SCOTUS has ruled ... taxes on Internet sales you shall pay

[GreyGeek]

https://www.atr.org/norquist-stateme...-v-wayfair?amp

Today, Americans for Tax Reform President Grover Norquist issued the following statement on the South Dakota v. Wayfair decision:
"Today the Supreme Court said 'yes—you can be taxed by politicians you do not elect and who act knowing you are powerless to object.' This power can now be used to export sales taxes, personal and corporate income taxes, and opens the door for the European Union to export its tax burden onto American businesses—as they have been demanding.


If physical nexus is no longer required, as the Quill vs. ND case demanded, for sales taxes then it is no longer required for personal or corporate income taxes.


Now, California (or any state or city that loses population through exit) can tax people and businesses who do their best to avoid that state or city.


We fought the American Revolution in large part to oppose the very idea of taxation without representation. Today, the Supreme Court announced, 'oops' governments can now tax those outside their borders—those who have no political power, no vote, no voice."

I shop a lot at Amazon. I recently purchased 3 LuciFer 256USB sticks for $75. I have a Prime account for which I pay $120/yr in order to get free shipping. I rarely watch prime movies. In the last 5 years maybe one or two, so movies aren't a factor. I don't have NetFlix or other on-line movie accounts. Just Roku on my TV, for which I paid a one-time fee of $25.

Amazon's purchase choices far exceed any local brick and mortar store, like Walmart. To shop at Walmart I first have to drive there, then physically browse their isles looking for what I want. Sometimes it isn't easy, finding 12" square microfiber cloths, for example, IF I can find it at all. Walmart can't begin to stock what Amazon offers.

After I buy it and take it home, and after I unbox it to actually see and touch it, IF it isn't what I wanted I have to drive back and go through their exchange dept, IF I didn't lose the sales slip.

Amazon didn't have to collect sales taxes in Nebraska because Amazon didn't have a brick and mortar presence in the state. Now, Amazon will have to either collect the sales tax and forward it on to my state Revenue office, or report the total taxes on a monthly or yearly basis. It must also know how much additional taxes each city may tack on to the state sales taxes, if any, and report that as well, if not collect it.

Regardless, in order to pay sales taxes for sales through Amazon, IF they don't collect them, I will have to file a state income tax form along with the sales tax form. To file the state form, in Nebraska, I'll have to file the Fed income tax form. While many income tax services offer free federal tax form submissions (EZ1040A) all of them charge for state income tax filing. Total expenses for me to fulfill that tax burden will amount to around $400 per year or more.

Is it worth it to continue to shop at Amazon, or other online stores?

Reasons to drop Amazon: $120/yr prime fee, which will, no doubt, increase in the future, can't physically see the merchandise, returns are sometimes rejected, lots of co-sellers are disreputable. Amazon used to offer the same products at a price lower than local stores could offer them, but not any longer. Sometimes, Amazon's prices are higher than the local merchant's.

Reasons to keep Amazon: ease of on-line shopping (no driving, 24/7/365 store hours), large selection of merchandise to choose from, free shipping (if it is truly free considering $120 Prime fee). And, what I order usually comes within 3 working days.

I drive an average of 1,500 miles or less per year. That will go up if I shop locally, or drive for a local pickup for on-line sales, which is the only way Walmart can match Amazon's merchandise coverage. How much driving? Who knows?

Basically, I've decided that if Amazon takes it upon themselves to collect the sales tax and send it to my state Revenue office then I'll continue to use Amazon, otherwise, I'll drop Amazon.

What will you do?

[TWPonKubuntu]

I've avoided Amazon. They do have a BIG warehouse presence in my residence state, so I'd pay state sales tax if I used Amazon.

The cost of Amazon Prime can only become a "wash" if one buys A LOT of merchandise from Amazon, so that is a no-go for me also. I look at it as saving $120/yr.

Considering the number of online purchases that I make on a yearly basis, a very small number, this will not be a big factor in my budget. It will further reduce that number because I'll look at local sources first, even though it means travel and shopping time.

Of course prices will be raised to cover the expense of sales tax tracking and payment by businesses. Duh!

BUT, the camel (online taxes) has it's nose under the tent and I don't see any way to stop it from coming in. Follow the money...

I'm not at all surprised by this ruling and I think it was done because of the desire for more cash flow into government coffers.

[Qqmike]

I've been paying state sales tax on-line at both Amazon and Wal-Mart for quite some time.

[dibl]

I consider that I've had a lucky run with Amazon, on the tax front, and I'm not outraged that it's coming to an end. I've never signed up for Prime -- I don't value speed of delivery since I normally buy well in advance if there is a "need" date, or else I just wait. I get all kinds of things from Amazon -- Oriental black bean sauce in jars, and other spices, for example, not to mention books, shoes, kitchen utensils, etc., but I doubt I spend over $500 there in a typical year. It's a wonderful marketplace and it's worth saving the gas and shoe leather and (most of all) time to just click click click and be done with a purchase.

[Qqmike]

dibl: I've never signed up for Prime -- I don't value speed of delivery since I normally buy well in advance if there is a "need" date, or else I just wait. I get all kinds of things from Amazon --

Hi dibl! Yeah, me, too, re Prime--never signed up. In the very rare instances where I need quick delivery, it is not the end of the world to cough up $4-$8 to get an item in 2-3 days. And I usually have accumulated some credit card "Reward points" that I can apply.

[GreyGeek]

What about Grover Norquist's other claims?

....you can be taxed by politicians you do not elect and who act knowing you are powerless to object.' This power can now be used to export sales taxes, personal and corporate income taxes, and opens the door for the European Union to export its tax burden onto American businesses—as they have been demanding.

And how will the EU do that? If an American business does business via the Internet in Europe they now have to pay EU sales taxes? That door swings both ways.

If physical nexus is no longer required, as the Quill vs. ND case demanded, for sales taxes then it is no longer required for personal or corporate income taxes.

I don't see the connection he makes here between sales tax and personal income taxes. Do you? If so, explain it to me. How could California, or the EU, require me to file an income tax with them since I live in Nebraska and haven't left the state in 10 years?

Now, California (or any state or city that loses population through exit) can tax people and businesses who do their best to avoid that state or city.

He lost me again. IF I do online business with a business that is based in California I will have to pay California sales tax, according to the SCOTUS ruling. When I shop online and at the checkout I see a line that says "California Sales Tax" I can, at that moment, cancel the sale if I do not want to pay CA sales taxes. CA can't tax me if I decide not to buy products sold in their state, on line or otherwise.

We fought the American Revolution in large part to oppose the very idea of taxation without representation. Today, the Supreme Court announced, 'oops' governments can now tax those outside their borders—those who have no political power, no vote, no voice."

The Internet has destroyed monetary borders because a person can shop anywhere in the world via the Internet. Sales at brick & mortar stores have declined with the rise of Amazon, NewEgg, CDW and other on-line businesses. As a result the political subdivisions that were funded by taxes on those sales have lost revenue that supports their projects. Nebraskan's paying sales taxes on purchases made online from an Amazon website located in another state, or country, are not funding Nebraska's political expenses.

IF I shop at an online business that is operating from California, for instance, then will I also have to pay CA sales tax too? Double taxation? Nebraska has a 7.5% sales tax. Individual cities add 0.5 to 1.5% to that, making the total sales tax in some cities between 8 and 9%. If I have to add CA's sales tax to that then add another 7.25% to that, plus any taxes for the city the website or sales office was in. That brings my total sales tax to around 15% or more. That's $15 in taxes for every $100 of purchases.

IF that is how it is going to turn out then I will be dropping Amazon. Jeff Bezos is going to see a dramatic drop in his personal piggy bank. I suspect that he won't be collecting taxes, just reporting total sales to their respective states per year for each shopper.

In fact, this ruling by SCOTUS may be the biggest bomb to hit the booming economy since the housing bubble burst.

[TWPonKubuntu]

One option, the most obvious to me, is for customers to take their business to the lowest tax venue. That is what is happening now with Internet sales beating brick and mortar sales.

If an online sales tax is imposed which crosses state and even National borders, then online business will feel the pinch, BUT will a sufficient majority of buyers chose to reduce their tax burden, by shopping around? I fear not, but I hope I'm wrong on this.

Businesses will of course pass this tax burden AND the added expense of tracking, back to the customer in the form of either direct tax payment added to the bill, higher product prices or both. I see no free lunch here, Everybody pays.

Too many buyers fall in the "Sheeple" category and may simply acquiesce to higher taxes. Let's hope that enough people voice their dislike of this added cost by voting...

[whatthefunk]

From the article:

We fought the American Revolution in large part to oppose the very idea of taxation without representation. Today, the Supreme Court announced, 'oops' governments can now tax those outside their borders—those who have no political power, no vote, no voice."

I wonder what the author does when he buys something out side of his county/city/state. The county line is a half mile from my parents house (divided by a road called County Line Road, mysteriously). Just across the road, a large shopping mall was built a couple decades ago. It was built there because local sales tax in that county is 3% cheaper than on the other side of the road. If I physically go to that shopping mall, am I excluded from the local sales tax because I don't have any representation in that county?

[TWPonKubuntu]

whatthefunk;

You point out one of the problems with this "new" tax policy. Enforcement will be more than just an accountants wet dream.

I see the intent as to eliminate the ability to shop for a lower tax rate... More cash flow for TPTB.

Will all businesses now have to ask for ID to determine which tax you are obligated to pay because of the location of your residence? In my best German accent: "Ihre Papiere Bitte".

That will be popular...
About as popular as an imperial tax on tea...
Look at how that worked out...

The more things change, the more they stay the same?

And to bring it home, will I now need to compute and pay a tax to every single tax entity in my software customer's City, County, State and Nation?

I'm sorry sir, but we only sell to customers who live in our town, we can't afford the overhead of foreign taxes.

This will go over like the proverbial lead balloon...

[KBD47]

My concern is how it's going to affect ebay. If I buy a used part or laptop from some guy in Florida and I live in the Midwest it should be no business of my local State politicians, but looks like that might change. Is every little ebay seller going to need an accountant at tax time now?

[SpecialEd]

My concern is how it's going to affect ebay. If I buy a used part or laptop from some guy in Florida and I live in the Midwest it should be no business of my local State politicians, but looks like that might change. Is every little ebay seller going to need an accountant at tax time now?

And, will that transaction now be taxed at both ends?

[KBD47]

And, will that transaction now be taxed at both ends?

Good question. I know ebay was mentioned as one of the 'losers' in the court case, so that's what I'm thinking. Ebay stock dropped today.

Just got this email from Ebay:

The U.S. Supreme Court has announced their decision on the S. Dakota v. Wayfair case, overturning the long-standing rule that states could not tax businesses or sellers outside of their borders. Now is the time for Congress to act on legislation that protects small businesses.
And we need your help.

Please consider signing our petition to show our country's political leaders that these new Internet tax burdens could permanently damage U.S. small businesses. The petition takes less than a minute to complete. We will soon deliver this petition to President Trump, key members of Congress, and select state governors, so we need you to participate now.

eBay has always supported tax policy that is fair to entrepreneurs, artisans, and small businesses. Rest assured that eBay will continue to fight this battle on behalf of all of our valued customers.

Sincerely,

eBay

Here is the petition:
https://www.ebaymainstreet.com/petit...les-tax-buyers

[GreyGeek]

Signed up.

[wizard10000]

IIRC the case that the Supremes decided required online vendors with > 200 orders or > $100k in sales to *collect* state sales tax so I think my own paperwork load will be minimal.

I support this; if we don't have small businesses then all we have left is Big Business

We also live in a city with a fairly large Amazon distribution center and we do pay sales tax on Amazon purchases. Although I don't watch much of their video either Prime gets to be a way of life here. Things we *need* are generally bought locally, things we *want* usually come from teh intrawebz. If we had to pay for shipping we probably wouldn't do as much Amazon but I think we do get our money's worth out of Prime.

But I digress

Brick and mortar can't compete and maybe this will level the playing field a little bit but I'm not sure anybody I know will change their shopping habits over the sales tax thing. I think we need small business and I'm really pretty okay with paying sales tax on the stuff I want.

[GreyGeek]

That $100,000 or 200 transactions part is in the law that South Dakota passed in order to trigger a SCOTUS showdown.
It will be up to each state to pass their own laws and set their own limits.
If Amazon collects the tax I won’t care. If they only report sales, forcing me to file annual taxes, then I’ll probably cancel my Amazon acct