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

[INVAR]

There is an obvious solution to all of this in the form of a bill currently languishing on the desk of the Ways and Means Committee  Chairman Kevin Brady.  The fairtax  (HR25) bill.

https://fairtax.org

Will never happen.

No one is government is going to vote to kill their revenue stream that keeps them fed and growing in both power and influence over our lives.

The Beast is self-aware.

[Bigun]

Will never happen.

No one is government is going to vote to kill their revenue stream that keeps them fed and growing in both power and influence over our lives.

The Beast is self-aware.

Unless WE demand it!

[Maj. Bill Martin]

True, but what we're talking about here is somewhat the reverse - applying a tax simply because it was brought from another state. I live in Iowa and if I physically buy something in Florida and bring it home, it is subject to Iowa 'use' tax. Now they've done the same to online sales.

Did some checking - this is from Iowa's own taxation site:

Consumer’s Use Tax is Applied When...

Consumer’s use tax, on the other hand, is imposed after the sale takes place and only on goods and services that have not yet been subjected to sales tax. In most cases, these are purchases made from an out-of-state supplier not collecting Iowa tax and that are for use in Iowa. Ordinarily, the retailer is responsible for collection of the tax; however, if the retailer is not required by law to collect the tax or the Iowa retailer fails to collect the tax, the purchaser is then responsible for consumer’s use tax. The purchaser must pay the use tax when ownership or control of the purchase is taken.

Use tax applies to, but is not limited to, purchases made tax free through mail-order catalogs, television shopping programs, the Internet, toll-free 800 numbers; magazine subscriptions; and untaxed purchases made while in another state and shipped or otherwise brought into Iowa.

https://tax.iowa.gov/consumers-use

To me, this looks like Iowa was trying to do a work-around of the prohibition against collecting out of state sales taxes.  If they now start collecting sales tax on those items, then the use tax won't apply.

Of course, if they attempted to do both, it would likely be struck down Commerce Clause grounds.

[Free Vulcan]

To me, this looks like Iowa was trying to do a work-around of the prohibition against collecting out of state sales taxes.  If they now start collecting sales tax on those items, then the use tax won't apply.

Of course, if they attempted to do both, it would likely be struck down Commerce Clause grounds.

Today yes. But I'm looking at how this is going to flow down the road. By giving carte blance to tax internet sales, states are going to look at how to maximize their revenue out of that wide open door, and they're going to get creative.

With the level of technology today, it's very possible to do that. Some of it will get struck down, but some won't. I guarantee the liberal states in particular are going to push it for all it's worth.

And this decision opened the door to that flood.

[INVAR]

Unless WE demand it!

Oh, you mean like when we marched on the Capitol and demanded that they don't shove ObamaCare down our throats?

[Jazzhead]

What concerns me is the impact of this ruling on the thousands of ordinary Americans who supplement their incomes by selling things on eBay and similar sites.   The burden of having to collect taxes for each of the states and localities they ship to may well be overwhelming. 

[ABX]

What concerns me is the impact of this ruling on the thousands of ordinary Americans who supplement their incomes by selling things on eBay and similar sites.   The burden of having to collect taxes for each of the states and localities they ship to may well be overwhelming.

Yep, this is a small business killer.

[Meldrew]

Some interesting thoughts about what this could mean to gun owners.

Supreme Court Sales Tax Ruling Could Mean Trouble for Gun Owners!

With the new requirement for retailers to collect and report on line sales taxes, states will have the right to audit retailers to ensure compliance. That means those states will be able to, say, take a look at Midway USA’s sales data for California and, while they’re doing that, take note of anyone who’s purchased Magpul AR furniture. Or New York’s busy bean counters could comb through Lucky Gunner’s books and see who’s purchased .223 ammunition.

HT: TTAG

[INVAR]

Yep, this is a small business killer.

I can definitely forsee states demanding sales tax be collected if an item crosses their airspace or processed at a postal or shipping facility in their state, even if the point of origin and the destination are in completely different states.

In fact, I remember reading such a proposal not entirely too long ago somewhere.  Possibly in a Chicago newspaper.

[ABX]

Of course, Kim Jong El Douche the grand Cheeto is celebrating more taxes.

https://twitter.com/realDonaldTrump/status/1009900449456115719?s=19

[guitar4jesus]

Of course, Kim Jong El Douche the grand Cheeto is celebrating more taxes.

https://twitter.com/realDonaldTrump/status/1009900449456115719?s=19

Dotard.

[Taxcontrol]

Actually complying with this will be a nightmare

its not just 50 states and their taxes, its county and town level as well.

a nightmare

I am of the opinion that ...if... (now "since") we have an Internet tax, Congress should step in and use the interstate commerce clause to require that:

1) each state publish a tax rate to apply to transactions that are shipped from that state from other states
2) each state publish a tax rate to apply to all transactions that are received by that state from other states
3) each tax rate will be all inclusive for that state
4) establish a tax authority to receive tax reimbursements for either #1 or #2 and to remit taxes collected internally to subdivisions of the state.
5) Require taxes be collected by the seller of an interstate good or service
6) The tax rate to be the average of the "shipped from" and "received" applicable rates
7) The tax collected to be remitted to the tax authorities in #4
8) the taxes collected to be divided 50/50 between the two tax authorities

This will acheive a couple of things-
-It will simplify tax collection
- it will strongly encourage businesses to locate in lower tax states
- subsequently it will apply pressure to the states to lower their tax rates as businesses relocate their work force.

[INVAR]

Of course, Kim Jong El Douche the grand Cheeto is celebrating more taxes.

https://twitter.com/realDonaldTrump/status/1009900449456115719?s=19

Like a moron, he is cheerleading the killing of his own economy to prop up the brick and mortar union crap he schmoozed with during the campaign.

Just wait until people discover that ordering anything online is going to cost them 40-50% of the retail price in taxes simply to satisfy all the claims laid upon it by bankrupted states and local governments that want their slice of the profits.

It's coming.  Ought to kickstart hyperinflation like no one's business.

[edpc]

Like a moron, he is cheerleading the killing of his own economy to prop up the brick and mortar union crap he schmoozed with during the campaign.

Just wait until people discover that ordering anything online is going to cost them 40-50% of the retail price in taxes simply to satisfy all the claims laid upon it by bankrupted states and local governments that want their slice of the profits.

It's coming.  Ought to kickstart hyperinflation like no one's business.

To your first point......

Online sellers of expensive items like furniture and jewelry could see a diminished advantage over brick-and-mortar rivals that collect sales tax.

He probably also believes it will somehow harm Bezos, but they don’t care.

Amazon’s third-party business should be minimally affected in the long term from states imposing taxes on online sales, as the impact is equal across the e-commerce ecosystem. ” said Jitendra Waral, an analyst at Bloomberg Intelligence. “This makes online sales more a function of loyalty and preferences than pricing, which highly favors Amazon.”

https://www.bloomberg.com/news/articles/2018-06-21/supreme-court-ruling-means-states-can-tax-amazon-marketplace

[Meldrew]

From the "that didn't take long" dept:

Source: Bill already in the works to use today's Supreme Court decision on Internet Sales Tax to solve New Jersey's budget standoff. Could be $300-$400 million in revenues.

https://twitter.com/wildstein/status/1009889242116444160

[Jazzhead]

According to the WSJ,  "between 87% and 96% of sales from the top 100 internet retailers are taxed.  The main exceptions are small businesses that would struggle to comply with the sales-tax regimes of 10,000 or so jurisdisctions." 

Congratulations, Justices Kennedy, Ginsburg, Alito, Gorsuch and Thomas.  One of best means for ordinary folks to supplement their incomes has just been turned into a nightmare.   

[GrouchoTex]

This isn't a smart move, and not very conservative.
Trump shouldn't be cheering it.

Businesses  do not pay taxes.

Taxes are always passed on to the consumers.

Businesses merely collect them from us.

[guitar4jesus]

This isn't a smart move, and not very conservative.
Trump shouldn't be cheering it.

Businesses  do not pay taxes.

Taxes are always passed on to the consumers.

Businesses merely collect them from us.

Bingo!

[Oceander]

I can definitely forsee states demanding sales tax be collected if an item crosses their airspace or processed at a postal or shipping facility in their state, even if the point of origin and the destination are in completely different states.

In fact, I remember reading such a proposal not entirely too long ago somewhere.  Possibly in a Chicago newspaper.

Not likely.

[Oceander]

This isn't a smart move, and not very conservative.
Trump shouldn't be cheering it.

Businesses  do not pay taxes.

Taxes are always passed on to the consumers.

Businesses merely collect them from us.

Completely disagree.  It will present some compliance headaches for some small businesses, but Congress can always step in and facilitate the process. 

However, it removes an epic distortion from the tax system that was solely the product of a misguided decision from 26 years ago. 

[GrouchoTex]

Completely disagree.  It will present some compliance headaches for some small businesses, but Congress can always step in and facilitate the process. 

However, it removes an epic distortion from the tax system that was solely the product of a misguided decision from 26 years ago.

I am correct.
Business do not pay taxes.
They merely charge more for their goods and services to cover the taxes.
Buy somthing from company X for 1 dollar with no taxes, it cost you a dollar.
Buy something from company x for a dollar who has to pay 30% tax, this product now cost you 1.33.

They do not pay taxes.
They collect taxes and pass the cost onto us.

[Oceander]

I am correct.
Business do not pay taxes.
They merely charge more for their goods and services to cover the taxes.
Buy somthing from company X for 1 dollar with no taxes, it cost you a dollar.
Buy something from company x for a dollar who has to pay 30% tax, this product now cost you 1.33.

They do not pay taxes.
They collect taxes and pass the cost onto us.

Ok, yes, as a matter of theoretical niceties, you are correct.  But your pedantry does not demonstrate that this was a bad decision by the Supreme Court, because the question can easily be reframed as: why should the Supreme Court facilitate tax evasion by individuals by continuing to maintain an artificial, essentially irrational, rule?

The physical presence requirement of Quill and Bella’s Hess was an anachronism even when those cases were decided. 

This decision simply puts taxing jurisdiction on the same Constitutional footing as other taxes, such as income and gross receipts taxes.  Neither of those taxes is subject to a constitutional physical presence test, so why should the collection obligation for sales & use tax be any different?

[Suppressed]

Just wait until people discover that ordering anything online is going to cost them 40-50% of the retail price in taxes simply to satisfy all the claims laid upon it by bankrupted states and local governments that want their slice of the profits.

Not if people move to Alaska, Delaware, Montana, New Hampshire, or Oregon. 

[Suppressed]

Congratulations, Justices Kennedy, Ginsburg, Alito, Gorsuch and Thomas.  One of best means for ordinary folks to supplement their incomes has just been turned into a nightmare.   

Then the legislative branch needs to step in.  Or the states get together and get an amendment.

[GrouchoTex]

Ok, yes, as a matter of theoretical niceties, you are correct.  But your pedantry does not demonstrate that this was a bad decision by the Supreme Court, because the question can easily be reframed as: why should the Supreme Court facilitate tax evasion by individuals by continuing to maintain an artificial, essentially irrational, rule?

The physical presence requirement of Quill and Bella’s Hess was an anachronism even when those cases were decided. 

This decision simply puts taxing jurisdiction on the same Constitutional footing as other taxes, such as income and gross receipts taxes.  Neither of those taxes is subject to a constitutional physical presence test, so why should the collection obligation for sales & use tax be any different?

I will still content that this is wrong, not conservative, and it is Federal overreach.
Federal government does not levy a sales tax, state do.
If the individual states decide that sales tax should be paid on internet purchases, they may do so.
The federal government should stay out of it.
While SCOTUS is supposed to be non-partisan, I'd think that conservatives on the court would rule in favor of less taxation and regulation, as a matter of principle, unless by doing so would be "extra" constitutional.