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General Legislative Discussions Any general discussion concerning legislative issues or events. Not necessarily specific to a particular region, or even a type of animal group.

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Old 01-16-2018, 02:38 PM   #1
Supreme court to reconsider sales tax on interstate commerce

The outcome of this case could make life interesting for small businesses that do a lot of online sales (like reptile sellers).

I collect and remit sales tax but only for WV. The cost of compliance is going to drive up prices across the board if the USSC rules that sales tax must be collected and remitted for interstate sales.
Old 01-17-2018, 08:36 PM   #2
I don't know about it having a high cost of compliance. I regularly have to adjust clients portfolios in response to local tax changes, it takes under 5 minutes even when they own multiple homes in multiple jurisdictions.

There are already add-on's in most internet sales platforms that do it automatically. Alternatively, lists them. here is inwood:
Old 01-17-2018, 10:04 PM   #3
LOL I know my own state's sales and use tax rates (all 39 of them based on city/county). Under the change being considered by the Court, I would have to calculate the sales tax for all of my customers nationwide based on their home address, then register my business with their states so I could file a return and remit the tax to that state.
Old 01-18-2018, 02:49 AM   #4
Well, I've seen this argument bantered about for a long time now, I suppose. But what about the consumer? If the retailers are going to be raking in all that cash from an imposed nationwide enforcement of individual sales taxes, where does that money come from? Yep. Middle class takes it in the shorts, yet again. Not to mention that nebulous class of people known as "lower class" (because of income levels) that are certainly going to be hurt because they are trying to stretch what little money they have as far as they can with every purchase they make. Not to mention that sometimes when a person sees the advertised price, then sees the advertised price PLUS sales tax, well, to some that difference is just enough to get them to walk away from the purchase.

The forces for this proposal have been using a two pronged attack for this effort, whereby on one hand they will claim it is for the poor brick and mortar ONLY retailers going out of business because they can't compete against online companies that consumers do not have to pay sales tax to in order to buy the merchandise they want. Obviously such stores are inept or unable to also engage in an online marketing strategy, I guess. Oddly enough, if they only have a retail store in a single state, marketing in all of the rest of the states would quite likely completely negate that slight negative they experience within their own state. Certainly online marketing even within their own state would have to benefit their bottom line, you would think. So are they REALLY the force behind this movement? From a retail perspective, are they really suffering from this situation, or is it perhaps one or more LARGE online retail concerns jockeying for position instead?

Then on the other hand, the proponents claim that state and local entities are DUE money lost because the residents in those areas will purchase merchandise out of that local taxing area, for whatever reason, but taking money out of local taxing revenue mouths, nonetheless. Now that sounds like a much more powerful motivation, to me. But I guess using dupes as mentioned above, who can't put two and two together to better their own marketing strategy to broaden their customer base would certainly be helpful.

Honestly, I tend to buy a lot of products online and there are multiple reasons why I do that. For one, I have spent countless hours of my time, and $$ for gasoline running around town looking for something specific that I want or need, and would prefer to have it RIGHT NOW, but VERY OFTEN have no such luck and head on home empty handed. I don't know how many times I went to stores looking for something only to have a sales person tell me "No, we don't have it in stock, but we can order it for you. We'll have it here within a week." Jiminy Christmas, I can order it myself, please and thank you, and wouldn't have had to waste my time coming here to look for it! So I wind up ordering it online anyway having wasted all day in town. Seriously, if the retailers want their cake in that they want to force the playing field in their favor in the grab for customers, then they should have to EAT that cake too. Meaning, that the law would REQUIRE them to have everything they claim to stock IN STOCK at each and every store so local customers can buy LOCALLY from them. That seems fair to me, if they want to try to force something like this down our throats.

Heck, I remember not long after moving down here to north Florida, I had a Commodore Amiga computer and read about a new Motorola chip that was supposed to spruce up the processor speed a bit. Motorola 68010, I believe it was, to replace the stock 68000. So I found an electronics shop in Tallahassee and asked the guy at the counter about that new chip. He checked his books and said "No, don't carry it, but bring the computer in and I'll see if I can get one of these other chips I have to fit." Oh really? I kid you not. So yeah, that was a wasted effort. And a lesson learned about trying to limit purchases from people who actually know what the heck they are talking about. Which can be difficult to do, sometimes, locally.

Besides, whoever stated that the federal government has the authority to enforce a state's self proclaimed *right* to the money they want in the form of sales taxes from everyone in every other state? Which implies that each and every state has a right to FORCE another state to enforce that other state's laws. How is that going to fly? Is each state going to send around their own auditing teams to check on each and every sales entity in the entire USA for compliance? Are we going to have a virtual army of "revenuers" running around the countryside chasing down virtual "moonshiners"? I got news for them. No one in, say, New York has a darn thing to say about me here in Florida being required to collect state sales tax for them. None. If I were a retailer and someone from New York ordered something from me online, the collection of New York state sales tax from that person is THEIR problem for enforcing any such STATE laws on THEIR books, not mine. And I seriously doubt the federal government has any legal constitutional authority to force that kind of forced servitude on anyone else, neither.

And as for Amazon not being affected by any such proposed law, well you can bet your bottom dollar that somewhere deep underneath, Jeff Bezos has some notable irons in the fire behind all this because he certainly has a big financial reason for doing so. He would love nothing better than to further eliminate any competition and continue along his chosen path to monopolize online sales and merchandizing entirely. And he certainly has the money to grease those wheels needed for this effort. So yeah, follow the money and see who benefits the most. It is usually just THAT simple.

Interestingly enough, just today I went and ordered a new laptop PC to replace my old ailing unit that I use to process all my email necessities. Where did I order it from? Costco. And yes, they have a local store here, so that meant paying state sales tax. Did they have it in stock? Nope. So I have to pay state sales tax AND shipping for it, and I don't get it in my hot little hands right away, neither. The reason I decided to do so was because they offered the best deal in overall benefits that overshadowed a purely $$ decision. They offer an easy return policy and provide a 2 year warranty along with the price being competitive. They are great to deal with. AND they are local, so returns for repairs or replacement would be an easy matter to accomplish with very little to no hassle. So they had a marketing edge based on the additional services they provided as a company in order to make the sale, even with the drawback of sales tax and shipping.

THAT is how these brick and mortar retailers need to compete. Offer more for the dollars they want to take out of our pockets. Not whine to the government to FORCE us to deal with them locally because they want us to have no financial advantage to do otherwise. I think most people don't shop online because they really want to, they do it because in order to get what they want, they really have to. I think MOST people would prefer to have something they want to buy RIGHT now if they could do so, even at a higher price. But they usually can't so they do the next best thing out of necessity.

And as an additional thought on all this, has anyone considered the additional hidden costs being incurred by buying locally? How much money in wasted gasoline would likely be spent by a random sampling of 100 people driving vehicles all over town looking for something they want to buy? Now how much would be spent if those 100 people instead just purchased their items online, and the UPS or FedEX truck simply delivered those packages to the door of those 100 customers? Let's see, 100 vehicles on the road or just one burning gasoline. Heck, what about the additional pollution pumped into the atmosphere by those 100 vehicles on the roads? Which scenario would be better for the environment as a whole? Or doesn't that matter any longer to the people in government?

Anyway, all in all, logic dictates that such a law would very likely be completely unenforceable. Not to mention that it would likely put every small retailer right out of business in short order. Each and every one of them would have to keep current on each and every state and local sales tax requirement, fill out forms for every one of those entities, and then file all the necessary forms while sending checks for their payments too. I believe they would have to hire at least one additional body just to handle all of that required paperwork. Either that or most would just wind up getting out of the online business aspect of their marketing plan because they couldn't afford to continue it with all the paperwork and red tape. (Well gee, wouldn't Jeff Bezos just think that was a real darn shame?) Yeah, if the federal government wants to completely sink thousands of small business owners and their employees by putting them all out of business, I think this will be just a grand way to accomplish that task. Which, I presume, would also break Jeff Bezos' little heart.

As for me, personally? Well, non-compliance works for me. Sometimes you just gotta say "NO!" to stupid ideas, no matter who comes up with them.

IMHO, of course.
Old 03-04-2018, 12:04 PM   #5
Oral arguments are set for April 17.
Old 04-23-2018, 08:35 PM   #6
The case is moving forward; oral arguments were last week.

Supreme Court Hears Oral Argument in Internet Sales Tax Case

In South Dakota v. Wayfair, South Dakota is asking the U.S. Supreme Court to overrule precedent and hold that states and local governments may require retailers with no in-state physical presence to collect sales tax.

NCSL President Senator Deb Peters and NCSL's tax expert Max Behlke interviewed by NCSL Public Affairs Director Mick Bullock following the Supreme Court hearing. NCSL estimated that states lost $23.3 billion in 2012 from being prohibited from collecting sales tax from online and catalog purchases.

In 1967, in National Bellas Hess v. Department of Revenue of Illinois, the Supreme Court held that under its Commerce Clause jurisprudence, states and local governments cannot require businesses to collect sales tax unless the business has a physical presence in the state.

Twenty-five years later in Quill v. North Dakota (1992), the Supreme Court reaffirmed the physical presence requirement but admitted that “contemporary Commerce Clause jurisprudence might not dictate the same result” as the court had reached in Bellas Hess.

Customers buying from remote sellers still owe sales tax but they rarely pay it when the remote seller does not collect it. Congress has the authority to overrule Bellas Hess and Quill but has not done so.

Even before oral argument, South Dakota could count three votes likely in favor of overturning Bellas Hess and Quill. In March 2015, Justice Anthony Kennedy wrote a concurring opinion stating that the “legal system should find an appropriate case for this Court to reexamine Quill.” While on the 10th U.S. Circuit Court of Appeals, then-Judge Neal Gorsuch wrote an opinion strongly implying that given the opportunity the Supreme Court should overrule Quill. Finally, while Justice Clarence Thomas voted North Dakota in Quill he has since rejected the concept of the dormant Commerce Clause, on which the Quill decisions rests.

At oral argument Kennedy and Gorsuch asked Wayfair’s attorney different lines of questions both of which indicated they remain anti-Quill. Thomas, as always, was silent. The most vocal champion of overturning Quill was Justice Ruth Bader Ginsburg. She said the court needs to take responsibility for overturning precedent it created, which is no longer appropriate in the current economy, instead of relying on Congress to act.

Justice Stephen Breyer was clearly torn about the case. He said he read both sides’ briefs and concluded both positions were “absolutely right.” He looked to the attorneys arguing for both sides to help sort out issues including exactly how much money is on the table, whether it really is easy and inexpensive to collect sales tax, and whether tax collection should be retroactive.

Justice Sonia Sotomayor lead the charge defending Quill, asking South Dakota’s attorney about many of the same issues Breyer raised—but taking a more certain approach that the answers were known and point to keeping Quill the law of the land. Justice Elena Kagan asked a number of questions expressing the view that Congress should overturn Quill, if it wants to, given that Congress can craft a more complicated solution than the court can. Justice Samuel Alito also didn’t seem particularly sympathetic to South Dakota’s position, suggesting that if Quill was overturned states would “grab everything they could” rather than exempt small businesses from having to collect.

Chief Justice John Roberts asked questions of both sides, something he has done more often since Justice Antonin Scalia died. His questions unfavorable to South Dakota focused on, among other things, the burden of requiring small businesses to collect sales tax and honoring Congress’s decision to leave things the way they are.

The Supreme Court will issue an opinion in this case by the end of June.
Old 06-21-2018, 12:45 PM   #7
High Court: Online shoppers can be forced to pay sales tax

Interesting. Truly tiny one person (or couple) small businesses that don't have a ton of online sales won't be affected, and corps like Amazon can eat the cost of compliance. The ones in the mid-range are going to be hurting.
Old 06-21-2018, 04:16 PM   #8
So unless each state is going to begin intercepting packages coming into their state, how are they going to KNOW who owes them state sales tax?

My guess is that some unscrupulous online sellers will be collecting sales tax from their customers, but that money will not be finding it's way to the states. How would the states know?

In the case of something like Ebay, who will be responsible for collecting the taxes? Ebay or the individual sellers?

Sure, just when the economy appears to be bouncing back, let's kick the legs out from under it.
Old 06-22-2018, 07:02 PM   #10
Originally Posted by WebSlave View Post
So unless each state is going to begin intercepting packages coming into their state, how are they going to KNOW who owes them state sales tax?
States will likely enter reciprocating agreements where when they audit businesses in their own state, they send the info on how much business that company did (#transactions, #sales, etc) did with buyers in other states. Part of the agreement could include the company's state being able to collect for other states on their behalf, with offsetting credits/debits between the states as needed.

I was audited three years in a row; WV basically wanted everything I had for 2010-2012. I ended up turning over a dump of all QuickBooks invoices and expenses, all bank statements, all receipts proving expenses, etc. So it would have been child's play to compile my customer list by state along with how much the customers purchased, and pass that info along to other states.

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