Supreme Court rules for internet sales tax: States can charge all online shoppers

[contract]

The Supreme Court of the US (SCOTUS) has just overruled 1992's Quill Corp v. North Dakota case in South Dakota v. Wayfair.

Quill stated that US states could only change sales taxes on companies with a physical presence in the state. Quill determined how state taxes worked with e-commerce from the web's first days. Now, under this new decision, even if a company doesn't have a store, warehouse, or office in a state, its internet sales to that state's residents can be taxed.

https://www.zdnet.com/article/supre...es-tax-states-can-charge-all-online-shoppers/

 

[Calamari]

This is probably for the best in the long term. It levels the playing field in regards to avoiding paying sales tax, and gets some Amazon affiliates (and other smaller programs) that were left out in the cold back in the game.

 

[dresden]

... gets some Amazon affiliates (and other smaller programs) that were left out in the cold back in the game.

How does it do that?

From my optic this is a fairly brutal move for ecommerce startups and folks who were doing a decent amount of (but not brisk) sales until a reliable solution comes about. I think it's likely that payment providers (stripe) step up and start offering this as a service. Shopify already collects (there are like 10k local tax codes) and I think they'll probably be offering a service to remit as well. The problem is maybe 75% remittance - which may be solved, and 25% government fuckery. What happens when some small locale in Montana decides you owe them money? What does that process look like?

 

[Ryuzaki]

How does it do that?

Some states were demanding Amazon collect their state sales tax a few years ago and instead of doing it Amazon decided to not allow any affiliates from those states to sign up to the Associates program. I suppose the idea is that if all states start demanding it then Amazon will end up letting people from the restricted states sign up again.

I'm not a huge fan of taxes or regulation, but e-commerce had a huge edge over physical retail with this, because everyone knew that even if the advertised price was the same, the resulting price was lower without state sales tax.

Then again, I live in the glory land where we don't have state tax and still manage just fine, perhaps better than others. I have no skin in this game. That's also why Amazon chose to open up some warehouses here too. Sneaky bastids!

 

[Calamari]

@Ryuzaki got it right @dresden. Until Amazon set up a physical presence in my state they weren't legally required to collect sales tax.

The state's argument was that affiliates were a physical presence. So when the state's made that claim Amazon simply ended their relationship with any affiliates in the state.

Now that they will likely have to start charging sales tax these "affiliate nexus" laws go away and the marketers should be able to get back into Amazon associates.