Author Topic: U.S. top court lets states force online retailers to collect sales tax  (Read 287 times)

grnidone

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WASHINGTON (Reuters) - States have broad authority to force online retailers to collect potentially billions of dollars worth of sales taxes, the U.S. Supreme Court ruled on Thursday, siding against e-commerce companies in their high-profile fight with South Dakota.

https://www.reuters.com/article/us-usa-court-taxes/u-s-top-court-lets-states-force-online-retailers-to-collect-sales-tax-idUSKBN1JH23B

Rupert

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I seem to remember sitting round a table in the early days, discussing this. "We" agreed the only sensible way to tax the internet was by the location of the buyer, or the delivery address for physical goods.

Seems like 17 years later the govt is catching up. Interesting article. There is still the rates advatage. I know it would screw me if I had to pay the businees rates of a physical shop.
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rcjordan

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>sitting round a table in the early days, discussing this

Yup. Sales tax was one of our earliest thread topics at WMW. No one wanted to believe it was coming to the (then) unregulated, untamed internet.

This will, however, be the last nail in the coffin for many small, independent sites unless some sort of simplified universal tax table is devised. On top of the complexity of state and LOCAL individualized tax rates, sales tax reports on each state's form is a massive PITA and onerous compliance issue.  I'm guessing that some cart software will take care of this for a fee but it's still a PITA and yet another cost of doing business.

rcjordan

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<added>

Worth a read
The internet sales tax is going to pummel small businesses

http://theweek.com/articles/780427/internet-sales-tax-going-pummel-small-businesses

DrCool

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>>some cart software

Avalara and TaxJar are probably hopping right now.

We already collect tax in about 45 states since we have so many physical entities, work with so many state schools, etc. So this won't affect us much. Most other large retailers are in the same boat. But the little guys will get screwed here.

So it is a matter of do you want to screw the brick and mortar small guys or the online small guys. I have seen quite a few different surveys and studies that show sales tax or lack thereof is a very, very small factor driving people to shop online. I can't think of an instance where I have ever abandoned a cart due to sales tax. Factors like product selection and convenience were a much larger factor. I don't think this law will be the thing that saves brick and mortar or even have more than a minuscule effect. States will be collecting more tax revenue so there is that benefit for them but parading the dying main street store as a sympathetic figure in all this is pretty lame.


rcjordan

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> I don't think this law will be the thing that saves brick and mortar or even have more than a minuscule effect. ... parading the dying main street store as a sympathetic figure in all this is pretty lame.

Ditto

rcjordan

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Effects on plankton starting to sink in

Etsy sellers confront unknowns after Supreme Court ruling

http://money.cnn.com/2018/06/22/technology/etsy-sellers-supreme-court/

aaron

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In some ways the increasing barrier to entry should provide higher returns for those who manage to make it over the hump.

Amazon gets over 1/2 their sales from third party merchants & until this ruling they typically did not collect on those. Now they'll need to.

buckworks

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>> studies that show sales tax or lack thereof is a very, very small factor driving people to shop online

That would vary with the size of the transaction.

>> parading the dying main street store as a sympathetic figure in all this is pretty lame.

I disagree. In one of the worlds I move in the sales tax on the average transaction was/is enough to be a serious motivation for online shopping vs purchasing from the local B&M who actually served you The B&Ms in the sector are an ailing breed, and some have indeed died.

This issue has been distorting natural market forces for years, sometimes a little, sometimes a lot. Even a "very very small" issue can be very very unfair.

Rupert

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Its too late possibly:

https://www.bloomberg.com/graphics/2018-amazon-industry-displacement/

Quote
Itís (Amazon) responsible for roughly 44Ę of every dollar Americans spend online, and itís now mixing in retail stores.

I was looking for a 1 in 7 dollars in the world quote, but have come to the conclusion that is hearsay.
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Mackin USA

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>>I have seen quite a few different surveys and studies that show sales tax or lack thereof is a very, very small factor driving people to shop online.
Mr. Mackin

rcjordan

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Top 10 headline of 2017. I quote it fairly often.

http://th3core.com/talk/water-coolerextra/the-tyranny-of-convenience/

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