Sales Tax for you

[FeuerFrei]

Now that it is October 1 ...

Looks like we have SALES TAX now on all items on Amazon, no matter which seller you select.

Also Newegg now charges sales tax.

Woe is we. 8.25% reduction in buying power (depending on state). I don't know about you, but I'm dumping tea into the Boston harbor.

 

[Ken g6]

I don't know about you, but I'm dumping tea into the Boston harbor.

But unlike the colonists, you have taxation with representation. Write to your representatives and complain!

Unless you think corporations are unfairly represented. Then vote...well, this is becoming too much of a P&N topic.

 

[BudAshes]

Move to a state without sales tax.

 

[Iron Woode]

we pay taxes at all those sites (13% in Ontario).

Welcome to the club, pal.

 

[ultimatebob]

We're been paying that in Connecticut for awhile now. In fact, we were supposed to pay a Use Tax on anything we bought out of state that wasn't taxed long before they enacted that rule. Most people didn't bother, naturally.

 

[Brainonska511]

I'll break out my tiny violin for you.

 

[bbhaag]

It's about damn time. I own a b&m store and have been collecting sales tax for close to 20 years. It never made sense to me to give online retailers an advantage over b&m stores.

 

[s0me0nesmind1]

Now that it is October 1 ...

Looks like we have SALES TAX now on all items on Amazon, no matter which seller you select.

Also Newegg now charges sales tax.

Woe is we. 8.25% reduction in buying power (depending on state). I don't know about you, but I'm dumping tea into the Boston harbor.

Whatever you're referring to is strictly your state.

What state are you in by the way?

Move to a state without sales tax.

This. NOMAD States - New Hampshire, Oregon, Montana, Alaska, Delaware.

Either way it's pick your poison.
1. Sales Tax
2. State Income Tax
3. Property taxes

OF the 3 types of taxes above states generally choose 2 out of the 3. Well - unless you're in a liberal state like CA, NY, or IL.... then you get to pay all 3 Enjoy.

I will take #1 and #3 a million times over #2 personally.

 

[s0me0nesmind1]

Ultimately, you can safely blame South Dakota for all this. They were the ones behind the SCOTUS case Wayfair vs. South Dakota which is what overturned Quill Corp vs. North Dakota.

This is what established and overturned the rule that said You (as a company) no longer have to have physical presence in a state in order for them to mandate that you collect and remit their taxes.

 

[s0me0nesmind1]

We're been paying that in Connecticut for awhile now. In fact, we were supposed to pay a Use Tax on anything we bought out of state that wasn't taxed long before they enacted that rule. Most people didn't bother, naturally.

Heh, that's not a Connecticut thing - that was an every state with a sales tax thing regarding use tax.

Generally, sales tax laws actively state that anything you buy to consume is taxable. The exceptions to the rule are items that they explicitly state.

 

[s0me0nesmind1]

It's about damn time. I own a b&m store and have been collecting sales tax for close to 20 years. It never made sense to me to give online retailers an advantage over b&m stores.

There is something along the lines of roughly 15,000 sales tax jurisdictions in the US.

And while you might have had to collect and remit your sales taxes based on your box-store, you generally have the cushiness of having to keep up with 1 jurisdiction with 1 set of rules.

Now imagine having to collect and remit state sales tax for all 45 states.
Now imagine having to collect and remit sales taxes for individual jurisdictions (cities, counties, districts, water districts, metro transit authorities, parishes, etc.)
Now imagine having to collect and remit other related taxes and fees - e.g. If you buy a computer monitor in California you have to also charge a $2 disposal fee (In addition to the sales tax).
Now imagine having to comply with the laws and file returns for all of the above jurisdictions that you had a sale in.
Now imagine having to keep track of if your products/services is taxable or not in all 15,000+ jurisdictions e.g. groceries are exempt in my state, but certain items like sodas are not.
Now imagine having to keep track of many other different laws (e.g. Some states tax you based on the jurisdiction you deliver to [Ship-to address], some tax based on the origin [Ship-From] if it's an in-state sale.)


I'm probably going overboard describing all the issues/work involved for a small store doing small shipments - but I'm just trying to relay the message that it isn't easy

 

[bbhaag]

There is something along the lines of roughly 15,000 sales tax jurisdictions in the US.

And while you might have had to collect and remit your sales taxes based on your box-store, you generally have the cushiness of having to keep up with 1 jurisdiction with 1 set of rules.

Now imagine having to collect and remit state sales tax for all 45 states.
Now imagine having to collect and remit sales taxes for individual jurisdictions (cities, counties, districts, water districts, metro transit authorities, parishes, etc.)
Now imagine having to collect and remit other related taxes and fees - e.g. If you buy a computer monitor in California you have to also charge a $2 disposal fee (In addition to the sales tax).
Now imagine having to comply with the laws and file returns for all of the above jurisdictions that you had a sale in.
Now imagine having to keep track of if your products/services is taxable or not in all 15,000+ jurisdictions e.g. groceries are exempt in my state, but certain items like sodas are not.
Now imagine having to keep track of many other different laws (e.g. Some states tax you based on the jurisdiction you deliver to [Ship-to address], some tax based on the origin [Ship-From] if it's an in-state sale.)


I'm probably going overboard describing all the issues/work involved for a small store doing small shipments - but I'm just trying to relay the message that it isn't easy

Yeah I get that. It's called the cost of doing business. As a small business owner I understand that. Do you?

 

[balloonshark]

Ebay also added 11 more states today bringing the total to 34 that have to collect taxes.

 

[s0me0nesmind1]

Yeah I get that. It's called the cost of doing business. As a small business owner I understand that. Do you?

No I do, I'm just saying it isn't easy hehe. I'm (obviously) involved in SaaS regarding this subject. Let's just say our general contracts are in millions.

My main point is that for small business and early mid size, it is honestly a process that a lot of businesses can't afford to do. When your accounting and tax department is 1 person it's virtually impossible heh.

 

[bbhaag]

No I do, I'm just saying it isn't easy hehe. I'm (obviously) involved in SaaS regarding this subject. Let's just say our general contracts are in millions.

My main point is that for small business and early mid size, it is honestly a process that a lot of businesses can't afford to do. When your accounting and tax department is 1 person it's virtually impossible heh.

My main point is that if you're going to be a retail business then you have to collect sales tax period regardless of the size of your business. Retail always has to collect sales tax it's the way it has always been and it's the way it should be as long as sales tax is around.
IMO if you're a small business and you've been selling online for awhile and taking advantage of this "loop hole" then you should have been putting that money aside and investing it in infrastructure because you damn well should have known that the free ride was gonna end sooner or later.

 

[Red Squirrel]

This is going to be a nightmare for anyone who wants to start an online business. Now you need to code your site to handle all the different sales taxes, not to mention the overhead of having to collect and manage all that. IMO the way it should work is that you should have to charge tax for wherever the site is based out of. If I come from out of town to a store I pay sales tax for the location of the store not my location. Should be the same online. I guess the issue is people would just host their stores in places with low or no taxes.

 

[s0me0nesmind1]

This is going to be a nightmare for anyone who wants to start an online business. Now you need to code your site to handle all the different sales taxes, not to mention the overhead of having to collect and manage all that. IMO the way it should work is that you should have to charge tax for wherever the site is based out of. If I come from out of town to a store I pay sales tax for the location of the store not my location. Should be the same online. I guess the issue is people would just host their stores in places with low or no taxes.

That was how it used to be. You had to legally have a physical presence in a state in order for you to be liable to collect taxes on behalf of the state.

That was decided under Quill (1992) and was overturned recently in Wayfair.

Edit: ohhh wait you mean charge someone the same tax regardless of where shipping to? Yeah that won't fly.

Sales taxes are otherwise known as "Consumption tax" in that the tax is based upon where the item is consumed. If I ship an item from Illinois to Texas then Texas wants their money... Not Illinois.

 

[Red Squirrel]

My main point is that if you're going to be a retail business then you have to collect sales tax period regardless of the size of your business. Retail always has to collect sales tax it's the way it has always been and it's the way it should be as long as sales tax is around.
IMO if you're a small business and you've been selling online for awhile and taking advantage of this "loop hole" then you should have been putting that money aside and investing it in infrastructure because you damn well should have known that the free ride was gonna end sooner or later.

It's still ridiculous to basically price small business out of existence. Anyone who wants to start an online store now practically can't if they need to abide by this crazy law. It's near impossible to manage all that in small scale without crazy costs and complexity.

 

[bbhaag]

It's still ridiculous to basically price small business out of existence. Anyone who wants to start an online store now practically can't if they need to abide by this crazy law. It's near impossible to manage all that in small scale without crazy costs and complexity.

Price small business out of existence? Why because they now have to pay into a system that every other retailer in the country has been doing for decades? Oh it's to complicated to figure out for a one man team? Well boo fucking hoo....

Between the mid '90's and late '00's I saw the rise of the big box stores mow down thousands of small business in communities across the country and no one stood up for us then because they wanted their shit cheaper. Now you want empathy from me regarding this change in the law because it will "hurt small business"?

No, personally I see it as a good thing even if most people don't because in my experience most people don't give two shits about a small business all they really care about is the final price of what they want to purchase. That's why this thread was started because the OP was bitching about tacking on an extra 8.5% to the final cost of the shit he wants to buy.

 

[Red Squirrel]

I got curious to see if it's this way here in Canada and apparently it is. You're expected to collect and send tax for each province and they all have their own requirements. Quite a hassle. Governments always have to make everything so complicated. Though you only have to if you make over 30k so at least if you stay under that you don't have to go through all the trouble. Not sure if that's 30k in profit or 30k gross though. I have a feeling it's gross which would make it harder to stay under 30k if the product actually takes off as you can only lower the price so much until you make zero profit.

Business and industry - Canada.ca

Information for businesses on tax and tariff requirements, permits and regulations, intellectual property and copyright, and how to fund or incorporate a business, hire employees or sell to government.

canadabusiness.ca

This thread is about Amazon but I presume it's expected to do this no matter how you're selling, even if you're doing it on your own site.

I have a project idea in mind that I wanted to look at selling online at some point and I never even considered the tax aspect till now. Makes it much more complicated than I originally considered. Wonder if there are services you can outsource to that handle all of that. Ship them a pallet, they do all the legwork of selling it by listing it on Amazon, ebay etc, then you get a cut. Probably the easiest way to go if such a thing exists. Then you can concentrate on the actual product and support instead of all the other leg work.

 

[Brainonska511]

This is going to be a nightmare for anyone who wants to start an online business. Now you need to code your site to handle all the different sales taxes, not to mention the overhead of having to collect and manage all that. IMO the way it should work is that you should have to charge tax for wherever the site is based out of. If I come from out of town to a store I pay sales tax for the location of the store not my location. Should be the same online. I guess the issue is people would just host their stores in places with low or no taxes.

LOL, you think people starting their own online business are individually coding their websites for each zip code? There are software packages and payment portals that can handle the bulk of that sales tax work - big and small companies buy them to comply with state laws.

And you don't pay the sales tax for the state that the site is based out of because the end user is supposed to be paying it. That's why you would either pay sales tax for an item you bought in-state, or use-tax for an item you bought out of state and didn't pay sales tax for (and if you paid sales tax in another state, you could technically file for a credit against the use tax you would have owed)

 

[whm1974]

We're been paying that in Connecticut for awhile now. In fact, we were supposed to pay a Use Tax on anything we bought out of state that wasn't taxed long before they enacted that rule. Most people didn't bother, naturally.

And how does Connecticut expect to enforce that? I mean most people don't usually keep most of their receipts for a long time anyway. What period of time are people supposed to pay sales tax on the items they have purchased a while back?

 

[s0me0nesmind1]

LOL, you think people starting their own online business are individually coding their websites for each zip code? There are software packages and payment portals that can handle the bulk of that sales tax work - big and small companies buy them to comply with state laws.

And you don't pay the sales tax for the state that the site is based out of because the end user is supposed to be paying it. That's why you would either pay sales tax for an item you bought in-state, or use-tax for an item you bought out of state and didn't pay sales tax for (and if you paid sales tax in another state, you could technically file for a credit against the use tax you would have owed)

Yes but all of that has indirect costs as well. In addition to the tax itself (which, yes is collected from the buyer), you have to pay for the service. Often times for small businesses from what I know they tend to be crappy services overall and charge by a percentage fee of transactions.... as if things like credit card fees weren't enough.

On top of collecting the taxes, the person still has to remit them for each and every jurisdiction. Certain states - such as Colorado, Louisiana, and Alabama off the top of my head - also separate out their sales tax processes by jurisdictions. That means you may have to file 1 return for the state, 1 return for the county, and 1 return for the city/district from just 1 transaction. On top of this you will have to actively respond to and fight audits.

I work in software that is built for large scale companies that interfaces with ERP systems - and as I said our contracts are often times a million plus - with yearly subscription costs in the hundreds of thousands.

 

[s0me0nesmind1]

And how does Connecticut expect to enforce that? I mean most people don't usually keep most of their receipts for a long time anyway. What period of time are people supposed to pay sales tax on the items they have purchased a while back?

Most states on their state income tax returns have a line that is there for you to put potential use tax owed. Of course, most people ignore this.

See the CT return here: https://portal.ct.gov/-/media/DRS/Forms/1-2018/Income/CT-1040-Form-W_1218.pdf?la=en

Line 15

 

[whm1974]

Most states on their state income tax returns have a line that is there for you to put potential use tax owed. Of course, most people ignore this.

See the CT return here: https://portal.ct.gov/-/media/DRS/Forms/1-2018/Income/CT-1040-Form-W_1218.pdf?la=en

Line 15

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Yeah but how does the State expect people to pay use taxes on items brought before the law required them to do? You mention 10 years prior.