We Will Now Be Taxed When Purchasing Online – IOTW Report

We Will Now Be Taxed When Purchasing Online

AP-

States will be able to force shoppers to pay sales tax when they make online purchases under a Supreme Court decision Thursday that will leave shoppers with lighter wallets but is a big win for states.

More than 40 states had asked the high court to overrule two, decades-old Supreme Court decisions that they said cost them billions of dollars in lost revenue annually. The decisions made it more difficult for states to collect sales tax on certain online purchases.

On Thursday, the Supreme Court agreed to overturn those decisions in a 5-4 ruling. The cases the court overturned said that if a business was shipping a customer’s purchase to a state where the business didn’t have a physical presence such as a warehouse or office, the business didn’t have to collect the state’s sales tax. Customers were generally responsible for paying the sales tax to the state themselves if they weren’t charged it, but most didn’t realize they owed it and few paid.

Justice Anthony Kennedy wrote that the previous decisions were flawed.

“Each year the physical presence rule becomes further removed from economic reality and results in significant revenue losses to the States. These critiques underscore that the physical presence rule, both as first formulated and as applied today, is an incorrect interpretation of the Commerce Clause,” he wrote in an opinion joined by Justices Clarence Thomas, Ruth Bader Ginsburg, Samuel Alito and Neil Gorsuch.

In addition to being a win for states, the ruling is also a win for large retailers, who argued the physical presence rule was unfair. Large retailers including Apple, Macy’s, Target and Walmart, which have brick-and-mortar stores nationwide, already generally collect sales tax from their customers who buy online. That’s because they typically have a physical store in whatever state the purchase is being shipped to. Amazon.com, with its network of warehouses, also collects sales tax in every state that charges it, though third party sellers who use the site to sell goods don’t have to.

But sellers that only have a physical presence in a single state or a few states have been able to avoid charging customers sales tax when they shipped to addresses outside those states.

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33 Comments on We Will Now Be Taxed When Purchasing Online

  1. I may not like paying taxes but watching my main street dry up hasn’t been much fun either.

    Online will continue to dominate small retailers but at least the lost tax revenue wont be shifted to property tax burden.

    14
  2. Why leave it at internet purchases only! Based on this ruling, it would only be fair that when making a purchase while traveling through other states that those other states be obligated to also collect sales taxes for your home state! Spread the wealth so to speak!

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  3. Consumers in many states, for example California, are obligated to pay what is called a use tax for goods purchased out of state. Most don’t, and in fact most don’t even know about this requirement. So collecting sales tax is theoretically a fiscally neutral requirement.

    5
  4. “A Piece of the Action”

    The demand of thugs everywhere.

    What stake does the (any) state have in an out-of-state (or even in-state) transaction?
    Will they verify the validity of the contract?
    Will they indemnify the contractors?
    Will they guarantee the quality and/or quantity of the contracted items?
    Will they guarantee against fraud?

    So, what is their part in this, other than the thugs’ part?
    “You are doing some sort of business and I demand a cut. And I can demand, and get, a cut because I have the very real threat of violence behind me.”

    So much for our SCROTUS and that sense of “justice.”

    It should be put directly to the affected people – either make it optional (which would prove its validity) or pass it by plebiscite.

    Those pretended “Solons” of the SCROTUS don’t speak for America, the Constitution, or Justice – they speak for the greed of the totalitarian state – no more, no less.

    izlamo delenda est …

    16
  5. I try to shop locally first just because I know so many small business owners. For quite a while I’ve been paying tax on KIndle-delivered books which is a bit. Can’t stand B&N and finally found hte Adult Basic Literacy Program in this county runs 3 well-stocked book stores.

    4
  6. I don’t do online shopping, because I’m Joe Dan Gorman’s cousin, but no one is getting off their couch to walk into a store because of taxes. (which I think suck, but whatever). And regarding the brick and mortars, if it’s not in the stores, people go online. You don’t get mugged, no crowds, no sass from a store clerk who doesn’t know shit, and there’s better options.

    I haven’t had enough coffee yet so I didn’t go read it, but if they charge tax on food and medicine (they didn’t before) I’m about to go set some mother fuckers on fire. Today.

    11
  7. No state sales tax here either; we’ve got a different kind of thievery going on with sticky fingers in our Alaska permanent fund.

    Whenever I’ve been anywhere in the Lower 48, though, when buying something I usually just end up paying the damn tax because most of the time L48 merchants think people from Alaska are too dumb to know the postal service has planes. It doesn’t have to cost $45 to mail a tee-shirt (for example), or it take six months on the ferry. I was prepared to buy a whole boatload of stuff one time in Seattle (they are the worst) and when I balked at the price of shipping (and not high just because I had a lot of stuff) the girl actually told me Fed Ex is the only way to get stuff to my house.

    4
  8. Pretty much buy everything but groceries online. Several valid reasons (no traffic, no parking, no rude clerks, and no “oh, I’m sorry – we’re out of those”) for shopping online, but sales tax is not a big concern.

    3
  9. From B Brad: “I’m with Frank on this one. Should be a major shot in the arm to local brick and mortar.”

    How does that work? The state going to write them a check every quarter for their share?

    9
  10. I recently noticed online bullion dealers that reside in CA are charging California residents sales tax? Tax on gold ain’t right, they keeping people beholden to the dollar.

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  11. And all that revenue gained for collecting those sales taxes will be spent on administrating said taxes, AND probably still add to the deficit of the state as well.

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  12. I don’t buy the argument that this will be a shot in the arm for local businesses. How? If your local store is suffering (supposedly) because people in your state buy from out of state sellers via internet sales, my question is, why hasn’t this business adjusted to the market to sell their wares to customers in other states? It works both ways. Come on, grandmothers sell stuff on Ebay, and you mean to tell me a local business cannot use the internet to boost its sales? Bull.

    5
  13. Looks like I will have to buy overseas in the future.
    The 5/4 call makes one wonder who on the court got paid.
    The more money the state collect the more they spend/waste.

    2
  14. On the plus side, this decision really fucks Jeff Bezos in the ass; so, I don’t feel too bad about it. And it provides an opportunity for brick and mortar stores to be set up in low sales tax states.

    3
  15. “Dissenting were CHIEF JUSTICE ROBERTS, JUSTICE BREYER,
    JUSTICE SOTOMAYOR, and JUSTICE KAGAN.”

    I bet those lefties would not have dissented if they thought the tax issue wasn’t going to pass. Those 4 always are on the wrong side but this time they were just siding on the other side to side on it.

    2
  16. In good old New York it seems that I always have to pay the sales tax when I buy online. The brick and mortar stores are disappearing anyway. What is the state doing to deserve that money?

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  17. every comment is about buying or not buying online….

    i USED TO make a little money selling dollhouse miniatures and barbie doll furniture online -that stops as soon as this goes into effect, since i can’t see why i have to be a tax collector for fifty different states NOT TO MENTION all the county and city sales taxes in this country……i am neither suited to the task, nor capable….

    bye bye income….it was nice knowing you…..

    3
  18. Why stop at state sales tax? We are spiraling down into debt from which we can never recover. A disaster is heading our way. We either need to reduce spending or shrink the givernment. Politicians have proven incapable of either. They will take the easy way out with a massive increase in taxes that is directed at the “rich” but that will hurt everyone. Thank the dumb ass democrats and the weak willed republicans.

    2
  19. @Wyatt, Insensitive Progressive Jerk June 21, 2018 at 12:42 pm

    > So collecting sales tax is theoretically a fiscally neutral requirement

    Were it even theoretically fiscally neutral, there wouldn’t be a Federal Supreme Court case.

  20. I sell things online and the shipping charges kill me.
    They went up a couple of energy crises ago and never came down.

    It always annoyed me buying stuff on ebay and the seller trying to charge me tax if I lived in the same state as them.
    I’m talking a citizen seller.
    I know the law but they were just pocketing the money.

    2
  21. re: Local brick and mortar

    One of the First Commandments of Capitalism is “competition”. If local middlemen can not successfully compete with foreign middlemen, then according to Capitalist Holy Writ, they need to be creatively destroyed. (And that was before Kim Jong Un.) If local middlemen can not successfully compete with foreign middlemen because the former are being strawmen for the local collectivist collectors (or, more likely, are being bigger straw men for the local collectivist collectors, than the foreign middlemen are being straw men for their own local collectivist collectors), then better they fail even faster and harder.

    1
  22. For those with a Bezos hate-on: Did you even read the post? Right above your comments. Not the linked source. Just the post at the top of the page.

    This would have no effect on Amazon. No matter which way it went.

    1
  23. let me add to my comment above…not only am i now not going to make money through internet sales, but MY CUSTOMERS, and potential customers, will forever be deprived of the opportunity to buy my unique and well-crafted offerings……and other sellers’ unique and well-crafted offerings….because none of us are equipped to deal with these tax issues…..

    and i am NOT the only victim…..if YOU ever bought from a unique etsy or ebay artist, you will probbly not ever have that chance again, since most of us are just craftpeople or artisans, NOT TAX COLLECTORS and NOT equipped to navigate the gazillion tax entities that exist in the US today….

    it’s not just MY loss…..YOU’VE just lost a whole universe of buying opportunities….

    welcome to walmart…..

    and ONLY walmart…….

    1

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