Supreme Court rules states can force online retailers to collect sales tax

Sucks that I'll have to start paying sales tax on my numerous NewEgg purchases but this was always coming. Letting businesses bypass sales tax so blatantly needs to end. Some states choose to fund themselves this way instead of income taxes. (state income taxes, incidentally, got punished in the GOP's tax 'reform' so shifting to sales tax may be something we see more often)

Civilization costs money, so taxes have to happen somehow.

Plus Ultra said:

I'd expect Amazon must collect the sales taxes from all customers, it has to have "physical presence" in every state to deliver to them.

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Not quite true. If you deliver into a state using a common carrier like the post office or UPS, that doesn't create sales tax nexus. What will create nexus is having warehouses, offices, employees, and other indications of physical presence.

I suspect Amazon has a warehouse, offices and employees in every State it delivers to. It is reported they gave up on challenging the requirement to impose and deliver State sales taxes two years ago. The only plausible defense would be lack of "physical presence" in the State. Warehouses, offices and employees are adequate "physical presence" in the taxig State.

I'm glad, but I am foreseeing that my conservative legislature will make poor use of the new funds, despite using a shortfall of sales taxes to cut programs.

Plus Ultra said:

I suspect Amazon has a warehouse, offices and employees in every state it delivers to. It is reported they gave up on challenging the requirement to impose and deliver state sales taxes two years ago. The only plausible defense would be lack of "physical presence" in the state. Warehouses, offices and employees are adequate "physical presence" in the taxig State.

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That's true, but the real problem for Amazon is states were using 'creative' laws referred to as "Amazon Laws" or "click-through nexus" laws to attribute nexus to behemoth Amazon when they didn't have nexus by any previous definition. Under these laws, Debate Politics putting up an Amazon.com banner to earn commissions would create nexus for Amazon in whichever state this website is hosted and/or where the owner(s) lives and works.

I think more than anything, Amazon got tired of the fight, which they were losing, and their business model changed from a few huge warehouses serving many states (probably in large part to avoid sales tax collection duties) to warehouses right in all the biggest markets so they could cheaply and very reliably deliver overnight or 2-day or even same day in some markets. That model meant they did have physical presence in every big market and what was left were small population states.... which they conceded and then switched to lobbying for all their competitors to also collect in all states!

Perotista said:

Little to no effect I would say. The problem as I see it, the sales tax should be collect in the state where the product is sold. Not where the buyer lives. If I buy something from California, if I pay sales tax it should be California's. Not Georgia's where I live. Some sites have already started to charge Georgia sales tax even though they make and sell their products in another state.

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Buyers pay tax from in the state they make a purchase.
it goes by your billing address ( i would assume) not your shipping address

fishnthec said:

Here again, we have a Supreme Court Decision that is decided upon political lines.

Democrats- always looking out for small business and consumers

Republicans- always sticking it to Small Business and Consumers!

Don't ever let another Republican lie to you and tell you that he/she is not for taxes or tax increases- because here is the perfect example of a totally Republican decision to create a needless tax on the small businesses and consumers across America.

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This was a really different 5-4 mix. The majority was Kennedy, Clarence Thomas, RBG, Alito and Gorsuch. Dissent was Roberts, Sotomayor, Kagan and Breyer. Kind of funny to see Clarence Thomas and RBG on the same side of a close decision like this.

annata said:

Buyers pay tax from in the state they make a purchase.
it goes by your billing address ( i would assume) not your shipping address

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It should be the shipping address as the tax is intended to be on consumption, or where the product is actually used.

Renae said:

Meh, not a shock but not good for online retailers, gonna create higher prices and hurt the poor.

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The poor?

I sure hope there aren't so many poor people so stupid as to believe online shopping a way of saving money...

JasperL said:

It should be the shipping address as the tax is intended to be on consumption, or where the product is actually used.

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Or, rather, where it transfers into the consumer's hands.

JasperL said:

It should be the shipping address as the tax is intended to be on consumption, or where the product is actually used.

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We've been charging tax for our online/shippable orders for over a decade( but we exist in 48 states, Guam, and PR, so it was required ), and the tax rate charged is a complicated formula based on where the merchandise is purchased from, fulfilled from, and delivered to. Its managed by a 3rd party purchased software product that contains all of the tax rates, down to individual areas of a single municipality(thanks metro-Atlanta), and creates the audit trail for the States.

The only annual expense with it is the subscription for the weekly rate updates.

JMaximus said:

The poor?

I sure hope there aren't so many poor people so stupid as to believe online shopping a way of saving money...

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higher priced good hurt those least able to afford it, this raised the price of goods in general. I save a ton of dough buying online.

JasperL said:

It should be the shipping address as the tax is intended to be on consumption, or where the product is actually used.

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too complicated..the billing addy is associated with any invoice is assumed to be the purchase and consumption point/
tyhey would have to look separately for shipping differential

JMaximus said:

Or, rather, where it transfers into the consumer's hands.

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That could be - if a company is audited for sales taxes, though, the auditors can check and see where a e.g. computer was ultimately used, so Company A doesn't have all goods shipped first to a warehouse in a state with no sales tax, then use their trucks to move the goods to Tennessee with a 9.5% sales tax. If Tennessee sales tax auditors find that, they'd charge the business sales tax on computers used/consumed in facilities in Tennessee.

annata said:

too complicated..the billing addy is associated with any invoice is assumed to be the purchase and consumption point/
tyhey would have to look separately for shipping differential

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The invoice has a delivery address too, and I know for a fact it should be used and often is used for sales tax purposes. The 'billing' address for a company in 40 states might be NYC or Nashville, and I'm positive a company in Nashville isn't paying Tennessee's 9.75% sales tax on goods shipped to a state with none or much lower rates - if they are someone needs to be fired.

JasperL said:

There's nowhere to challenge a ruling by the SC, and the impact on Ebay and Craigs list etc. will depend on how the ruling is implemented. It's not a hard thing for Ebay or the big boys to buy software that does the sales tax collecting for them, and accurately. They might decide to impose it on all sellers using their platform or maybe states require it. We'll see.

As to garage sales, all states (AFAIK) have exemptions for casual sales like that. Generally to be subject to sales tax you have to be engaged in an ongoing business, not selling your old mower for $50 to a friend or neighbor.

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Technically, Congress could void the ruling by simply making a law that exempts online sellers from having to pay sales tax. Of course such a law could also be challenged by the states to determine the constitutionality of it (of course since it would definitely involve interstate commerce, it is a good possibility that it would stand as constitutional). I doubt Congress would make such a law (especially the current Congress) but it can be done.