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Supreme Court rules states can collect sales tax for online purchases nationwide

Online shoppers could find costs going up after the Supreme Court did away Thursday with a decades-old precedent limiting the ability of states to collect sales tax on certain out-of-state Internet purchases.

The 5-4 ruling called the current rules “unsound and incorrect.”

Currently, businesses shipping a product to another state where it does not have a "physical presence" -- a store, office or warehouse -- are not forced to collect that state's sales tax.

In giving a victory to the states, the high court said that rule is outdated.

“When the day-to-day functions of marketing and distribution in the modern economy are considered, it is all the more evident that the physical presence rule is artificial in its entirety,” Justice Anthony Kennedy wrote.

The current regulation “allows remote sellers to escape an obligation to remit a lawful state tax is unfair and unjust,” added Kennedy. “It is unfair and unjust to those competitors, both local and out of state, who must remit the tax; to the consumers who pay the tax; and to the states that seek fair enforcement of the sales tax.”

A coalition of small business owners, many offering their online goods from home offices, say their profits would evaporate if forced to comply with complex tax rules in all 50 states.

http://www.foxnews.com/politics/2018/06/...nationwide.html

This is very bad for online sellers such as my self.

Lots of incoming IT work to update every site.

While we all took advantage of this situation, I never thought it was fair. In today's technology, each transaction should be taxed appropriately.

I wonder if this will impact eBay sales.

I am sure it will impact everything but that Govment gots to be kissed.
It was nice while it lasted though.

IMHO, There is no reason why an online purchase should get special treatment. An item is taxable if is sold by an in state merchant to a resident of that same state, but if they sell it to someone just across the border it isn't? Crazy. All such purchases should be taxable.

eBay used purchases are not taxable. (IIRC) New items would, and should, be taxable. Right now (In Ohio, anyway) you are supposed to fill out a tax form and pay the sales tax on anything you buy from an out of state seller, that is not charged sales tax .... and pay that sales tax to the state.

I've never understood why the retailer can't just charge their own state/city tax and be done with it. Why does it have to be where the product is shipped? The sale took place in state X, who care where the stuff is going.

Yeah, it was beneficial while it lasted, but it wasn't completely ethical. Not saying all shoppers were doing it on purpose, but I know a good percentage were.

Plus, we can all complain how our tax dollars are used, but this policy has been shorting our local governments a lot and for a long time. I'm hoping this can finally put money into our infrastructure (roads, rails, public transportation, schools, etc.)

I am hearing talking heads on tv saying the people were supposed to remit their local and state taxes on untaxed purchases anyway.

Now it will be done for you.

Know anyone who failed to remit their state or local sales taxes like that?

Actually, now that I think about it, I pay sales tax at the ReStore and at the Goodwill store, so used items are also probably taxable.

With eBay, I suspect that they will set up their automatically charge tax, and submit it to the proper state. (since all sales will be subject to sales tax)

Actually, all sales might not be taxable.

It depends if you are selling a product or a service.

As I dont have to collect taxes for Ga because online games are considered a service, and they dont require taxes for services. But every state will be different


It is more complicated than just collect some extra money.

Well that helps you, right?

Yeah, before this ruling, but now other states might do things differently. And I have to collect taxes for them.

This is a terrible decision.

So, what... we're going to potentially pay taxes on where we live, where the retailer is registered, perhaps where the product ships from, and maybe even where the web servers are hosted? This decision that location doesn't matter opens up all of it to be claimed.

Horrible, horrible decision that was reached solely to throw a bone to brick & mortars and not because it was logically thought through.

From what I have read, the decision is all about North Dakota being long denied local and state taxes due to internet sales.

Other States are warned to not exceed the ruling for NDakota or they will face lower court challenges.

North Dakota already received taxes on purchases made from businesses located in North Dakota. Why do they feel entitled to taxes on purchases made in other states? Why do consumers need to be taxed twice (once for being North Dakota citizens, and second for whatever state they made the purchase in) ?

Money. Grab.

Sorry, its South Dakota.

"The Internet's prevalence and power have changed the dynamics of the national economy," Kennedy wrote. "This expansion has also increased the revenue shortfall faced by states seeking to collect their sales and use taxes."

The ultimate impact of the ruling remained in doubt, and lawyers for online retailers warned of future lawsuits to determine what businesses and consumers will have to do. The ruling only directly affected South Dakota, which had sought to collect taxes from online retailers with more than $100,000 in annual sales or 200 transactions in the state.

"States would be well advised not to try to go further than South Dakota did,” said former U.S. solicitor general Paul Clement. “If a state deviates from that model, they’ll be asking for trouble."

Faced with the South Dakota law and its exemptions for the smallest retailers, the justices nevertheless opened the door to states that may want to collect sales taxes from a larger number of sellers. Kennedy said Congress or lower courts could step in to referee those situations.

"If some small businesses with only de minimus contacts seek relief from collection systems thought to be a burden, those entities may still do so," he said. But the potential for problems, he said, "cannot justify retaining this artificial, anachronistic rule that deprives states of vast revenues from major businesses."

More: https://www.usatoday.com/story/news/poli...ases/699556002/

A rare mix of ideologies in the concurring and dissenting opinions. Ruth Bader Ginsburg joined conservatives Clarence Thomas, Sam Alito, and Neil Gorsuch, along with centrist Anthony Kennedy. Conservative Chief Justice, John Roberts authored the dissenting opinion, and was joined by liberals Stephen Breyer, Elena Kagan, and Sonia Sotomayer. That doesn't happen too often, I don't think.

https://www.nytimes.com/2018/06/21/us/politics/supreme-court-sales-taxes-internet-merchants.html

Thats South Dakota's problem that they can't attract businesses to their state. They should fix their state and not blame it on others. Consumers shouldnt be punished by being taxed twice. Also, brick and mortar arent subjected to this. It is quite unfair to internet businesses.

If this only affects South Dakota sales, I'm just gonna stick out my tongue.

Oh, hey, South Dakota, come at me bro.

I was wondering why there wasnt more press on this.

Because its kind of a big deal.

If its just that South Dakota got their panties in a wad, then who cares.

How are consumers being taxes twice?

Because you would have to pay taxes to the state you live in, as well as the state the business is located in.

I've already spelled out why this is a can of worms on the thread in PP.

That is good and people can read it there too.

We don't have to deal with it over here when it goes political over there.

I agree. The exempt status was made when the net was new. Paying taxes and shipping would have stalled net sales.

Now that buying via the net is common place, the rules needed to change. States need the revenue. I would rather pay this way then a property tax, gas tax, whatever tax increase.

I agree in theory, but in reality politicians are going to look at these internet revenues in addition to those taxes, not instead of. Once their hand is in your pocket, its forever, and they always, always, always take more. Politicians are like dogs, all they ever want is more.

The shame is that nothing is ever tied to Govt. spending ! They just want more and more , and we get ??????????

Agreed.

At the end of the day, gov't. 'needs' more money. Always, and constantly.

One of my biggest regrets is not having started off working for the gov't. in some manner.

It would take an act of God to be fired, full benefits after 30 years.


There's a reason the gov't wants to keep slicing into your income. They need it. And if they don't get it, they just put it on the tab.

That is an excellent analogy. Just put it on the tab...

I think that is wrong. Tax was already paid on those items when they were purchased new.

I feel like a fool for thinking I could make a decent living without the gov't. backing me up. Guaranteeing me raises, guaranteeing benefits. What the hell was I thinking?

I'm not some big business guy. I screwed up.

You would be an Awesome Government Guy!

Not too late. Even government buildings need repair. You might want to find out how to bid for a contact. You really make the money when you lean your business on the government.

They will need to come up with a new federal law to prevent more than one state taxing the same sale which is very unfair to the buyer. To me it should go to the state where the origin of the sale was from in the same way that you would pay it if you were physically there.

I mean you might live in florida but you won't pay florida sales tax when your in california and buying something in Cali.

I mean they are already taxing the business on it's income tax to begin with so sales tax in general to me is double taxation and unethical. For some states like florida where there is no state income tax though I can see it being totally fair.

You gotta start somewhere man. Just keep growing your business and you will be fine =)

It will have to be taxed from the shipping point or where the order is processed. Otherwise, net retailers will be sending tax checks to 50 different locations rather than just one.

That would be a nightmare for business'.

To be fair to all, I would like to see the states agree on a flat net tax rate. Maybe toss the five highest tax rates and the 5 lowest, then average the rest.

My state does not have a income tax, so the sales tax rate is 9.25%, all inclusive. Other places it is much lower because most states do have a income tax.

Oregon is almost the exact opposite as Tennessee. We have a 9% state become tax, at my income level, but no sales tax.

We would be better off if all current taxes were abolished including income, sales, sin, gas, property, and SS contributions. Then implementing a 20%-25% flat income/new money tax with a forced 10% IRA.

Haven't done the math but would bet that is way less than the working poor common man pays in taxes now.