Supreme Court Clears Way for Internet Sales Taxes

[Run&Gun]

The taxes in Europe seem a little more streamlined, over here every state charges something different, most every county adds on to that in different amounts, then some cities add on to that... It's possible that a lot of online businesses will stop selling to some places, or will shut down due to the extra labor overhead. If it was a universal amount, reported and paid to a single clearinghouse, I would say that this won't be a problem. But that's not how it is going to work.

I wish I was smart enough to be able to implement it, but I see an opening for start-up companies to be the "clearing houses" and take care of this for companies. Company X creates software to integrate in with the on-line merchants sales system to properly bill the correct local and state sales taxes, on-line merchant sends money to Company X every month based on the amount of sales tax collected and Company X properly distributes/pays the correct state and local governments. And they do it for a flat fee or probably a percentage. No real labor overhead/increase for the merchant because it's all automated, but there would be added expenses paying a company to handle it for them Or Company X could just be the outright billing service for some on-line merchants and it all goes through them and then they pay the merchants.

 

[optitek]

I wish I was smart enough to be able to implement it, but I see an opening for start-up companies to be the "clearing houses" and take care of this for companies. Company X creates software to integrate in with the on-line merchants sales system to properly bill the correct local and state sales taxes, on-line merchant sends money to Company X every month based on the amount of sales tax collected and Company X properly distributes/pays the correct state and local governments. And they do it for a flat fee or probably a percentage. No real labor overhead/increase for the merchant because it's all automated, but there would be added expenses paying a company to handle it for them Or Company X could just be the outright billing service for some on-line merchants and it all goes through them and then they pay the merchants.

How is hiring a business to collect and distribute sales tax NOT overhead? Assuming this will even get done and work.. usually these undertakings involving regulatory entities take years if not decades to pan out....

 

[egproductions]

Optitek, we're on the same page (recall my earlier post) but not everyone understands that big government is an issue for all, no matter what side of the aisle you are on. Let people run their businesses the way they want unless there are externalities. If a business can't compete on it's own merit, the solution isn't for the government to come in and "level the playing field' at the end of the day that isn't good for anyone (consumer or seller). It's not up to the government to attempt to fix imbalances. In a free market, some businesses will fail and the economy will ultimately be better for it.

 

[cpreston]

You really don't get it do you:
This government mandate shifts the burden of tax collection and distribution on the small business-YOU. Not only you have to collect the tax and raise your prices but you have to distribute the tax to all the states in the US. Your overhead just went up who knows how much. So you raise the price again. How is that sensible, fair or logical to impose somebody's else's obligation on you? I'm stunned by some comments here TBH...

Small businesses in the state have always been supposed to be collecting sales tax at the point of purchase. Sales tax has always been a burden on a business. Practically speaking, online sales were just a loophole for a business not to collect sales tax as long as the purchaser wasn't in state. And nobody was paying the use tax. It was obvious that the states were going to find a way to start collecting the money they thought they were owed as more sales went online.

Obviously, being forced to keep track of 50 states worth of sales tax is going to be a huge burden and I don't know how it will be implemented. I can think of a few ways to make it seamless for the buyer and seller, but it is unlikely the states and federal government will work together to simplify the process.

You are basically arguing for the abolishment of the sales tax. Fine. That is a legitimate argument. But it is unfair to only make certain businesses have to collect sales tax while others don't.

 

[egproductions]

I wish I was smart enough to be able to implement it, but I see an opening for start-up companies to be the "clearing houses" and take care of this for companies. Company X creates software to integrate in with the on-line merchants sales system to properly bill the correct local and state sales taxes, on-line merchant sends money to Company X every month based on the amount of sales tax collected and Company X properly distributes/pays the correct state and local governments. And they do it for a flat fee or probably a percentage. No real labor overhead/increase for the merchant because it's all automated, but there would be added expenses paying a company to handle it for them Or Company X could just be the outright billing service for some on-line merchants and it all goes through them and then they pay the merchants.

If the government wants to collect sales/use tax, they should be collecting it themselves. In an age where the majority of purchases are made using credit card, they should be able to track what states purchases were made and keep tabs of a consumers liability at the end of a given period. Compromise...any business that accepts cash will be required to collect the tax on cash (and maybe check) transactions. As it stands now, businesses are acting as a collection agency and not being reimbursed for it. Perhaps tax's would be that much less appealing for the governmetn to raise if they have to actually do the collecting themselves and would have to think of more creative ways to balance the budget.

 

[egproductions]

But it is unfair to only make certain businesses have to collect sales tax while others don't.

It would be "fair" either way. If you don't want to collect multistate sales tax, make sure you only have nexus in one state. Even large corporations can do this.

The point is that adding more legislation to correct a perceived imbalance (whether it favors the small or large businesses) is going in the wrong direction.

 

[cpreston]

If the government wants to collect sales/use tax, they should be collecting it themselves. In an age where the majority of purchases are made using credit card, they should be able to track what states purchases were made and keep tabs of a consumers liability at the end of a given period. Compromise...any business that accepts cash will be required to collect the tax on cash (and maybe check) transactions. As it stands now, businesses are acting as a collection agency and not being reimbursed for it. Perhaps tax's would be that much less appealing for the governmetn to raise if they have to actually do the collecting themselves and would have to think of more creative ways to balance the budget.

Every state could just abolish their sales tax. That would fix the problem.

Again, this conversation seems to have shifted to complaints about the overall size of the government and too many taxes. Some people just seem to be concerned about whether they are going to have start paying taxes on their equipment purchases. None of that has to do with the problem of an unfair tax collection method that was started before online sales took over.

To be clear, I don't think anything about the way taxes are implemented at the federal or state level encourage small businesses or make it easy for us to file our taxes correctly. It is all a pain in the ass. I just think that the online sales was another loophole that needed to be closed to make taxes simpler for everyone. It is not like calculating your use tax or how to tax digital vs physical copy sales is simple for a small business either. I don't like loopholes.

 

[optitek]

Small businesses in the state have always been supposed to be collecting sales tax at the point of purchase. Sales tax has always been a burden on a business. Practically speaking, online sales were just a loophole for a business not to collect sales tax as long as the purchaser wasn't in state. And nobody was paying the use tax. It was obvious that the states were going to find a way to start collecting the money they thought they were owed as more sales went online.

Obviously, being forced to keep track of 50 states worth of sales tax is going to be a huge burden and I don't know how it will be implemented. I can think of a few ways to make it seamless for the buyer and seller, but it is unlikely the states and federal government will work together to simplify the process.

You are basically arguing for the abolishment of the sales tax. Fine. That is a legitimate argument. But it is unfair to only make certain businesses have to collect sales tax while others don't.

You still don't get it: I don't advocate abolishment of the sales tax although that would be nice. I oppose putting the burden of out of state tax collection and distribution on the seller. This has always been, as it should, the buyers's responsibility. The buyer is a resident in the state, county where the tax is collected so it is the buyers responsibility, not the sellers that has nothing to do and will never benefit from paying taxes half a continent away in some cases...The local government inability to enforce the tax code i.e. incompetence, greed, laziness, lackadaisical was just transfomed into a burden on every business in our country.
BTW this is a pretty cunning trick by the politicians:
They full the voters into thinking they want to relief them from the responsibility and "inpersonate" the tax collection by putting it on some business name instead that no one can feel compassion for or relate to but then again: to be a politician you have to be cunning and sleazy- and this is a prime example. They even fooled plenty of guys here haha...

 

[cpreston]

The local government inability to enforce the tax code i.e. incompetence, greed, laziness, lackadaisical was just transfomed into a burden on every business in our country.

You mean the "buyer's" inability...

We could just drastically expand each state's IRS type agency so that they could audit every person's online purchases every year.

One last time. I am not defending the current tax system or the current government. I am insisting that it is reasonable for the government to close a loophole that was practically, if not legally, benefiting one type of business over the other and unnecessarily shifting the tax burden onto certain types of businesses. My guess is that the government's attempt to close the loophole will just cause more problems, but that doesn't mean that we should just give up on closing tax loopholes.

 

[optitek]

Buyer is always going to avoid paying taxes- it's government responsibility and interest to collect them Putting this responsibility on a third party does no solve anything. I think it has more to do with keeping the voting crowd happy so they can get re-elected and continue receive their bribes while getting paid their salaries, pensions, health plans etc. by us than with closing any loopholes...

 

[nutmegger]

I wish I was smart enough to be able to implement it, but I see an opening for start-up companies to be the "clearing houses" and take care of this for companies. Company X creates software to integrate in with the on-line merchants sales system to properly bill the correct local and state sales taxes, on-line merchant sends money to Company X every month based on the amount of sales tax collected and Company X properly distributes/pays the correct state and local governments. And they do it for a flat fee or probably a percentage. No real labor overhead/increase for the merchant because it's all automated, but there would be added expenses paying a company to handle it for them Or Company X could just be the outright billing service for some on-line merchants and it all goes through them and then they pay the merchants.

This is going to be a nightmare to implement. An item may be taxable in one state but not in another state. We need a flat nationwide sales tax. Allowing each state/municipality to decide what goods and services are taxable will be a nightmare for online retailers to track.

 

[Run&Gun]

How is hiring a business to collect and distribute sales tax NOT overhead? Assuming this will even get done and work.. usually these undertakings involving regulatory entities take years if not decades to pan out....

I say in my post that there would be added expense to pay a theoretical company to provide this theoretical service. When I said there would be no real labor overhead increase for the merchant, that's based on my theoretical company providing an automated service to the merchant. So no need for added physical employees(and their salaries, etc.) on the merchants part, they are paying an outside company for the service.

 

[Run&Gun]

This is going to be a nightmare to implement. An item may be taxable in one state but not in another state. We need a flat nationwide sales tax. Allowing each state/municipality to decide what goods and services are taxable will be a nightmare for online retailers to track.

Which is why if it is going to happen, there needs to be an automated system to handle it. I'm not saying it won't be hard in the beginning(or that I'm even in favor of it), databases would have to be established that have all of the tax rates, etc., but it can be done, and will have to be done, if this is going to move forward and work smoothly.

 

[optitek]

Which is why if it is going to happen, there needs to be an automated system to handle it. I'm not saying it won't be hard in the beginning(or that I'm even in favor of it), databases would have to be established that have all of the tax rates, etc., but it can be done, and will have to be done, if this is going to move forward and work smoothly.

Sounds like a government mole in the heart of the business. I would not trust it with any access to the sales data...

 

[Run&Gun]

Sounds like a government mole in the heart of the business. I would not trust it with any access to the sales data...

You do bring up a good point. How is the 'gub-ment' gonna know who is being charged correctly and if it's being forwarded to the right locals without some type of auditing system?

 

[Greg_E]

I see an increase of running things through paypal, they can already handle the tax payout. Amazon already charges taxes in many states, so they are good to go.

And I'm sure some companies will pop up to handle this for a percentage and the states will be happy to only get 7% tax returned on the 8% charged because it will still be 10's of millions of dollars returning to the states, maybe much more than that.

 

[groveChuck]

I wish I was smart enough to be able to implement it, but I see an opening for start-up companies...

There should be an app for that, not "companies". :thumbsup:

A few weeks ago I shot, and am now editing, Terry Jones (started Kayak, Travelocity, and about 20 other companies) , and he was talking about automation, bots and AI for businesses- losing old jobs, creating new ones. I imagine a 15 year old with a spreadsheet of all levels of governments' tax rates could write an app for this in a flash (Jones' 15 year old son wrote a WWII video game with guys on 3 continents a while back via IM and chat, sold it for $300,000, paid for college plus...)

And since the discussion has included sales tax on both business and gear, until recently, here in Florida, there was no tax on services (which is what we offer).
But since there's also no state income tax (that's one reason people retire here), the state coffers were hurting, so they started taxing services- accountants, professionals, etc, but no cameramen or videographers, that I know of... yet. :huh:

 

[optitek]

I think you are overestimating 15 year olds today haha I had a couple of those not that long ago. While academically superb in their environment, nowhere near this level of competence. They are just kids after all. I realize you were metaphoricqlly speaking, or were you ?

 

[Maest]

@Optitek

I am gratefull for your efforts but...... fogetabaudit!!!! They just don't get it...until its too late s usual...


Let me try on your behalf to be more plastic with explanation:

All of you, who think that this new tax game is a good idea that will do good for you and your families, your comunities your businesses, did you pay tax last year?
How about year before or years before year before?
If so, How much did you pay?

Well:

https://www.nytimes.com/2017/03/09/business/economy/corporate-tax-report.html
https://www.nytimes.com/2011/03/25/business/economy/25tax.html
https://www.nytimes.com/2016/10/18/opinion/the-big-companies-that-avoid-taxes.html


You see, whatever happened that these articles describe, will happend with this new tax scam!
What makes you think yhat you will benefit and get away with it?!
You realy think you are so SPECIAL?!?!?!!

SONY will get awaywth it.
DISNEY will.
AMAZON will.
APPLE will.
VERIZON will.

YOU will NOT!


Get real and wake up!

 

[nutmegger]

@Optitek

I am gratefull for your efforts but...... fogetabaudit!!!! They just don't get it...until its too late s usual...


Let me try on your behalf to be more plastic with explanation:

All of you, who think that this new tax game is a good idea that will do good for you and your families, your comunities your businesses, did you pay tax last year?
How about year before or years before year before?
If so, How much did you pay?

Well:

https://www.nytimes.com/2017/03/09/business/economy/corporate-tax-report.html
https://www.nytimes.com/2011/03/25/business/economy/25tax.html
https://www.nytimes.com/2016/10/18/opinion/the-big-companies-that-avoid-taxes.html


You see, whatever happened that these articles describe, will happend with this new tax scam!
What makes you think yhat you will benefit and get away with it?!
You realy think you are so SPECIAL?!?!?!!

SONY will get awaywth it.
DISNEY will.
AMAZON will.
APPLE will.
VERIZON will.

YOU will NOT!


Get real and wake up!

I agree. I live in Connecticut. GE used to be headquartered in Connecticut. A few years ago GE used corporate tax loop holes to avoid paying state income taxes. I payed more in state income taxes that year than GE. As Leona Helmsly said once "Only the little people pay taxes."