Vendors should pay the federal government say 5% for each sale and the feds distribute back to the states. In a perfect world there should be no tax.
As a small business owner that sells directly to consumers, this is a bad and disastrous decision. States already have laws on the books to collect taxes, now the Supreme Court gives them the go-ahead. Most states do not limit to companies with over $100K revenue in state. Now I have to negotiate nearly 10,000 jurisdictions—tax all, tax non-food, tax food, tax meds, tax shipping, tax services—all are sales taxes. A mess. And the cost of filing is on top of that.
"*SOB* our poor, poor overtaxed Mom & Pop Brick & Mortar businesses can't survive with out of state tax free competition. *Boo hoo hoo hoo*"
The solution is NEVER, EVER, EVER lower our local taxes so they can compete, It's ALWAYS impose taxes on someone, somewhere.
Preferably someone who has no presence in our voter pool and can't vote us out.
This used to be called "Taxation without representation", and we have fought one bloody war to end it.
Don't make us do it again.
No. They should have treated this question with deference to the US Constitution, specifically the Commerce Clause.
While the States might theoretically be short-changed on sales-tax collections due to internet shopping (a) you can't "lose" revenue you never had; (b) the obligation to pay the sales taxes was already in place, and it belonged to the consumer. The Supremes should have sent South Dakota back home and told them if they want their tax revenue, then go enforce the existing, Constitutional law against their own citizens. To do otherwise, clearly places a significant burden on the conduct of interstate commerce by forcing out-of-state merchants to be their toll collectors.
They are taxed.
It has been obvious for some time that this would be ruled legal.
This was a decision for congress not the court.
As an agent for collecting taxes, my fees for service will be, $5 per sale and 2% of the total value of the sale. That agency fee will be deducted and any remaining amount will be remitted. Any negative amount must be remitted by ACH by the 10th day of the following month or a penalty will assess at 25% of the outstanding amount. Amounts remaining overdue by the 59th day will be forfeited.
What the SCOTUS did was to REFRAIN from INTERFERING with a just role of CONGRESS/STATES, i.e. Taxation.
SCOTUS corrected their error and stepped away, leaving the question up to CONGRESS/STATES to figure out, as it should be. Taxation is at first a political question, not a legal one.
ALL sales within a state can now be treated the same way.
It is the “sale” not the “entity” that creates the act of taxation. Technology will develop a mechanism to satisfy the parties involved.
The physical presence rule was an invention by the court. Talk about an activist court!
But, . . . if the locus of the sale is now the selling corporate entity, then the retail sale did not take place in the buyer state. ( seeeeeeeeee ....??) That’s the next argument to be made. State laws affecting “foreign/alien” corporations will also come under scrutiny.
Catalogue sellers was a battle from the last century against taxation. Now, Online sellers can take their turn. My money is on Online and the Behemouths. They will pay their way to get the rules “adjusted”.
Now, taxation is left up to the states and the people, as it shouldnbe.th e
> “An Illinois resident may purchase a product in New York for delivery to South Dakota that would trigger this monitoring requirement.”
So New York adds a sales tax to a purchase of a product in its state, then South Dakota adds a sales tax to the product delivered in its state, Illinois adds a sales tax to the purchaser for purchasing the product.
Is this a plan to save brick and mortar businesses?
Me thinks this decision needs to be revisited pronto.
I don’t think they realize or care just how “not” based on the constitution their decisions are. What’s ok with one court isn’t ok when one or more seat changes... The decisions this time around were a mix of liberal and conservative (topsy turvy) and no one could predict how they would turn out. Interesting but hardly gives one confidence ANY of them know what they’re doing..
This decision is a little like Nancy Pelosi’s Cigar Tax. It is aimed at certain Internet Giants and has the unintended consequence of harming the small businesses it sought to protect.
However, I don’t see congress addressing the real problem of predacious Monopolist Conglomerates anytime in the near future.
The glaring weakness is this argument is the contention that the businesses are being taxed. They are not. The end consumer is being taxed by the state in which they reside. So the argument that the party getting taxed has no recourse at the ballot box is false. If I live in Texas, I pay the Texas sales tax which is collected by the business and forwarded to the Texas on my behalf. If I don’t like it I can express my opinion at the ballot box when I vote for my representation in Texas.
The contention that this will be exorbitantly expensive for small business has not yet been shown to be true. Sales can be easily tracked by zip code, the proper tax rate applied and balance due to the state and or city computed and remitted. The challenge is for someone to actually illustrate what the new exorbitant expense will be.
I wonder how bad those blackmail pics of Justice Roberts really are?...sarcasm off now....
ML/NJ
Do what the tech companies do. Break the business into different entities. Sell the online sales rights to an entity in a foreign jurisdiction, and separate out the fulfillment division in the US from any other (manufacturing, procurement etc). Every online sale is processed overseas, but pays a royalty to the licensing company and a fulfillment fee to the warehouse. Nobody pays sales tax except those in a state with a physical nexus since they are most likely to attack the scheme. North Dakota would have a harder time piercing such a structure.
There may also now be other tax benefits. Corporate profits are now taxed at 20%. Personal income taxes for some people will be 2x that or more. Now there is disincentive for some people to take profits out of a corporation and instead take profits in the corporation, pay 20% rate instead of personal income rate, and turn the corporation into a loan outfit, a leasing company, a travel agency, an employment agency etc for the benefit of its owners.
This is not legal or tax advise, Just hypothetical entertainment.
On another note, I wonder how much USG and State Tax assistance will be given in the form of Tax Credits to small businesses???
Looks like another opportunity for Trump and the Republican Congress to create another win. It would make a lot, a lot, a lot of people happy.
I always thought it was fair that the no sales tax offset the shipping costs.
bump
Government MUST have a LOT of little taxes EVERYWHERE; else the mere compilation of all of them would be such a BIG number the serfs would light their torches and hone their pitchforks!