sales tax

Today the S. Ct. decided a case called South Dakota v. Wayfair, et al.  It will be on the news.  South Dakota had a law requiring out of state sellers who sell stuff and ship it to S. Dakota to collect from S. Dakota resident purchasers the appropriate S. Dakota sales tax and to remit the tax to the state.  Prior S. Ct. cases had said that a state could not do this, and today, the S. Ct. in a 5-4 decision reversed the earlier cases and said the S. Dakota law was permissible.  Therefore, a state can require an out of state seller to collect the applicable sales tax. 

Let's say you live in S. Dakota, which has a sales tax and you order some California cabernet sent to you from the winery.  The winery may be compelled to collect the S. Dakota tax from the consumer and remit the tax to S. Dakota.

So, let's say you buy stuff from Amazon.  You might well not be paying sales taxes on those purchases today.  You might well be paying sales tax on them shortly.

Original Post

As much as I'm unhappy with the decision, I totally understand it.

I have benefitted from the lack of intrastate tax on wine purchases for over a decade now, and really haven't felt any remorse.  

That said, I can't come up with an argument that an out of state wine retailer deserves a 5-10% advantage over a local store because my out of state purchase is tax exempt.

Do you have a "legal" opinion on this, irwin?

PH 

 

Huge win for small businesses who have been forced to unfairly compete with Amazon, Wayfair and other online retailers who could avoid collecting taxes.

Anyway, the Supreme Court decision today did not say that States could now tax internet sales (States could do that before today's ruling). It only changed the way those taxes are collected. Sellers may now be required to collect the taxes instead of the buyers having to report and pay the taxes personally (which did not happen).

Also an odd coalition for the majority. RBG and Clarence Thomas on the same side.

VM

Amazon pays local state taxes everywhere they have a warehouse, which in today's US is quite alot fo places where they do collect sales tax.

The main question is, for those small business who wish to sell on the internet, how much is it going to cost them to figure out the individual tax laws of 49 states so they can remit and pay individual sales taxes to every one of them?

purplehaze posted:

As much as I'm unhappy with the decision, I totally understand it.

I have benefitted from the lack of intrastate tax on wine purchases for over a decade now, and really haven't felt any remorse.  

That said, I can't come up with an argument that an out of state wine retailer deserves a 5-10% advantage over a local store because my out of state purchase is tax exempt.

Do you have a "legal" opinion on this, irwin?

PH 

 

My take is that you're only going to further restrict interstate commerce.

You're going to have situations where only the largest companies can sell across state lines.

Mom and pops shop is NEVER going to try and figure out another states tax payment system for say 50$ in purchases, occasionally from a buyer of that state.  It means that the bigger states like NY and CA and TX may benefit from a wider variety, but the smaller states with more mom and pops shops will have to hope that the state is busy promoting "shop local" instead of the b ig shops.

You're basically just making it harder for that mom and pop retail shop to be able to grow to a national company.

First, VinoMe is correct that it changes the way taxes might be collected. Here in Maryland, any purchaser of anything sent in here from out of state is supposed to fill out a form on the Comptroller's website, compute the tax, and send in the form with the taxes.  Failure to do so is a misdemeanor. No one has ever complied with this law, I suppose.

This case says that the S. Dakota law, requiring out of state sellers who ship into S. Dakota, and who have either $100,000 in gross sales or 200 transactions with S. Dakotans, must collect the tax and remit it to the state, so they don't have to rely upon the self-reporting of their citizens.

Now, let's say out of state folks start collecting taxes, prices go up, and they remit the $ to the states. That means more revenue for the states. What are the states going to do with all this new revenue? Cut their tax rates? (Like change the sales tax from 6% to 5%)?  Or, just keep the extra money and use it for stuff?

The lineup of the judges here was interesting.  As noted RBG and Thomas were on one side. The dissenters were Kagan, Sotomajor, Breyer and Chief Justice Roberts, the latter writing the dissenting opinion.

The Trump administration took the side of S. Dakota, or, in other words, the side of more tax revenue for the states. So prices will go up. Inflation will go up. States will spend the $ on stuff.  The earlier opinions were based on a constitutional interpretation of the commerce clause. The commerce clause hasn't changed. What has changed is the advent of internet commerce. 

I can live with the decision. But, just as the laws on interstate shipping of wine were becoming more common and easier, we now have something which discourages it. Wineries will have overhead to keep track of the amounts of tax to charge in various states, what forms to fill out, how to remit, when to remit, etc.  Just making commerce less free.

 

Any of the US lawyers on the forum know how practically this would be enforced?  Presumably the SD Department of Revenue has the ability to levy fines etc, but doesn’t have the ability to extend beyond its borders for the purposes of collecting them.  

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