Internet Sales Tax Decision is...

[floridapipeman]

I’d like to see how each state is going to police all the merchants in every state. I can eventually see that they’ll force credit card companies to do the distribution for all merchants to the states. The IRS got them to report all credit card sales so it’s inevitable.

 

[woodsroad]

They don't have to police every merchant in every state. Just make an example out of a few of them, that's all.

 

[hoosierpipeguy]

20% of the companies will account for spins 80% of the revenue. They'll focus on collecting from that 20%. Others will prefer to comply and collect/pay the taxes versus the threat of penalties and having their business shut down.

 

[floridapipeman]

I’d like to see how a sale in Tennessee is going to enforce my sales from Florida, I think it’s going to be a long road down that pike before they get it all figured out. In the meantime, enjoy your out-ot-state purchases.

 

[seacaptain]

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.

Like I said up thread, the real beef states have is against the citizens of their own state for not self reporting, but yet somehow this ruling will allow states to force companies in other states to comply with their tax collection laws.
That's pretty much the definition of states regulating commerce across state lines.
If it were done in congress, like the Constitution says, they could spell it all out in legislation and it wouldn't be the dumpster fire that it's going to be with just a court ruling.

 

[aldecaker]

"force companies in other states to comply with their tax collection laws."
I'm not seeing a lot of wiggle room here for saying that that statement is not regulating commerce across state lines.

 

[sablebrush52]

Like I said up thread, the real beef states have is against the citizens of their own state for not self reporting, but yet somehow this ruling will allow states to force companies in other states to comply with their tax collection laws.
That's pretty much the definition of states regulating commerce across state lines.

And as I've written, it's protecting states rights to regulate commerce within their borders, which is what is happening with regard to user taxes. Your definition is fine as long as it ignores the facts.
The question might be raised whether use taxes are currently Constitutionally valid. But it would seem that SCOTUS has decided that they are.

 

[seacaptain]

And as I've written, it's protecting states rights to regulate commerce within their borders, which is what is happening with regard to user taxes. Your definition is fine as long as it ignores the facts.

A business in another state isn't "within their borders". I'm not sure why you're insisting it is.

 

[aldecaker]

What in the hell did they do in the good old days when vendors sent you a catalog, you saw something you wanted, and ordered it by phone? Or, back in the Old-Westy Sears and Roebuck day, by Pony Express, FFS? Did states just say, "Ah, screw it, I guess we're just gonna go broke"?
I guess I'm missing something huge here, Jesse. Here's how I break it down:
1. Is ordering something online "commerce"? Yes.
2. Are the two parties to the commerce across state lines? Yes.
3. Is making the vendor report or collect tax on the transaction "regulation"? Yes.
I understand how the game is played, and that part I'm not arguing. It goes like this:
Guy who really likes machine guns: "My state not letting me have a machine gun is an infringement on my right to bear arms!"
SCOTUS: "No, it isn't."
Guy: "But, but...infringe means-"
SCOTUS: "We KNOW what "infringe" means, and this is not an infringement. GO AWAY."
Guy: "Awww..."

 

[woodsroad]

There are many other similar situations where a state compels an out-of-state entity to comply with their laws. State laws on firearm and magazine shipments come to mind. As does Washington’s laws on tobacco shipments.

 

[brian64]

A business in another state isn't "within their borders".

Exactly. If I travel to another state and purchase something, the sales tax goes to the state where the business is located, not to my state. I'm essentially "traveling" when I visit an on-line store. It seems (on the surface at least) that whether it's mail order or internet it would be simpler for the sales tax to go to the state where the business is located.
But I'm sure there are other complications that would arise that way as well...the devil is always in the details.

 

[woodsroad]

'm essentially "traveling" when I visit an on-line store.

Except, you aren’t. Unless you are are actually in another state when you place the order.

 

[brian64]

And I thought we were living in a virtual world now.
EDIT: perhaps the virtual travel argument doesn't hold...but I'm still doing business with a store in another state. If I'm not virtually traveling, then they don't have a virtual presence in my state either.

 

[seacaptain]

State laws on firearm and magazine shipments come to mind.

I have some knowledge in this area, guns being one of my many hobbies.
Let me give you a few examples.
First, Federal law trumps state laws.
So, if you're shipping a firearm across state lines, it must ship to someone with an FFL (Federal Firearms License).
The FFL does a background check on the purchaser before releasing the firearm.
Where state law come into play is if the firearm isn't state "compliant", the FFL will not release it to the purchaser and it will go back to the seller. Rather than put up with the hassle of misunderstandings, many sellers won't ship to certain states, but they can.
The state isn't regulating the business in the other state, the state is regulating what the citizen of their own state can legally purchase.
Again, the analogy with sales tax is that the state should be enforcing collection of sales tax against the citizens of their own states, not asking the court for permission to force businesses in other states to comply with their laws and collect taxes on their behalf.
In the gun analogy it would be like California, which bans certain types/models of guns, to force manufacturers in other states to stop manufacturing them because they aren't allowed in California. In other words, forcing them to comply with California law.

 

[woodsroad]

I've always felt like the world might not really exist, but it keeps hitting me on the head anyways.
Either way, the State feels that it has the ability to tax what it's subjects residents buy, wherever they may buy it.

 

[aldecaker]

I have a sneaking suspicion California would like to bar every state from doing anything California doesn't like.

 

[seacaptain]

EDIT: perhaps the virtual travel argument doesn't hold..

I think the virtual argument is quite clear, and consistent with a physical presence.
Think of it this way - The place you purchase an item is at the point of sale, not the point of origin.
In a physical store, the point of sale is the cashier or card reader accepting my payment, NOT my hand which holds the payment.
In the virtual world, the point of sale is the website accepting my payment, whatever state they're in, not my finger hitting the send button from my keyboard.

 

[brian64]

I agree seacaptain. That's how I've always thought of it. And it sure would simplify things.
For larger entities such as Amazon who are located all over the place, the sales tax should apply to wherever the product is shipping from, IMO.

 

[brian64]

I have a sneaking suspicion California would like to bar every state from doing anything California doesn't like.

I suspect CA would also like to force everyone to do everything they do like.

 

[sablebrush52]

A business in another state isn't "within their borders". I'm not sure why you're insisting it is.

The transaction is "within their borders" and the use is "within their borders". Them's the facts.
As for Congress moving to protect Internet purchases against user taxes, forget about it. A large and vociferous constituency of B&M based businesses will be tar and feathering congressmen in that instance.