New Sales Tax Rules

[Bob Salomon]

Here the bosses determine who belongs to the tribe and who doesn't. You can be born on the Res as a full-blooded Indian but not qualify; or you can be some Atlantic City or NYC or even Pakistan hood and get in on the act. Some of these tribes are fictitious to begin with - complete fabrications set up just
for purpose of gaming. But there are also some very gut wrenching stories. We had a long-time family friend in the position of deciding whether to open up
to gaming or not. He was personally against the whole idea, but was himself poor with a big family and desperately wanted enough income to move off the
reservation before one of them got killed. It was an incredibly violent place. He eventually opted for something relatively small catering to senior citizens
being bused in to gamble. But the very day it opened, Indians themselves were naively losing everything they had to loan sharks. Things are even rougher
here, with three people found face down in the Bay the day after that casino opened. Vietnamese and Cambodian mobsters basically have the run of that place. Someone in the neighborhood who protested it found a stack of dynamite piled against his front door. After incidents like that, Richmond, Berkeley,
and Oakland all turned down local gaming. There are Indians companions from my youth who are doing quite well, but they took the route of higher education and careers well away from the Res. But given the fact that many of the previous generation lived to be well over a hundred, the sudden drop of
average lifespan to under thirty years tells you an awful lot. Even at my tenth high-school reunion, half the class was already dead. So I never went to another one. Too depressing.

Boy, if 10 of my class had died by the 10th reunion there would have been a pretty small group! We only had 32 guys in my class!

[Drew Wiley]

Bob, my high school district was larger than six New England states! There were no large towns involved, but kids bussed in from up to two hours one-way.
There was a distance trophy each year. In my class, one student had to walk or ride a bike five miles to the road in the morning, then catch the bus for the two-hour ride across a steep canyon, then do it all in reverse in the evening. During the winter, some had to be dormed there due to the snow depth at higher elevations, at least until more modern versions of the snowplow arrived. I was one of the lucky ones and lived only fifteen miles away. But the way
tax revenues were allocated back then was according to district, and that particular district was extremely wealthy from the taxation of most of the state's
hydroelectric power. Later on, funds were more fairly allocated on a per-student basis, so that kind of infrastructure could no longer be supported. Population
increased and several school districts are now in place. It was a long way from any city, so we were free to climb around the hills or swim in the creek once
we had completed mandatory classes, but unfortunately weren't allowed to graduate early. Mostly cowboys and Indians, plus logging and hydroelectric. The
usual boneheads and bullies; but it was still a rather innocent era, prior to the drug epidemic. The violence of the Rancherias (little Reservations) was kept
to themselves. People just disappeared from time to time. Some ended up in prison, with several escaping and returning for violent clashes. But photographically, those places could also be incredibly beautiful. Life for Indians on their own private ranches was a completely different story, and quite
normal. Some very fine people. Three people in "Almost Ancestors", a book containing some of the oldest photographs of California Indians, I personally knew. Of course, their own pictures were as taken in childhood, and all were quite old when I was young. ..Well, guess I hijacked another thread...

[Bob Salomon]

Bob, my high school district was larger than six New England states! There were no large towns involved, but kids bussed in from up to two hours one-way.
There was a distance trophy each year. In my class, one student had to walk or ride a bike five miles to the road in the morning, then catch the bus for the two-hour ride across a steep canyon, then do it all in reverse in the evening. During the winter, some had to be dormed there due to the snow depth at higher elevations, at least until more modern versions of the snowplow arrived. I was one of the lucky ones and lived only fifteen miles away. But the way
tax revenues were allocated back then was according to district, and that particular district was extremely wealthy from the taxation of most of the state's
hydroelectric power. Later on, funds were more fairly allocated on a per-student basis, so that kind of infrastructure could no longer be supported. Population
increased and several school districts are now in place. It was a long way from any city, so we were free to climb around the hills or swim in the creek once
we had completed mandatory classes, but unfortunately weren't allowed to graduate early. Mostly cowboys and Indians, plus logging and hydroelectric. The
usual boneheads and bullies; but it was still a rather innocent era, prior to the drug epidemic. The violence of the Rancherias (little Reservations) was kept
to themselves. People just disappeared from time to time. Some ended up in prison, with several escaping and returning for violent clashes. But photographically, those places could also be incredibly beautiful. Life for Indians on their own private ranches was a completely different story, and quite
normal. Some very fine people. Three people in "Almost Ancestors", a book containing some of the oldest photographs of California Indians, I personally knew. Of course, their own pictures were as taken in childhood, and all were quite old when I was young. ..Well, guess I hijacked another thread...

Drew, my school had day students from Rye, NY; other local Westchester Ct homes; N Stamford, CT; Darien; CT, etc..
For me to get to school until I turned 16, I took a car ride to the Talmadge Hill RR station, took three train to Greenwich and the caught a school bus up the hill to the school!
Once I turned 16 we would just drive directly to Thorpe school and park in the senior lot. This was kind of a rated lot based on what you drove! Coco Chneitti drovrpe current Ferrari, Tony Goldschmitt drove a Mercedes gull wing coupe; Tony Meschermitts drove a Reynold; I had a 49 Stuedebaker; Mike Mckeever had the latest Chevy muscle car and Tony Radar had the hotteset Pointiac! And a kid named kernichen had an old Citrean 2cv with rattan seats! But we had fun!

[Alan Klein]

I agree with what Rick has said. To take it a step further, after reading the Opinion, it's very clear to me that the Court, essentially said:
"SD has attempted to simplify collection for out-of-state sellers, therefore this is not an unreasonable restriction on Interstate Commerce [in the 21st Century.]"

This is about as close to writing a law, without writing one, that I've ever seen the Court get. Not to say that this will be easy for small businesses. BUT: the concept inherent in California's philosophy to refuse Other State's Resale Exemptions runs 100% against the philosophy shown in the Court's opinion. It is a clear, unreasonable restriction on Interstate Commerce ... hence, to re-iterate what someone else said, there will be more lawsuits unless Congress steps in.

You don't need to furnish a Resale Certificate to California. Let's say you're a NY company. You bought a product from a California company. They charged the NY sales tax when you bought it and forwarded the sales tax to NY tax bureau. You would be able to apply an equal amount for credit against sales taxes owed in NY when you file your company's sales taxes in NY if the product was resold.

I would think most states have some sort of similar arrangement. Of course you have to upfront the sales tax payment. But at least you can get it back later.

[Alan Klein]

IMO, most small-time sellers will just limit their sales to avoid this mess. It'll be difficult for folks who have a ton of small items they need to get rid of.

How are the states going to know you sold products to residents of their states? How are they going to know if you exceeded the money limit or quantity of sales limits requiring collection of their sales taxes? If they don't know what their own residents bought so they can get the Use tax, they're not going to know what their residents are doing any better under the SCOTUS decision. Plus, the companies are out-of-state. Do they plan to travel to your state and ask to see your company's books? They don't have the authority right now to audit companies except those in their own states.

[Alan Klein]

The reason Amazon collects the sales tax is because they have physical locations in the states in the form of distribution sites. So they can be subpoenaed within each state. How does a state subpoena an out-of-state company in that state or demand that you show them your books for auditing? Any tax lawyers here?

[Alan Klein]

Here in North Dakota we just drive a few miles to a town on the Reservation. No sales tax, decent restaurants and Casino.

When I was in Monument Valley, owned by the Navajo Nation, I had to pay sales tax if I recall. Everyone's got their hand in your pocket. Why should they be different?

[Alan Klein]

In NJ there was a big law suit involving the Ramapo Indian tribe that wanted to open casinos in the Ramapo mountains in northern NJ. They kept losing in all the courts that they sued in but one of the reasons that they kept losin was that the Indians filing the suits all had names ending in a vowel!

Geronimo? Hiawatha?

[Bob Salomon]

Geronimo? Hiawatha?

More like Gambino, Costello, Frankie the Boot Boiardi.

[MikeH]

Alan: I'm a 3rd generation native Southern Californian CPA with some experience in California Sales Tax matters. I have no experience with other states. However, California is soooo aggressive, that, many CPAs refer sales tax issues to CPAs and tax lawyers who only handle CA Sales tax matters. That being said...

The reason Amazon collects the sales tax is because they have physical locations in the states in the form of distribution sites. So they can be subpoenaed within each state.

A number of Amazon's 3rd-party-sellers are located in CA. CA alleged that these 3rd-party-sellers were agents of Amazon, and that gave Amazon nexus in CA. Press reports, in the mainline media (which doesn't always get the details correct), indicated that Amazon capitulated. I do not buy through Amazon. Can anyone confirm that Amazon collects CA sales tax from CA buyers?

How does a state subpoena an out-of-state company in that state or demand that you show them your books for auditing? Any tax lawyers here?

If you study the Case "Franchise Tax Board of California vs. Hyatt" [to the Supreme Court THREE(?) times] carefully, you'll realize that CA does what CA wants to do. There are enough ambiguities in SD vs. Wayfair for CA to drive a Mack Truck through. They have gone after former CA residents, many years removed from CA, for failure to file CA tax returns, and attached bank accounts 3,000 miles away. They taxed pensions, earned @ CA aerospace companies, after people moved out of CA, until Congress stepped in and said: "No More!." In Hyatt, they apparently libeled the taxpayer and went through his trash, then reportedly tried to justify it using a Supreme Court case from the 19th Century regarding cops on horseback chasing "the bad guys" across state lines.

Do you want me to go on? I could write a book.

There is a very good possibility that, if you sell ONCE into CA, that CA will be able to use that to audit you to see if you fit the "200 shipment" criteria. And, CA will do that. When you get audited, would you rather pay CA $1,000 - $5,000 in tax now and be done with it, or hire specialized CPAs and lawyers and pay them $1,000 - $5,000+ to fight it? IMHO, I call that "legal extortion." But, it's legal, at least in CA.