DirigoDev - 10:49 pm on Dec 1, 2011 (gmt 0)
Not even our government could be that stupid.
The Federal government has no authority to charge a sales tax. They’re governed by the Constitution and the Commerce Clause. Only states have that authority. At least this is how I understand our Constitution. Any webmaster lawyers out there that can explain this better (do Lawyer/webmasters even exist)?
In Quill v. North Dakota the U.S. Supreme Court ruled that retailers are exempt from collecting sales taxes in states where they have no Nexus. The Court specifically said that Congress had the authority to change this policy and could enact legislation requiring all retailers to collect sales taxes – this is within the bounds of the U.S. Constitution. The argument was that requiring companies to comply with the varied state sales tax rules and regulations would burden interstate commerce.
Some have made the argument that software has eliminated this burden. Well, if you’ve every rolled your own commerce system or run your own large scale web business you know that this argument is bunk. Collecting and remitting taxes on a national scale is burdensome. At $50MM in sales with a livable margin collecting and remitting taxes is certainly affordable. At $500K to $20MM, no way.
PLEASE DISAGREE WITH ME IF YOU KNOW BETTER. I’m not sure how some of the larger SaaS solutions or commercial software e-commerce solutions deal with this. I’m sure that Amazon, Ebay and OS Commerce have solid systems. How about Miva and some of the $2MM - $30MM revenue / mid-tier e-commerce packages?
As of July 2010, Arkansas, Georgia, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Nebraska, Nevada, New Jersey, North Carolina, North Dakota, Ohio, Oklahoma, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Washington, West Virginia, Wisconsin, Wyoming and the District of Columbia had approved an interstate agreement that establishes uniform sales tax rules and definitions. Until all states are on board, the process is still too burdensome. If the rest of the states could agree on a simplified system, then the burden would go away.
Under the proposed legislation, states and cities would still have the authority to determine what goods are taxed at what rate. They would simply need to adhere to rules governing such things as how and when they can change tax rates, as well as uniform definitions like whether marshmallows are food or candy for tax purposes. This taxonomy has yet to be developed.
So I believe that a "government rate" is out of the question.
If this law passes it will consolidate more commerce into the big boys and stifle competition. The big firms support the legislation because they know that they’ll get richer. Smaller e-commerce sites are in the cross-hairs. Not good.