Luminous Landscape Forum

The Art of Photography => The Coffee Corner => Topic started by: aderickson on June 21, 2018, 06:43:13 pm

Title: SCOTUS decision on state tax for online purchases
Post by: aderickson on June 21, 2018, 06:43:13 pm
What do you think? Will this affect your buying decisions? I must admit to considering state sales tax when buying big ticket photography items. I probably purchase more from B&H or Adorama because of this. I actually think this is a good idea to help level the playing field for all businesses.

Allan
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Slobodan Blagojevic on June 21, 2018, 07:05:41 pm
Mind letting us know what you are talking about? News? Link?
Title: Re: SCOTUS decision on state tax for online purchases
Post by: digitaldog on June 21, 2018, 07:54:47 pm
I think it's fair, I think it will help out the states. I buy a LOT on Amazon and have been paying sales tax for awhile now, I'm OK with that. I don't see why on-line companies shouldn’t pay taxes like Brick and Mortar and this levels the playing field.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: digitaldog on June 21, 2018, 07:56:48 pm
Mind letting us know what you are talking about? News? Link?
Here you go, but since it's not on Fox News, (just checked their web site) maybe 'fake news'?  ;D  NO.
Is NBC OK?

https://www.nbcnews.com/politics/supreme-court/supreme-court-rules-states-can-require-online-retailers-collect-sales-n873416?cid=public-rss_20180621 (https://www.nbcnews.com/politics/supreme-court/supreme-court-rules-states-can-require-online-retailers-collect-sales-n873416?cid=public-rss_20180621)
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Chris Kern on June 21, 2018, 08:18:36 pm
Mind letting us know what you are talking about? News? Link?

Note: This only affects consumers in the United States.

It's news.  As for the links, I haven't had the time to read the U.S. Supreme Court's opinion (https://www.supremecourt.gov/opinions/17pdf/17-494_j4el.pdf) yet, but here is a summary by Adam Liptak of the New York Times (https://www.nytimes.com/2018/06/21/us/politics/supreme-court-sales-taxes-internet-merchants.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region&region=top-news&WT.nav=top-news).

The Court, in an extremely unusual ruling, today directly invalidated a previous Constitutional doctrine based on opinions in earlier litigation that allowed retail outlets to avoid collecting a state's sales tax* unless they had a "physical presence" in the state.

Today's Supreme Court decision eliminates that restriction.  The states are now free to enact statutes that would require out-of-state retailers to collect sales taxes on purchases by their residents as long as those laws don't overly burden interstate commerce.

There are a number of potential complications involved in implementing this federal court ruling and, no doubt, they will spawn additional lawsuits.

But the bottom line is that if you are a resident of another state, and you're accustomed to avoiding sales taxes by purchasing from online New York retail outlets like B&H and Adorama, your supplier may in the future be required to collect your state's sales tax on your Internet purchases.

In other words, it may be time to consider accelerating your order for that $48K Hassy (https://www.bhphotovideo.com/c/product/1384729-REG/hasselblad_h_3013775_h6d_400c_multi_shot_medium_format.html).  You know you want it!  (I'm not certain whether the previous link will work outside North America).

___
* International note: we have an unusual system of taxing retail sales in the United States.  No national VAT or GST.  The states control this particular class of taxes.  (For those of you in Europe, the individual states here exercise independent authority over retail sales taxation roughly analogous to that of the EU national governments—except that here each state has complete discretion to determine its own sales tax rate, or impose none at all.)
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Alan Klein on June 21, 2018, 11:25:38 pm
In reading, I find that the minority opinion is better.  Congress should make the rules.  They are charged with regulating interstate commerce.  What happened here is that the Supreme Court decided how states should handle interstate sales taxes.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Alan Klein on June 21, 2018, 11:30:01 pm
Interesting.  CHief Justice John G. Roberts Jr. joined liberal Justices Stephen G. Breyer, Sonia Sotomayor and Elena Kagan in the dissent.  Roberts was the one along with four liberals who got Obamacare passed when he called the penalty a tax.  He really leans over to having Congress decide law and keeping the Courts out of it.  He did so again with this ruling although he was on the losing side.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Two23 on June 21, 2018, 11:59:36 pm
Most of what I buy is used, and more & more I buy from private sellers on buy/boards.  I'm having trouble remembering what the last new gear was I bought.  Might have been a $22 camera cover. :)   The irony here is it seems to have been my state that brought the case, and it was our attorney general that I just voted for governor in the primary that was in charge.  South Dakota has less than 900,000 people so any decline in sales tax is noticed.  Taxes here in general are very, very low anyway.  (We have ZERO personal or corporate income tax, a major reason I moved here instead of Minnesota.)  Overall, I don't see this affecting me much as I have zero plans to buy new gear.  I like to wait at least a year and then buy used from an individual seller.  Looks like I'll be saving even more now. :)


Kent in SD
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Farmer on June 22, 2018, 12:15:58 am
This is not just a US issue.

We (Australia) recently changed our laws to require international entities like eBay and Amazon to collect our GST (VAT) on sales to Australia.  Amazon will now block Australians from buying from Amazon overseas and only let us buy from Amazon Australia in response.  Other major online retailers are just dealing with it and collecting it, and many have been for ages (Adobe, Dropbox, to name two that I use).

Online sales are so large now that governments have realised it's being used as a loophole to avoid tax and they're moving to close it.  Previous laws had no concept of online sales.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Alan Klein on June 22, 2018, 12:30:43 am
Phil, I recall that discussion.  One question.  How will Australia enforce foreign companies to collect tax and reimburse the Australian government?  In the US, a state can sue a company in another state and bring them to court in  the US.  Not sure where it would be adjudicated.  In the state that's suing or in the state the company is located?  Maybe someone knows. 
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Farmer on June 22, 2018, 05:41:13 am
All of the larger operations have some sort of presence locally which gives one avenue.  The other is to simply confiscate goods for which taxes are unpaid.  This doesn't apply to "mom and pop" operations doing minor exports - in those cases, products over a threshold value are taxed when they enter the country - i.e. the purchaser has to pay the tax.  They can also simply block access to the websites of companies that don't comply - yes, you can VPN your way around that, but most people either can't do that or can't be bothered, so it's a genuine threat.

There are also various tax and trade agreements which also provide legal recourse at the countries of origin.

They can't provide for 100% enforcement, but they can do enough to make it very painful for companies and, more importantly, for purchasers (which then impacts companies who lose sales).
Title: Re: SCOTUS decision on state tax for online purchases
Post by: RSL on June 22, 2018, 07:06:46 am
In reading, I find that the minority opinion is better.  Congress should make the rules.  They are charged with regulating interstate commerce.  What happened here is that the Supreme Court decided how states should handle interstate sales taxes.

Exactly!
Title: Re: SCOTUS decision on state tax for online purchases
Post by: BJL on June 22, 2018, 08:08:07 am
I haven’t read the ruling, but it seems that it was the former rule that took decisions out of the hands of elected governments, both state and federal.

Anyway, the ruling probably has little or no legal effect on how much tax customers owe to their states, since states have a “use tax” owed on purchases from out of state, equal to the sales tax that would be owed on an in-state purchase. What it does is to make the widespread avoidance of that tax far harder.

I optimistically hope that this will make it easier for buy photo gear in an actual shop that lets me examine the gear in advance and discuss it with a human sales rep.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: RSL on June 22, 2018, 09:09:12 am
I optimistically hope that this will make it easier for buy photo gear in an actual shop that lets me examine the gear in advance and discuss it with a human sales rep.

Hear, hear. I'd love to see some real photo shops reappear.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Alan Goldhammer on June 22, 2018, 10:08:39 am
Hear, hear. I'd love to see some real photo shops reappear.
Prepare to wait a very long time.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Alan Klein on June 22, 2018, 11:14:19 am
A visit to the B and H Photo store in Manhattan is like going to an amusement park.  Quite an fun experience.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: donbga on June 22, 2018, 11:18:19 am
Hear, hear. I'd love to see some real photo shops reappear.
Dream on, they ain't coming back.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Alan Klein on June 22, 2018, 11:23:09 am
I haven’t read the ruling, but it seems that it was the former rule that took decisions out of the hands of elected governments, both state and federal.

Anyway, the ruling probably has little or no legal effect on how much tax customers owe to their states, since states have a “use tax” owed on purchases from out of state, equal to the sales tax that would be owed on an in-state purchase. What it does is to make the widespread avoidance of that tax far harder.

I optimistically hope that this will make it easier for buy photo gear in an actual shop that lets me examine the gear in advance and discuss it with a human sales rep.

Well you did underline "legal".  Use taxes are rarely collected.  Who reports they bought something from out of state and then reports and pays the sales tax to their state? 

I believe the way the supreme court ruled, each state can collect the sales tax, regardless of how much that company might do in that state for an entire year.  That means that little mom and pop places have to charge and pay sales tax even if they only collect $10 for an entire year.  They can't afford to pay accountants to file all those sales tax papers in 50 state.  It's too big a burden.   It's going to be too complicated.  I think Congress will get back into this arena and come up with a better plan and SCOTUS will OK anything they legislate because the Constitution gives the Congress the right to regulate interstate commerce.  It's probably something Congress should have done already.  SCOTUS is just pushing them.  Maybe that was their intent. 
Title: Re: SCOTUS decision on state tax for online purchases
Post by: RSL on June 22, 2018, 11:35:40 am
Prepare to wait a very long time.

I'm sure you're right, Alan. Amazon has been collecting sales tax for a long time now. I suspect B&H and Adorama will simply lower their prices to fight any attempt to reinstate camera shops. A camera shop has expenses B&H simply doesn't have to deal with when they ship stuff directly to a customer. Too bad, though. The local camera shop was a great place for people testing photography with a toe to find out what's involved. It's not all selfies with a cell phone out there nowadays, though it sometimes feels that way.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: OmerV on June 22, 2018, 12:48:05 pm
Not sure if local camera stores will reopen, but this ruling may give stores like bestbuy, Target, Sears and other large retail corps. some air even though some of them have started their own online presence in attempts to compete with Amazon. The local Apple store is the busiest(by a long shot,) store in the Tucson version of a high end shopping mall.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Rob C on June 24, 2018, 10:11:42 am
The camera shop, staffed by people who knew their onions, was a very useful resource. But its demise started long before the Internet, with the huge marketing mistake that allowed big buyers to buy from manufacturers at lower prices than could little shops. What madness! The manufacturers would have sold the same number of items at the same price, whether from a mega-store or a local one-man operation. The only retail price advantage a mega should have had was from its own, internal economies of scale, not from unfair selling by the manufacturers.

I chose to buy all my camera stuff locally, despite the existence of several huge, postal dealerships in Leeds and London who could have saved me a few miserable quid. In the event of a failure, how nice to go back to the local shop and hand over the product, the solution then up to the shopkeeper and the reps. Imagine: no repacking, insuring, visits to the post office!

As with so much that ails society, it's rooted in pure, bloody greed. We bring these things upon ourselves.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Alan Klein on June 24, 2018, 11:13:20 am
I'm sure you're right, Alan. Amazon has been collecting sales tax for a long time now. I suspect B&H and Adorama will simply lower their prices to fight any attempt to reinstate camera shops. A camera shop has expenses B&H simply doesn't have to deal with when they ship stuff directly to a customer. Too bad, though. The local camera shop was a great place for people testing photography with a toe to find out what's involved. It's not all selfies with a cell phone out there nowadays, though it sometimes feels that way.
Just to clarify, B and H has a huge store in NYC on 34th Street near Madison Square Garden.  I've been there many times.  They aren't just an internet store.  They have hundreds of salespeople and 250,000 items you can fondle. They have free talks all of which are video'd so you can watch from where you live as well as stored on the internet.  They provide training and demonstrations constantly.  Also taped.  You can go in and try printing from different computer setups, buy or sell your used equipment, etc.   You can buy fresh film, developers, stands, lighting, telescopes, etc.  They have kiosks of equipment from each of the major camera manufacturers manned with knowledgeable people  to help you decide and try the stuff.   They have a visible overhead conveyor belt system so you can watch the stuff you buy get transported from the sales floor to the checkout area where a dozen people are busy packing your stuff ready to leave with you when you pay.  It's like a candy store for little kids.  You can get lost in there for a week.  They own a parking lot across the street for those who drive, near subways and the bus terminal for those who don't.  All of these things are enormously expensive, especially in NYC with taxes, labor costs, etc.  Of course they have a big market locally. 

But the point is that they are in the big business of a local store as well as big internet sales.  It is unfortunate that so many other markets can't have the walk-in ability with all the top rate technical support New York City area photographers have with B and H.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Slobodan Blagojevic on June 24, 2018, 11:33:51 am
Excellent post, Alan!

And yes, I've been there several times too. It is like you die and end up in a photographic heaven. Well, for the gear junkies, anyway ;) Then again, even if you are an artist-photographer only, you do need to take care of equipment inevitably.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Alan Klein on June 24, 2018, 11:38:24 am
Equal tax requirements create playing fields and are good, long term and overall.  It creates fairer competition that will lower prices for consumers and foster more innovation, always a good thing.  Displacements occur continuously in a vibrant and fair market, which is what we want. How many people would prefer doing away with the internet and going back to stores only?
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Martin Kristiansen on June 24, 2018, 11:40:55 am
I visited B&H before the internet was a thing. They were  legendary even then. About three months ago I decided to buy a Sony 70 to 200. Well actually it became a pressing business requirement. No Sony dealer where I live. Wednesday lunchtime I downloaded B&H’s app onto my iPhone and placed the order. Friday afternoon the lens was delivered to my door. In Johannesburg. Weird thing is I wasn’t even surprised. That’s the service I have come to expect from them. Amazing.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Chris Kern on June 24, 2018, 11:57:57 am
Just to clarify, B and H has a huge store in NYC on 34th Street near Madison Square Garden.  I've been there many times. . . .  [T]hey are in the big business of a local store as well as big internet sales.  It is unfortunate that so many other markets can't have the walk-in ability with all the top rate technical support New York City area photographers have with B and H.

They also provide exceptional customer service to Internet customers.  Not happy with that sample of a lens they sent you?  Send it back at their expense.  Got a presales question?  Phone them or open an online chat session; in my experience, their rep will give you remarkably objective advice, not just a sales pitch.  If they eventually are required to collect sales tax from all U.S. purchasers—note that the individual states will each need to enact new laws before this happens except in the unlikely scenario that they follow Amazon's lead and choose to collect state taxes at their own initiative—I doubt their Internet sales will be adversely affected.  And, of course, the Supreme Court ruling is irrelevant to international sales, which I suspect are a growing component of B&H's business.

In the long term the Court's decision probably will help local stores in the United States compete more effectively with the big Internet sales outlets.  But I suspect the effect will vary considerably by locality and store type.  Frankly, I'd be surprised if it does much to revive the local retail camera trade.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Alan Klein on June 24, 2018, 12:33:48 pm
I was just looking at South Dekota ruling that SCOTUS based it on.  SD implementation starts at $100,000 or 200 sales which is a lot of money and activity for an out-of-state small business to sell there by the internet.  Less than that, they don't have to worry about it.   If they're doing that much business, they will be able to afford the additional paperwork which hopefully will be reduced even more with a central clearinghouse. 
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Alan Klein on June 24, 2018, 12:47:30 pm
I think I'm reversing myself.  Maybe Congress shouldn't get involved.  Let private enterprise develop clearinghouses that business can pay to handle their sales tax payments easily, if they wish.  Congress will only mess things up.   

When I was in business, I used a payroll service to handle paying my employees and the feds, states and local taxes including social security withholding income etc.  I could see ADP and other payroll services like them getting involved and providing paying sales taxes as an additional service to their clients.  Or a separate.  Any bright, entrepreneurial IT people out there?  Here's your chance to start a business.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Chris Kern on June 24, 2018, 01:57:53 pm
Let private enterprise develop clearinghouses that business can pay to handle their sales tax payments easily, if they wish.

I don't have any inside information, but I suspect Amazon—which already collects sales taxes on behalf of states where it does not have a physical presence for products sold and fulfilled by Amazon (but not those sold through Amazon by other sellers)—already is prepared to offer just such a service.

Of course, Congress has the inherent authority "[to] regulate Commerce . . . among the several States."  That's the whole point of the "commerce clause" in Article I, Section 8, of the U.S. Constitution (https://en.wikipedia.org/wiki/Article_One_of_the_United_States_Constitution#Section_8:_Powers_of_Congress).  But there are significant economic interests on both sides of this issue which may influence the congressional delegations of different states in conflicting ways, and so far Congress has declined to enact a national statutory regime for the collection of state sales taxes.  So for now, at least, each state legislature is free to draft a law to require out-of-state retailers to collect taxes on purchases by its residents.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: texshooter on June 24, 2018, 02:28:00 pm
Now that the state will be collecting more tax revenue thanks to the SCOTUS ruling, the government can now lower the sales tax rate for everybody. No?

(https://pbs.twimg.com/media/CZ6tw08UcAEtDZY.jpg)
Title: Re: SCOTUS decision on state tax for online purchases
Post by: D Fuller on June 24, 2018, 04:37:00 pm
I think I'm reversing myself.  Maybe Congress shouldn't get involved.  Let private enterprise develop clearinghouses that business can pay to handle their sales tax payments easily, if they wish.  Congress will only mess things up.   

When I was in business, I used a payroll service to handle paying my employees and the feds, states and local taxes including social security withholding income etc.  I could see ADP and other payroll services like them getting involved and providing paying sales taxes as an additional service to their clients.  Or a separate.  Any bright, entrepreneurial IT people out there?  Here's your chance to start a business.

I don’t know about other states, but I pa6 sales tax in Maine, where my business is located. It takes me about 5 minutes every quarter. Quickbooks makes it exceedingly simple to do. If I were required to pay sales tax in other states, I don’t see that a platoon of accountants would be required.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: digitaldog on June 24, 2018, 04:39:44 pm
I don’t know about other states, but I pa6 sales tax in Maine, where my business is located. It takes me about 5 minutes every quarter. Quickbooks makes it exceedingly simple to do. If I were required to pay sales tax in other states, I don’t see that a platoon of accountants would be required.
+1, takes mere minutes for me, twice a year, in New Mexico.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Alan Goldhammer on June 24, 2018, 04:53:52 pm
Well you did underline "legal".  Use taxes are rarely collected.  Who reports they bought something from out of state and then reports and pays the sales tax to their state? 
I have done Pennsylvania state income taxes for several years when my daughter was living there and IIRC they have some type of calculation for this that is automatically triggered.  It's been a couple of years so if anyone from PA is looking at this they can weigh in.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Slobodan Blagojevic on June 24, 2018, 05:04:45 pm
I don’t know about other states, but I pa6 sales tax in Maine, where my business is located. It takes me about 5 minutes every quarter. Quickbooks makes it exceedingly simple to do. If I were required to pay sales tax in other states, I don’t see that a platoon of accountants would be required.

I did pay sales tax in Illinois for a couple of years. It took way longer than five minutes per quarter, mostly due to the confusing nature of online forms.

However, I have no idea what would take to report sales tax in all 50 states. I know that, when I report my income tax for just one state, I have to pay about $20 per state to submit it electronically (free if by mail). Also, one state is included in the federal price, but each extra state is about $20.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Alan Goldhammer on June 24, 2018, 06:18:17 pm
However, I have no idea what would take to report sales tax in all 50 states. I know that, when I report my income tax for just one state, I have to pay about $20 per state to submit it electronically (free if by mail). Also, one state is included in the federal price, but each extra state is about $20.
Don't know what software you use for taxes but those are about the right prices for Turbo Tax that I use.  The states also make things much more difficult than they should be.  My daughter works at on a summer camp staff in Pennsylvania and every year I have to file a paper return to get back the withheld state income tax as Maryland is a reciprocal state under the joint agreement between the states.  A few years ago you could do this all on line and get the refund back in a couple of weeks.  Now you send the return in and it's usually 8-10 weeks before she gets her return.

It's even more ludicrous with trust income.  I was the trustee for an inherited trust for the two daughters and I had to file a Federal and multiple State tax returns (one for Maryland where I live and the other for where the daughter lived).  It was worse the first couple of years as there was an apartment building in California that paid out rental income.  Each of the girls had to file separate returns for $2 of taxes, yes TWO DOLLARS.  What was worse since both girls lived out of state the returns could not be done electronically as it was real estate income.  IIRC each return ran about 40 pages so there was extra postage involved and yearly accountant's fees.  Fortunately, the apartment building was sold as soon as the real estate market rebounded and the trust dissolved when the girls turned 30.  Unless there is a real good reason, I wouldn't subject my kids to dealing with an inherited trust.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Alan Klein on June 24, 2018, 07:07:43 pm
+1, takes mere minutes for me, twice a year, in New Mexico.
But if another state, let's say 25 states, where you sent your products out requires paperwork too, the time you'd have to work at it will go up considerably.  Then what happens when you get a letter from Hawaii, that asks for back up information on the shipments you made to there.  Multiply that by 25 states.  It can get really crazy.  I think the $100,000 start amount in SD is what will keep this from getting out of hand.  Most small businesses don;t do that much, at least not in a foreign state.  If they do, God bless them and they'll be able to afford a bookkeeper.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: digitaldog on June 24, 2018, 07:16:15 pm
But if another state, let's say 25 states, where you sent your products out requires paperwork too, the time you'd have to work at it will go up considerably. 
Nope, I only have to report sales tax in the state I reside in, do business in, no matter where my customers come from. That was the same when I did business in California! I can't speak for all other states, can you (or speak of those 25)?
Do you actually have your own business, file sales tax? What state?
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Alan Klein on June 24, 2018, 09:38:24 pm
Nope, I only have to report sales tax in the state I reside in, do business in, no matter where my customers come from. That was the same when I did business in California! I can't speak for all other states, can you (or speak of those 25)?
Do you actually have your own business, file sales tax? What state?
I'm retired now.  But I had a specialty contracting firm that mainly installed and serviced BAS and EMS systems in NY.  Our offices were in NYC and all our employees worked out of NY.  However, we had customers in NJ.  So when we did work there, we billed them including NJ sales tax which I reimbursed to NJ having to file NJ State Sales Tax forms.  If I recall correctly, it was on a quarterly basis, but it could be monthly if the sales tax was over a certain limit.  I had both NJ and NJ Certificates of Sales Tax that allowed me to collect sales tax in both states even though my company had no physical presence in NJ.  It would not have been legal to do my work in NJ without it. 

So now with internet sales, companies like yourself will have to pay sales tax to many states.  How will that be set up?  Will the company have to get a sales tax certificate for each state they do business in?  Will they have to file forms and pay on a monthly or quarterly basis?  Your current situation may change.  Maybe a lot depending on the amount of sales in each individual state.  I was once audited by NJ Sales Tax people.  It was expensive, not what they found, but just the cost of my accountants who were required for the audit.  So paying sales tax in all these states can open companies up to all kinds of headaches.

I think that clearinghouses will be set up by some entrepreneurial people, maybe yourself.  They will set up so they will pay each of the states for many companies, just like payroll firms like ADP now handle payroll processing including withholding taxes for company's employees.  They pay the state and federal withholding taxes.  Maybe ADP will add sales tax payments to their services.  Then you would send in one check, with one sheet that shows all the sales for all of the states you did business in.  ADP will handle the distribution of those funds to each state for you and charge you a small handling fee.

Title: Re: SCOTUS decision on state tax for online purchases
Post by: Alan Klein on June 24, 2018, 09:41:02 pm
Another interesting point.  IF you're a company that have customers buy things in your store and then have them shipped to their home in another state, will you have to start collecting sales tax for that state too just like internet sales?  That hasn't been the case. 
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Alan Klein on June 24, 2018, 09:45:52 pm
One benefit I haven't heard anyone speak of yet, is that internet taxes benefits small companies in another way.  If a retail store or even someone who does business out of their house does less the required limit (ie. South Dakota SCOTUS case indicated $100,000 or 200 sales), then you don't have to charge sales tax.  So that will put you in a stronger position than larger companies who going over the state limit as they will have to collect the sales tax from the buyer.  That will raise their prices and make the smaller companies more competitive. 
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Chris Kern on June 24, 2018, 10:26:39 pm
Nope, I only have to report sales tax in the state I reside in, do business in, no matter where my customers come from.

This is what may change as a result of last week's Supreme Court ruling—assuming other states besides South Dakota enact laws requiring out-of-state retailers to collect sales tax on their behalf for purchases made by their residents.

In theory, if all 49 eligible jurisdictions* passed such laws, sellers who exceeded a certain threshold of sales to residents of a jurisdiction would be required to (1) account for and report all sales to residents of that jurisdiction and (2) collect the applicable sales tax for that jurisdiction and remit it to the jurisdiction.

The Court's opinion (https://www.supremecourt.gov/opinions/17pdf/17-494_j4el.pdf) acknowledged that the reversal of the former "physical presence" rule may expose Internet retailers to an additional administrative burden.  The South Dakota law that was the subject of the litigation was cited approvingly by the Court for mitigating that burden.  The opinion also predicted that software might soon be available to help merchants deal with the administrative overhead, and noted that Congress can at any time legislate a national regime for interstate tax collection:

Quote
[The retail sellers that were parties to the litigation before the Court] argue that “the physical presence rule has permitted start-ups and small businesses to use the Internet as a means to grow their companies and access a national market, without exposing them to the daunting complexity and business-development obstacles of nation­wide sales tax collection.” . . .  These burdens may pose legitimate concerns in some instances, particularly for small businesses that make a small volume of sales to customers in many States. State taxes differ, not only in the rate imposed but also in the categories of goods that are taxed and, sometimes, the relevant date of purchase. Eventually, software that is available at a reasonable cost may make it easier for small businesses to cope with these problems. Indeed, as the physical presence rule no longer controls, those systems may well become available in a short period of time, either from private providers or from state taxing agencies them­selves. And in all events, Congress may legislate to ad­dress these problems if it deems it necessary and fit to do so.

In this case, however, South Dakota affords small mer­chants a reasonable degree of protection. The law at issue requires a merchant to collect the tax only if it does a considerable amount of business in the State. . . .

Unless Congress acts (I guess it's possible, but I'm not holding my breath), future litigation will no doubt be required to clarify the parameters of the authority of the states to require retailers to collect sales taxes on their behalf.

_____
* I.e., the 46 states which have some form of sales tax, the District of Columbia, and the U.S. territories of Puerto Rico and Guam.  Delaware, Montana, New Hampshire, Oregon, and the territories of the U.S. Virgin Islands, American Samoa, and the Northern Mariana Islands currently have no sales tax.  Alaska has no state-level sales tax, but permits municipalities to tax sales.

(Correction: this post has been edited to correct the number of U.S. jurisdictions that are potentially affected by the Supreme Court's ruling.)
Title: Re: SCOTUS decision on state tax for online purchases
Post by: digitaldog on June 24, 2018, 10:54:39 pm
I'm retired now.  But I had a specialty contracting firm that mainly installed and serviced BAS and EMS systems in NY.  Our offices were in NYC and all our employees worked out of NY.  However, we had customers in NJ.  So when we did work there, we billed them including NJ sales tax which I reimbursed to NJ having to file NJ State Sales Tax forms.  If I recall correctly, it was on a quarterly basis, but it could be monthly if the sales tax was over a certain limit.  I had both NJ and NJ Certificates of Sales Tax that allowed me to collect sales tax in both states even though my company had no physical presence in NJ.  It would not have been legal to do my work in NJ without it. 
I can only report how I and other's did business (24 years on NM, 15 in CA) in terms of the collection of sales tax and how long it takes/took. Therefore this statement today and in the past isn't the case: But if another state, let's say 25 states, where you sent your products out requires paperwork too, the time you'd have to work at it will go up considerably.
IF another state let's say 25 states where I sent my products/did my services required XYZ paper work, and they don't, that comment might have a leg to stand on assuming I was doing this on a paper ledger. I'm simply telling you how this stuff works today and has for 35 years in TWO states.
And no, I'm not an internet or mall company, I'm a company that did business in two states and in terms of the collection of sales tax, I only need to report that income to the state I do business in. I could NOT avoid paying sales tax for supples like Polaroid, film etc, because that was part of what I 'manufactured' but that has nothing to do with collecting and paying sales tax, rather what goods I can purchase without paying sales tax. IF I do work for an out of state company, I do not bill, collect or pay sales tax. IF I were required to do this, it would still take 5 minutes to have my banking program print out a report AND fill out the form for me, twice a year!
What MAY happen in the future, I cannot predict. It will still take the banking application mere seconds to draw up a report (I have templates, I simply enter date ranges). So there's no need to look at what SCOTUS did and place a political slant via FUD about what may happen in the future and how much time you assume it will take to report sales tax. 2 or 25 or all 50 states, it is still going to be, for me, a 5 minute operation.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: digitaldog on June 24, 2018, 10:56:44 pm
This is what may change as a result of last week's Supreme Court ruling—assuming other states besides South Dakota enact laws requiring out-of-state retailers to collect sales tax on their behalf for purchases made by their residents.
Yes, it may. It will still take minutes to figure out and report the sales tax for me; I use a computer to do this. I can't speak for other's in differing states, using other methods of calculating and reporting sales tax. But my main point is, in terms of what SCOTUS did, I applaud it and it will not be any kind of a burden for me or my business, nor produce any additional time reporting the tax. It's not rocket science.  ;D
Title: Re: SCOTUS decision on state tax for online purchases
Post by: digitaldog on June 24, 2018, 11:00:10 pm
Another interesting point.  IF you're a company that have customers buy things in your store and then have them shipped to their home in another state, will you have to start collecting sales tax for that state too just like internet sales?  That hasn't been the case.
Where? IF I go into a store here Santa Fe and have the thing I purchased sent out of state, at least here, pretty sure I'll get changed sales tax. Even if not, IF I were to sit outside that store today and if they had internet sales, got onto the wifi and ordered a product to be shipped out of state, currently they would not change me sales tax. That outlines why I feel what SCOTUS did seems reasonable and fair.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Slobodan Blagojevic on June 24, 2018, 11:06:50 pm
One question: is there really a state sales tax? In my experience, it is a municipal sales tax, county based,  therefore there might be thousands of different sales taxes to deal with. Illinois has 102, Florida 67.

Just checked: there are 3,007 counties in the U.S.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: digitaldog on June 24, 2018, 11:11:03 pm
One question: is there really a state sales tax? In my experience, it is a municipal sales tax, county based,  therefore there might be thousands of different sales taxes to deal with. Illinois has 102, Florida 67.
Metaphorical question. Literal answer. Yes there are state sales taxes and those of us in business often collect it and then send that to our state taxation board. The rate does vary here in NM based on the location of the county the business resides. IF you had two locations, each site would fill it's own report based on the taxes in that county. At least in NM.
Do you actually have your own business, file sales tax? What state? Literal question if you can answer it without metaphor....
Title: Re: SCOTUS decision on state tax for online purchases
Post by: digitaldog on June 24, 2018, 11:12:41 pm
Just checked: there are 3,007 counties in the U.S.
So what?
In 2010 there were 27.9 million small businesses, and 18,500 firms with 500 employees or more.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: donbga on June 24, 2018, 11:16:42 pm
One question: is there really a state sales tax? In my experience, it is a municipal sales tax, county based,  therefore there might be thousands of different sales taxes to deal with. Illinois has 102, Florida 67.

Just checked: there are 3,007 counties in the U.S.
Every state has their own rules plus each jurisdiction may have additional taxation and fees depending upon the type of business. So from a sellers perspective things will become a total mess for the businesses that have not administered sales taxes. My wife is a CPA and Controller for a large company that sells in all 50 states and every state / jurisdiction have the possibility of imposing their own taxes and fees.

From a buyers perspective the taxes are paid at the time of purchase in essence making the selling entity a tax collector for the state.

It's not pretty and I'm sure congress won't do shit to simplify things since this ruling presents a new revenue stream for local jurisdictions.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Slobodan Blagojevic on June 24, 2018, 11:16:52 pm
Yes there are state sales taxes ... The rate does vary here in NM based on the location of the county the business resides...

That answer is contradictory... if the sales tax rate varies based on the county, then those are county sales taxes, not state. In other words, there is no single state sales tax, at least not in the state of Illinois where I had a business and paid sales taxes (which I already stated in my post #33 in this thread).

Title: Re: SCOTUS decision on state tax for online purchases
Post by: Slobodan Blagojevic on June 24, 2018, 11:21:48 pm
So what?...

So it means that if someone has a nation-wide business of sufficient volume, they would have to maintain a data base of potentially 3007 different sales tax rates. Also, some of those rates might change mid-year, so there needs to be a system of monitoring that constantly.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: digitaldog on June 24, 2018, 11:29:36 pm
That answer is contradictory... if the sales tax rate varies based on the county, then those are county sales taxes, not state. In other words, there is no single state sales tax, at least not in the state of Illinois where I had a business and paid sales taxes (which I already stated in my post #33 in this thread).
Nope! It all goes to the NM state and one NM tax agency. It’s called sales tax through out the state; literally!
Title: Re: SCOTUS decision on state tax for online purchases
Post by: digitaldog on June 24, 2018, 11:34:11 pm
So it means that if someone has a nation-wide business of sufficient volume, they would have to maintain a data base of potentially 3007 different sales tax rates. Also, some of those rates might change mid-year, so there needs to be a system of monitoring that constantly.
Again, so what? We just trading factoids or you have a non metaphorical point to make about the new decision to tax online stores? Damn question marks! You can’t seem to tell us if you have a company, collect sales tax and IF SO what state.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Slobodan Blagojevic on June 24, 2018, 11:39:28 pm
... You can’t seem to tell us if you have a company, collect sales tax and IF SO what state.

Answered twice already:

... in the state of Illinois where I had a business and paid sales taxes (which I already stated in my post #33 in this thread).
Title: Re: SCOTUS decision on state tax for online purchases
Post by: aderickson on June 24, 2018, 11:51:53 pm
So it means that if someone has a nation-wide business of sufficient volume, they would have to maintain a data base of potentially 3007 different sales tax rates. Also, some of those rates might change mid-year, so there needs to be a system of monitoring that constantly.

A trivial computing problem. I would guess that many if not most of those businesses are already using a third party payment processing system for security reasons. To add a sales tax calculator would not be a major problem. I would also guess that taxing authorities would be happy to send updates of their rates.

Allan
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Alan Klein on June 25, 2018, 12:50:35 am
If states refuse to simplify the way sales taxes are collected from sellers in other states, they just won't get them to comply.  Since the state must be so disorganized, they never figure out how to prosecute.  I suspect, once this thing get going, states will change their laws to make it easy for internet companies to file and pay sales taxes to their states.   

Regardless, sales tax packaging companies will start providing software and processing of payments to provide a simple on-shop sales payment capability.  If you're that small that you won't be able to pay for it, the level of your sales to the various states will be lower then the trip point anyway.  So you won't have to collect the sales charge anyway. 
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Alan Klein on June 25, 2018, 01:00:43 am
Another problem I see is companies charging the buyers sales tax with no intention of forwarding the money to the states.  Just keeping it for themselves.  Of course that's illegal. 

On the legal side, how does an internet company know that they are going to go over the limit set by the state when they have to pay?  They have to charge the sales tax just in case.  How do they handle the money if the sales tax collection if the minimum is not reached?  DO they return it to the customers/ Do they forward it to the states regardless.  What if they don't start collecting until the minimum is reached.  Do they go back and charge the earlier buyers?  There's no process indicated by SCOTUS, another reason Congress should get involved. 

How do states go after companies in other states that don't pay them?  How would they even know?  A Texas tax agent can't go into Idaho and demand to see some company's books to see where he shipped his products.  They have no legal authority.  Only Idaho tax department has the authority to see Idaho books.  Congress could clarify this I suppose.  But it will become another SCOTUS issue.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Alan Klein on June 25, 2018, 01:05:23 am
...It's not rocket science.  ;D
If paying taxes was as simple as rocket science, we wouldn't need accountants.  :)
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Alan Klein on June 25, 2018, 01:14:38 am
Where? IF I go into a store here Santa Fe and have the thing I purchased sent out of state, at least here, pretty sure I'll get changed sales tax. Even if not, IF I were to sit outside that store today and if they had internet sales, got onto the wifi and ordered a product to be shipped out of state, currently they would not change me sales tax. That outlines why I feel what SCOTUS did seems reasonable and fair.
My wife and I bought something in Santa Fe in April at the Georgia O'Keeffe museum (nice place for photographers to visit) and had them ship it to our home in NJ,  We did not pay sales tax.  They only collect sales tax if you take the purchase with you or ship it to an address in New Mexico.  .


My question is will they have to charge sales tax when they ship to other states going forward because of the SCOTUS decision?  That would apply to sales in all 50 states.  Interesting side question is that five states have no sales tax.  Therefore they have no interest at all whether other states collect their sales tax.  So internet companies will move their headquarters where payment is made to one of these five states.  Then they will ignore collecting sales taxes.


This thing is going to get very messy.  SCOTUS opened Pandora's box and I doubt Congress can put Humpty Dumpty together.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Slobodan Blagojevic on June 25, 2018, 01:17:02 am
A trivial computing problem...

Anyone who has worked with computers and numbers would know that there is no such thing as a trivial computer problem.

I am generally in favor of leveling the playing field. Given the examples mentioned so far (volume and monetary thresholds), it looks like small businesses would be spared. Big online businesses have the resources to deal with the complications.





Title: Re: SCOTUS decision on state tax for online purchases
Post by: Alan Klein on June 25, 2018, 02:17:36 am
Anyone who has worked with computers and numbers would know that there is no such thing as a trivial computer problem.

I am generally in favor of leveling the playing field. Given the examples mentioned so far (volume and monetary thresholds), it looks like small businesses would be spared. Big online businesses have the resources to deal with the complications.






SCOTUS should have deferred.  This is a question for the people to decide through their representatives in Congress.  The Constitution gave the power to regulate interstate commerce to Congress, not the courts.  SCOTUS should have minded their own business.  They're not legislators and should not interfere with the people's will. 

All they've done is create a requirement with no way to enforce it.  Without Federal legislation that apply to all states, along with enforcement rules and penalties, there's no requirement because there's no clear way of handling it and can not be any enforcement. Everyone will ignore it except the very big internet companies.  Even they may ignore it. 

For example,  New York Tax auditors cannot go into California to demand to see a California company's books.  They have no legal authority in that state.  They can slam the door on them.  How will they even know if that company is selling in their state much less that they've met some arbitrary level that kicks it in? There has to be some Federal law to set this whole thing up, or leave it the way it was. SCOTUS is putting the cart before the horse and made a mistake

This change requires Congress to legislate first. 
Title: Re: SCOTUS decision on state tax for online purchases
Post by: jeremyrh on June 25, 2018, 05:03:46 am
Slightly OT but...

When I buy stuff from the US by Internet (software etc) they charge me VAT based on the country I order from. Does that company send one cent of that money they collect to the tax man in Europe?
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Chris Kern on June 25, 2018, 06:21:06 am
When I buy stuff from the US by Internet (software etc) they charge me VAT based on the country I order from. Does that company send one cent of that money they collect to the tax man in Europe?

The short answer is yes.  I'm hardly an expert on international commerce, but my understanding is that the shipping entity which seeks to import the goods is required to demonstrate that all applicable taxes have been paid before the shipment can clear customs in the destination country.  Major American retailers such as Amazon-US apparently pay the foreign taxes at the time of purchase for products that they fulfill and provide the shipper with the necessary documentation, so the purchaser sees the tax charge at the time of sale.  However, a German purchaser recently described a different scenario for a purchase that was made through Amazon from a third party.  The product was sold and fulfilled by a small U.S. company that used Amazon only as an intermediary.  The merchant apparently did not have a mechanism in place to pay foreign taxes, so the German VAT did not appear in the Amazon "shopping cart."  Before it would deliver the product, the shipper (I don't recall whether it was UPS or DHL) required the purchaser to reimburse it for the VAT the shipper had paid on the purchaser's behalf at the time of importation, plus a hefty "service" fee (€50, I think) for advancing the funds for the VAT.  Needless to say, the purchaser was rather miffed at the added expense, but apparently this was part of an arrangement the shipper had made with the German government.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Alan Goldhammer on June 25, 2018, 07:17:14 am
For example,  New York Tax auditors cannot go into California to demand to see a California company's books.  They have no legal authority in that state.  They can slam the door on them.  How will they even know if that company is selling in their state much less that they've met some arbitrary level that kicks it in? There has to be some Federal law to set this whole thing up, or leave it the way it was. SCOTUS is putting the cart before the horse and made a mistake

This change requires Congress to legislate first.
I'm not so sure.  Pennsylvania passed a law earlier in the year addressing this:  http://www.mcall.com/news/nationworld/pennsylvania/mc-nws-pennsylvania-online-sales-amazon-20180307-story.html

Addressing Slobadan's point about sales tax and whether it is state or local.  Maryland administer's its sales and liquor tax at the state level.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: RSL on June 25, 2018, 07:38:21 am
It depends. When I was dealing with the tax situation in Manitou Springs, Colorado, Manitou's sales tax collections were handled by the state -- at Manitou's request. County sales tax was separate from that. So you had at least two sets of forms to fill out and two checks to write. This is a case where, had Manitou not opted for the state to do the collecting, a sale to somebody in the relatively small city of Manitou Springs from a Florida company could require keeping track of three separate sales taxes. It's a potential nightmare.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: petermfiore on June 25, 2018, 08:51:36 am
It depends. When I was dealing with the tax situation in Manitou Springs, Colorado, Manitou's sales tax collections were handled by the state -- at Manitou's request. County sales tax was separate from that. So you had at least two sets of forms to fill out and two checks to write. This is a case where, had Manitou not opted for the state to do the collecting, a sale to somebody in the relatively small city of Manitou Springs from a Florida company could require keeping track of three separate sales taxes. It's a potential nightmare.

Now remember Russ, all business have a staff of employees to handle such non creative issues... Oh wait I'm self employed, I have no such staff. This will be a nightmare.

Peter














Title: Re: SCOTUS decision on state tax for online purchases
Post by: RSL on June 25, 2018, 09:09:09 am
Yeah, I used to do it for my wife's gallery. It was bad enough when you were dealing with local sales. If the feds don't come up with a way to combine everything into a single pot, a small business could end up with thousands of tax forms to do quarterly or even monthly. It could put a bunch of small businesses out of business.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Slobodan Blagojevic on June 25, 2018, 09:14:57 am
... Addressing Slobadan's Slobodan’s point about sales tax and whether it is state or local.  Maryland administer's its sales and liquor tax at the state level.

Let me clarify what I was asking or saying. In my experience (Illinois) sales tax was undeed administered at the state level, meaning you report it to a single authority and send a single payment to them. However, to arrive to that single sum, I had to calculate my sales in about a dozen different counties, each having their own, different, sales tax rate.

Further complications: as I was selling prints at art fairs, the promoters will tell you which sales tax to apply. At the time of paying it to the state, you often discover that the tax rate for that county in the state’s database is different. Sometimes, it would happen that, if you go to that county’s web site, they’d have a third rate. Great! So much for a “trivial computer problem.” So, you either overcharged or undercharged your customer and is now left to deal with the difference.

I was participating in art fairs only in Illinois and only in summer, thus had to register and pay only in one state, one or two times a year. A lot of people are traveling to art fairs across the country all year long. They need to register and pay to each state, and calculate different county taxes each time.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: petermfiore on June 25, 2018, 09:16:03 am
Yeah, I used to do it for my wife's gallery. It was bad enough when you were dealing with local sales. If the feds don't come up with a way to combine everything into a single pot, a small business could end up with thousands of tax forms to do quarterly or even monthly. It could put a bunch of small businesses out of business.

That's my biggest concern...Ever notice how the Government treats you like your in business for them.

Peter
Title: Re: SCOTUS decision on state tax for online purchases
Post by: RSL on June 25, 2018, 09:27:06 am
Peter, you just caused me to remember something that really, really, really pissed me off at the time. I once called the tax office in El Paso county, Colorado to ask a question about sales tax. I don't remember exactly what the question was, but the answer I got was: "Well, since you're in business. You should already know that."

When the government is trying to "help" you, you're probably in deep trouble.

What really bugs me, and there's a lot of it right here in The Coffee Corner, is pronouncements about business from academics who've never been anywhere near a business. I've forgotten which Democrat presidential candidate it was who made all sorts of left-wing pronouncements about business, and then, when they threw him out of politics he went into business and fell on his keister. He at least had the grace to admit he'd been wrong. I doubt you'd find that kind of honesty among our current crop of leftists.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: digitaldog on June 25, 2018, 09:57:41 am
A trivial computing problem.
It is indeed, despite Slobodan's metaphorical like FUD that is literally wrong in calculating sales tax. To fill out state sales tax, one needs simple addition and division. At least in those two small sates I've done it in (California and New Mexico). One can do this on a computer, a calculator or on paper. Well some might be able to do this on paper if they have the concepts of basic math and can pull themselves away from telling us how SCOTUS and the Gov will ruin everything. In terms of taking 5 minutes to file sales tax, I've ben doing it over 30 years, and it takes ME five minutes. No, I do not need an accountant to do this, maybe some here do. Filing state sales tax reports isn't the same as filing federal income taxes despite a retired poster here suggesting it is necessary to involve an accountant. Maybe for him, not for me, perhaps not for others. The FUD-mongers are predicting nightmares and massive problems but until then, it's more of the political FUD we see in this forum. Some are more concerned and find more nightmares in filling sales sales tax than they do in our climate changing as indicated again in this forum. And as we see in this forum, everything has to be reduced to how awful government is, with a political slant to blast out the FUD.

Let's see what happens before all the doom and gloom because unless you've experienced, you're only imagining it! If you've experienced it, tell us actual experiences, not metaphorical FUD about what might. What the ruling does is level a playing field and will generate more funds for the states. I see that as a good thing THUS FAR. You old white guys can complain, predict, spew FUD and maybe some of that will result; come back when it does and tell me so. Until then, I can't understand the obsession with a utter lack of following the spirit of THIS web site; photography! Maybe because some here are less photographers than professional FUD-mongers.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Alan Goldhammer on June 25, 2018, 09:58:35 am
Let me clarify what I was asking or saying. In my experience (Illinois) sales tax was undeed administered at the state level, meaning you report it to a single authority and send a single payment to them. However, to arrive to that single sum, I had to calculate my sales in about a dozen different counties, each having their own, different, sales tax rate.

Further complications: as I was selling prints at art fairs, the promoters will tell you which sales tax to apply. At the time of paying it to the state, you often discover that the tax rate for that county in the state’s database is different. Sometimes, it would happen that, if you go to that county’s web site, they’d have a third rate. Great! So much for a “trivial computer problem.” So, you either overcharged or undercharged your customer and is now left to deal with the difference.

I was participating in art fairs only in Illinois and only in summer, thus had to register and pay only in one state, one or two times a year. A lot of people are traveling to art fairs across the country all year long. They need to register and pay to each state, and calculate different county taxes each time.
Sorry for the misspelling.  I will also clarify that Maryland sales tax is a statewide tax and I don't think municipalities can add their own on top of it.  the problem as with a lot of regulations is that local rules and regulations are usually much more difficult to deal with than those at the Federal level.  One would think that collection of tax revenue would be easy to accomplish but it often is not.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Alan Klein on June 25, 2018, 10:41:56 am
The short answer is yes.  I'm hardly an expert on international commerce, but my understanding is that the shipping entity which seeks to import the goods is required to demonstrate that all applicable taxes have been paid before the shipment can clear customs in the destination country.  Major American retailers such as Amazon-US apparently pay the foreign taxes at the time of purchase for products that they fulfill and provide the shipper with the necessary documentation, so the purchaser sees the tax charge at the time of sale.  However, a German purchaser recently described a different scenario for a purchase that was made through Amazon from a third party.  The product was sold and fulfilled by a small U.S. company that used Amazon only as an intermediary.  The merchant apparently did not have a mechanism in place to pay foreign taxes, so the German VAT did not appear in the Amazon "shopping cart."  Before it would deliver the product, the shipper (I don't recall whether it was UPS or DHL) required the purchaser to reimburse it for the VAT the shipper had paid on the purchaser's behalf at the time of importation, plus a hefty "service" fee (€50, I think) for advancing the funds for the VAT.  Needless to say, the purchaser was rather miffed at the added expense, but apparently this was part of an arrangement the shipper had made with the German government.

Couldn't the purchaser prepay the VAT to the seller at the time of purchase to avoid the shipper's €50 handling fee?  Shipper's are spending time and money.  What if the purchaser is not there for delivery?  They've risked their money and may not get paid back the VAT they paid for the purchaser.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: RSL on June 25, 2018, 10:47:54 am
I will also clarify that Maryland sales tax is a statewide tax and I don't think municipalities can add their own on top of it.

In other words, Alan, you don't actually know what the law is in Maryland. In most states each taxing authority can levy its own sales tax. In Colorado the state specifies the combined limit for sales tax, but stays out of the local details. When I was mayor of Manitou Springs it appeared the county was about to raise their sales tax a penny, which would have brought the total to the state limit, and would have left us holding the bag if we had to raise our local sales tax a penny because of the burdens the state and the county were putting on small cities. I got my council to vote for a one cent raise on first reading. We never had a second reading to pass the increase, but the fact that if the county passed an increase on first reading we could go ahead on second reading and beat them to the punch put a screeching halt to the problem. I wasn't very popular with the county commission after that, but that's life in the fast lane.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Alan Klein on June 25, 2018, 10:53:03 am
I'm not so sure.  Pennsylvania passed a law earlier in the year addressing this:  http://www.mcall.com/news/nationworld/pennsylvania/mc-nws-pennsylvania-online-sales-amazon-20180307-story.html
....

The article says nothing about how Pennsylvania will enforce collecting taxes from out of state companies.  Here's what their tax official said.  It sounds very weak to me. 

"Q: Historically, consumers don’t file use taxes on their own. How will your department police this law and track down consumers using the records the companies provide the state?
A: What we are hoping for is that the companies will start to collect the tax. They will see this is a lot of trouble — ‘We don’t want to bother our customers with this, it will be easier just to remit the tax on their behalf.’."
Title: Re: SCOTUS decision on state tax for online purchases
Post by: RSL on June 25, 2018, 10:57:40 am
That's a hoot, Alan. This is gonna be another job fair operation for attorneys.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Alan Klein on June 25, 2018, 11:00:08 am
Yeah, I used to do it for my wife's gallery. It was bad enough when you were dealing with local sales. If the feds don't come up with a way to combine everything into a single pot, a small business could end up with thousands of tax forms to do quarterly or even monthly. It could put a bunch of small businesses out of business.
Exactly, we need Congress to pass legislation.  Of course, they will defer and leave the whole thing as a mess because getting involved will mean that their voters will be paying more taxes.  Politicians don't like raising taxes.  So, let the Supreme Court figure out how to handle it.  Those dummies created the mess by in effect legislating interstate commerce which is reserved for Congress to do.  Without Congress, how will it be enforced?
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Alan Klein on June 25, 2018, 11:03:06 am
Let me clarify what I was asking or saying. In my experience (Illinois) sales tax was undeed administered at the state level, meaning you report it to a single authority and send a single payment to them. However, to arrive to that single sum, I had to calculate my sales in about a dozen different counties, each having their own, different, sales tax rate.

Further complications: as I was selling prints at art fairs, the promoters will tell you which sales tax to apply. At the time of paying it to the state, you often discover that the tax rate for that county in the state’s database is different. Sometimes, it would happen that, if you go to that county’s web site, they’d have a third rate. Great! So much for a “trivial computer problem.” So, you either overcharged or undercharged your customer and is now left to deal with the difference.

I was participating in art fairs only in Illinois and only in summer, thus had to register and pay only in one state, one or two times a year. A lot of people are traveling to art fairs across the country all year long. They need to register and pay to each state, and calculate different county taxes each time.
You have to go over a certain limit for the requirement to kick in.  $100,000 in South Dakota.  $10,000 in Pennsylvania.  If you were doing that kind of business, you'd be thrilled to collect and pay those sales taxes.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Alan Klein on June 25, 2018, 11:09:38 am
Peter, you just caused me to remember something that really, really, really pissed me off at the time. I once called the tax office in El Paso county, Colorado to ask a question about sales tax. I don't remember exactly what the question was, but the answer I got was: "Well, since you're in business. You should already know that."

When the government is trying to "help" you, you're probably in deep trouble.

What really bugs me, and there's a lot of it right here in The Coffee Corner, is pronouncements about business from academics who've never been anywhere near a business. I've forgotten which Democrat presidential candidate it was who made all sorts of left-wing pronouncements about business, and then, when they threw him out of politics he went into business and fell on his keister. He at least had the grace to admit he'd been wrong. I doubt you'd find that kind of honesty among our current crop of leftists.
I feel your pain.  I was once audited for sales tax in New York. It's very complicated because being in construction, some Capital Improvement isn't taxed nor are Non-Profits and government work.  So I had to track which work was for what and pay sales tax accordingly.  Well, the moron they sent from the sales tax bureau for the audit demanded that I pay more tax that really wasn't owed. She quite frankly didn't understand the law.  I knew more than she did.  So I had to call her supervisor and demand they straighten her out or send someone else who knew what they were doing.  Well, it finally got resolved.  But that's why I said the complication on a national basis could become a nightmare.  I'm glad I'm retired. 
Title: Re: SCOTUS decision on state tax for online purchases
Post by: RSL on June 25, 2018, 11:23:26 am
I've forgotten which Democrat presidential candidate it was who made all sorts of left-wing pronouncements about business, and then, when they threw him out of politics he went into business and fell on his keister.

I finally got time to look him up. It was George McGovern. He was sure he knew all about what businesses should do until he finally went into business and found he didn't know squat. At least he was man enough to admit it. But it was too late for him to undo the damage he'd done as a left-wing politician.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Slobodan Blagojevic on June 25, 2018, 11:29:18 am
You have to go over a certain limit for the requirement to kick in.  $100,000 in South Dakota.  $10,000 in Pennsylvania.  If you were doing that kind of business, you'd be thrilled to collect and pay those sales taxes.

Would that be $10,000 in sales? That's not such a high bar, I had that at times (in Illinois only, though). But you rightly noted the complications with the thresholds: what happens before one reaches it? You charge it to the customer but do not transfer to the state? Or you don't charge it until you reach the threshold in sales?

In illinois, I had to charge sales tax for every sale, with no thresholds. And if I collect only $1.00 I had to transfer that one dollar to the state.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: digitaldog on June 25, 2018, 12:04:35 pm
Would that be $10,000 in sales?
Think about that before asking; what else could it be?
Quote
what happens before one reaches it?
I'll repeat the answer.
Quote
In illinois, I had to charge sales tax for every sale, with no thresholds
That's the same today in NM. That may change in the future where so many are predicting more FUD while asking about how this stuff works (hilarious/sad). We should cross that bridge and answer when we come to it.

Mind letting us know what you are talking about? News? Link?
Enough said.  ;)
Title: Re: SCOTUS decision on state tax for online purchases
Post by: digitaldog on June 25, 2018, 12:25:12 pm
I don’t know about other states, but I pa6 sales tax in Maine, where my business is located. It takes me about 5 minutes every quarter. Quickbooks makes it exceedingly simple to do. If I were required to pay sales tax in other states, I don’t see that a platoon of accountants would be required.
Going back to what abridged this silliness about how difficult it is to fill out sales tax, today for some who still do so, or the idea of some who don't do this, they need an accountant, here's the form which if you feel is massively complicated, the 2nd time you fill it out (after looking up your county code, which as pointed out vary, special code IF applicable), you probably are both mathematically and form filing impaired. Again, this is just ONE example but yeah, it's 5 minutes work including having that complex computing algorithm (addition) to figure out your gross sales (what else would be asked of you to put here?). My biggest beef with this and many forms WHEN filling out by hand; not enough space for email address  :o
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Alan Klein on June 25, 2018, 12:41:47 pm
I finally got time to look him up. It was George McGovern. He was sure he knew all about what businesses should do until he finally went into business and found he didn't know squat. At least he was man enough to admit it. But it was too late for him to undo the damage he'd done as a left-wing politician.
can you imagine how he'd run the country if he won?
Title: Re: SCOTUS decision on state tax for online purchases
Post by: digitaldog on June 25, 2018, 12:46:18 pm
can you imagine how he'd run the country if he won?
Yes, unlike the guy running it today. This just in my morning read (our local paper, I read many differing sources and support local papers and news with my $$).
Allowing people to hear what they want, indeed:

Title: Re: SCOTUS decision on state tax for online purchases
Post by: RSL on June 25, 2018, 01:25:11 pm
Your "morning paper" is like my morning paper, Andrew: simply full of crap. But, happily, I also take the WSJ.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: digitaldog on June 25, 2018, 01:43:34 pm
Your "morning paper" is like my morning paper, Andrew: simply full of crap. But, happily, I also take the WSJ.
How is it full of crap? Did or did not Tump, in the course of days do exactly what the article states in terms of what he's said about the vote in the House about immigration bills?
This is crap (he didn't write this) nor did prior, Raj state this? If so, he's not leaving his staff to clean up a messy pile of conflicting statements.

White House deputy press secretary Raj Shah, in a written statement, said the president would sign the new package.
Earlier in the day, Trump said he would not sign a compromise immigration bill reached by House Republican centrists and conservatives.
Published 9:44 AM ET Fri, 15 June 2018  Updated 6:14 PM ET Fri, 15 June 2018
As for the WSJ, you missed this:
Trump’s Comments on Immigration Muddy Prospects for Compromise Bill
https://www.wsj.com/articles/trump-says-he-wont-sign-compromise-immigration-bill-1529074497
Title: Re: SCOTUS decision on state tax for online purchases
Post by: RSL on June 25, 2018, 02:27:11 pm
He' right, Andrew. Check Schewe's post on Trump vs the little kid. This is the kind of game the left's been playing. More and more people are realizing what bullshit it is.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: digitaldog on June 25, 2018, 02:29:00 pm
He' right, Andrew. Check Schewe's post on Trump vs the little kid. This is the kind of game the left's been playing. More and more people are realizing what bullshit it is.
Who's he that's right? More and more people; can you speak for yourself?
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Alan Klein on June 25, 2018, 03:05:11 pm
Going back to what abridged this silliness about how difficult it is to fill out sales tax, today for some who still do so, or the idea of some who don't do this, they need an accountant, here's the form which if you feel is massively complicated, the 2nd time you fill it out (after looking up your county code, which as pointed out vary, special code IF applicable), you probably are both mathematically and form filing impaired. Again, this is just ONE example but yeah, it's 5 minutes work including having that complex computing algorithm (addition) to figure out your gross sales (what else would be asked of you to put here?). My biggest beef with this and many forms WHEN filling out by hand; not enough space for email address  :o
You're lucky in NM.  In NY there are two pages (around 80) different subdivisions of taxes in a 5 page tax form due to differences between counties, cities and towns.  I understand that across the ountry, there are 10,000.  That's why someone will computerize the whole thing and update it regularly and provide a service where these forms will be generated by computer broken out by state and sub categories with a central clearinghouse where you write one check for taxes you have to pay for the whole country.  The clearinghouse will pay the states for you just like payroll services like ADP now handle withholding and salary checks and pay the various entities.  The clearinghouse is paid one check through bank to bank payment.  Easy.
NYS Sales TAx quarterly form. (pdf)  5 pages.
 https://www.tax.ny.gov/pdf/current_forms/st/st100.pdf 
Title: Re: SCOTUS decision on state tax for online purchases
Post by: digitaldog on June 25, 2018, 03:08:37 pm
You're lucky in NM.  In NY there are two pages (around 80) different subdivisions of taxes in a 5 page tax form due to differences between counties, cities and towns. 
Not much different here! There are lots of pages DESCRIBING the different counties, maybe 3 pages here, so what? Look up which applies to you, fill out the form. Your's doesn't seen any more difficult to fill out, no need I see for an Accountant to do so. I don't see that much more, if any more fields you'd fill out compared to me.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Alan Klein on June 25, 2018, 03:16:54 pm
I finally got time to look him up. It was George McGovern. He was sure he knew all about what businesses should do until he finally went into business and found he didn't know squat. At least he was man enough to admit it. But it was too late for him to undo the damage he'd done as a left-wing politician.
From Wikipedia. 
"McGovern had made several real estate investments in the D.C. area and became interested in hotel operations. In 1988, using the money he had earned from his speeches, the McGoverns bought, renovated, and began running a 150-room inn in Stratford, Connecticut, with the goal of providing a hotel, restaurant and public conference facility. It went into bankruptcy in 1990 and closed the following year. In 1992, McGovern's published reflections on the experience appeared in Wall Street Journal and the Nation's Restaurant News.  He attributed part of the failure to the early 1990s recession, but also part to the cost of dealing with federal, state and local regulations that were passed with good intentions but made life difficult for small businesses, and to the cost of dealing with frivolous lawsuits. McGovern wrote, "I ... wish that during the years I was in public office I had had this firsthand experience about the difficulties business people face every day. That knowledge would have made me a better U.S. senator and a more understanding presidential contender." His statement would still be resonating with American conservatives two decades later."[/b]

Good advice for Hillary.  Too bad she didn't use it. 
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Alan Klein on June 25, 2018, 03:22:50 pm
Not much different here! There are lots of pages DESCRIBING the different counties, maybe 3 pages here, so what? Look up which applies to you, fill out the form. Your's doesn't seen any more difficult to fill out, no need I see for an Accountant to do so. I don't see that much more, if any more fields you'd fill out compared to me.
If you only have to do one or two states, you're right.  But if your sales are to dozens of states every month, it's a big deal because you have to mail in a check and a filled out for each state.  On the bright side, if your sales are that high and diverse, you'll be able to afford hiring a person for a day's pay once a month to all the preparation and submissions for you.
Title: Re: SCOTUS decision on state tax for online purchases
Post by: Jeremy Roussak on June 25, 2018, 03:28:20 pm
Enough.

Jeremy