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Thread: New Sales Tax Rules

  1. #91

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    Re: New Sales Tax Rules

    Quote Originally Posted by rdenney View Post
    But crafting law is not the Supreme Court's job. Regulating interstate commerce is Congress's job.
    Rick, levying a sales/use tax on out-of-state purchases has nothing to do with interstate commerce. Its about making sure that like transactions -- a state's resident buys something subject to sales tax in the state -- generate the same taxes due. Fair is fair.

    Dan "challenge delivered as expected" Fromm

  2. #92
    Drew Wiley
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    Re: New Sales Tax Rules

    Such rulings basically hint at acceptable parameters and include darn little practical advice how to implement something compliant. This is just the way the
    Supreme Court works - something is either deemed constitutional according to their majority opinion, or it isn't. Then it's left up to the individual parties or
    states to figure out; and if someone thinks they have found a flaw in how this is done, the gripe proceeds back up the ladder. I state this a particular way due
    to personal conversations with a family member who specializes in State and Federal Supreme court law. It's really a strange business, because many of these rulings have very little to do with what most of us would consider as either justice or even common sense, but about different competing philosophies
    of how to interpret the Constitution as well as past judicial precedent. I've also learned that how the Supreme Court debates these things do not necessarily
    give a firm clue to how they'll finally rule. Just like criminal lawyers carefully study the backgrounds and inclinations of potential jurors, those lawyers who
    argue cases before the Supreme Court deeply study the individual personalities and philosophical, and alas, political, leanings of the Judges themselves. But
    in this tax instance, there is bound to be quite a mess before the dust settles. Either be too small a businessman to worry about it, or big enough to let your
    accounting dept do the worrying for you. But for the mid-sized business, don't expect some accountant down the block to figure it out. Large quantities of sales will require some kind of instantaneous computer program to be developed first. And
    since many businesses require a degree of customization in their programs, trying to retrofit some kind of generic fix might
    not be realistic at all. I've been through that twice - it was incredibly expensive and time-consuming; and I retired just on the
    very brink of yet another trip through software hell that is still causing headaches at my former employer a year and a half
    later.

  3. #93
    Tin Can's Avatar
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    Re: New Sales Tax Rules

    Let's bring back Sunday morning swap meets.

    Usually, work was complete before the swap opened to the public.

    The guys with bodyguards and briefcases of cash were hilarious.

  4. #94
    Serious Amateur Photographer pepeguitarra's Avatar
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    Re: Keeping the internet sales tax at bay - Failed

    Quote Originally Posted by Randy Moe View Post
    No and no
    Correct. You need to be registered with the State to collect sales tax or use tax. You will not pay tax on items that are for sale. This is for businesses only. However, if you get payments over $20,000 in PayPal, you are considered a business and have to add a form in you income tax explaining and or paying the taxes.
    "I have never in my life made music for money or fame. God walks out of the room when you are thinking about money." -- Quincy Jones

  5. #95
    Alan Klein's Avatar
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    Re: New Sales Tax Rules

    Quote Originally Posted by Dan Fromm View Post
    Rick, levying a sales/use tax on out-of-state purchases has nothing to do with interstate commerce. Its about making sure that like transactions -- a state's resident buys something subject to sales tax in the state -- generate the same taxes due. Fair is fair.
    ...
    But there are requirements in sales tax states to collect the sales tax. Their own residents are required to reimburse the state the sales tax (called a use tax) for products they bought outside of their own states for use in their state where they live. Methods of purchasing could include: 1. they ordered it on line through the internet, 2. by phone with a placement of order using a credit card, 3. by sending a check and order to the out of state seller using the mail or by 4. telephone. The problem is the residents are illegally not complying with their own states' laws. They don't reimburse their states. The states claim they are incapable of enacting procedures to capture those missing sales taxes. That's the states' problem why they can't collect it. If they wanted to, they could simply add an additional charge on their own state's income taxes adding a small percentage against total income for sales not paid for each resident. Or use police methods to get the money. It's their problem not a seller in another state to collect the money for them.

    The original supreme court rule said that a state cannot demand a seller in another state to enforce its tax rules unless they have a close nexus to the state they are sending the product too. But the supreme court just overruled their original judgment creating a mess. Since this involves trade between the state, not the tax itself, but product sold, Congress authority to create fair methods of handling it could be legislated. I don't think Congress has the stomach for it because no one likes to be taxed. Congress doesn't want to be seen as taxing people more. But that's what the people want. But the Supreme Court apparently knows better and legislated commerce on their own when they should have deferred. Without Congress writing law, I don't see how one state can enforce collections from another state? Plus there are 50 states. It's hard enough to know what's going on in your own state. How are you going to handle 50 states without common legal agreements that could be handled by Congress in setting up?

  6. #96
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    Re: New Sales Tax Rules

    Quote Originally Posted by Dan Fromm View Post
    Rick, levying a sales/use tax on out-of-state purchases has nothing to do with interstate commerce. Its about making sure that like transactions -- a state's resident buys something subject to sales tax in the state -- generate the same taxes due. Fair is fair.

    Dan "challenge delivered as expected" Fromm
    When I go online while in Virginia and buy something from a guy in California, and he ships is to me in Virginia, it's interstate commerce. If the Commonwealth of Virginia makes him collect sales tax on my behalf, and then submit it to Virginia, he has to have a Virginia sales and use tax permit, and he has to file monthly even if he has no sales. That is excessively burdensome by any definition, including the Court's. What makes it burdensome is that the seller doesn't know Virginia's rules without spending hours researching it, can't file for the permit (which must be signed, notarized, and filed in person at a Virginia county courthouse), and can't tell from addresses how much to collect. That's exactly the sort of burden that is the reason Congress is charged with regulating interstate commerce in the Constitution.

    Paying use tax on out-of-state purchases is the buyer's responsibility, while collecting sales tax is the seller's responsibility. You cannot connect the two with a slash like they are the same thing, even if they are covered by the same bits of the state code. The former is difficult enough to enforce that few states including Virginia even attempt it, and the latter is expensive to implement and also difficult to enforce. Part of the reason why is that nobody think it's reasonable to expect individuals to have the sorts of personal accounting systems that let's them add up their out-of-state purchases in any sort of auditable way. Justice Roberts had it right. There are mechanisms that would relieve those difficulties, but it's not the Court's job to design those mechanisms.

    Rick "it's fair to collect taxes that are owed, but it's not fair to require processes on the part of taxpayers that cost more than the taxes in so doing" Denney

  7. #97

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    Re: New Sales Tax Rules

    Rick, sales tax and use tax are the same thing.

    Your claim that when it comes to collecting and remitting sales tax on sales to out-of-state buyers will cost sellers more than the taxes collected is ridiculous. When all the dust settles and other states pass laws like the North Dakota one, each seller won't have to solve the problem for itself. Amazon has already solved it for state taxes (I'm not sure about local) and will happily sell rating and remitting services. CCH will do the same. What sellers will have to do is buy access to the service and install billing software that will do the lookups.

    It will take a while for the dust to settle.

  8. #98

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    Re: New Sales Tax Rules

    Quote Originally Posted by Dan Fromm View Post
    Rick, sales tax and use tax are the same thing.

    Your claim that when it comes to collecting and remitting sales tax on sales to out-of-state buyers will cost sellers more than the taxes collected is ridiculous. When all the dust settles and other states pass laws like the North Dakota one, each seller won't have to solve the problem for itself. Amazon has already solved it for state taxes (I'm not sure about local) and will happily sell rating and remitting services. CCH will do the same. What sellers will have to do is buy access to the service and install billing software that will do the lookups.

    It will take a while for the dust to settle.
    South Dakota had de minimus exemptions (200 sales/$100,000) and provided free software. Other states will need to follow suit to fall within the holding of the case.

  9. #99

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    Re: New Sales Tax Rules

    Quote Originally Posted by faberryman View Post
    South Dakota had de minimus exemptions (200 sales/$100,000) and provided free software. Other states will need to follow suit to fall within the holding of the case.
    I agree.

  10. #100
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    Re: New Sales Tax Rules

    Quote Originally Posted by Dan Fromm View Post
    It will take a while for the dust to settle.
    Which was my point, along with the need for legislation.

    What you think is easy may or may not be. Ask states how easy it is to collect use taxes, which are already owed. If sales and use taxes are the same (especially in how they are implemented), then why is it states work out their sales tax collection so carefully but have all but abandoned hopes of enforcing use tax?

    Amazon is vast, and has an army of accountants already. They also maintain the kind of detailed database they need, and they have an office in every state that can handle the local requirements. That's why they already collect sales tax--they can. So, are you suggesting rather than selling things directly to buyers, all smaller business without those resources will have to be represented by companies like Amazon? That sound very good for Amazon. But it doesn't sound so good for businesses running thin profits who don't have the margin for yet another middleman.

    I have actually read the Virginia Code on sales and use tax--I just helped my wife set up a business. I am also familiar with the sales and use tax laws in Texas (at least what they were a three decades ago), where I used to have a business.

    Rick "what is the same in the state code isn't the same in the accounting software" Denney

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