U.S. Supreme Court Rules States Can Force eShoppers to Pay Sales Tax

[engine]

The U.S. Supreme Court has ruled that States can require e-sales tax collection. This is quite a big change and could, ultimately, once enacted, affect every online buyer in the U.S.

The ruling is likely to lead other states to try to collect sales tax on purchases from out-of-state online businesses more aggressively. It also likely will lead to many consumers paying more at the online checkout. Forty-five of the 50 states impose sales taxes.

Most states would need to pass legislation before seeking to collect the additional taxes, although some have already enacted laws or regulations similar to South Dakota's.

[cnbc.com...]

[LifeinAsia]

The user is supposed to pay the taxes voluntarily.

Exactly! Now the merchants have role of tax collector forced upon them (without any additional compensation).

Where the PROBLEM exists is in the reporting and payment side and that's not onerous, just more than one has been doing. Mail the check.

Um, instead of "not" I think you meant to type "extremely." Just in California, we have 58 counties, which can (and most do) impose higher tax rates than the state rate. Cities within those counties can impose their own additional tax rates, in addition to their county's higher rate. And many of them change frequently- CA updates it extremely onerous tax tables quarterly. There is no "one check"- you may be able to send 1 check to CA, with a tax return that breaks down the sales by taxing region, but that's just 1 state. New York is almost as onerous.

To truly "level the playing field," sales taxes should be collected at the point of purchase- the merchant's location. That way, it's the EXACT same tax treatment as if someone bought a gizmo at the Walmart down the block (using the local tax rate for that location), a Walmart in the next state (using the local tax rate for that location), or Walmart dot com (using the tax rate for Bentonville, AR, where Walmart is located), and the collection/payment of taxes would be MUCH simpler as it's only 1 standard rate to implement.

Otherwise, it's only fair to require ALL businesses to collect the appropriate taxes based on their customers' residence. All Walmarts should have to require a drivers license when customers make a purchase so they can collect the correct sales tax. I live about 4 blocks from the border with Los Angeles County (which has a whopping 2% greater sales tax rate that where I live!), but I am charged the L.A. County tax rate on the rare times I cross the border to shop there. The SCOTUS ruling seems to indicate that I should be able to demand the lower tax rate (based on my residence) when I shop in L.A. County. OK, admittedly the ruling is narrower than that. But it seems like it opens up Pandora's box to a lawsuit to force this issue.)

Oh, and as far as using the ZIP Code to determine the tax rate? My ZIP Code straddles both counties. And there are many other ZIP Codes that span multiple jurisdictions (with potentially different tax rates). So online merchants would have to make the determination on a much granular level than just ZIP Code.

[edited by: LifeinAsia at 4:46 pm (utc) on Jun 28, 2018]

[piatkow]

Every now and again somebody suggests local taxes in the UK. Threads like this make me realise what a stupid idea they are.

[RhinoFish]

I hope Avalara or TaxJar or a few others who will pop up (especially now) will solve this issue. Not holding my breath that congress will.

[Shaddows]

Every now and again somebody suggests local taxes in the UK

Never local consumption taxes though, which is what US Sales tax is. The equivalent of VAT. Variations on VAT is illegal under EU law, anyway.

It always shocks Americans when you tell them UK Sales tax (VAT) is 20%...

Proposed local taxes in the UK are typically either Land or Property taxes, or in more market-orientated circles (and I mean more market-orientated that 75% of the Tories- Orange Book LibDems, Jacob Rees Mogg, apparently Liz Truss) local Income Tax gets a mention.

[keyplyr]

It always shocks Americans when you tell them UK Sales tax (VAT) is 20%...

I'm shocked to hear that.

[Leosghost]

Only individuals pay VAT..
Businesses don't..
They collect it on behalf of the governments..
It is however an unfair tax, in that it hits the poor far harder than the rich..

I thought Rees Mogg was for tithes etc ( paid to him, and others of "their betters" by the Hoi polloi ), those who cannot pay , could be flogged..

Britain had local taxes in the past..They varied with locality ( and the mood of the collector, usually the "nobility" or the church ) highly arbitrary, Thankfully they are long gone, Rees Mogg may well seek to reintroduce them, if only for the opportunity for some flogging..

[Dimitri]

To tease (in a friendly way) Leosghost, VAT was invented by a French man :) [en.wikipedia.org...] (opening Pandora's box)

[Leosghost]

I know..but I'm Irish :) ..

First time I met VAT was when I had business in the UK..been working with VAT ( in many countries , now in France ) for over 4 decades..way simpler than "local taxes"..but I still consider it to be unfair to the poorest ( 20% of very little disposable income hurts far more to those poor who pay VAT , than 20% of a comfortable income, the richer one becomes the lower the proportion of one's income one pays in taxes, due to accountants et al )..The widely disparate "local taxes" system in use in the USA is killing small local businesses , it didn't really hurt until the advent of online buying and cheap or free shipping..now the "playing field" needs to be levelled..

I've lived and worked in the USA, ( many times ) always hated that the "sticker price" was not the price I actually was asked to pay at the till, felt like I was being scammed, now I no longer visit the USA, not my problem..Just making some observations..

[Dimitri]

I know..but I'm Irish :) ..

Oops!