MMP Sales Tax

[Ric of The LBC]

I guess MMP will need to collect sales tax from each state as laws are passed. MMP will need pass on the cost of this collection I assume.

Hurry up with reissue of core modules!

 

[JRKrejsa]

I can’t imagine it would be much- but MMP will do that like everyother retailer.

State and local governments are loosing too much money as more and more people shop on the internet, instead of brick and mortar stores,

Inevitable, I suppose.....

 

[Jazz]

Probably not much at all compared to shipping costs.....

 

[RandyT0001]

Probably not much at all compared to shipping costs.....

Depends on what state you are in when you make the purchase. In my home state it is 7.5% state sales tax and add 2.5% for local city sales tax for 10% total. Now if I go across state lines and buy, using my cell phone, in Mississippi where the sales tax is lower, 6% (IIRC) then I have to pay less. I'm not real sure how the states plan to charge out of state businesses. It is not where I live that determines sales tax paid, but where I am at the time of purchase. If I go to Mississippi and buy some pencils I pay Mississippi tax not Tennessee's taxes.

 

[Bob Walters]

Depends on what state you are in when you make the purchase. In my home state it is 7.5% state sales tax and add 2.5% for local city sales tax for 10% total. Now if I go across state lines and buy, using my cell phone, in Mississippi where the sales tax is lower, 6% (IIRC) then I have to pay less. I'm not real sure how the states plan to charge out of state businesses. It is not where I live that determines sales tax paid, but where I am at the time of purchase. If I go to Mississippi and buy some pencils I pay Mississippi tax not Tennessee's taxes.

I would think the shipping address would make the most sense.

 

[RandyT0001]

I would think the shipping address would make the most sense.

If I go to Home Depot in Mississippi and buy lumber, nails, etc. for delivery to my house in Tennessee I pay Mississippi sales tax. Yes, MMP and other online businesses, including Gamer's Armory in NC, NWS in Florida, LC in Canada, etc. will have to collect sales tax based on the shipping address for these different states including local rates and send that money to each state and city. This is going to be a headache for small niche, online sales.

 

[Vinnie]

Is there going to start a market for transhippers? Buy from Georgia, transport to Alabama for lower tax, send on to Illinois?
Be interesting to see how this is solved.

 

[Bob Walters]

Is there going to start a market for transhippers? Buy from Georgia, transport to Alabama for lower tax, send on to Illinois?
Be interesting to see how this is solved.

It seems like that would be more trouble than it is worth.

 

[cschneider3]

I can’t imagine it would be much- but MMP will do that like everyother retailer.

Actually, the costs and administrative burden of multi-jurisdiction sales & use tax compliance is much greater that you imagine. For a small company like MMP it can have a significant impact. Yes there are software packages that will calculate the amount of tax that customers must be charged but they're not cheap nor do they take care of everything. The software is not going to file the paperwork (and various fees) for the many licenses and registrations required for the many locale you're now considered to be doing business in. The software is not going to file dozens of tax returns and make dozens of payments for you each month. The software is not going to respond to all the notices and other correspondence you'll be getting from all the out of state taxing authorities. And the software is definitely not going to deal with a state auditor when they come knocking at your door.

 

[Sparky]

Good news if there is any is this might still be years down the pike. The Supreme Court merely overturned the statute/precedence which established no internet sales tax (was based on mail order). That was not the same as saying now States COULD do it. It is in limbo now.

The Devil will be in the details moving forward which might be years going through the legal system, and court challenges to those. Not to mention Congress could jump into this and solve it quickly for small businesses by superseded the court.

 

[Jacometti]

Actually, the costs and administrative burden of multi-jurisdiction sales & use tax compliance is much greater that you imagine. For a small company like MMP it can have a significant impact. Yes there are software packages that will calculate the amount of tax that customers must be charged but they're not cheap nor do they take care of everything. The software is not going to file the paperwork (and various fees) for the many licenses and registrations required for the many locale you're now considered to be doing business in. The software is not going to file dozens of tax returns and make dozens of payments for you each month. The software is not going to respond to all the notices and other correspondence you'll be getting from all the out of state taxing authorities. And the software is definitely not going to deal with a state auditor when they come knocking at your door.

I hear there is a great software package, using the latest Artificial Intelligence, called "Perry Calculates".

 

[Sparky]

Actually, the costs and administrative burden of multi-jurisdiction sales & use tax compliance is much greater that you imagine. For a small company like MMP it can have a significant impact. Yes there are software packages that will calculate the amount of tax that customers must be charged but they're not cheap nor do they take care of everything. The software is not going to file the paperwork (and various fees) for the many licenses and registrations required for the many locale you're now considered to be doing business in. The software is not going to file dozens of tax returns and make dozens of payments for you each month. The software is not going to respond to all the notices and other correspondence you'll be getting from all the out of state taxing authorities. And the software is definitely not going to deal with a state auditor when they come knocking at your door.

Upwards of 10,000 by some estimations...

 

[Sparky]

a couple points that might bear mentioning. What the court decided was that the prior precedent (the Quil decision) did not apply to internet sales. What it did not say is if the State (or smaller locaties) COULD tax businesses that had no physical locations in their jurisdictions. THE Supreme Court is like ASL. Contra. Read specifically what it says and don't infer. The law doesn't work that way, same as ASL haha.

What is yet to be determined is whether it is constitutional for locatlities to do this, that was not what was brought before the court, nor what they ruled on. In fact if one reads the majority opinion you might find this. "judges have no authority to construct a discriminatory “tax shelter” like this"

that is not the same as saying localities CAN constitutionally can tax Internet sales. That wasn't the question before the court. What well likely happen, is that very question being put before the court. Suppose the S.D. law will be challenged quicker than quick on constitutional grounds and it (and any other state laws that may follow) will be in the courts for years and suspect at a lower level they will found unconstitutional. Likely this all ends up again in the Supreme Court and would be facinating to see how they rules considering the conservative bent of the court

The other point worth mentioning this particular S.D. law, which it seems some other states are modelling their pending legislation on, might be going after the big fish not amateur operations like MMP. Over $200k in sales, anything less is too small for them to bother. Good thing for it would be a complete disaster for the truly small business like ASL producers.

 

[echack]

It's 200 customers in SD or $100k in sales. If you scale by population, for California, it's about 9100 customers and $4.5 million in sales. Don't expect California to scale it.

As others have pointed out, it's a major hassle for retailers if this gets imposed nationally. 45 states have sales tax. So there are at least 45 state returns that have to be filed each quarter (or possibly more often), opening you to audits, business license requirements, state income taxes, etc.

Each state, and sometimes municipalities and other taxing entities in states have differing rules on what is taxed. Example, in Texas food isn't taxed if not for immediate consumption, so most grocery items aren't taxed, but a Happy Meal is. For quite a while, a state ruling was that 6 donuts was "not for immediate consumption". So a small pack of 6 Hostess mini-donuts was sales tax exempt, but two Twinkies were not.

You need to have detailed geodata information on what is and isn't taxed in an area and what the rates are there. For a big company like Amazon, it's not a significant expense. But a small diversified business is screwed.

Congress needs to get on this quickly with some national guidance. At a minimum they need to have one form to fill out for sales taxes all over the US. And having one place to file it would be nice.

 

[macrobo]

Hi All

You may Ask What has an Aussie got to say here!!! :study:

but alas - as of 1st July the Australian Goods and Services Tax will apply to all "imported" goods including small purchases - we have a huge personal online ordering epidemic over here and this will make the government billions!!! - this is including ASL so another 10% for Aussies too.... (as well as a postage rate that is actually nearly 100% of the price of the ASL item for the last few years :facepalm

What it means is the dollar goes less distance for Aussie ASL players (our dollar is 30% less than yours as well! ) so I have cut back hugely on TPP and now I am contemplating that MMP stuff might not all get bought (eBAY is impossible now - I actually did a huge eBay shop 5-10 years ago to "complete" my collection)

Not Very Happy

Rob

 

[Sparky]

Congress won't immediately for this will likely be heading to the courts by the end of this next week haha.

Any lawyer involved with this knows of the existence of Article 1, Section 8, Clause 3 of the United States Constitution. And even if they weren't, all they had to do was read Gorsuch's opinion where he makes it very clear as to this decision does not speak as to the actual legality of the S.D. Law, only that Quill was not a basis alone for not allowing local taxes on Internet purchases (inter-state commerce).

 

[Bob Walters]

You can just bet that the current Supreme Court will never rule in favor of the consumer, the worker, or any individual. The majority will always rule in favor of their corporate owners.

 

[Sparky]

on the face of it yeah Bob except for 2 very distince notions inherent in a politically (judicial I suppose haha) conservative body.
a) ADHORANCE of new taxes. One reason Congress hasn't, and won't touch this. As much a sacred cow as Net Neutrality. People will forgive corporate tax breaks, not tax increases on their internet shopping. Not by Congress. Nope. Not even the Democrats would touch that. They are still fixated on sticking it to Corporate America, not consumers, especially the young, tech savy, and wealthy that well. Are one of their major political power blocks.

b) a strict interpretation of the Constitution and not being judicial activists.

Sure they'll fuck over Joe Six Pack in a heart beat but doing so by increasing taxes AND being judicial acitivists and going against what is fairly clearly stated and has been interpreted in the High Court a century or two in the Holy Grail, the Bible, the Constitution.

That inter-state commerse is the domain of the federal government not the state or local one.

As I said, will be extremely interesting to see how they do rule. Very few analysits have had the right of it yet, but the few that have saw the Court just merely punted this one. It could have ruled on the core issue, but chose not to, it purposefully did not say that South Dakota was within its rights to tax Internet Sales, only that the legal precedent used to stop it was not valid. It was asking Perry a specific rules question and expecting him to obtw give you a ruling on one you didn't even ask. That is what Perry does haha.. that is what the Supreme Court does. This will be back in the hands of Supreme Court, and I think they sort of intended it to be with the way Gorsuch worded the Maj. Opinion.

 

[bprobst]

and this will make the government billions!!! -

No, that's what the government hopes will happen. The major local retailers (Harvey Norman, etc.) that lobbied for this hope that the customers who have been abandoning them in droves will return. What will actually happen is that people will continue shopping online, looking for the best prices. It's possible that sometimes that means the "best prices" will yield a little more revenue for the government, and sometimes it won't. I'm pretty sure that nobody will come out ahead because of this -- not the government, not the local retailers, and certainly not the shoppers. The costs in collecting the additional revenue will exceed the value of that revenue. There was a reason that it only used to be levied on high-value imports!

 

[Bob Walters]

on the face of it yeah Bob except for 2 very distince notions inherent in a politically (judicial I suppose haha) conservative body.
a) ADHORANCE of new taxes. One reason Congress hasn't, and won't touch this. As much a sacred cow as Net Neutrality. People will forgive corporate tax breaks, not tax increases on their internet shopping. Not by Congress. Nope. Not even the Democrats would touch that. They are still fixated on sticking it to Corporate America, not consumers, especially the young, tech savy, and wealthy that well. Are one of their major political power blocks.

b) a strict interpretation of the Constitution and not being judicial activists.

Sure they'll fuck over Joe Six Pack in a heart beat but doing so by increasing taxes AND being judicial acitivists and going against what is fairly clearly stated and has been interpreted in the High Court a century or two in the Holy Grail, the Bible, the Constitution.

That inter-state commerse is the domain of the federal government not the state or local one.

As I said, will be extremely interesting to see how they do rule. Very few analysits have had the right of it yet, but the few that have saw the Court just merely punted this one. It could have ruled on the core issue, but chose not to, it purposefully did not say that South Dakota was within its rights to tax Internet Sales, only that the legal precedent used to stop it was not valid. It was asking Perry a specific rules question and expecting him to obtw give you a ruling on one you didn't even ask. That is what Perry does haha.. that is what the Supreme Court does. This will be back in the hands of Supreme Court, and I think they sort of intended it to be with the way Gorsuch worded the Maj. Opinion.

See the mistake you make is you think the Constitution means squat to these people it doesn't the only thing that matter is money and power. Anyway, this is getting off topic.