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Your Next Online Purchase Just Might Include Sales Tax

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Without a doubt, online shopping has made the lives of people so much easier. Whenever they need to buy something, online shopping has eradicated the necessity of having to travel to a physical store to pick up an item. In addition to this, customers have become smarter buyers since they get to look at the reviews of a product they are interested in before they make a decision. So indeed, online shopping has helped millions of people throughout the world.

Unfortunately, online shopping just might become a bit more expensive in the country.

Earlier today, the U.S. Supreme Court voted to collect state sales taxes on purchases made from online retailers. The justices made a 5-4 decision, overturning the 1992 ruling that prohibited states from collecting a sales tax on online retailers since they had no "physical presence". This sales tax exemption encouraged consumers to submit required taxes voluntarily. But since majority of consumers failed to do so, states have been complaining of the losses they incurred in tax revenue.

The Government Accountability Office revealed that around 25 percent of tax from online sales are missing. This translated to around $13 billion in missed sales. It is remarkably unfair for brick-and-mortar retailers who have long been complying with sales tax dues. And by continuing to follow the 1992 ruling, states are missing out big time. For one, the buying power of consumers have drastically changed since then. Back in 1992, mail-order sales grossed $180 billion. Last year, online sales skyrocketed to $450 billion. That's

Immediately after the ruling was made, stocks of online retailers went down significantly. Among the companies that were affected include Shopify, Etsy, Blue Apron, Wayfair, Overstock, and Amazon.com. Among these, Amazon may be considered as the least affected retailers. Since it has a nationwide network of warehouses, Amazon already collects sales tax for most states.

Today's decision supports a South Dakota statute requiring companies with over $100,000 annual sales to collect sales tax on sales made to customers in the state. With this ruling, it's safe to say that the Supreme Court is only targeting huge retailers who do business online. This gives smaller shops who sell via the likes of Amazon or eBay a safe way to continue their business. But if they would be affected by this ruling, all they need to do is increase their prices to cover the sales tax.



Source: BGR

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33 comments:

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  1. Noooo. Callingmart should move their PIN issuing server to Mexico! 😉

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    1. NOOOO. Callingmart would have to pay LOTS of extra money for bribes and guards, so the discounts would be wiped out!

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  2. I will respond to this Supreme Court ruling by purchasing fewer items period. I will do without if possible. The government is getting enough of my money already.

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    1. Which makes it funny that it was Republican-appointed Justices (plus one Democrat) who made this ruling, eh?

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    2. "I will respond to this Supreme Court ruling by purchasing fewer items period. I will do without if possible. The government is getting enough of my money already."

      Wise choice, and you of course realize that the primary result of taxing an activity is to discourage said activity.

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    3. This is an Excellent plot! Businesses will lose some sales. High tax states will lose even more residents. Governments in high tax states will be even more exposed for inefficient, ineffective spending. More Democrats will be replaced with Republicans who promise to control taxes. Yes, this is funny! I guess Justice Ruth Bader Ginsburg and the top Dems who supported this may change their mind later....

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    4. The Republican Supreme Court Dream Team in favor of more Internet taxes --

      Alito (George W. Bush appointee)

      Gorsuch (Donald Trump appointee)

      Kennedy (Ronald Reagan appointee)

      Thomas (George H.W. Bush appointee)

      plus

      Ginsburg (Bill Clinton appointee)

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    5. "Team in favor of more Internet taxes"
      Yes, we all know that Rep's are in favor of higher taxes. But what happened to the other Dem's?

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    6. I hope the Republicans who favored the sort of over taxation are votedI hope. it's a rather risky policy. I remember when Bush the first cause a recession by breaking "his no new taxes" promise.

      Someone else

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    7. The United States Supreme Court voting in favor of these unnecessary taxes is unfortunate. But they will more than make up for it if they rule on Monday or Tuesday to stop the abusive situation of workers being forced to pay money to unions that don't represent their interests.

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  3. We already pay sales tax for many online purchases in California, and I am fine with it as it levels the playing field for all retailers.

    It is unrealistic to say that Amazon does not have a "physical presence" in any other state. I consider vast numbers of delivery trucks carrying their goods to be a physical presence.

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    1. If it's an Amazon truck...sure.

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    2. "We already pay sales tax for many online purchases in California, and I am fine with it as it levels the playing field for all retailers."

      I am not fine with it at all, since the solution is to beat up/overtax "Brick and Mortar" businesses LESS, not to plunder the online ones MORE.

      This ramping up of the greed by the ruling elites will result in people being fired and of course take a bite out of the pocketbook of American families.

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    3. Consumption taxes are very regressive; they hurt poor people. On the other hand, poor people pay no income taxes and many get paid tax credits, free health care, free food and big housing subsidies. So unless you think everyone should just get a free ride for everything Government does (which is delusional), there will always be consumption taxes. It's one way to tax all the rich a little, no matter how well they shelter their income.

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  4. "it's safe to say that the Supreme Court is only targeting huge retailers who do business online."
    This is not true at all! The SCOTUS ruling does not target any size of retailer. Each state will have to pass their own laws, if they don't already have one before they can force online sellers to collect sales tax. Every state can have their own threshold for collecting tax; the SD threshold is only enforceable there. If CA wants to set the requirement at 2 sales or $100 per company, they can do that (I'm not saying they will).

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  5. I honestly never even realized there was no online sales tax. I don't think this should be too big of a deal.

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    1. I find it unfortunate, as governments on all levels have more tax revenue than ever before. I'd rather that the people kept more of their own money rather than the few rulers seize control of even more of it.

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    2. They're not rulers; they're our employees. If you don't like what they do with tax dollars, community-organize and replace them.

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    3. "They're not rulers; they're our employees. If you don't like what they do with tax dollars, community-organize and replace them."

      A rather civically-uninformed view which really has never happened anywhere. And

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    4. So... Your servants place your orders for you?

      Reminds me of when George Bush senior saw a price scanner in a grocery checkout and asked, what's that?

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    5. "Reminds me of when George Bush senior saw a price scanner in a grocery checkout and asked, what's that?"

      https://www.snopes.com/fact-check/maybe-im-amazed/

      ...except that's an urban legend. He had seen supermarket scanners before, but not that exact model. Nice try....

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    6. "A rather civically-uninformed view which really has never happened anywhere. And"
      Who is uninformed?
      http://www.ncsl.org/research/elections-and-campaigns/recall-of-state-officials.aspx
      Suggestion: learning how to use a search engine could go a long way towards avoiding this again.

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    7. Of course when the ruling Elites go way out of the way and do something Beyond The Pale, they can get recalled. But the fact remains that they are essentially rulers and as far as who serves who, we pay them massive Financial tribute.

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  6. The person who wrote this article is an example of a severe case of "Ivory Tower Syndrome". Reminds me of a person I knew who said everything was "no big deal". Yes, it was no big deal as long as HE didn't have to do it.

    The article says, "This gives smaller shops who sell via the likes of Amazon or eBay a safe way to continue their business. But if they would be affected by this ruling, all they need to do is increase their prices to cover the sales tax."

    There are two problems with that passage.

    1. Safe? Nothing is safe. Amazon doesn't calculate or collect the tax for 3rd party sellers. The sellers have to do it. A seller tells Amazon what it wants to charge and that's it. Amazon does no other work for the seller.

    2. "all they need to do is increase their prices". Yeah, sure. No big deal as long as YOU don't have to do it. How much does a seller increase the price?

    The sales tax is 1,000 different numbers in different places in the country. No seller can just easily increase the price to cover "the sales tax". There is no THE sales tax. It's 1,000 DIFFERENT numbers.

    What this writer doesn't think about is that now every seller will have to calculate the sales tax in 1,000 different locations across the country and then fill out forms for EACH state that is due the tax and separately REMIT that tax to all of those locations! That is a tremendous amount of work for small businesses.

    Within a state the sales tax varies widely, so every retailer has to specifically determine the tax for every customer. In Warwick, NY, for example, the sales tax is 4% for NY State and 4.125% for Orange County, which makes 8.125%. In Troy, NY it's a total 8% sales tax rate. On the west side of Manhattan, it's 4% for NY State, 4.5% for NY City, and a Metropolitan Commuter Transportation District surcharge of 0.375%, which makes 8.875%. Travel another 20 miles in NY state and the sales tax changes.

    Now spread all that work across the country to all the other states that have sales taxes.

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    1. Most companies won't look up and apply the tax manually. They will subscribe to a web service or software that will do that work for them. In my state, businesses keep a portion of the internet taxes they collect, to compensate for the extra work.

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    2. So in the end online businesses have to resort to middlemen just to figure out the tax rate itself, jacking up the cost of taxation higher than normal.

      Fantastic.

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    3. Every chain brick and mortar store has the same burden with regard to collecting sales tax. It is patently unfair to excuse internet retailers from this obligation just be cause it is a bother for them to comply. Sorry, but if someone wants to profit by selling nationwide then they are going to have to do some work.

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    4. "It is patently unfair"

      No, the only thing unfair is this ruling, which will result he even more over-taxation and depletion of the bank accounts of families.

      there's no way that anything that results in higher taxation can be called "fair". It's just plain greed, and bad public policy.

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    5. Oh, so "fair share" only works when you want to soak the rich even more? People earning 6 figures already pay about 80% of income taxes, and half the people pay no income taxes at all.
      I'm fine with not taxing Internet sales online. Just report the names and addresses of buyers and the purchase amount to state and local governments. Then when they call their fire, police, water departments for service; send a kid to school; or enter a road, highway, library or hospital they can pay their taxes before receiving service or using anything. After all, state and local taxes help pay for all those things. So its patently fair.

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    6. "Just report the names and addresses of buyers and the purchase amount to state and local governments"

      No need to. These "buyers" are already paying much more than enough for "fire, police, water departments for service; send a kid to school; or enter a road...." WITHOUT the online over-taxation.

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    7. "are already paying much more than enough for..."
      Maybe so. Then the solution is to elect better government leaders and managers who don't waste money. Not to screw local and state businesses who employ and invest in your communities and ....... pay more state and local taxes on THEIR profits.

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    8. "Maybe so. Then the solution is to elect better government leaders and managers who don't waste money."

      Yes, and such obvious reforms as repealing "prevailing wage" which results in government paying as much as 25% more on infrastructure than necessary.

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  7. Well, at least the SCOTUS just ruled that police "generally" will have to get a warrant to obtain cellphone location data, emergencies excepted.
    https://www.cnet.com/news/supreme-court-says-warrant-necessary-for-phone-location-data/

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