the shipping companies (all in the name of "Homeland Security"), and if you think UPS/FEDEX/USPS/DHL et all will argue over providing the state with complete shipping records then you are, again, living in la la land because they do it ALL THE TIME.

You only need to get caught ONCE and trust me, by the time they are through with you, you will be in bankruptcy. You will be required to appear in the state that is investigating/prosecuting you multiple times (or hire a lawyer at an average cost of $100 - $400 per HOUR), submit hundreds of court filings at approximately $75 a pop (average cost per filing in AZ, many states charge MUCH more, AND your lawyer will ALSO charge you an hourly fee each time they file on your behalf.)

If you refuse to provide records, or provide records that seem "sketchy" they will just assess what THEY consider an appropriate aggregate tax based upon THEIR estimation of your total shipments to the state and the average value of the products that you sell, PLUS INTEREST, and THEN charge you with contempt of court at the least.

THEN you have the entire reciprocity issue - trust me the states that choose to collect sales tax on eCommerce will ALL work together and share records of your sales. Try to get around the new tax by not getting a sales tax license? That is prima facie evidence of intent to defraud which raises the stakes from a tax issue to one of a felony criminal offense.

Good luck with your "idea" to defeat the system. I hope you enjoy putting yourself out of business.

flyguy Loc: Las Cruces, New Mexico

"The only solution will be for Congress to pass an Internet sales tax that applies to all states."[/quote]

Or the really intelligent solution would be to pass a law prohibiting taxation of internet sales because it is,
I would think, interstate commerce and Congress could pass it without being overturned by the courts.

AndyH Loc: Massachusetts and New Hampshire

Some real expertise here; thanks for sharing it.

It raises a couple of questions for me: If I'm not in business, but just sell my used camera on eBay, am I responsible for tracking down the information for the buyer's location on a one-time sale? If so, that will surely add to the asking price of items sold by individuals on eBay, as it adds an extra cost and extra labor. I don't think I've ever sold an item on eBay, but I've certainly bought quite a few. At least I might get an advantage if I point out to sellers that I'm in a "no sales tax" state!

Also, I'm assuming this will change the policy that Amazon and other retailers have of basing the tax charged on the location to which the product is delivered. In the past, I have been able to send gifts to kids and grands in other states, but been charged zero taxes because I'm in a state with no sales tax. While I haven't read the whole ruling, I would assume that delivery point would now determine the applicable taxes. On high value / low weight items, it might be preferable to have it shipped to me and to re-ship it to the recipient if that's the case. For bulkier items more expensive to ship, it might be best to just pay the tax at the recipient's location.

Certainly some things to think about, and the unintended consequences of this decision, and policy changes resulting from it, won't be known for a while.

Andy

AndyH Loc: Massachusetts and New Hampshire

I just went on "The Bay" to check on an auction, and received a message from eBay, linking to the online petition they are supporting.

Here is the link, for those interested in signing on to it...

https://www.ebaymainstreet.com/petition/internet-sales-tax-buyers

Andy

Notorious T.O.D. Loc: Harrisburg, North Carolina

This may ultimately be a move toward a national VAT tax. That will be presented as the easy way to level the playing field for all businesses. in many EU countries it runs about 20 percent. There are costs that internet sellers have that brick and mortar stores don't have and vise versa. I generally would not by from Amazon if I could buy from another supplier that didn't charge me sales tax. Amazon usually hits you with taxes on a purchase.

Also keep in mind that a tax is usually associated with an activity, purchase, transaction, or ownership. I have a place in PA that we have paid more in taxes on in the past 25 years than what the purchase price was. What a deal...you have to buy it, pay for it 3 or 4 times over...and it is still not really yours free and clear... Our founding fathers must be shaking their heads...

Best,
Todd Ferguson

Kingman

What about international sales. When one buys items from Europe and delivered here, we pay no VAT tax unlike the folks that life in the EU. Will the tax collecting agencies starting asking our EU neighbors to charge sales taxes based on our complicated zip code system?

traderjohn Loc: New York City

Six Sigma Black Belt. Where would you file that...oh yeah. Round file.