New Taxes / Fees on orders.....

[danreefman]

When taxes rise, don't cry. Knuckle down, and grind!!

Love America!!! Don't mind paying taxes.

 

[MnFish1]

The largest potential problem is the tax laws in each state that require the local, county and state tax be collected at time and place of sale or delivery. Each county, and city in Washington has the ability to add to the states sales tax. So now if Washington prevails in black mailing internet sellers the counties and cities will step up to claim thier share and then you will see the huge difficulity in fairly recording the transactions for each sale. As a potential internet seller I would just close my doors and call it a day. There are 39 counties that collect different sales rates and the Washington state tax form requires sellers to record the sale at the point of delivery. In my case it increases if you add the local sales tax added by the cities. There is no end to the actual complications this will cause in actual audits and a small work force to over see it.

Washington has had several tax revolts over the years. It used to cost me over $3000.00 each year to license and pay use tax for a used $16,000.00 car (my numbers might be off some do to old age but not much). Tim Eyman and others prevailed in an election to overturn this huge largese by the politicians in Olympia. After the voted tax revolt it cost only $35.00 per vehicle per year....then Olympia has slowly increased the price to about $200.00 average per car. Keep in mind we still pay the sales tax on the actual value of the car before we can license it for the first year and that is huge given the price of new cars. I have not purchased a new vehicle since 1987 because of the huge waste of money in terms of loss of value and taxes you pay to acquire it. But think how much better it is for us not to have to pay use tax each year on the "book value" or whatever value the state tax commision wanted to charge you for the right to use your own property!

I just want ask people at this point in America do you actually own anything of real value or property when you have to pay the government for the right to access and use the property you have actually already paid for? I will lose my house unless I pay the huge property taxes each year. I will lose my business unless I pay the property taxes on all the equipment I purchased over 20 years ago. It is actually a joke on us the tax payer to assume we own anything...we are actually all paying tribute to the "king" just like before we became a nation.

Theres a lot of interesting ideas in this post. As to collecting taxes from 'stuff' bought on the internet - I guess my opinion is that if people buying stuff from 'local stores' have to pay state tax, people buying the same thing from another state should have to pay the same tax. Maybe your point would be that it would be better to (like 5 states) have no sales tax (I have no problem with that either). Either way, I guess I think it should be a level playing field, i.e. if you sell a Red Sea Reefer locally you have to wade through the regulations as the business owner, and the buyer has to pay state tax - so should someone selling the same tank on the internet, and so should the person buying the product.

 

[MnFish1]

When taxes rise, don't cry. Knuckle down, and grind!! Love America!!! Don't mind paying taxes.

Many people say this. Many more think the best way to get around the need to 'grind' is to beat the system. Even more just work with 'cash' to avoid paying. Most people just pay without thinking. Hopefully what everyone has in common is the desire that the money thats being collected isn't being wasted... Which IMHO is the reason people 'mind' paying taxes...

 

[Fin]

Looks like Louisiana has been doing this also. I have had a couple of companies charge me tax, but I guess I will be getting a tax document from you guys on how much I spent this year. Honestly had no idea they were doing this already. It was just in the news to be expecting all online vendors to be sending residents "Important Tax Documents" by January 31st. I do usually report an estimate of what I spent online, but never really kept an accurate running total. :-(

 

[Skynyrd Fish]

This is a nightmare. The manpower and cost to retailers is going to be huge. Accounting fees alone, and time wasted. This will trickle down to the consumer.

As a consumer and tax payer, online ordering is a better use of valuable resources, time, fuel, wear and tear on the vehicle. I am not able to get to LFS often, as I work my butt off. I can however order online any time. If I took time to drive around and shop I would make less money, and my state would get less income tax from me (I own my business).

Before they look at the small picture of collecting sales tax, they need to look at a bigger picture and the economic trickle down. How many people are employed in my state to get that package to my door? I also feel that having stuff delivered is a greener solution to driving to a store. I wonder if there is a study showing gallons of fuel saved from online shopping? What this would do to the demand supply curve for gasoline?

I like my LFS, I like going there. I do buy when I am there. They don't stock any of the high end stuff I want, and would order. I buy live stock, food and salt and thats about it.

I feel this is unnecessary, and illegal. Please take my rant with a grain of salt and have a great night.

 

[AKReef]

I think that the Quill ruling will be upheld. The consequences of it not would be disastrous to small & medium businesses. The cost of regulatory compliance is already a tremendous burden on small businesses, and one cannot reasonably expect small/medium realtors to learn all the complexities of 50 different state sales/use/gross receipts/ad valorem (or whatever a particular state calls their tax) taxes.

I predict that the supreme court will uphold the ruling and then states will predictably cry about losing revenue. Of course that's a ridiculous argument for a state to cry about, as sales taxes are hardly the sole source of revenue for a state. There are pretty much an infinite ways a state can raise revenue, most of which already tap into already (income, gas, tobacco, liquor, property, vehicle registrations, etc.). States are going to raise as much revenue as they think they can get away with, using any method they can get away with.

 

[Peng]

Noticed it when I was buying from BRS this year... I was surprised/not surprised since Amazon started to do this to Washington residents several years ago.

 

[Ryanbrs Verified Sponsor]

I think that the Quill ruling will be upheld. The consequences of it not would be disastrous to small & medium businesses. The cost of regulatory compliance is already a tremendous burden on small businesses, and one cannot reasonably expect small/medium realtors to learn all the complexities of 50 different state sales/use/gross receipts/ad valorem (or whatever a particular state calls their tax) taxes.

I predict that the supreme court will uphold the ruling and then states will predictably cry about losing revenue. Of course that's a ridiculous argument for a state to cry about, as sales taxes are hardly the sole source of revenue for a state. There are pretty much an infinite ways a state can raise revenue, most of which already tap into already (income, gas, tobacco, liquor, property, vehicle registrations, etc.). States are going to raise as much revenue as they think they can get away with, using any method they can get away with.

Everyone I have talked to says they would be stunned if they upheld it. Most of the conservative judges have already stated the decades-old ruling which applied to catalog companies was largely based on how unreasonable it was them to manage taxes in all 8,000 jurisdictions with that era's technology. Today there is expensive but available software that does all of this for you. That said, if they don't uphold it, it is going to be the wild west while everyone tries to figure out what to do in the aftermath.

However, I am not sure it matters either way. States are getting very aggressive about how they go about this. There is no court case or law saying the state can't force companies to provide a purchase history for companies who ship products into their state. This is what WA is doing, collecting sales tax is just a alternative to that requirement. So far no one has challenged WA take on this. That will likely come with the first large entity that WA goes after in 2019. Everyone will have a different opinion on this but I think most people would prefer to buy from vendors that just charge the tax up front rather than send all their data to the state government or attempt to pay it themselves at the end of the year. That may very well be a defining characteristic of where people shop in the future. However the more you select vendors who don't collect the tax, the more info the state has on you. I fully anticipate automated letters requesting as little as a buck in unpaid tax.

My biggest concern for small companies is they now have 50 different states with the authority to audit them. Something they likely need to defend in the state that audits them not in your own. Many companies could find themselves getting audited by multiple states a year.

 

[AtlCPA]

Everyone I have talked to says they would be stunned if they upheld it. Most of the conservative judges have already stated the decades-old ruling which applied to catalog companies was largely based on how unreasonable it was them to manage taxes in all 8,000 jurisdictions with that era's technology. Today there is expensive but available software that does all of this for you. That said, if they don't uphold it, it is going to be the wild west while everyone tries to figure out what to do in the aftermath.

However, I am not sure it matters either way. States are getting very aggressive about how they go about this. There is no court case or law saying the state can't force companies to provide a purchase history for companies who ship products into their state. This is what WA is doing, collecting sales tax is just a alternative to that requirement. So far no one has challenged WA take on this. That will likely come with the first large entity that WA goes after in 2019. Everyone will have a different opinion on this but I think most people would prefer to buy from vendors that just charge the tax up front rather than send all their data to the state government or attempt to pay it themselves at the end of the year. That may very well be a defining characteristic of where people shop in the future. However the more you select vendors who don't collect the tax, the more info the state has on you. I fully anticipate automated letters requesting as little as a buck in unpaid tax.

My biggest concern for small companies is they now have 50 different states with the authority to audit them. Something they likely need to defend in the state that audits them not in your own. Many companies could find themselves getting audited by multiple states a year.

Ryan - I'm a cpa and while not a sales tax expert, I do agree with you the states that want to do this will find a way to automate sending a letter and getting it in their system that you owe the state. Just like Florida does with the mailing of you a letter for not paying a toll.

Some states are also hiring accounting firms to go collect the tax for them since they don't have the resources at the state level.

Trump has mentioned Amazon several times. The old school brick and mortar retail places are and have been raising hell about this sales tax issue for years. It's an unfair advantage to online business and the states realize they are the losers when no sales tax gets paid.

Having said all that....I'm going to try to figure out how to get this best deal I can.

FYI, I have about an $8,000 equipment order (not counting the tank) for a tank going into a house we're building. Let me know the best way you think I should proceed

 

[Daniel@R2R Verified Admin]

Lots of good information here. It's good to know about these realities and the potential they have to impact businesses and customers alike. Thanks @Ryanbrs for sharing the info (and of course for all the other great stuff you do for our community).

 

[Pmj]

Everyone I have talked to says they would be stunned if they upheld it. Most of the conservative judges have already stated the decades-old ruling which applied to catalog companies was largely based on how unreasonable it was them to manage taxes in all 8,000 jurisdictions with that era's technology. Today there is expensive but available software that does all of this for you. That said, if they don't uphold it, it is going to be the wild west while everyone tries to figure out what to do in the aftermath.

However, I am not sure it matters either way. States are getting very aggressive about how they go about this. There is no court case or law saying the state can't force companies to provide a purchase history for companies who ship products into their state. This is what WA is doing, collecting sales tax is just a alternative to that requirement. So far no one has challenged WA take on this. That will likely come with the first large entity that WA goes after in 2019. Everyone will have a different opinion on this but I think most people would prefer to buy from vendors that just charge the tax up front rather than send all their data to the state government or attempt to pay it themselves at the end of the year. That may very well be a defining characteristic of where people shop in the future. However the more you select vendors who don't collect the tax, the more info the state has on you. I fully anticipate automated letters requesting as little as a buck in unpaid tax.

My biggest concern for small companies is they now have 50 different states with the authority to audit them. Something they likely need to defend in the state that audits them not in your own. Many companies could find themselves getting audited by multiple states a year.

Seems like the states should provide an easy to use API where the systems post the address or zip and the sales tax % to collect is returned.

 

[Ryanbrs Verified Sponsor]

Seems like the states should provide an easy to use API where the systems post the address or zip and the sales tax % to collect is returned.

If only it were that simple. Some states tax clothing, others don’t tax food or other items at different rates. So it’s not just the state>country>city you bought it from but also what you bought.

 

[AKReef]

Everyone I have talked to says they would be stunned if they upheld it. Most of the conservative judges have already stated the decades-old ruling which applied to catalog companies was largely based on how unreasonable it was them to manage taxes in all 8,000 jurisdictions with that era's technology. Today there is expensive but available software that does all of this for you. That said, if they don't uphold it, it is going to be the wild west while everyone tries to figure out what to do in the aftermath.

However, I am not sure it matters either way. States are getting very aggressive about how they go about this. There is no court case or law saying the state can't force companies to provide a purchase history for companies who ship products into their state. This is what WA is doing, collecting sales tax is just a alternative to that requirement. So far no one has challenged WA take on this. That will likely come with the first large entity that WA goes after in 2019. Everyone will have a different opinion on this but I think most people would prefer to buy from vendors that just charge the tax up front rather than send all their data to the state government or attempt to pay it themselves at the end of the year. That may very well be a defining characteristic of where people shop in the future. However the more you select vendors who don't collect the tax, the more info the state has on you. I fully anticipate automated letters requesting as little as a buck in unpaid tax.

My biggest concern for small companies is they now have 50 different states with the authority to audit them. Something they likely need to defend in the state that audits them not in your own. Many companies could find themselves getting audited by multiple states a year.

I recently looked at one of those tax solutions and I was quoted over $1 per transaction to calculate the tax. Talk about expensive! I could pay someone full time to just sit there and figure it out (pretty much already do). Our issue is use tax, rather than sales. It’s the same concept, where we are basically self-reporting taxes instead of paying suppliers. Mainly we do that because we can’t trust our vendors to charge us the correct tax amounts. That and because we have a mix of taxable and non-taxable transactions (ie internal use vs. resale) and only a few people in our organization can seem to figure out what the difference is. It’s such a drain on resources.

I think the approach you have taken with BRS is the smart and most respectable approach in regards to your customers. I know I would be upset if I knew a vendor was sharing my purchase information with the government. Just another reason why I choose to do business with you. Keep up the good work!

 

[Lowell Lemon]

@Ryanbrs ,
I have posted a link to a George Will opinion piece in todays Washington Post on the state of taxation across state lines here for all to read. This explains why this is a direct challenge to Federal Law and is likely to be struck down by the Supreme Court. With over 12,000 jurisdictions with differing tax requirements it would be impossible for small online businesses to comply with this attempt to grab taxes not due the states by Federal Law.
https://www.washingtonpost.com/opin...ba0ed2371cc_story.html?utm_term=.fe131faa3a45
This is why I believe it is not a good idea to encourage the lawless attempt to grab taxes across state lines by Washington state or South Dakota. Read and see what you all think.
Lowell

 

[Ryanbrs Verified Sponsor]

@Ryanbrs ,
I have posted a link to a George Will opinion piece in todays Washington Post on the state of taxation across state lines here for all to read. This explains why this is a direct challenge to Federal Law and is likely to be struck down by the Supreme Court. With over 12,000 jurisdictions with differing tax requirements it would be impossible for small online businesses to comply with this attempt to grab taxes not due the states by Federal Law.
https://www.washingtonpost.com/opin...ba0ed2371cc_story.html?utm_term=.fe131faa3a45
This is why I believe it is not a good idea to encourage the lawless attempt to grab taxes across state lines by Washington state or South Dakota. Read and see what you all think.
Lowell

South Dakota's law was designed to be illegal so they could bring it to the SC and I agree 100% it sucks. I can't even imagine how much this has cost Wayfair and the other defendants.

Washington's law is not as clear. I don't believe anyone has challenged WA's ability to enforce their demand that companies who ship and sell to WA residents provide them with the transaction data for this interstate commerce. Collecting the use/sales tax is not mandatory it is just provided as an alternative to sending customers to purchase data to their state government so they can harass them for payment or worse.

Really not a fun situation for anyone involved.

 

[Tautog]

Well, like we didn’t see this coming ............and once again it’s all about money! So, it seems the best way to get around this to create a reefers business, LLC here we come, create a tax ID #, and write off all my loses, and of course, a bank account with little to no activity.

 

[siggy]

Well, like we didn’t see this coming ............and once again it’s all about money! So, it seems the best way to get around this to create a reefers business, LLC here we come, create a tax ID #, and write off all my loses, and of course, a bank account with little to no activity.

The feds have seen thru that, after 3 years of losses it's considered a HOBBY! and you could end up paying it ALL back.... "Give Caesar what is Caesar's" ...It's coming, Just a matter of time.

Michigan's Infrastructure is Literally crumbling. the Roads are the worst I have ever seen, sewer, water, and drainage outdated and partial blame is due to this loss of revenue. Online sales utilizes our transit system to deliver products to the Home and Businesses (on the taxpayers back). The billions of dollars spent on goods with No tax collected( sales & gas ) as severely impacted the states ability to perform general improvements and are Just putting out fires. Consumers are no longer buying gas, stopping for lunch or frequenting other bushiness as they have in the past, not to mention the Job & business loss and the loss of profit that direct sales and online competitive pricing has had. Vehicle Fuel Efficiency has also Impacted revenue in the gas tax as well........WE will pay the Tax one way or the other!

Now Don't get me started on Chinese online sales and Import's ( e-bay, Alibaba ............ )

 

[Gareth elliott]

There really isnt an easy solution to this, SD goal is to assist small businesses. But the businesses affected by a full reversal of the 26yo statute will be small businesses. Ebay, amazon, etc can all afford a full time team of accountants to wade through the complexities of town and state taxes required per order. But A business with say a staff of 20 will have a much more difficult time fulfilling each order and applying the applicable taxes.
There is no federal database of municipal tax rates. What happens if after 2 years of selling items that small businesses receives tax bills from 14 different states in back sale taxes because their accountant made a clerical error. What happens if the clerical error is the other direction and now owe 100’s of customers they over taxed? A change in the statute without a sensical replacement just assists large online vendors at the expense of startups, this measure was meant to protect.

 

[AKReef]

In my view, the State's argument that they are losing tax revenue and the Brick & Mortar businesses' argument that they are put at a competitive disadvantage are cop outs. These are archaic views that need to evolve with modern times. The states can easily level the playing field by repealing their state sales tax laws and collecting revenue elsewhere. States literally have an unlimited means available to them to raise revenue (income tax, property tax, fuel tax, liquor tax, tobacco tax, soda tax, *insert whatever ridiculous thing they want to tax here* tax), they just need the political will to do so.

The Quill Decision "held that the Constitution’s commerce clause limited interstate tax enforcement without congressional assent." I really don't see the current case's circumstances change that very basic, CONSTITUTIONAL premise. If the Supreme Court changes precedent, I will be sorely disappointed as this will be another example of legislating from the bench. Unfortunately, I believe that I will be disappointed, just in the fact that the Court decided to take the case, rather than defer to the lower court's opinion that sided with Wayfair.

 

[Opus]

There really isnt an easy solution to this, SD goal is to assist small businesses. But the businesses affected by a full reversal of the 26yo statute will be small businesses. Ebay, amazon, etc can all afford a full time team of accountants to wade through the complexities of town and state taxes required per order. But A business with say a staff of 20 will have a much more difficult time fulfilling each order and applying the applicable taxes.
There is no federal database of municipal tax rates. What happens if after 2 years of selling items that small businesses receives tax bills from 14 different states in back sale taxes because their accountant made a clerical error. What happens if the clerical error is the other direction and now owe 100’s of customers they over taxed? A change in the statute without a sensical replacement just assists large online vendors at the expense of startups, this measure was meant to protect.

And think of all the paper work to file all those sales tax returns. I've done returns for a small business before which only sold locally and it can take hours to do a return and pull the necessary data. Now do this hundreds of times. I've seen many that say "oh they can just out source it". Well that will be expensive and might really eat into any profits made online.