Supreme Court Decides South Dakota v. Wayfair - Enjoy paying your sales tax

[s0me0nesmind1]

I say good luck to those counties and cities with enforcing their rules.

I imagine that, in the name of efficiency, states will enact a scheme to collect at the state level, take their cut, and distribute the revenue to local districts.

Some states already do this - Texas being one of them.

There are only certain "home rule" states that are a huge fucking pain in the ass like Colorado and Louisiana being the worst. See: https://en.wikipedia.org/wiki/Home_rule_in_the_United_States

 

[Sonikku]

I have about $200 a month for anything not rent or food. And as an online shopper who can't afford the exorbitant prices of rural farm country, I just got 8% poorer.

 

[Genx87]

Yeah, but to be honest my main concern isn't brick and mortar... I really think this will bend over anyone that is a small company trying to grow.

Let me break down the complexities for you - there is roughly ~65,000+ jurisdictions (states, cities, counties, districts, metro transit authorities, etc..) in the US that have a sales tax in some way or another. Each one of those taxes products different, each one of them has different requirements for reporting the sales, etc... So expecting any small scale company to be able to handle this is insane.

That is true. Did not think of it that way. Are there any services that can handle this for small business? If not, sounds like an opportunity!

 

[s0me0nesmind1]

That is true. Did not think of it that way. Are there any services that can handle this for small business? If not, sounds like an opportunity!

It's tough - I do think there are options out there for small business - in particular websites that you run the payments through perhaps? Examples would be stuff like Square pay...but I have no idea - I've been told they don't actually have all the information needed to correctly charge tax.

The problem is, I guarantee the fees they charge (to vendors that would use the service) will probably be overall costly for them to calculate the sales tax.

 

[zinfamous]

Yeah, but to be honest my main concern isn't brick and mortar... I really think this will bend over anyone that is a small company trying to grow.

Let me break down the complexities for you - there is roughly ~65,000+ jurisdictions (states, cities, counties, districts, metro transit authorities, etc..) in the US that have a sales tax in some way or another. Each one of those taxes products different, each one of them has different requirements for reporting the sales, etc... So expecting any small scale company to be able to handle this is insane.

why can't this be calculated in milliseconds with software that determines your sales tax based on the zipcode of your billing or shipping address?

oh right, that's the easy part: it's paying out each state their due for each purchase. Don't 3rd parties already handle this?

 

[s0me0nesmind1]

why can't this be calculated in milliseconds with software that determines your sales tax based on the zipcode of your billing or shipping address?

Because every state is different to...a fucking huge degree. So I help implement and configure the software for this stuff - but we have an ENTIRE practice/division that is dedicated to knowing about the sales tax laws for all the states. Each person is usually specialized to certain states - because it's simply that complex. So if I have some issues with say... a vendor in Mississippi, they will say "Oh go to Bob - he knows Mississippi inside and out". On top of just the address information, you need to send the system information on the product or service. Not every product or service is taxable in each jurisdiction (and as said previously, 65000+ different jurisdictions).

Let me give you a perfect example - You live in IL correct? Do you know what address it bases the sales tax rate on? Hint: It's not the destination/shipping address - and it's definitely not the billing address - or even the address of where it was shipped from (origin).

It's actually based on the Administrative Origin - AKA: The "Point of Order Acceptance" - basically, it is the location in which the vendor you're buying from "accepts" the order into their system. BUT - That is specifically for sales tax or in-state transactions. What if someone ships a product from Ohio to IL? Then the calculation is based on the destination jurisdiction.


But to your overall point - it can do that. It does calculate in a matter of milliseconds. The problem is that we send a decent boatload of information about each transaction to the system via XML - and it returns it to the source system with an XML response... And it's updated all the time... and it costs a boatload to implement and license.

oh right, that's the easy part: it's paying out each state their due for each purchase. Don't 3rd parties already handle this?

I would say the hardest part is accurately calculating the taxes - and knowing when you're responsible to start collecting. Filing them is - yes - another pain in the butt part. You probably could hire a specialized accountant or firm, but I guarantee it will be significantly overpriced and likely not reasonable for small scale or medium size companies.

 

[Pulsar]

How does this affect online auction sites like ebay?

 

[lxskllr]

How does this affect online auction sites like ebay?

I know little about it, but I'd expect tax for a seller with a federal ID, and no tax for a private party.

 

[s0me0nesmind1]

How does this affect online auction sites like ebay?

Sellers may be liable to collect sales tax and report it whereas previously most do not except for the state in which they live in.

eBay has transitioned from joe blow selling to more of an eCommerce platform with large scale sellers for the most part. The cut-off for the new law (at least the one made in SC) is if a seller has either $100,000 in sales in the state OR 200+ transactions within the state.

So if an eBay seller sells 200 paperclips at 1 cent each to SC, in theory they would be liable to collect tax from all their customers in that state.

I know little about it, but I'd expect tax for a seller with a federal ID, and no tax for a private party.

Nope - don't need to be registered entity or anything. Any income is taxable income in the IRS' eyes (with a couple small exceptions - this not being one of them). As said above, all the seller needs to do to be liable is sell 200 transactions or $100,000 in sales.

 

[whm1974]

I have about $200 a month for anything not rent or food. And as an online shopper who can't afford the exorbitant prices of rural farm country, I just got 8% poorer.

I feel your pain as I'm in the same boat but I don't live in rural farm country.

How do states and local governments enforce the use tax on buyers? Big ticket items such as cars, boats, and the like are easy to enforce, but for the smaller stuff...? Note: I'm not encouraging tax evasion this is just a question.

 

[Red Squirrel]

Sales tax is ass backwards. They should be taxing everything that is not local and don't tax anything local. It seems governments do everything to encourage people not to buy local. It's similar here in Canada, it can cost $20+ to ship something here from within the country, AND you pay taxes. But if you order from China it's free shipping and there's no taxes. It should be the opposite. Governments seem to have something against small business.

 

[s0me0nesmind1]

Sales tax is ass backwards. They should be taxing everything that is not local and don't tax anything local. It seems governments do everything to encourage people not to buy local. It's similar here in Canada, it can cost $20+ to ship something here from within the country, AND you pay taxes. But if you order from China it's free shipping and there's no taxes. It should be the opposite. Governments seem to have something against small business.

Wut?

They are called CONSUMPTION taxes for a reason. Wherever the product, food, service, etc.. is being CONSUMED is what determines where the tax should be applied. What do you think VAT taxes are based on?