New Sales Tax Rules

[Jim Jones]

Amen. Since when is a civic responsibility a bad thing?

Yes, indeed. As a strong leader said, ". . . ask not what your country can do for you — ask what you can do for your country." After all, it is our home.

[Corran]

Nothing wrong with questioning what gets taxed, how much it is taxed, what the tax is used for and how it is distributed, etc.

[Drew Wiley]

Here in Calif. you just declare on your resale filing when something is shipped out of state. As it is, it is now mandatory to file sales taxes for in state transactions via web because it's so darn complicated already, with every county and even every different city potentially having a somewhat different sales tax rate, and even variations of rate within the same jurisdiction for different kinds of items, with all kinds of potential exceptions just like on income taxes.
It would therefore be a logistical nightmare to have to constantly update the many thousands of different requirements across the country. That's one reason it's never been implemented at the small seller end. Darn near impossible. But out-of-state sellers with any tangible business presence in Calif (like Amazon)
are required to charge the specific Calif rates when shipping here. But policing everything else is a whole other story; and there's been a long-running squabble between CA and NY over the issue. But there are far more blatant ways the playing field has been kept from being level than mere sales taxes, as significant as they can be. I'll stop at that, or I'll be crossing a red line past photographic output per se.

[Bob Salomon]

Here in Calif. you just declare on your resale filing when something is shipped out of state. As it is, it is now mandatory to file sales taxes for in state transactions via web because it's so darn complicated already, with every county and even every different city potentially having a somewhat different sales tax rate, and even variations of rate within the same jurisdiction for different kinds of items, with all kinds of potential exceptions just like on income taxes.
It would therefore be a logistical nightmare to have to constantly update the many thousands of different requirements across the country. That's one reason it's never been implemented at the small seller end. Darn near impossible. But out-of-state sellers with any tangible business presence in Calif (like Amazon)
are required to charge the specific Calif rates when shipping here. But policing everything else is a whole other story; and there's been a long-running squabble between CA and NY over the issue. But there are far more blatant ways the playing field has been kept from being level than mere sales taxes, as significant as they can be. I'll stop at that, or I'll be crossing a red line past photographic output per se.

Our company was in NJ. We had no properties outside NJ. We had one employee who lived in MN. All of our sales reps were independent contractors. We never could control who they saw and when, unless we were on a sales trip with them.
We had one warehouse in NJ, we had no satellite sites that we shipped from.
We only sold to camera stores, luggage stores and photo labs.
The state of WA decided that we were subject to a tax of 0.005% on all shipments that we made into the state of WA as our independent sales rep lived in WA state and because we periodically made trips to WA to visit and train our Rep and our dealers!

Our attorneys told us it would cost us far more to fight this tax then to pay it. So we finally paid the tax quarterly plus the interest and penalties they added on for not paying the tax for the previous 5 years before they decided that we owed the tax. Our competitors were never charged the tax. Only the companies represented by our rep were charged the tax! We even switched to a rep from OR that called on our dealers and the state still charged us the tax!
In the end it didn’t make much of a difference as we were able to deduct those payments from our local state tax.

[williaty]

The threshold, IIRC from reading the NPR story earlier today, is $100,000 per year per state or greater than 200 transactions per year per state. If a seller is below those limits, the current ruling doesn't apply.


It's actually not quite as bad a ruling as I at first thought. Basically, the argument is that, without nexus, taxing everyone for out of state sales imposed an undue burden on the seller. The specific case that came before SCOTUS was for a state where these limits were in effect and the state provided a program for sellers where they could sign up to the program, the state told them how to tax the sales, took the money, was responsible for disbursing it to local entities, and indemnified the seller against any potential errors in taxation or distribution. The SCOTUS held, basically, that with the state providing that level of service and it only applying to businesses above that size/scale, it did not constitute an undue burden. SCOTUS didn't say that taxing all out of state sales was reasonable, only that taxing out of state sales when the destination state made it really easy and the rule only applied to companies operating at scale was reasonable.

One would expect that if a state tries to tax every little hobby-mom Etsy seller we'll see the case going back to SCOTUS so they can say "no, in fact THAT is an undue burden".

[Nodda Duma]

Yeah I woke up to this little gem this morning, after getting only two hours’ sleep from staying up to coat plates last night to get them out to people.

My first thought: When the hell am I going to find time to keep track of the ~50,000 tax codes across the country? How much *more* sleep am I going to lose out to being a tax collector for locations I derive no benefit from?

That $100k limit is the North Dakota law. A greedy state like CA or MA would have no problem sucking up every possible dollar below that threshold for the several years it would take for a challenge to make its way through the courts (if you don’t think that happens now with other obviously unconstitutional law, think again).

There will be talk of “a precedent” being set. What that means is that the lawmakers are now thinking of the possibilities of billions of dollars going to state coffers without considering the ramifications of the economic loss of those billions of dollars staying in comsumers’ pocket and being directly injected into the economy. THAT’s what precedent means.

If you didn’t already realize that the government think of us as no more than tax crops, then maybe you will realize it now.

[Tin Can]

Illinois for one has Use Tax laws where the buyer is legally responsible for paying sales tax. Not the seller.

http://www.revenue.state.il.us/Indiv...Qs-Use-Tax.htm

I advocate USA VAT as a way to eliminate loopholes and enhance compliance.

AI will Police it all soon.

Buy now!

[Dan Fromm]

So now we have an opportunity for an enterprising person to collect state and local sales tax rules and rates and create a database with software that will match buyer's address and the product(s) purchased to the appropriate rates and tell the seller how much to charge and where to remit. CCH used to have something like this, but on paper. eBay should do this as a service to sellers. Whether they will is an interesting question. I'm sure that Amazon will do it and make the service available to their sellers.

In spite of all the wailing, this is a problem that has to be solved only once.

[Nodda Duma]

Depending on your viewpoint Dan, this is actually an ongoing problem with no end in sight. Taxes always go up, they never go down.

[Dan Fromm]

Depending on your viewpoint Dan, this is actually an ongoing problem with no end in sight. Taxes always go up, they never go down.

Jason, what you say might be true. Or not. But it has nothing to do with the mechanics of collecting sales taxes on, um, imports.