Sales Tax Laws Got Complicated

That already works in Canada when we sell products through Amazon.ca - a Marketplace Facilitator - Amazon charges tax based on the home province of the buyer and remits it to the appropriate provincial government. If I am not mistaken we get the federal tax portion and have to remit that on our trimonthly GST (Goods & Services Tax) remittance to the feds.

I don't know what happens in the US when you buy from Amazon.com, but it looks like Maryland wants the same piece of the action (state tax) that they would get for a sale made within their borders as one made within the USA via Amazon (or whoever) that ends up delivered within Maryland.

Craigslist better watch out!

John :-#)#

o state. Looks like the Supreme Court opened a bit of a can of worms.

ales tax, sells or facilitates sales of tangible personal property into Mar yland, and processes payments on behalf of sellers must collect and remit s ales tax on all sales made through the marketplace for delivery into Maryla nd. However, a marketplace facilitator and seller may ask for a waiver of t his collection requirement if:

nt that the seller will collect and remit applicable taxes; and

the seller is licensed to engage in the business of an out-of-state vendor in Maryland

e unless they can prove the seller is the right guy. The "marketplace faci litator" is someone like eBay or Aliexpress I believe.

s already require the collection of these taxes, but it seems Maryland is s till not. They are a pretty heavy tax state, but they are a bit slow on th e uptake with this one. So my mail order stuff is being delivered to MD fo r the interim.

ts collecting.

have any physical presence in the US??? Telling US companies have to coop erate with all states is one thing, but foreign companies???

I assume Amazon has physical presence in Canada. Does Aliexpress do the sa me? I guess they could also have physical presence.

Really, why?

I don't know, but why else would they be collecting the tax? How could US law be binding on foreign companies with no US presence? It's not like Ali express is shipping any of the packages so they could be stopped. They are just a "marketplace facilitator" handling the money.

I'm appalled SCOTUS reversed the long standing precedent and is allowing th e taxes to be collected at all. In other cases they actually asked a lawye r if he felt SCOTUS should reverse a long standing decision for the simple reason that it was the "right" thing to do. lol Then they reverse this de cision just so the states can impose more and more taxes on us. No one was "losing" money on this. Sales tax collection was increasing every year ev en without the rising sales tax rates. The states are so greedy they wante d taxes to increase faster.

One of my electric bills has 15 line items when the electric company only n eeds three to charge me for electricity.

A friend auto-pays his electric bill and has no idea what they are billing him for. There must be something wrong with me.

S law be binding on foreign companies with no US presence? It's not like A liexpress is shipping any of the packages so they could be stopped. They a re just a "marketplace facilitator" handling the money.

like the EU. if is from one EU country to another EU country the seller is responsible for collection and forwarding the VAT to the buyers country (once it is above some minimum annual amount to the country)

if it is from a country outside EU shipments go though customs and if they determine that you have to pay vat the shipping company (fedex/DHL/UPS, et. al.) collect the VAT at delivery

You rant about some USSC ruling, which you do not cite, then you copy a bunch of gibberish from a Maryland regulation or pamphlet. Hopefully this isn't representative of anything.

I don't begrudge the state its revenue. That's where we live, and most of the important things government does is state based, not federal government based. States are perennially short of critical funds for infrastructure, transportation, education, etc.

I don't disagree with that, but it's wrong for a state to be able to tax someone who does not live in that state, and who has no vote, no representation to appeal to.

The purpose of sales tax should be to repay the seller's state for the cost of its vital services and infrastructure used in producing the product.

The buyer's state contributed nothing to the labors of production, and shouldn't have any claim on the fruits.

Cheers, James Arthur

James, what's the difference if I go down to my local hardware store and buy some screw made in China, vs buying it on amazon? I think I could argue that the amazon order puts more 'wear and tear' on my state. (It certainly puts more wear and tear on my long gravel driveway. :^)

George H.

If your state wants to tax purchases and the voters approve, I suppose they could go ahead and do that. But that's not a sales tax imposed on someone out of state, that would be a purchase tax imposed by a state on their own citizens.

It doesn't appeal much to me, but if New York wants to do that that's up to them and their voters.

To me, the producer should reap the rewards of his labor, and be responsible for the costs, too. That's the seller, and the seller's state.

If your state had nothing to do with producing the product, why do they deserve a share of the result?

More critically, there's a question of federalism. Should state 'A' be able to impose laws obliging other states' citizens beyond its borders, requiring citizens of 49 other states to, for example, collect taxes for them?

That seems abundantly clear: no.

That's taxing the seller without representation. It robs the seller's state of rightful revenue from a product the seller's state was used to help to create.

And state 'A', passing laws imposing duties on state 'B's citizens outside of its borders, is asserting sovereignty over 'B's citizens. That violates state 'B's sovereignty -- they get to preside over their citizens. State 'B' and its citizens get to decide their own taxes, and the duties of its citizens.

State 'A' extending its laws past its borders defeats the purpose of having states, it defeats the Constitution's guarantee

"to every State ... a Republican Form of Government" (Art. IV, sec. 4)

(that is, each state is guaranteed a representative form of government, with representatives of their local choosing).

If your government / country / state played no role in the planting of the wheat, the harvesting, the milling, or the baking of the loaves, what exactly is their claim to Henny-Penny's (The Little Red Hen) bread?

SCOTUS botched this one badly, IMO.

Cheers, James Arthur

Hmm, James you are smart enough to argue rings around me... my head spins. (Have pity.) The above is a 'sales tax'... that to me is the same as a 'tax on purchases'. If you come into my state, buy said Chinese screw from 'my' hardware store we collect a sales tax on you.. an out of stater. If you are meaning something else here I'd need a lot more words to understand the distinction. I think below you are talking about a value added tax. I haven't thought much about VAT's. (I really haven't thought much about taxes mostly just grin and pay 'em.)

Isn't this a VAT and not a sales tax?

Well the states rights discussion is a whole 'nother kettle of fish.

Why can't you stick with my simple example? Chinese made screw sold by local hardware store and amazon. They should be able to compete equally. Giving amazon a tax advantage seems to disadvantage my local guy. (And I want my local guy to stay around, I'm happy to pay his mark-up, and do business with him, for the convenience of running over there on a Saturday morning to buy said Chinese screw to fix whatever is broken that day.) In this electronic age it's not at all clear to me in what state the sale of a screw on amazon takes place?

The above is all worthy of discussion, but seems to have little to do with sales taxes. I have to pay sales tax on my car, even if it's a used car purchased from a private citizen! I have no love of taxes.

George H.

US law be binding on foreign companies with no US presence? It's not like Aliexpress is shipping any of the packages so they could be stopped. They are just a "marketplace facilitator" handling the money.

s responsible for collection and forwarding the VAT to the buyers country

y determine that you have to pay vat the shipping company (fedex/DHL/UPS, e t.al.) collect the VAT at delivery

I'm pretty sure US customs is not getting into this fray. It would be as m uch of a mess for them to try to figure out any tax that is required as for anyone. Remember, this is not a national tax. It's not completely a stat e tax (50 states+). It can also be a county tax or even a city tax and man y times combinations of the three.

I don't know about other sales tax, but in Virginia they let the county and cities collect tax on restaurants so pretty much restaurant tax is 11% ins tead of 6%. Some places do the same with sales tax. Then there is the tim e factor. They keep changing the tax laws to raise (never lower) sales tax as well as the things it is collected on. As a country this is a mess.

One of the reasons SCOTUS changed their collective minds is that we *now* h ave the technology to implement this using computers. Damn that quantum co mputing. I knew it would lead to no good!!!

That's fine. A state has jurisdiction inside its boundaries and can have whatever taxes it wants to. If an out-of-stater comes to NY and buys something in NY, he has to follow NY's rules.

But Rick's referring to a Supreme Court decision that states can require out-of-state sellers living elsewhere, to collect and remit sales tax to the buyer's state.

So I thought we were talking about that -- you mail-order something from Oklahoma, and New York makes Mom-n-Pop(tm) in Oklahoma collect New York sales tax from you, and send the money to New York. Mom-n-Pop in Oklahoma now has to act as tax collector for New York.

VAT's another topic.

I don't think so -- the mail-order guy has to pay shipping. That's a big handicap. (I need a 5k potentiometer, but I'm not willing to pay $7 shipping + $1 to get a $1 part.)

And the local in-state can sell over the internet too, if he wants to. There's nothing stopping him. Why not set up a website and do both?

I like local businesses and I try to buy stuff from them, even if it's a little more. I value their efforts. I want small businesses to stay around, too.

The internet is one of the greatest opportunities for them, ever, though. Making the scrappy one-horse outfits collect internet sales tax for all 50 states and the 1,000's of counties of all of their customers is a terrible development. I don't know what SCOTUS was thinking.

I was speaking to the issue of states imposing their sales taxes and the duty of collecting those taxes on people who physically reside and are conducting their portion of the transaction in other states.

If you buy a used car in your state, naturally you owe sales tax. That's how states pay for the services they provide. That's fair and proportionate -- you used a bit of your state's services to make and sell whatever it was you sold. They deserve part of the revenue.

But if you make a purchase in another state, then your state had no part in it. The purchase (and any tax) should be governed by the other state; your state shouldn't have any stake or say in that.

Cheers, James Arthur

so it is the same rules for everyone, if you want to sell stuff in New York you collect and pay tax in New York

so you can't just move the business address to a low tax state and unfairly compete with those who doesn't

I think that's a good thing -- how is that unfair? If New York makes business untenable, why shouldn't someone be able to move, and why should New York be able to tax someone who moved away to escape their mistreatment?

And why is New York owed for something that happened in another state? What claim does New York have on that?

Tax competition between jurisdictions is important. If taxes in a state (or country) get too high, people move. That helps keep taxes lower and local governments efficient.

If a New Yorker moves to Berlin, should vendors all across Germany legally have to collect and remit New York sales tax to New York for every purchase the New Yorker makes living abroad?

Cheers, James Arthur

they are free to move, just can't do business in New York without following the rules of New York

Huh, OK. It seems like there is a lot more amazon than mom & pops. Can they send some attachment to the sale that says you the receiver has to pay your local sales taxes? That's how it has been, I'm mostly happy that Amazon collects and pays my NYS sales tax. I use to have to guesstimate and give 'em ~0-50 bucks.

Grin. James, this is totally OT, but I was listening to this liberal anti gun guy talk about the 2nd amd. And he totally repeated your 'what the framers' wanted. Local militias were the 'balance' to any federal army, and they were worried about some federal taking over.

huh? amazon prime! I've got 2 kids and a wife, I'm not sure but easy more than 100 shipments per year, two days, for $100? (I think it went up some.) I sent Phil, strippers for his B-day, it cost me nothing in my books for shipping... Amazon prime is a bit crazy, and I can't imagine it lasting for long.

Well, I can ask my local shop owners, but I think not. Their business is local, installing parts some guy bought on amazon is not what they want to do. The local guy I know says he'll install whatever, but there is no guarantee/ warranty on mail order parts.

Yeah sorry, my bad. I don't know of this decision. Can't you just send some 'extra' bit of paper work that says you have to pay local taxes, or be subject to the local fines? That's how it use to be here, there's a line item for 'out of state purchases'.. I'm not saying NYS is sane tax-wise, but they figure they get a piece of whatever you spend anywhere.. well you can buy stocks and bonds and such.

Hmm, OK. but you can sell some things. Like a house, and pay no sales tax.

Hah, come to NYS. I had to pay some sort of sales tax, on value, of the several vehicles I brought up from TN. (It wasn't a lot of tax, they were older models... some of my favorite rides!)

George H.

I don't think I said anything to indicate I begrudge the state due revenue. The issue is this is NEW revenue they had never collected before. Revenu es from sales taxes in the US have increased every year since 1994 other th an 2009 which was in the depth of the great recession. So how can anyone s ay the states were "begrudged" sales tax revenue? It's not like the mail o rder exclusion was new. This was money they've never collected and they ha d no entitlement to receive which SCOTUS agreed some decades ago. Original ly the matter was decided based on consideration of Constitutional issues. Now it's a matter of technology.

It's more like the states were getting fruit from the part of a tree in the neighbor's yard that over hung their year. Now they've figured out how to eat more of the fruit by using ropes to bend the whole tree to hang over t heir property.

Could be a treaty.