This might actually be something that I agree with Trump on. I understand the argument that it’s the internet and that it’s tax free commerce helped it grow into a commerce platform, but now it’s competing with brick-and-mortar shops. It should pay the same taxes they pay.
Thoughts?
Oh, oh, this is interesting:
Sales tax make 60% of the general fund? Deliberately chose not to have an income tax? Ok, that is interesting. Let’s go on:
Let me get straight. White folk decided to erect and run a government with no income tax, very low property taxes, and a 6.5 sales tax on the population about the size of San Jose, CA. Faced with a series of revenue shortfalls, white folks did the only responsible thing: raise taxes on oil and gas sector. Haha, just kidding. The legislature declared an emergency and decided to go after online retailers. I’m done with South Dakota. Bye, Felicia.
Seriously, though, I’m assuming there is significant cost in complying with collecting and remitting tax payments to thousands counties (with their own tax structure). If I were a small business owner, I wouldn’t want to get my hands dirty. I’d wash my hands of the situation and not sell to States like South Dakota.
And that will be easy to do IF only a few states follow SD’s lead. My store sells firearms, ammo, and accessories online but I refuse to sell to states with ridiculous regulations like California. Even though the actual gun sales go through a local dealer as well I refuse to jump through their hoops and take the risks involved in selling to people living in an unreasonable state. Luckily there are only a couple of states with such strict but pointless laws.
But if the majority of those states had similar laws I’d be forced to either stop online sales or sell to those states as well. This is what may happen to all online sellers regarding sales tax. I fear it’s just too much money for a majority of states to not jump on the bandwagon.
White people? What does race have to do with sales tax laws?
This is a terrible situation. My wife and I run a small business and our average sale price is about $10 for digital goods. We could now be required to collect sales tax for the more than 10,000 taxing jurisdictions in the USA. Collecting it is not really a huge problem as there is software to calculate the right rate based on a customer address. The real problem is remitting the taxes. Taking just our sales in June, I would have to send roughly 50 cents to 400 different jurisdictions all over the country.
What is to stop White Pine County, Nevada (population 9,811) from demanding that a mom & pop website in Bloomington, IL collect and remit sales taxes for all their sales each month to residents of White Pine County? And if they made no sales, the county could still demand that they submit a form showing that they had no sales in the county.
Nevada sales tax is 4.6% and White Pine county adds another 3.125% that must be paid to the county…the state may or may not collect it on behalf of the county, depending on the state.
A seller should only have to remit taxes to the place where the seller is based. If they want to pass a law that says I can collect Nevada sales tax in Nevada for sales to people in Illinois, fine. Just don’t make me pay it out to Illinois and the other 10,000 tax locales in the USA. If I buy something from a website based in Texas, I’m ok with paying Texas sales tax on it… no different than if I walked physically into a store in Texas. And the Texas-based seller never has to deal with sending money to Nevada.
This is from the state of Colorado which collects county sales tax on behalf of its counties but for cities:
“City - There are 224 cities that have established city sales taxes. Most small cities’ sales taxes are collected by the state. However, most of the larger cities (home rule cities) collect the city portion of the sales tax directly from the vendor and require a separate reporting form.”
So now your mom & pop business in Clearwater, FL will have to fill out a monthly form and send it to the city of Silverthorne, CO, population 4,500.
“The Town of Silverthorne uses Xpress Bill Pay for online payments – new users will be required to create an account when logging on for the first time for utility payments, sales tax and business licenses.”
That is my main objection to the opinion. States have many options for raising revenue and because Quill foreclosed one such opportunity for South Dakota, when the state chooses not to use other methods, then it is an emergency and a travesty that must be immediately remedied.
Further, these policy considerations should have nothing to do with what the law is. If states are going broke because of current law, then change the law; don’t say that the law is now changed.
Also, this may have a dramatic effect on internet commerce. It won’t affect Ebay or Amazon, but I can see a bunch of small businesses who at least initially refuse to ship to states that require them to collect and remit sales taxes.
Never mind.
Duplicate thread.
https://boards.straightdope.com/sdmb/showthread.php?p=21036826
So now there are a thousand potential new regulations on small business. Is Trump preparing to eliminate two thousand existing regulations?
As a matter of principle it seems wrong that on-line sellers can evade taxes others must pay. This may have made sense once if public policy was to encourage e-Commerce. But now, I think it is bricks-and-mortar commerce that may need encouragement.
But if every little on-line seller will soon have to file hundreds of forms, enclosing checks for 49¢ or so, I think we can agree that’s absurd! Is that what the net result will really be?
Where I live (a yellow folk country :smack: ) a flat national value-added tax is collected, which the central government somehow partitions among the provinces — very simple. UIAM some while-folk countries use a similar system. But I do understand that the country that pioneered the computer revolution and landed a man on the Moon could never be expected to make a radical change in its taxation methods.
The relevant difference is that the on-line sellers are not represented in the distant jurisdiction but the “others” (i.e. those physically present there) are. The relevant principle, thus, is “No taxation without representation”.
Trading partners like Canada and China will pay tariffs on good shipped to the U.S. Is that “taxation without representation”?
Doesn’t it seem wrong that goods sold from one jurisdiction to a buyer in a different jurisdiction can evade taxes simply because two jurisdictions are involved? Surely it would be “fair” for sales tax to be paid in one place or the other. (If you agree so far, the buyer’s jurisdiction is the “right” place for the tax to be paid for some reasons, though it ends up much more cumbersome.)
How will this be enforced when it come to out-of-country transactions?
If I buy a vegetarian haggis from Bartles and Boothby in England, how does the state of Oregon find out about it and how do they force B&B to fork over the money?
Trump is not for internet retailers paying sales tax. He’s just against Amazon, and doesn’t even care that Amazon already collects sales tax and has been doing so for several years.
Amazon might even benefit from this by setting up a solution to collect sales taxes from third party sellers who would otherwise have to close up shop or limit the states they sell to.
Of course this might also lead to more internet merchants limiting their sales to specific states, and voters turning against sales taxes.
It’s a step in the transition caused by increased online sales, and it’s not completely predictable what will happen next.
Against my better judgement, I’ll answer the question. White economists have told white folks over and over again that sales taxes disproportionately affect the poor. White sociologists and economists have likewise insisted that that these taxes attenuate social mobility for minorities. I’m not making this up; indeed, white folks with white sounding names from prestigious white universities have affirmed these facts.
What do white folks do in response? They double down on sales taxes, refuse to consider implementing an income tax, refuse to consider raising oil and gas taxes, and decide to declare a fucking “emergency” and openly go after online retailers. This is some wypipo shit if I’ve ever seen it.
In Louisiana, for example, white folks have deliberately decided to run a government with low income taxes and a very high sales tax rate of 9 - 10.75%. Yeah, 10.75%. Stop now and Google Map this place - it looks like a small-town hell-hole; there’s not even a recognizable sidewalk on most of the main streets. Why the hell are people paying 10.75% taxes in Lake Charles, Louisiana? NYC or Chicago sales tax rate is a smidgen under the Lake Charles rate. The poor people in Lake Charles get jack shit for their sales taxes. No carefully manicured parks and recreation, no generous public health screenings, no award-winning schools or universities, no top-notch hospitals and clinics, no reliable public transportation (buses don’t run on weekends), no trains, no subways, or even a fucking public water fountain (from what I can see). White folks deliberately decided to enact a regressive tax scheme in place of a fairer, progressive one. This was their choice. SCOTUS should not have shielded municipalities or State governments whose budget relies heavily on sales tax.
First, I disagree with the racial aspect of this. There are poor white people as well who, if these studies are true, would then face the same problems. It is rich v. poor instead of white v. black.
Second, there is a lot to be said about the fairness of a sales tax. Everyone has skin in the game, and (so long as there are exemptions for necessities) it taxes a person in relation to how much he uses the infrastructure, and it does so in a way that makes the rich pay more. Visitors, residents, illegal immigrants, and the local preacher all pay the same with no loopholes or writeoffs.
But putting all of that aside, I agree with what you are saying. The state has many different ways to tax people to pay for state government. A sales tax is simply one of those methods. Because South Dakota has chosen to run its government with a majority of its revenue through sales tax collection, despite knowing the Court’s controlling precedent in Quill, doesn’t strike me as a time to get out the violins for the poor, poor politicians of SD and pull their feet out of the fire.
How is the race of the economists, sociologists, and universities relevant?
Hmmm. Does anyone care to comment on the actual, you know, LEGAL aspect of the case before the court? Or have we all given up caring about what the law requires and just accepted that the real argument is policy based, with the law being made-up as needed to adjust to the socio-political decision required?
I find the case fascinating because it is a direct descendant of one of the first cases I ever read in law school, International Shoe Co. v. Washington, 326 U.S. 310 (1945). While the case technically involves the so-called “Dormant Commerce Clause”, the Court’s decision is based on reasoning that tries to re-align the jurisprudence of that concept with the jurisprudence of the Due Process Clause of the Fourteenth Amendment. Since the Court long-since realized that it was possible for a state to assert commercial authority over retailers that lacked a physical presence in the state, Justice Kennedy now asserts that it’s time to discard the idea that a physical presence provides the needed “substantial nexus” between a tax on commercial activity and the commercial activity being taxed. That “nexus” can be established other ways. My assumption is that the Court will now align Dormant Commerce Clause holdings regarding state taxation with the Due Process holdings regarding jurisdiction.
Personally, I think that Justice Kennedy’s opinion is sound. Does anyone wish to take on his LEGAL reasoning here?
By the way, here is a link to the opinion and the dissent.
(emphasis mine) Well at this point criminal charges could be brought against you, to start with.
Note that this ruling doesn’t require states to charge sales tax to online retailers, it just allows them to. So if what you suggest starts happening and the voters of a state or municipality get up in arms, the simplest solution is for them to simply exempt online sales.