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US Supreme Court ruling on sales tax, wonder if it will effect back sales?

Boinger

Active member
That seems about right. The only thing I would say is that the US system seems to benefit entities (whether individuals, charities/foundations/non-profits or businesses) that have the ability to use any of the thousands of loopholes in the tax code to avoid taxation, and it seems to hit hardest on normal people, small businesses, honest people etc. In europe, it is certainly a lot harder to avoid VAT, since it is collected on nearly everything and in that way is a regressive tax. But in exchange, the things that are the biggest burden for lower income families (education, health care, senior care) are heavily subsidized by the government. I hate tax just as much as everyone else, but it is kind of funny to see that the nations in the OECD with the highest taxes are also the happiest statistically. The top ten in the world happiness report are all high-tax nations apart from Switzerland, which is pretty close to the US. https://en.wikipedia.org/wiki/World_Happiness_Report
This is not to force a causation, just an interesting correlation. The politics behind all this are extremely fraught, and the last thing I want to do is to get into an argument, but it just came up.

In any case, the sales tax issue is an interesting one in the states, and I can see what the Supreme Court was thinking when they decided to make it apply to internet sales, still, it is frustrating when these kinds of taxes are applied towards consumers when, for example, companies can easily shift their profits to tax havens all over the world with minimal fuss.
Yep I agree, and honestly it would be a ridiculously simple fix.

If you earn money in a country. You are taxed in that country. Simple.

But what they allow is "licensing" the IP to a foreign country call it an expense so there is no profit in the country they made the money in and then the profit is calculated where the IP is licensed.
 

bab

Active member
There is Sales tax and Use tax in California. You are responsible to pay sales tax on the items you purchase out of state and bring into California, you are also responsible to pay Use tax on items you purchase out of the country and bring into California.

In the past a business in California had the ability to have more than one tax number for each business not so anymore so all your purchases are linked. This way they know if your bringing in goods from another county is by the entry documents when clearing customs.

If you sell an item and it is carried by a common carrier out of the state your not responsible to collect the taxes.

California has new programs within the franchise tax board to seek and find missing taxes. not they most likely will not find purchases of a digital camera bought in Georgia and shipped to California...why because the state of Georgia and California don't communicate. Just like the entire government doesn't communicate. All the sales taxes collected in the state of California and inappropriately handled the majority of the revenue is wasted.

The sales tax revenue is only an issue when the states account is running low and they cant fund special interest projects like waste bags for dogs in the park (only the parks across the street from a government officials home) or don't have enough funds to cover a 150k party. That when the directive comes down to the investigators to go into the field and search for missing funds.

Lets see you buy a car in California for a 100k and pay the sales tax say $10k you sell the car one year later for $90k the buyer has to pay tax on the $90k. If the car in the next ten years is sold ten more times then California collects sales tax on each and every transaction. Ok now you buy a car in Oregon and bring it into California after 90 days you liable to pay sales tax to the state of California on the purchase price upon registration of the vehicle.

The major reasons the taxes owed to a state or duties owed to the government are not paid and are not collected from individuals and small companies is the way the Tax Revenue and Import Duties codes are written and rewritten and rewritten complicated and impossible to comprehend. The workers for the Government don't even understand them and have not a clue on what the charges should be. When large firms say DELL ship in 30,000 notebooks all the documents are pre done in China and sent to US Customs before they arrive if not the customs agents hold the shipments why because they themselves have no clue how to figure it out.

Ok you arrive into the county on a Boeing 747-40...what does the plane hold 600 people, also there are nine other flights arriving at the same time with yours. Your purchases are more than $1600 so you go to pay duty I'll bet out of 6000 people only 2 are paying any duties come on WTF!
 

Jorgen Udvang

Subscriber Member
Reading all this, I'm amazed how complicated it is. It must cost a fortune just to organise all those taxes. Most countries have one sales tax (the VAT or Value Added Tax), and it's the same across the country, organised the same way everywhere. Businesses get it back again of course, by deducting the tax on things they bought from the tax on what they sell. That's where the "Value Added" applies. They, in reality their customers, only pay sales tax for the value they add.

It seems like the "American Freedom" has become freedom to pay tax :ROTFL:
 

Wayne Fox

Workshop Member
A simple fix is a flat tax for online sales. Or state wide tax instead of county city state etc.
the challenge ends up on the retailer to actually track all this stuff and even more challenging is the process to submit and pay the taxes. And of course dishonest retailer could easily "cook" the books to cheat the states, so now states end up having to audit all of these companies, so suddenly online providers will be audited countless times each year by individual states ... a pretty expensive process.

I think to solve the problem it will require Federal intervention, or a state consortium that can create a single clearing house that the retailers deal with and the clearing house handles the collection and distribution of the taxes. To your point, it only makes sense if it's a flat tax, or if only the state level tax is collected. Of course if the Feds set up and manage this, then suddenly we'll end up with a national sales tax which could easily be tagged into this process.
 

Boinger

Active member
the challenge ends up on the retailer to actually track all this stuff and even more challenging is the process to submit and pay the taxes. And of course dishonest retailer could easily "cook" the books to cheat the states, so now states end up having to audit all of these companies, so suddenly online providers will be audited countless times each year by individual states ... a pretty expensive process.

I think to solve the problem it will require Federal intervention, or a state consortium that can create a single clearing house that the retailers deal with and the clearing house handles the collection and distribution of the taxes. To your point, it only makes sense if it's a flat tax, or if only the state level tax is collected. Of course if the Feds set up and manage this, then suddenly we'll end up with a national sales tax which could easily be tagged into this process.
Yes I understand, this is directly related to my work. Online sales are fairly easy to track where you are shipping what too.

Doing the statewide tax is doable. But all the jurisdictions would just be ridiculous, and I also think there should be a small business exemption. We are burdened with enough expenses as is without having to deal with complicated tax accounting.
 

dougpeterson

Workshop Member
Reading all this, I'm amazed how complicated it is. It must cost a fortune just to organise all those taxes. Most countries have one sales tax (the VAT or Value Added Tax), and it's the same across the country, organised the same way everywhere. Businesses get it back again of course, by deducting the tax on things they bought from the tax on what they sell. That's where the "Value Added" applies. They, in reality their customers, only pay sales tax for the value they add.

It seems like the "American Freedom" has become freedom to pay tax :ROTFL:
Most countries are a fraction as large and diverse as the US. California by itself would be the world’s 5th largest economy. The states of Delaware and Montana have very little in common other than the joint agreement they belong to the same country.

To be sure we are a strange country and the federal-state system creates many problems, but it also solves many problems.
 

tcdeveau

Well-known member
Reading all this, I'm amazed how complicated it is. It must cost a fortune just to organise all those taxes. Most countries have one sales tax (the VAT or Value Added Tax), and it's the same across the country, organised the same way everywhere. Businesses get it back again of course, by deducting the tax on things they bought from the tax on what they sell. That's where the "Value Added" applies. They, in reality their customers, only pay sales tax for the value they add.

It seems like the "American Freedom" has become freedom to pay tax :ROTFL:
It’s even more complicated than you might think. In my state, Georgia, sales tax rates vary from county to county, so it’s not even consistent across the whole the state. Idk if that is the same for every state or not

Here’s the current sales tax rates within my state:

https://dor.georgia.gov/sites/dor.g...Publication/2018.04.01_Rate_Chart-General.pdf

I’m going to lunch today in a different county (a 15-minute drive) and will pay a different sales tax at lunch than I will for dinner.

The sales tax isn’t even consistent across the same county sometimes, as the sales tax in Fulton county where I grew up changes depending on whether you are inside Atlanta city limits or not
 

Shashin

Well-known member
Most countries are a fraction as large and diverse as the US. California by itself would be the world’s 5th largest economy. The states of Delaware and Montana have very little in common other than the joint agreement they belong to the same country.

To be sure we are a strange country and the federal-state system creates many problems, but it also solves many problems.
In terms of sales tax or VAT, a national approach would be more equitable and simpler, even with being a moderately diverse country as the US is (India, China, and the EU are far more complex and diverse and I am not sure how GDP is pertinent (you could go to GDP per capita and the world look a whole lot different). Given how easy it is to purchase from anywhere in the nation, having local and State sales tax structures actually make little sense. When a local government needs to develop its economy, but the town across the border (I am thinking of the ME/NH border) has no sales tax and locals go there to shop, how do you create a local retail economy? And when State government eliminates sales tax as an incentive, it shifts the tax burden to property tax, which is not an equitable solution.

Naturally, given the healthcare debate, I am sure implementing a national sales tax would be just as straightforward...
 

Shashin

Well-known member
It seems like the "American Freedom" has become freedom to pay tax :ROTFL:
Actually, it is the opposite. It actually gives you more freedom not to pay taxes (the resent tax law that changed the corporate rate is an example: the nominal rate and the effective rate were very different with the previous effective rate (what corporations actually paid) quite low and competitive to other developed nations, but the discussion was around the nominal rate that no corporation actually paid). Since States and local governments (can) have their own authority to levee taxes, there is a great deal of discretion. Federal government has limited powers to levee taxes, usually under the commerce clause of the Constitution, which is how the Supreme Court can make this judgement. Yes, we are one nation that is made up of 50 states that each have their own set of powers. It was a great idea in the 18th century. How it works in the 21st would be a good question.
 

GrahamWelland

Subscriber & Workshop Member
Btw as a European who has lived in the US for 25 years my overall impression is that most folks here want cheap, low taxation and immediate access to goods but regardless of the effect on the US manufacturing industry and ultimately quality. (Hence Walmartification and the invasion of cheap foreign-made goods and absolute devastation of small stores and industry based on good quality, local, but ultimately more expensive goods).

Compared to my UK taxes and sales taxes, the US is by FAR less taxed than most of the rest of the civilized world. In the Uk I was taxed at almost 40% + 15% VAT (Now 20%) but by comparison here in the US I live in an income tax free state and so overall only pay maybe 23% overall (even though I'm in the 35% tax upper bracket). In Vancouver WA we pay 8.4% sales tax (6.5% WA + 1.9% Vancouver local sales tax). Now I do commiserate with my US colleagues who choose to live in higher taxed States. Heck, I left Oregon because even though there is no sales tax, my state income tax would cost me $20-25k per year for living on the other side of the Columbia river.

I fear that in the US we doth complain too much!!
 

Frankly

New member
Reading a bit more about it and reeducating myself, it sounds as if our courts are confused and the end result penalizes small businesses more than the giant ones.

Once you really start reading and thinking about economics it puts me in awe that the entire system works as well as it does as it seems to be balanced on the head of a pin, ready to topple at the slightest breeze yet somehow people retain faith and it still lumbers away.

I agree the in the USA we pay a lot but receive less because we pay to police the world whether our citizens want to or not. There is hardly any change in actual policy even with a "radical" in leadership, the system is just as sluggish as any Communist government. In fact the Soviets had a higher turnover with incumbent representatives.
 

Jeffrey

Active member
The easiest thing to do is to not purchase any new gear and shoot with what we have.

Heaven forbid this should happen!
 
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