Friday, June 22nd 2018
US: The Tax Man Cometh After Online Sales Tax Following Supreme Court's Decision
A Supreme Court decision last Thursday may be just what the doctor ordered for states' ability to collect taxes on online sales from a much wider variety of businesses. The decision, passed with 5-4 votes from the Justices involved, overrules previous understandings regarding the physical presence rule: essentially, that a business was only forced to collect sales tax and send it to the State it's operating if it had some sort of physical presence (be it warehouses or some such) in that particular state. If not, taxes were still due - but shoppers had to take the initiative of delivering their taxable amount to the state. That, naturally, very rarely happened, which led to reported billion dollar losses in tax revenue for a variety of US states.
Now, states have essentially been given the green light to pass laws requiring out-of-state sellers to collect the state's sales tax from customers and send it to the state. More than a dozen states have already adopted such laws even ahead of the court's decision, confident in the decision's direction, said state tax policy expert Joseph Crosby.
This move, however helpful it is for states to regain (up to now) lost revenue, will likely be a slow death strangle for small online businesses. These smaller businesses with an online only presence usually skirted tax fees on their products, bringing lower prices to consumers - allowing for actual competition with bigger chains that are better able to leverage economics of scale. Now, these find themselves in a position of having to charge sales tax on every product they sell, irrespective of inside their home state or not. Now, everyone is playing on an even tax field, since big corporations (like Amazon, which has a physical presence in every state and thus already collected tax) and small businesses alike compete on the same field. But this does mean that the smaller upstarts will have more troubling times ahead, and online services like Kickstarter might find themselves taken aback immensely. Not to say anything about shoppers, who now will have no way to resort to lower prices due to no tax being applied to their products.
Source:
AP News
Now, states have essentially been given the green light to pass laws requiring out-of-state sellers to collect the state's sales tax from customers and send it to the state. More than a dozen states have already adopted such laws even ahead of the court's decision, confident in the decision's direction, said state tax policy expert Joseph Crosby.
55 Comments on US: The Tax Man Cometh After Online Sales Tax Following Supreme Court's Decision
Completely normal in europe and small businesses will be fine. It's actually the big ones that tend to struggle here as the smaller ones have their own customers and the larger ones have to compete much more, even with other companies under the same mothercompany.
Local shopping still isn't dead here either surprisingly. People just love fetching them iPhones!
for many states it will instantly have an impact, though I curious about Oregon and other states who do taxes differently.
Taxer of the sales man... (ooooohhh)
Champion of the wallet.
He's a master of corruption and evil for every one.
Personally, i think it's better to grow less while having low debt than grow fast with high debt. Keep in mind that Portugal has been hit hard with austerity measures because our deficit crossed quite a bit over 3%, which is the European Union's deadline. Greece were hit harder then us because they were allot worse as far as deficit is concerned.
Back on topic: Over here, almost everything has 23% value added tax, with few exceptions that have 6%. Doesn't matter if it's online or not.
EDIT
Corrected the type of tax: had put sales tax by mistake.
VAT in Argentina can go from 10.5 to 27%, according to the kind of good/service and the kind of business you run, but sales tax goes from 0% to 6% at most... And this is a tax hell...
Mixed the two of them up: my bad.
EDIT
Over here, IVA ranges from 6% up to 23%, also according to the kind of good / service.
money.cnn.com/2018/01/30/news/economy/gdp-europe-economy-2017/index.html
Economic growth in the 19 countries that use the euro currency was 2.5% in 2017, according to official data published Tuesday. Growth in the 28-member European Union also reached 2.5% last year.
Funny side note: this growth is achieved in the face of a major migration crisis and massive monetary support to some EU members such as Greece.
en.wikipedia.org/wiki/Economy_of_the_European_Union
The European Union is the second largest economy in the world in nominal terms and according to purchasing power parity (PPP). The European Union's GDP was estimated to be €15.3 trillion (nominal) in 2017,[21]representing ~22% of global economy (nominal global GDP).[22]
The euro, used by 19 of its 28 members, is the second largest reserve currency as well as the second most traded currency in the world after the United States dollar.[23][24][25] The euro is the official currency in the eurozone and in six other European countries, officially or de facto.
The European Union (EU) economy consists of an internal market of mixed economies based on free market and advanced social models. The GDP per capita (PPP) was $37,800 in 2015,[4] compared to $57,084 in the United States and $14,340 in China.[26] With a low Gini coefficient of 31, the European Union has a more egalitarian repartition of incomes than the world average.[27][28]
Euronext is the main stock exchange of the Eurozone and the 7th world largest by market capitalisation.[29] Foreign investments made in the European Union total $5.1 trillion in 2012, while the EU's investments in foreign countries total $9.1 trillion, by far the highest domestic and foreign investments in the world.[30][31]
The reality is that US and EU economies are strongly linked and tend to follow each others' ups and downs. Its not all that different as you say it is.
Specifically the South Dakota law has a $100,000 or 200 transactions requirement. There's implementation problems with that. Specifically, do they not collect the first $100,000/200 on a yearly basis or does the business have to collect it and not pay in? If I looked over the law, it probably says how. Let's just assume it's fine and a non-issue, the problem is things get complicated with more and more states demanding interestate sales tax. It's further compounded on large international companies that have to collect and report sales tax if they meet the criteria. GOG comes to mind.
finance.yahoo.com/news/seattle-tax-opposed-amazon-likely-195828848.html
EDIT:What pisses me off the most is being charged sales tax on secondhand goods.
New Hampshire has an added perk though because it has no state income tax either but, the difference is made with pretty expensive property taxes but on the balance, NH has a relatively low overall tax burden compared to most states in the union.