PSA: Supreme Court rules many online sales can be taxed by states (based on companies annual sales/#transactions)
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In a 5-4 ruling, the court overturned a 1992 court precedent barring states from requiring businesses that have no physical presence in the state to collect their sales taxes.
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Thanks, Mistercheap. Good to stay on top of developments like this.
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The thread title is a bit misleading. The opinion does not allow states to tax ALL online sales. It applies to sellers that sell more than $100,000 or have over 200 separate transactions in a given state. It will not, therefore apply to most Ebay or Amazon Marketplace sellers. Overstock, Newegg and similar entities are the ones who will be affected by this ruling.
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@gatorj said in PSA: Supreme Court rules all online sales can be taxed by states:
The thread title is a bit misleading. The opinion does not allow states to tax ALL online sales. It applies to sellers that sell more than $100,000 or have over 200 separate transactions in a given state. It will not, therefore apply to most Ebay or Amazon Marketplace sellers. Overstock, Newegg and similar entities are the ones who will be affected by this ruling.
fair point, I’ll update it to make it more accurate.
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Not really a big deal to me. I was reporting my sales and use tax on my state return anyway. Would report either the safe harbor amount or the calculated amount, whichever was lower.
Last few years, my calculated amount has been much lower than the safe harbor amount. Not shopping online as much anymore, and most of my purchases are already taxed.
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Let me tell you how it will be
There’s one for you, nineteen for me
’Cause I’m the taxman, yeah, I’m the taxman
Should five per cent appear too small
Be thankful I don’t take it all
’Cause I’m the taxman, yeah I’m the taxman
If you drive a car, I’ll tax the street,
If you try to sit, I’ll tax your seat.
If you get too cold I’ll tax the heat,
If you take a walk, I’ll tax your feet.
Don’t ask me what I want it for
If you don’t want to pay some more
’Cause I’m the taxman, yeah, I’m the taxman
Now my advice for those who die
Declare the pennies on your eyes
’Cause I’m the taxman, yeah, I’m the taxman
And you’re working for no one but me.
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The big issue is how all the small sellers have to comply with the tax regulations for over 10,800 taxing jurisdictions. It’s not just the rates either. Some things are taxable in one place, and not in the other. Other items, such as clothing, can be taxed depending on the cost.
Next they have to keep track and submit the money to each of the taxing authority. They may also need to apply for a bunch of sales tax/business permits. There are fees to operate businesses in many places. Annual reports may then need to be issued to each state.
The ruling says the taxes have to be “simple”, and a taxing authority can say “Our rules are simple.” The problem comes with 10,000 so-called simple rules that all need to be complied with.
As the ruling says, selling a small amount makes them exempt, but it isn’t a very high threshold before the burden takes effect.
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You can sign the petition on ebay mainstreet’s web, they are the lobbying portal for ebay.
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@zennuts said in PSA: Supreme Court rules many online sales can be taxed by states (based on companies annual sales/#transactions):
You can sign the petition on ebay mainstreet’s web, they are the lobbying portal for ebay.
Ebay was quick to send me email on the petition. As far as the ruling, little to no affect on me. I’m not a big online buyer, and places I do buy like Amazon, have already charged me sales tax.
