MMP Sales Tax

[Sparky]

word. Perhaps it is, or is not.

The fear Bob is not paying sales tax on our ASL. ASL is not a hobby for those in the poor house. A few dollars more, for the vast majority I suspect it is no problem.

The fear is Bob is since this is likely going back to the Supreme Court, and one would rationally think the law will be challenged on constitutional grounds, and if the court rules in favor of South Dakota?

The decision would mean that taxing internet purchases is not the sole purview of the Federal Government per Article 1, Section 8, Clause 3 which means...

all 10,000 of those states and localities could tax internet purchases. And who wouldn't want a part of that pie. That means that for perhaps the first time ever. Poltics is very much on topic and relevant with regards to ASL. Best case those costs associated with tax compliance that our small ASL producers wlll have are passed on to us, worse, middle case, they give up the direct sales route, worse case, fold up shop. This case can directly impact ASL. It shouldn't, thus the relevant poltics, but as you note. Who knows with the Supreme Court. However it could have a huge impact on ASL. We shall see.

 

[cschneider3]

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.

Keep in mind that this is not a new tax. Consumers have always been liabile for sales & use tax on products they buy; if not collected by the seller they are supposed to remit the tax to state themselves (side note - I wonder if all the folks who like to complain about others not paying their fair share of taxes bother to pay the use tax on their own internet purchases ). It is easier to go after a handful of retailers than thousands of consumers so the states want to be able to compel as many retailers as possible to collect tax for them.

Also, I would argue that the SC did not punt here. It is not their job to legislate. They may have opened a can of worms by overriding the bright line test in Quill but it is Congresses job to provide a new framework.

 

[cschneider3]

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!

Good point. I suspect the windfall in online sales tax revenue that the local governments here in the States are projecting may not materialize either. They may wind up killing the goose that lays the golden eggs instead.

I saw a statistic in the Wall Street Journal that sales tax is already charged on 85% to 90% of sales by the top 100 online retailers. This makes sense since the big players (i.e. Amazon, Wal-Mart, Apple) have locations throughout the country and are already required to charge sales tax. So the pool of untaxed sales is going to be primarily from mid-sized online retailers (like Wayfair.com who challenged the SD law) and a whole bunch of small retailers (like MMP). If a large portion of the small retailers are off the table due to diminimis thresholds like those included in SD's law, then your are looking at the mid-size companies with hundreds of millions in sales (versus the big boys with tens of billions of sales). I think the politicians are looking at Amazon's sales but I think in reality the pie is much smaller than they realize. I fear that once they figure this out any diminimis thresholds will be quickly discarded.

 

[Sparky]

Also, I would argue that the SC did not punt here. It is not their job to legislate. They may have opened a can of worms by overriding the bright line test in Quill but it is Congresses job to provide a new framework.

shit brother, you don't have to argue. I take it you are an expert, either on the legal or economic side, me? Just a highly interested grunt who is educating myself in this on the fly. Yesterday I skimmed the court document, today I read it all (not exactly light reading btw haha). I'm afraid you have the right of it. It is game on for the states and local, but Congress can swat them, it still retains dominance. Good luck with that, considering it can not accomplish much of anything in our divisive political state we are. Perhaps when .. I see you touched on that ....

Yes, that is the fear, the big money states are after is already taxed. When the money starts rolling in and they find it isn't quite the cash cow the local politicians think they it will be, it will game on for the small fish and potentially bad news for the 3 primary ASL producers here in the states.

I'm taking it from your first post in this thread that the costs for companies to be (and remain) tax compliant are not trivial and could be especially harsh, even catastrophic, on very small, or part time producer/sellers.