06/21/2018 at 11:44 am #43024
“Internet retailers can be required to collect sales taxes in states where they have no physical presence, the Supreme Court ruled on Thursday.”
- This topic was modified 3 years, 7 months ago by Jay.
06/21/2018 at 11:55 am #43027SharppParticipant
- Location: Henderson, Nevada
It’s time for eBay to earn their fees and help us out on this. How many casual sellers will decide that it’s not worth the bother if they have to comply with sales tax collecting and reporting?
06/21/2018 at 11:58 am #43028
It’s going to be a while between now and taxing people.
–States have to first create the taxes and rules. Maybe they’ll just set it up for businesses that sell over $100k a year.
–Will counties and towns also be able to charge taxes?
–Then platforms like eBay/Amazon would have to figure out how to collect the different taxes and send them to the different places.
Congress could get involved and either protect businesses from the taxes or push businesses into this new reality.
We’ll just keep listing.
06/21/2018 at 12:05 pm #43029BigSallyParticipant
- Location: Washington State
Hey Jay, I was just listening to that story on NPR- How will states be able to implement this? Or will it be the honor system until the 20k threshold for form 1099 federal tax. Does the fed share this info with the states? We don’t pay state income tax, We pay 10% sales tax and a billion other state tax fees on everything in between….Any thoughts on this?
I bought my vehicle on the WWW through Beepi.com , now defunct i think. The company was out of Ca. and an associate of mine who is in the auto sales industry was livid that this company could operate in Wa state without paying B&O tax etc. They did charge me sales tax. Just an example of interstate commerce and ecommerce intersecting. It seems impossibly hard to legislate technology that is evolving so quickly-
06/21/2018 at 12:39 pm #43035ashend57Participant
- Location: Middle Tennessee
Having collected state sales taxes when on Amazon FBA (I had inventory in AZ warehouses in states where I had to collect sales tax), this can be a royal pain. The pain is not the tax collection but getting one’s business set up in the states.
This ruling basically opens the door for all 50 states to require tax collection on items we sell into their states. It will take a while to settle out legally and logistically, but yes, we all need to keep watch for coming change – yet again!
06/21/2018 at 12:42 pm #43036
In GA I have to remit to the state at the state + county/local tax rate where my GA buyer lives, rather than where I reside. To my knowledge ebay only allows me to charge one tax rate to GA buyers and its illegal for me to overcharge a GA customer sales tax. So I do end up having to eat some of the tax costs (negligible amount) as I charge the lowest possible rate within the state (6%) and make up the difference myself when a buyer in a higher taxed jurisdiction buys something. It’s a pain to have to identify which tax jurisdiction each one of my GA buyer resides so I can remit the proper sales tax. I cannot even fathom doing that nation-wide. If that ends up being the case and eBay doesn’t step up to collect and remit the sales tax for its sellers, then hopefully a third party service will offer a software that will track, report and remit for us (for a fee, of course).
06/21/2018 at 12:49 pm #43038
We are with Jay on our reaction to this. Still time for things to shake out. Congress may get involved, a national organization may work to help states with this, and at least (so far) it is only at the state level, so eBay is set up to handle that.
Should the counties and cities get involved, it gets sticky (we dealt with that when we did oil and gas work on site…what state/county/city tax do we have to collect, and how to remit?). I would think that if cities and counties would get involved, some smart entrepreneur will develop a matrix that will run things through with how to charge and how to remit.
For now, we list and work, and when we have to, we implement a strategy.
06/21/2018 at 12:55 pm #43041ashend57Participant
- Location: Middle Tennessee
TaxJar already exist for monitoring sales tax “expected” for ecommerce sales to individual states. Registering one’s business with each state’s processes, procedures, and “FEES” could be the biggest headache.
06/21/2018 at 1:24 pm #43047So Cal JoeParticipant
I believe the answer is a sales tax for merchandise sold on the internet. One number for everyone and let the government dole it out from there. Just keep it simple.
Ebay (or whoever) should tack it on to each sale and better yet be responsible for paying it to the government.
The way it is set up now is way too complicated. You have to figure state sales tax, county tax and local tax.
I’m not an advocated for more taxes, but this is a long time coming. If it’s kept simple and automatic, people will pay it and move one. If it becomes a burden, it will drive some people underground and off the internet.
I agree, it’s going to be w while before it gets implemented as no state is going to want to give up an advantage they may have.
06/21/2018 at 1:32 pm #43049
Yep. This is where the states need to be smart. If they require every seller to register with their state to remit, they are going to be crushed on day 1 with applications. Imagine tens of thousands of sellers starting to bombard them with requests for sales tax id numbers.
Potentially times 50…
06/21/2018 at 1:44 pm #43054So Cal JoeParticipant
The trucking industry went through this years ago. each truck has to pay roadtax to each state they travel in, based on the miles they travel.
Back in the day, you would see semi-trucks rolling around with 20 or more license plates on them and they would have to individually pay each state.
Now they submit one mileage report each month (or quarter?) to IFTA who handles the collection and payment of the taxes.
Hopefully common sense prevails with this situation as well.
06/21/2018 at 2:00 pm #43062
We can hope…but I never underestimate the power of human stupidity. Especially when governments are involved.
I spent years consulting to governments on finance and accounting. Doing things efficient and reasonable was never an option to them…
06/22/2018 at 9:11 am #43142
T-Satt’s comment rings true. I worked in the federal government for a decade, 7 years in DC at a Treasury bureau responsible for writing and implementing certain regulations. I predict state governments will act first and worry about the details later.
States will be quick to amend their legislation – they’re the government and they want their money. Georgia has already calculated their expected annual windfall from this and are touting its economic benefit over the evening news and in newspaper headlines this morning. In Georgia’s case it is probably as simple as changing the language in their current regulation to remove the physical presence exemption. I imagine they will have to put it up for a vote in the state legislature but again, because its more $ coming into the state coffers, it will get to the floor for vote quickly. So on the state-level, I expect it won’t take long for many states to require it. They certainly won’t wait until they have the systems in place to accept, monitor and enforce it.
As far as county/city legislation, Georgia covers all of those jurisdictions within the state regulation so a change only need to be made to the state code (county/city sets their own additional tax rate).
I think for a while it will be hairy. Once its a giant mess, only then will governments take action to simplify things, and then it will be because they are motivated to ensure they are getting all monies they are owed.
But like many commenters have already stated we can only wait and see and hope that it takes awhile for this to really affect us little guys.
06/22/2018 at 10:21 am #43152
Hey Julie B. … Heard the radio advertisement this morning first thing along with first cup of coffee. They were, as you say, announcing the multi-millions of dollars that the “new online sellers tax enforcement” was going to bring to the state. Wonder if they are already figuring out what to spend it own. Another radio station was saying they were going to target the “larger, higher dollar items” like furniture, appliances and home remodeling products first but no mention of the size of the seller.
Think they are figruing they want the 6.5 or whatever percetage of a $2 to $4,000 dollar sale first as opposed to a $25 dollar sale of a used brass candle holder :-).
Since we are resellers and incoporated and have a Federal ID number and a Tax Exempt Certificate can we start using it to be exempt from paying Sales Tax when we buy stuff from others online. It may help save us the tax percentage as a buyer? And wonder if we will start getting buyers from us, who are resellers giving us their tax ID exempt certificates and if we will have to keep those on file? As you say, tons of details to go through.
Our daughter just relocated back to Atlanta from Orlando due to a nice promotion and will be settling more over your way. She handles the Mercedes Benz and Porsche accounts and will need to be close to the corporate offices. She will probably be looking up GA 400 and I-75 North of Alpharetta. I know you are further up but she will have to use those routes to commute down to I-285 / Dunwoody area. Boy, that is an interesting commute. Just for information for her, how long does it take you to reach the I-285 loop?
Mike at MDC Galleries and Fine Art in Atlanta
06/22/2018 at 10:38 am #43155Anonymous
Mike, if your daughter will be making frequent trips to Mercedes or Porche at peak times, I would really encourage her to look intown, rather than make a long-term commitment to an insanity-inducing commute. I live intown and left a job in Marietta in no small part to end the daily commute, and I was going counter-flow! Some of the intown public schools are quite good these days and there are world-class private schools, too.
06/22/2018 at 10:46 am #43157
Hey… Didn’t know you were in the Atlanta area. She is middle aged, un-married so she is alone, EXCEPT for two dogs. A mid-sized hound and a full sized Dalmation. She needs a fenced in yard, so she thought out in rural area to find a good sized yard.
I used to also be a home remodeler and spec home builder [for a while besides my art and printing career] and I told her we could maybe find something inside the loop, buy it, demo and rebuild as others are doing in that area. Also she is seeing some of those total re-models being flipped by re-habers and re-sellers in a price range she can afford. That would be the best of both worlds. Inside the loop in the Dunwoody area and with a back yard.
Any tips or pointers for her would be a great help.
Mike at MDCGFA
06/22/2018 at 11:56 am #43161Anonymous
Dunwoody’s still a long commute. I worked for 7 years at Abernathy and 400 until 2008. I tried the drive, which was 1/2 hour in the AM and 1 hour in the PM. Ended up just taking the train daily (even sold our 2nd car) because I live close to Marta rail, which was 1 hour door-to-door including ten minutes of walking at each end.
But that was 10 years ago and counter-flow. At the least I’d encourage her to drive the commute several times at peak hours.
I think Medlock in unincorporated DeKalb might be a good option. Midcentury ranch houses on large lots with some good bargains to be found. It’s quiet, not a cut-through, close to DeKalb Medical center, and it’s close to the path of the proposed Clifton Corridor Marta expansion. We’ve been considering relocating there ourselves.
06/22/2018 at 10:57 am #43158
MDC – From Rome, GA to 285 takes over an hour but I’m on relatively uncongested state highways for the first 31 miles. Then I’m on I-75 S for another 31 miles to get to 285. Sometimes the traffic is backed up from 285 all the way to Acworth. On those days I’m looking at 1.5 hour commute just to get to 285, minimum. Some days the backup doesn’t start until Kennesaw. Once I’m on 285, it seems no matter where I’m going from there in Atlanta the commute is only half way over. When I do have to commute to Atlanta, its usually to Dunwoody or Norcross. Its been taking 2.5 to 3 hours due to the Peach Pass construction. Before that it was probably just under 2 hours for the entire commute from Rome to Dunwoody in good traffic conditions. The I-75 Peach Pass lanes are supposed to open this summer. I don’t care what it cost, I’m going to use those lanes!
If I had to commute daily to North Atlanta I’d move to Acworth/Kennesaw/Marietta. They are expensive and congested but worth it to shorten the commute. Acworth isn’t as congested and at least has a bit of a smaller town feel (sort of) and lake front when you can get it. Going anyplace in Kennesaw at any time of day on any day of the week will have a lot traffic. I’m not as familiar with Marietta but beings its closer to Atlanta, it’s probably the same.
06/21/2018 at 4:54 pm #43089
I drove truck back in those days with the multi state bingo plates (might be a bolo item to watch for).
We also had to keep track of the mileage we drove in each state on our daily logs.
06/21/2018 at 4:39 pm #43087
And maybe the hidden silver lining is that many of the smaller sellers may not licenses or FEIN Tax numbers or their state numbers which will force many to just drop out on the online selling game. Then those of us who are legit or Incoporated, or LLC’s, Sole Props, will have less competition, less sellers placing extremely low prices and the rest of us will benefit somehow.
And if as SC Joe says, a big if, they keep it simple somehow then maybe be easier.
Julie B. I finally got the state of GA. to put me onto only filing Sales Tax within GA. once a year [End of Dec. each year]. It took six years of having to file monthly and doing the county, region thing. Most of the time it was zero sales anyway, but still a pain. Now that I only have to file yearly, they only ask for the years total sales, then the “total” sales in GA and I do one check to them for one amount. When I asked my CPA he said only if we were ver audited, then maybe, but only maybe they would ask for a breakdown, but with our software only keeping state totals, he said he would give them that number and if they wanted more, he would tell them to have at it. But in his whole years of experience he said he has never seen an auditor request the county breakdown. But, still now that we only do it once a year, it is one total amount of sales times the state tax rate.
He also said that the total GA sales was almost insignificant in dollar amounts. And by paying with the higher percentage tax rate that in the counties or areas where the rate is lower they would proberly owe me money back, but again just small dollar amounts.
mike at MDC Galleries and Fine Art
06/21/2018 at 5:03 pm #43092
Mike: “And maybe the hidden silver lining is that many of the smaller sellers may not licenses or FEIN Tax numbers or their state numbers which will force many to just drop out on the online selling game. Then those of us who are legit or Incoporated, or LLC’s, Sole Props, will have less competition, less sellers placing extremely low prices and the rest of us will benefit somehow.”
Veronica and I discussed this a lot as well. If we get caught up in the snag on this, and the wall for new sellers (or current sellers that don’t want to deal with it) gets higher, those that survive with thrive.
This makes me want to make sure my SixBit is working to handle all platforms. And is Bonanza set up for requiring tax in all states? TrueGether? Poshmark?
06/21/2018 at 5:06 pm #43095
Those are great points, either the states will have to work with some tax czar for internet sales or these smaller online C to C sites will have some big hurdles to jump over.
06/21/2018 at 6:29 pm #43102
Point about Bonanza.. I think I may be with Ryanne on deleting all the stuff off Bonanza. It is not even close to being synched with Ebay and I am now getting a bunch of emails about buying different tiers or levels of tools for the Bonanza store. You want more exposure, then pay us more. I haven’t had a Bonanza Sale since fall of last year. If it is synched with Ebay and all items are present and accounted for then why pay them anything extra.
I bet if you give a pencil and paper to random people and tell them you will give them $10 for every online buyers platform they can think of, most would not even list Bonanza or TrueGether as a shopping channel-platform. But just my opinion.
06/21/2018 at 6:33 pm #43105
Love the phrase, ..”those that survive will thrive”. Getting into the weeds, details, numbers, ratios, tax forms, legit stuff is not for the broad brush sellers. Many of the old antique people keep their receivables in their left pocket and their payables in their right. Even many corporate guys loved guys like you and I who crucnched the numbers or were the minute detailed operations guys with the clipboard and stop watch.
Yep those of us on sixBit, WonderLister et. al will just automate the whole process and .. “keep on truckin”!
06/21/2018 at 8:37 pm #43117
Mike: “receivables in the left pocket, payables in the right”.
If we are lucky… 😂
06/21/2018 at 6:31 pm #43104
I think that while some may drop off, because of the push for brick and mortar stores to go online (especially with the extensive store closures), the competition is going to increase. Companies going online have already been engaged in the wide array of business protocols required to be a business, so tracking and reporting taxes will be nothing new. Then there will be those who will take their business and/or tax know how (especially those who have been laid off) and spin it off into a business focused on helping sellers with this tax reporting thing which will be highly lucrative leading to more people doing it and more seller competition. Unfortunatley, there will be many who will have to work to figure it out for themselves. Since online selling is only increasing, I think we will all see more competition but from larger competitors.
06/21/2018 at 6:42 pm #43107
Oh I definetly agree that many of the bigger stores will just hire a few more people aor add a dept. and Bingo it is done. And they will keep growing, but those bigger companies do not buy unpolished, dirty, rusty 50 year old oil lamps, tarnishing silver plate, art glass vases, old erector sets, 50 year old post cards and sell them.
I know a bunch of sellers who do not even know what SEO is, can’t write formulas for spread sheets, write html code or know what a relational datbase is or what and how it works. Those folks will just have another wall – hurdle for them to climb. Then the others who are about at their limits, stretched too thin, the “Peter’s Principle” is just about to get them and this will be the final straw and just give up. It will be a lot of those 17% sellers you guys talk about that I would hope thin out to some degree.
But yes you are right, those equipped for fast commerce will adapt in a heartbeat and expand thus your e”evem nore competition” will apply, I just hope they don’t stop buying solidered tin decor from China and start showing up at our estate sales and auctions. Can’t see a Wayfare buyer sitting next to us at last weeks auction. LOL.. funny 🙂
Anyway you are correct within those guidelines.
06/21/2018 at 7:52 pm #43112
It’s the big guys that scare me the most right now. Demand and Supply go in cycles with the best case scenario being demand and supply being equal or demand driving the increase of supply and the vendor having the capability to increase supply and distribution.
It appears that right now the demand for new items is high and increasing with there being plenty of vendors/sellers/retailers ready and willing to provide the supply with all of the amenities – low prices, free shipping, free returns etc. My concern is that with more big sellers of new products onboarding and ebay and other ecommerce sites preparing for this, the demand for vintage/used/pre-owned items will decrease leaving an abundance of supply and a weak consumer base. If this happens, I think it may be several years before vintage/used/pre-owned items are on the upswing again as they once were.
06/21/2018 at 1:42 pm #43052NiNjA BoBParticipant
So I got an text from my brother who gets the Supreme Court updates. He texted me while at Goodwill. I was shocked as I thought that the judges were moving in the other direction but hey… what can you do? I can’t say that I am happy about this, actually my first reaction was anger then a little nervousness as to what this will mean for our businesses. But I have had lunch now and had a little time to think it over. This is nothing we can control and will just become the norm for buyers. We will all tell our kids how we used to not pay taxes online and they will look at us like it was the wild west. But everyone will pay it. My only concern is if it can be made retroactive. If they can come after for back taxes. So why do I think people will except and still buy? Because people love to buy. And things cost what they cost. This will not hurt the online market… I don’t shop online because it is cheaper, I do it because of the convenience and the availability of what I want. I can’t even tell you how many times I have gone into Best Buy or Home Depot (this happened yesterday) to buy a product and they didn’t have it. Also, people including my family happily pays $100 for prime, just for the convenience of using their services. A little off the top will not hurt and like returns it is easier to pay it and not think about it to much and chalk it up to business. How long did we really think the government would keep its paws out of the honey pot.
06/21/2018 at 2:05 pm #43065
The sales tax requirement is already having an impact.
06/21/2018 at 3:07 pm #43069Anonymous
It would be impossible for us to comply. The USA has about 10,000 sales tax jurisdictions with scores of various tax rates.
I pay sales tax in NY State and we have scores or various tax rates. Plus the address does not match the jurisdiction.
As an example, if I mail something to a Utica, NY mailing address – it may be in the Town of Deerfield – just outside of Utica. Utica City has a sales tax. So If I mail it to a house in Deerfield with a Utica mailing address and I charge Utica sales tax, I am charging too much sales tax because the Deerfield buyer should be paying NYS Sales tax and Oneida County Sale Tax, but not Utica Sales tax.
So as far as the City is concerned – we have no way of knowing os that’s the real physical location of just a mailing address.
This is true for the perimeter of Utica and other cities.
Imagine this issue multiplied thousands of times.
Worse yet – eBay only allows one tax rate per state !
Let us keep an eye on Taxjar’s blog to see what they say: https://blog.taxjar.com/
I use then for Amazon FBA and they figure out what buyer lives where and what tax I owe where.
06/21/2018 at 3:28 pm #43077
Joe: I agree. If they do go down to the city/county level, it would be a huge issue. As of now, it is only at the state level as it was only a state that sued and has won the case. Other states would have to pass laws like South Dakota did for them to come into this.
It could be a huge pandora’s box that they have opened, but the good news is, governments work slowly…
06/21/2018 at 3:43 pm #43080soniaParticipant
- Location: Northeast US
it’s not just about state vs. county vs. city. It’s also about different types of items having different tax rates. Here’s an example justice roberts gave in his dissenting opinion:
“Texas taxes sales of plain deodorant at 6.25 percent but imposes no tax on deodorant with antiperspirant,” Chief Justice Roberts wrote. “Illinois categorizes Twix and Snickers bars — chocolate-and-caramel confections usually displayed side-by-side in the candy aisle — as food and candy, respectively (Twix have flour; Snickers don’t), and taxes them differently.”
So for the folks who buy candy really cheap the day after Halloween to sell on ebay, there may be different rates for reese’s (they contain peanut butter, after all, which is a food) vs smarties. lol.
But yeah, for now, just keep on listing. We small sellers are not going to be the first targets for enforcement of this.
06/21/2018 at 3:57 pm #43081
Which is some potential air cover on this. Following Pareto’s Distribution, they will most likely hit the big guys first to get to the 80% of the revenue, and these big guys may need to ramp up some, but could much easier handle the extra.
If they eliminate the 80% of us that only make up 20% of the sales, they would be overwhelmed with applications, processing remittances, questions, etc.
So we could hope that they have a revenue level you have to cross before you have to worry about collection and remittance.
06/21/2018 at 4:45 pm #43088mrsamsonite1Participant
I’m taking a wait and see approach. If we do have to collect taxes in the end, I’m going to see if it is worth the fee to use a service like taxjar. I would imagine there will be more businesses like taxjar popping up if every online sellers needs to collect taxes. I dont think I would try to collect and remit all myself.
If a service like taxjar is too expensive it could be an opportunity to open a local store. There would be less options to buy online with all the sellers that would leave so maybe buyers will be more willing to buy locally.
06/21/2018 at 5:05 pm #43094
Mrsamsonite1: Agree. I think if it DOES get messy by the states/cities/counties, then there will be a service that goes up to do the accounting for us.
Just like anything else…there is money in a mess if you have the mop!
06/21/2018 at 5:13 pm #43096
From a CNN Money article today
“South Dakota’s law applies only to those businesses with more than $100,000 in sales, or at least 200 transactions, in the state each year. Thirty-one states already levy online sales taxes of some sort. It remains unclear whether Thursday’s ruling will prompt them to revise their laws, or encourage the remaining 19 states to impose taxes on retailers even smaller than those affected by South Dakota’s law.
If you are buying a lot of furniture that you are having delivered to your house from a pretty big seller, you are going to start paying taxes,” said Stephanie Martz, senior VP and general counsel at the National Retail Federation.
That said, you probably won’t pay more for the artisanal products offered by small retailers on Etsy or eBay. eBay, a home to thousands of small sellers, framed the ruling as “limited to large online retailers” in a statement to CNNMoney. It also says the ruling shows “small businesses are clearly viewed differently by the Court.” Still, eBay called on Congress “to provide clear tax rules with a strong small business exemption.”
06/21/2018 at 5:21 pm #43097
That is what we can hope for. Some type of exclusion.
Though what is “small” I hope is kept to $ of transactions. With the number of transactions we have, we could trigger in some states. And I would also have to see how to handle the trigger.
Do I collect this year and remit even if I miss the mark?
Or not collect and then eat the tax if I pass the mark?
How am I audited?
What reports are sent to states on transactions that occurred in that state?
Gonna be an interesting rollout. Devil is in the details…
06/21/2018 at 5:34 pm #43098
The other interesting part is…the states have to pass laws on this stuff. So South Dakota just said that people that were buying online and saving some money now have to pay higher taxes than before. Wonder how those votes would go if it was on a ballot? And what is the tax rate for online transactions vs what brick and mortar have to collect?
Could we see brick and mortar stores ask people for their ID and tax them based on their home state? So when people from Virginia visit Disney World, shouldn’t Disney World collect and remit taxes based on Virginia’s laws?
Netflix is in a battle now with Chicago and other locations…
I get the hole that the internet created regarding Nexus, but to cover that hole needs to be simple, or it will devolve quickly. Lawmakers need to really think this through before creating a big headache…
06/22/2018 at 5:19 pm #43216
What keeps going around in my head is that my legislators did this and no one is saying anything about how they just levied another tax on the citizens of SD who wish to purchase online, they say it’s an unfair advantage for out of state online sellers, no mention of the extra cost in shipping.
All the talk is about the money the state is losing, money they didn’t have in the first place.
I’m sure they’ll spend this new income stream wisely (ha!).
06/22/2018 at 6:35 pm #43233
Because remember, to most legislators, the “corporations will pay the taxes”…not mentioning that it is passed on to consumers. Similar with corporate income taxes. All costs of a business are passed on to customers.
Ain’t no free lunch anywhere. Anything you receive from the government was taken from some other taxpayer…
06/22/2018 at 12:30 am #43136Anonymous
I’m confident there’ll be a sales threshold that exempts small sellers, who’d be responsible for $50 or less on average in sales tax to a given state.
How much expense will a state be willing to incur chasing down $50 a year in sales tax from each of the millions of small out-of-state sellers, and how exactly would they compel remittance?
Even if sales platforms or third-party services create tools to streamline collection, I suspect compliance would be low.
06/22/2018 at 1:05 am #43137LizParticipant
I can’t get worked up about this until eBay says “You need to take a specific action regarding taxes”.
What I expect will happen is that several states will push through legislation to collect internet sales tax. Ebay will give sellers an option of sorting the taxation mess out on their own OR paying X dollars a month/quarter/year to use eBay’s soon-to-be-created tax collection/remittance service for small sellers. Ebay is going to find some 3rd party bolt-on product that works behind the scenes to calculate the taxes. They probably already have a few 3rd party vendors in mind and have had many high-level meetings with techy people to say “So, what do we need to do to make this happen in the US?” This may even make it easier for people like Julie that have to jump through all sorts of hoops with Georgia. They can opt-in to eBay doing the hoop-jumping for them.
06/22/2018 at 8:11 am #43139SharynParticipant
- Location: Central NJ
eBay has a page on their response to the Supreme Court ruling. They have a petition you can sign.
06/22/2018 at 10:03 am #43146TemudginParticipant
- Location: Jacksonville FL
Here is the actual Supreme Court opinion: https://www.supremecourt.gov/opinions/17pdf/17-494_j4el.pdf
With the level of commerce on the internet that we see now it was only a matter of time before the physical presence test (“Quill”) fell. States tried the honor system whereby the recipients of online goods were supposed to pay use tax, but that didn’t work.
The South Dakota law, as Steven says, only applies to businesses with at least $100,000 in sales or 200 transactions in the state. With Quill gone, the Court went with what they call the Complete Auto test that drops the physical presence part but leaves substantial nexus. The Court specifically said that the SD law’s $100K/200 transaction threshold met the test of substantial nexus.
But there’s one more test for laws out there, and that is: No state law may unduly burden interstate commerce. Unfortunately the Court dodged a holding on that test specifically because that issue wasn’t before it, but then the opinion goes on to say that SD’s tax Act in question includes several features that appear designed to prevent undue burdens upon interstate commerce: First, the Act applies a safe harbor to those who transact only limited business in South Dakota. Second, the Act ensures that no obligation to remit the sales tax may be applied retroactively. Third, South Dakota is one of more than 20 States that have adopted the Streamlined Sales and Use Tax Agreement. This system standardizes taxes to reduce administrative and compliance costs: It requires a single, state level tax administration, uniform definitions of products and services, simplified tax rate structures, and other uniform rules. It also provides sellers access to sales tax administration software paid for by the State. Sellers who choose to use such software are immune from audit liability. But this is all “dicta” – words in an opinion that do not have the force of law.
The Court only was addressing the South Dakota law in deciding this case. Now, any state in the country can duplicate SD’s law to the letter and be reasonably safe from a court challenge. If they all do that, fine. But we probably won’t be that lucky. There will be states that adopt laws with lower dollar or transaction thresholds, or not as many features that lessen the interstate burden. Then it will be up to someone to challenge them, and since the big online retail players are already screwed no matter what, that someone will have to be small businesses. I think that’s why four of the Justices dissented, saying that that the easy physical presence test should stand unless Congress wanted to change it, and then Congress could be specific about all the messy details to make it fair for small businesses.
06/22/2018 at 5:22 pm #43218buytikiselltikiParticipant
Not to predict the future but…. Can’t wait to get the eBay update that says:
Sellers, you can now opt in to ebays new “free sales tax for customers” program!”
We have discovered that the majority of our buyers don’t like to pay sales tax, so this program gives you the opportunity to increase satisfaction and increase sales!
Add the ” free sales tax ” message to your qualifying listings today!
06/22/2018 at 6:35 pm #43234
buytikiselltiki: Love that!
06/22/2018 at 7:53 pm #43245Anonymous
Buytiki: I know you’re joking, but under Georgia law it is explicitly illegal for sellers to offer to pay sales tax on behalf of buyers.
06/22/2018 at 9:01 pm #43249
That is so interesting Luftmentsh,
I wonder how businesses handle not charging sales tax when for Memorial Day or another holiday they explicitly advertise their sales as tax free for that day or weekend.
06/22/2018 at 9:02 pm #43250
06/22/2018 at 9:20 pm #43251Anonymous
There may or may not be language in the Ga code addressing sales tax holidays in that context.
I’m pretty sure any arrangement in which third parties like eBay were to remit sales taxes on behalf of sellers would have to be expressly authorized in the code.
I also wonder if eBay could legally require sellers to collect and remit sales tax (presumably in terms of service) through some integrated system. This is partly why I think compliance would be low: I think states would still be reliant on individual sellers to remit, and I don’t think interstate enforcement mechanisms exist.
As an aside: I’ve read pretty much the entire Ga code pertaining to taxation, and I’ve seen where the state is authorized to collect state sales taxes, but I have not found where the state is authorized to collect and distribute local sales taxes, though it does.
06/22/2018 at 9:27 pm #43252
Thanks Jay and Luftmentsh,
I appreciate you sharing the information.
06/22/2018 at 9:52 pm #43254Anonymous
Now as Mike mentioned, Georgia does require sellers to file monthly sales tax returns even when no sales tax activity has occurred (on-line it’s like 4 clicks), so I wouldn’t be surprised if, even with generous safe-harbor exemptions in place, we nevertheless have to register with all 50 states (and how many territories?), and file monthly, quarterly, or annual returns documenting our sales in the given state.
Here’s a thought, though: suppose you exceed the safe-harbor threshold; do you only need to collect and remit sales tax on sales occurring after that point, or will all sales for the year be taxable (sales for which you haven’t collected taxes)?
Nevermind, on further reflection I recall that’s how safe-harbors work: they apply to up to the threshold. Duh.
06/24/2018 at 10:48 pm #43374MarganaParticipant
I’m pretty sure any arrangement in which third parties like eBay were to remit sales taxes on behalf of sellers would have to be expressly authorized in the code.
That’s what Washington State and Pennsylvania did — they made it so “marketplace facilitators” like eBay and Etsy can collect and remit sales tax for their sellers. So now if you sell something to Washington on Amazon or Etsy, they handle everything and you don’t have to register or file a return (unless you have nexus in Washington, in which case you still do).
Currently, the law only requires marketplace facilitators to either collect and remit tax for sellers *or* notify customers that they’re supposed to pay use tax — which I assume is why eBay is not collecting WA tax now. I’m wondering if, with this new Supreme Court ruling, they could close that loophole and just force eBay to do it?
Other states would be smart to do things this way, since realistically it’s the only way to get sales tax from small sellers without massive levels of noncompliance. And it’s an end run around that “substantial nexus” test — at least, if it holds up in court it is. But who knows what states actually will do.
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