Internet Sales Tax Decision is...
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I just scanned the decision. The dissenting decision is interesting - they all agree that the physical presence doctrine was wrong at law, but are reluctant to overturn a prior decision of SCOTUS even one that they acknowledge was wrongly decided. The dissenters feel that Congress should do that legislatively.
As I read the decision, it is certainly open to states to start requiring (and enforcing) out of state vendors to collect tobacco taxes as long as the vendor has a reasonable threshhold of sales in that state.
The only thing surprising about the Wayfair decision is that it took this long.
As I read the decision, it is certainly open to states to start requiring (and enforcing) out of state vendors to collect tobacco taxes as long as the vendor has a reasonable threshhold of sales in that state.
The only thing surprising about the Wayfair decision is that it took this long.
Legislation is already on the books in many (most?) States that would allow state revenue departments to start collecting these taxes immediately. The burden of compliance is solely on the out of state seller.
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Unfortunately people will now be able to buy less pipe tobacco as well as other things. The real problem for tobacco is when businesses are forced to collect tobacco excise taxes. I haven’t read the decision but I think every state will have different thresholds for compliance for a given business. Sad.
'capn, you should try SC. We have some of the lowest gas prices in the country,sales tax 6%, plus income tax, & also some of the worst roads in the country. If your state's got high taxes & bad roads, the state legislature's where the real problem is.
[BTW, absolutely none of what I'm saying on should be taken as politically oriented at all. It's strictly economic based on respective tax rates. It's just the reality of what each of us personally lives with.
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One thing hoosierpipeguy said caught my attention -- about FL having an oppressive sales tax. It's actually only 6% (although local taxes may take that a little higher, but usually not all that much). However AL's effective rate is higher (4% state, with addition of local rates in most areas that take it to an average of about 8-9), *&* they have an income tax as well, which FL does not. So taxes in FL are really actually not all that high when you look at it.
This is getting too wonky, which I really honestly didn't intend. How the SD decision will eventually shake out for tobacco sellers I wish I knew, especially with so many online vendors being uneasy about it before. I really do wish I hadn't hocked that crystal ball now!
[BTW, absolutely none of what I'm saying on should be taken as politically oriented at all. It's strictly economic based on respective tax rates. It's just the reality of what each of us personally lives with.
]One thing hoosierpipeguy said caught my attention -- about FL having an oppressive sales tax. It's actually only 6% (although local taxes may take that a little higher, but usually not all that much). However AL's effective rate is higher (4% state, with addition of local rates in most areas that take it to an average of about 8-9), *&* they have an income tax as well, which FL does not. So taxes in FL are really actually not all that high when you look at it.
This is getting too wonky, which I really honestly didn't intend. How the SD decision will eventually shake out for tobacco sellers I wish I knew, especially with so many online vendors being uneasy about it before. I really do wish I hadn't hocked that crystal ball now!
Well, it's going to be a mess for the smaller online or mail order retailer to handle, though the larger retailers apparently have the software to do that. Sounds like an opportunity for an enterprising software maker to supply an updatable application for computing the additional costs based on zip code if that doesn't already exist. That or it's another task for an e-commerce clearing house to take on.
Reminds me of the bullshit I had to go through computing sales tax on freelance commissioned work. I finally got around that by billing for labor only, which avoided sales tax, and by contractually making the client responsible for any and all sales taxes on the finished piece, which would include compositing, adding of type, etc after I delivered the artwork.
Could be worse. About 30 - 35 years ago, Congress passed a major tax rewrite that required artists like me to calculate how much paint I squeezed out of each tube for each painting, how much wear on how many brushes for each painting, etc in order to deduct the expenses of operating a studio. There were a couple of artists who protested by burning all of their art supplies and their artwork. I got lucky that year because I went in-house full time for all of that year and had no significant independent contractor work.
Reminds me of the bullshit I had to go through computing sales tax on freelance commissioned work. I finally got around that by billing for labor only, which avoided sales tax, and by contractually making the client responsible for any and all sales taxes on the finished piece, which would include compositing, adding of type, etc after I delivered the artwork.
Could be worse. About 30 - 35 years ago, Congress passed a major tax rewrite that required artists like me to calculate how much paint I squeezed out of each tube for each painting, how much wear on how many brushes for each painting, etc in order to deduct the expenses of operating a studio. There were a couple of artists who protested by burning all of their art supplies and their artwork. I got lucky that year because I went in-house full time for all of that year and had no significant independent contractor work.
Anybody else in NY know anything about how this might effect us? I know some of our tobacco taxes are crazy. I used to think smoking cigarettes was unattractive - now I just see a girl with a career.
It's not even that simple, which shows the Pandora's box of crap they opened with this ruling. For instance, I live in a zip code that encompasses part of a city and part of a county. If the city charges taxes and the county doesn't, then you'd have to drill down to each individual address to get it right.
And this is what happens when you rule that states can regulate commerce across state lines. The founders had it right, only Congress should be doing that, not the courts.
Well, that does complicate things a bit.
Except that that's not what happened here and it's a fallacious argument. The court ruled that states can regulate commerce within their borders and that residents of that state don't have a right to ignore that. The point of sale is your keyboard in your home within the borders of the state in which you reside. WeSellSlaveLabor.com may have inventory, but it's not a sale until you buy it and you're buying it from within your state of residence and bringing it to your state of residence for use within your state of residence. The Framers had a lot right and they also didn't cover a lot of ground about things they could not foresee.
Totally concur, Bard. That's one of the main sticking points in originalist approach to constitutional law. :|
Here's the summary. Buy as much tobacco as you can as quickly as you can. It's not getting any cheaper or more available.
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