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Old 21 June 2018, 02:48 PM
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Icon605 Supreme Court: Online shoppers can be forced to pay sales tax

This just in: https://wtop.com/government/2018/06/...ales-tax-case/

I don't see this changing people's online shopping habits; despite having to now pay your state's sales tax, it's still more convenient than going to a B/M store, looking for a parking place, finding someone to wait on you etc.
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Old 21 June 2018, 03:03 PM
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I don't this changing people's online shopping habits either, mostly because Amazon, which accounts for 44% of all online sales, has been collecting state sales tax since 2017.
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Old 21 June 2018, 03:09 PM
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Pennsylvania has a place on the state income tax forms that "asks" you to estimate your on-line spending and pay the applicable taxes, with estimated amounts based on your household income. I wonder if they will do away with that now and just charge through the on-line companies.
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Old 21 June 2018, 03:52 PM
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I doubt they will remove it. South Dakota only requires a e-retailer to collect state sales tax if that retailer has $100K or 200 individual sales to customers in South Dakota. Presumably, other states would have a similar model as attempting to collect from very small retailers could cost more to the state that what it would bring in. If that is so, then sales from companies below those limits would still require the purchaser to pay the sales tax, so the line would remain for that reason.
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Old 21 June 2018, 04:20 PM
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Also, that line isn't just for online purchases. You're also technically supposed to pay sales tax on anything you bought in a physical store in a different state and then brought back to your home state to use there, although you can then deduct any sales tax you paid to the other state. Also you're supposed to pay it on stuff you order from an old fashioned mail order catalog. I assume there are still some of those around. At least that's how it works in California. I'm sure the law varies from state to state.
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Old 21 June 2018, 05:06 PM
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Originally Posted by dfresh View Post
Pennsylvania has a place on the state income tax forms that "asks" you to estimate your on-line spending and pay the applicable taxes, with estimated amounts based on your household income.
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Originally Posted by WildaBeast View Post
Also, that line isn't just for online purchases. You're also technically supposed to pay sales tax on anything you bought in a physical store in a different state and then brought back to your home state to use there, although you can then deduct any sales tax you paid to the other state. Also you're supposed to pay it on stuff you order from an old fashioned mail order catalog. I assume there are still some of those around. At least that's how it works in California. I'm sure the law varies from state to state.
Both of these apply to New York as well. (You can also add up the exact sales tax on your income tax return instead of the estimate, if you so desire.)
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Old 21 June 2018, 05:54 PM
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Also you're supposed to pay it on stuff you order from an old fashioned mail order catalog. I assume there are still some of those around.
There are indeed.

Most of the companies that produce them are also online by now; but I find it much faster to check through a print catalog than to hunt through a website, and also usually both faster and easier to order by calling them up on the phone than by doing it online.
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Old 21 June 2018, 06:29 PM
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I find it much faster to check through a print catalog than to hunt through a website, and also usually both faster and easier to order by calling them up on the phone.
I'm with you on the paper catalog portion of this, but since I hate making telephone calls, I much prefer online for ordering.

Since I live in Washington, where Amazon has always had to pay taxes, I'm not too concerned about this.

Seaboe
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Old 21 June 2018, 07:13 PM
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This seems fair. The status quo of online retailers having this advantage over brick and mortar local businesses didn't make a lot of sense.

It does pose some logistical challenges for online businesses, which have to deal with lots of different state and local rates, but this is 2018, not 1998. I'm sure that a few payment processing companies will be able to provide a system to make this data easily available so that e-commerce sites don't have to re-invent the wheel a bunch of times.
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Old 22 June 2018, 06:55 PM
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This seems fair. The status quo of online retailers having this advantage over brick and mortar local businesses didn't make a lot of sense.
Actually I beg to differ on this. Since the online retailer will have to ship the item, the customer is usually the one paying for shipping. So, the final cost of the item will be its price, the tax, and the shipping. Whereas as a brick and mortar, the customer will only pay the price and the tax. For items where the margin and prices are very competitive, this may be a deterrent to buying online.

OY
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Old 22 June 2018, 07:18 PM
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Actually I beg to differ on this. Since the online retailer will have to ship the item, the customer is usually the one paying for shipping.
The shipping is an inherent cost of their business model, not a tax. They don't get a free subsidy because their business model requires shipping. Brick and mortar stores also have a different set of inherent costs to their business model, which factors into their retail prices. Online retailers aren't going anywhere, and are often price competitive by much larger margins than sales taxes anyway. This is a fair and reasonable change and won't actually be enough to turn the tide from online shopping to local shopping. It will allow state and local governments to better adapt to the new reality and get back some of the revenue they lost for local infrastructure.
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Old 22 June 2018, 08:53 PM
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Originally Posted by overyonder View Post
Actually I beg to differ on this. Since the online retailer will have to ship the item, the customer is usually the one paying for shipping. So, the final cost of the item will be its price, the tax, and the shipping. Whereas as a brick and mortar, the customer will only pay the price and the tax. For items where the margin and prices are very competitive, this may be a deterrent to buying online.

OY
The brick and mortar stores also have to deal with shipping, although it might be hard to determine actual shipping costs for a specific product. Larger retailers may use dedicated freight services, consider Walmart's fleet of tractor-trailers from their distribution centers to the individual stores.

Pricing and shipping are sometimes weird combinations.

Another Amazon story, I needed (okay, wanted) a cigarette lighter adapter, it really was an extension, with the female on the end I intend to remove and install a plug to match a radio - Amazon price was $3.99, shipping included and it was mailed "Small Packet By Air" per the label. Maybe shipping wasn't free, as the customs valuation was $1.53, but even then, that is $2.46 for shipping from Shenzhen, China to Florida.

Adding, I wonder how the sales tax issue is going to affect these direct shipments. I'd assume the sales taxes would be collected from the shipper and remitted to the state of destination, as with shippers located in the United States. Amazon is going to be busy.

Last edited by UrbanLegends101; 22 June 2018 at 08:55 PM. Reason: Sales tax comment added
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Old 22 June 2018, 09:48 PM
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The brick-and-mortar store has to cover the costs of the physical store, the displays, the utilities to keep the place comfortable for customers, and the time spent with customers -- some of whom come into the store so that they can see, try on, and in general get their hands on merchandise which they then order online instead of from the store that let them handle it, because the online shipper has fewer costs to cover and so can often offer the product more cheaply, even allowing for shipping.

Giving the online merchants the additional boost of not having to charge sales tax may have made sense when buying via computer was a new and tender business that most customers weren't used to. That time has passed.
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Old 22 June 2018, 09:58 PM
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Also, this puts the online sale side of the brick and mortar store on equal footing as the online-only store. Online B&M sales always had to pay sales tax, now the OO store does too.
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Old 22 June 2018, 10:29 PM
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Originally Posted by UrbanLegends101 View Post
The brick and mortar stores also have to deal with shipping, although it might be hard to determine actual shipping costs for a specific product. Larger retailers may use dedicated freight services, consider Walmart's fleet of tractor-trailers from their distribution centers to the individual stores.
Brick & mortar mostly ship IN, not ship out. Shipping in is normally in larger quantities and is much more reasonable than individual parcels like an online retailer does. Be that as it may, the online retailers (Amazon is a notable one) often have quantity discount with UPS/USPS.

Amazon, FYI, does not always charge sales tax. If the item is drop-shipped (from an out of state seller), it will not be taxed.

This brings up another question, will used items sold on ebay now be taxed?

OY
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Old 22 June 2018, 11:19 PM
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Originally Posted by overyonder View Post
Brick & mortar mostly ship IN, not ship out.

True enough, but brick & mortar outlets either pay the shipping as a part of the invoice, or if the wholesaler is paying the shipping, it is part of the cost of the product.





Quote:
Originally Posted by overyonder View Post
This brings up another question, will used items sold on ebay now be taxed?

OY
Looks like it is already being a concern.

https://www.marketwatch.com/story/et...ing-2018-06-21

In theory, virtually all states which have a sales tax also have a use tax, in which the receiver is supposed to pay the use tax if the shipper/seller did not collect the sales tax. I suspect very few people actually do this, but I did have a co-worker who was very diligent about keeping records and paying the North Carolina use tax.
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Old 23 June 2018, 01:03 AM
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Originally Posted by UrbanLegends101 View Post
In theory, virtually all states which have a sales tax also have a use tax, in which the receiver is supposed to pay the use tax if the shipper/seller did not collect the sales tax.
Yeah, that's one of the reasons I support online sales tax. I hate unenforceable laws that penalize people who want to do the right thing. It would be a huge PITA to do all the bookkeeping to comply with the law on what online purchases you are nominally supposed to report. I know I don't bother with that. But I don't like that you're even supposed to do something so tedious, and how it rewards the majority of us who are too lazy to bother by never enforcing it.
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Old 23 June 2018, 01:37 AM
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Originally Posted by UrbanLegends101 View Post
I did have a co-worker who was very diligent about keeping records and paying the North Carolina use tax.
I do that, too. I don't keep records, per se, but I can figure out what online purchases I made in the past year by looking at my credit card statements from the past year since I use the same card for all of them, and virtually all online merchants have a way of letting you look up your past orders. So I go through all of them, figure out which ones didn't have sales tax collected already, and pay the use tax on them. And that's why I support having online merchants collect sales tax -- it will save me from the most tedious part of filing my taxes by far.
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Old 25 June 2018, 01:39 PM
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I know one thing: my state's comptroller is a happy happy man. This has been a thorn in his side for years; the last I heard, his office is hard at work putting the new ruling into practical use.

Dawn--I bet his wife is happy too! --Storm
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Old 25 June 2018, 02:11 PM
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Originally Posted by overyonder View Post
This brings up another question, will used items sold on ebay now be taxed?
Shouldn't be if the seller is not doing it as a business, used items sold privately are usually not required to collect sales tax.
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