WWTBAM Bored

The Supreme Court threw out precedent requiring businesses to have a physical presence in a state before the states could collect sales tax. The law in question was from South Dakota and exempted smaller retailers, but the Court said that the states could collect tax from smaller retailers if it wanted and also suggested that Congress could set up minimum limits on retailer size.

The vote was 5-4, with Kennedy writing the majority opinion (Ginsburg joined the conservatives in the majority while Roberts dissented).

Look for some Congressional action in the future to come up with some uniform standards to protect smaller sellers.

https://www.usatoday.com/story/news/pol ... 699556002/

This is a complex issue, yet simple. Or is it simple, yet complex?

I think states have a right to collect sales tax (for goods delivered in the state). I think it fair to require out of state purchases to include sales tax; fair to local retailers and buyers as the buyers benefit from the sales tax (assuming the states spend wisely, but that is a separate discussion).

The complexity is in the calculation of the tax, collection of the tax, and the remittance of the tax from a seller's position. In Texas calculating sales (or use) tax is complicated by the multiple layers of taxing entities dispersed geographically like a Jackson Pollock painting. We are undergoing a Texas sales tax audit at the present time. Aside from the folks doing it being some of the most incompetent people I've ever dealt with, it is extremely complicated and unless you keep meticulous records, the state could just say you owe us $#####.

This will have a serious negative impact on small online sellers if they are not exempted. But it will be a huge opportunity for some startups to begin providing services, and will be a huge benefit to Amazon and Ebay as they can easily provide those services to their sellers.