Get Ready to Pay Sales Tax

Ole Cowboy · Jun 21, 2018

benenglish said:
This is gonna get real complex, real fast. As always, complexity favors BIG GOVERNMENT over all.

Still, there have always been sales tax provisions that were weird or were seemingly set up to get people. It used to be common for people in the northeast, when retiring to Florida, to stop off and buy a whole house full of furniture in the Carolinas. Since they lived in Florida, there was no sales tax. Florida got wise and literally started stopping furniture trucks, inventorying the contents, and charging sales tax to the buyers. I remember plenty of those stories from decades ago.

Never underestimate the short-sightedness of states who think they can make a few bucks. Their ability to stick their fingers in their ears and hum loudly whenever anyone starts to say "unintended consequences" is amazingly consistent and effective.

Fixed it for ya

benenglish · Jun 21, 2018

Ole Cowboy said:
Fixed it for ya

It works both ways. Some would argue they are the same thing or at least work for each other, anyway.

(OOC thread fodder, I suppose, but I really don't care.)

stdreb27 · Jun 21, 2018

Lunyfringe said:
Agreed, and Texas has a cap that 8.25% is the max combined sales tax...

But does a retailer pay the 3 entities directly, or just pay it to TX Comptroller who pays it out to the county and city? Doesn't change the fact that 8.25% is not the sales tax throughout all of Texas. And some jurisdictions have tax exempt items (groceries, for example) with different definitions of what is taxable and what is not by jurisdictions... example I saw was that in Illinois, the tax rate on a Snickers and a Twix is different, because the Twix contains flour and is considered groceries. That's a lot of tax tables.

It’s worse than that. In Texas you have to file with each jurisdiction.

So if you take the city of corpus.

You have city, state, hospital district college school district, school district yadda yadda ya.

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busykngt · Jun 21, 2018

stdreb27 said:
...hospital district college school district, school district yadda yadda ya.

These are all SALES TAX adders??

Because total sales tax is capped at 8.25% I believe. So all those entities would get just a portion of the available 2% (that portion that’s above the state’s 6.25%).

Dash Riprock · Jun 21, 2018

I think he's mixing property and sales tax. I'm not aware of school districts getting sales taxes but I could be wrong.

stdreb27 · Jun 21, 2018

busykngt said:
These are all SALES TAX adders??

Because total sales tax is capped at 8.25% I believe. So all those entities would get just a portion of the available 2% (that portion that’s above the state’s 6.25%).

Yeah they get a portion of the 8.25%.

I used to file for my wife’s traveling business. We’re talking a few grand a year.

Been a couple years.
But each festival we collected sales tax. 6% to state 1/2 a basis point to the county, .35% to hospital district 1.022421249372782% to community college.

On and on

Each location has several taxing authorities.

If I did festivals in 4 cities there could be 20 different taxing entities. Some overlap etc.

I have NO clue how you’d manage that across 50 states.

Think about it. That’s 50 states, some require monthly returns. Some quarterly some yearly. Multiple taxing entities for a single location.

I predict clearing houses... like everyone run their sale through eBay or Amazon....

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Lunyfringe · Jun 21, 2018

stdreb27 said:
Yeah they get a portion of the 8.25%.

I used to file for my wife’s traveling business. We’re talking a few grand a year.

Been a couple years.
But each festival we collected sales tax. 6% to state 1/2 a basis point to the county, .35% to hospital district 1.022421249372782% to community college.

On and on

Each location has several taxing authorities.

If I did festivals in 4 cities there could be 20 different taxing entities. Some overlap etc.

I have NO clue how you’d manage that across 50 states.

Think about it. That’s 50 states, some require monthly returns. Some quarterly some yearly. Multiple taxing entities for a single location.

I predict clearing houses... like everyone run their sale through eBay or Amazon....

Does Ebay even manage sales tax? (I haven't sold there)

Everybody keeps saying 50 states... there are 5 states that do not have sales tax (but Delaware has a "Gross receipts tax") and when talking about Texas- even though there are all these districts, you still remit your sales tax to the Comptroller, but you have to identify what sales apply to what location... right? (Haven't had a business in Texas, but wife had a store in Colorado that moved between taxing jurisdictions and that's how it worked there) they have an online tool, I plugged in a swap meet location into it and got this:
Juris Name Code Type Tax Rate
Total Tax Rate 0.0825000 **
CORPUS CHRISTI CRIME CON 5178505 SPD 0.0012500
CORPUS CHRISTI MTA 3178998 TRANSIT 0.0050000
CORPUS CHRISTI 2178015 CITY 0.0137500
STATE SALES TAX STATE 0.0625000

stdreb27 · Jun 21, 2018

Lunyfringe said:
Does Ebay even manage sales tax? (I haven't sold there)

Everybody keeps saying 50 states... there are 5 states that do not have sales tax (but Delaware has a "Gross receipts tax") and when talking about Texas- even though there are all these districts, you still remit your sales tax to the Comptroller, but you have to identify what sales apply to what location... right? (Haven't had a business in Texas, but wife had a store in Colorado that moved between taxing jurisdictions and that's how it worked there) they have an online tool, I plugged in a swap meet location into it and got this:
Juris Name Code Type Tax Rate
Total Tax Rate 0.0825000 **
CORPUS CHRISTI CRIME CON 5178505 SPD 0.0012500
CORPUS CHRISTI MTA 3178998 TRANSIT 0.0050000
CORPUS CHRISTI 2178015 CITY 0.0137500
STATE SALES TAX STATE 0.0625000

45-50 that’s semantics imo.

But bingo.

Don’t think eBay does sales tax. BUT if I were them. I’d a had a plan ready and my programmers would be working right now to get a product out there for online sales tax compliant stores...

diesel1959 · Jun 21, 2018

Dawico said:
I think it is fair. It sucks that prices will go up but this may help local retailers stay afloat.

Compliance is going to be a bitch for small vendors on places like etsy or ebay.

I happen to think that the "physical presence" rule was a rule-of-reason, and it just made sense.

benenglish · Jun 21, 2018

stdreb27 said:
Don’t think eBay does sales tax. BUT if I were them. I’d a had a plan ready and my programmers would be working right now to get a product out there for online sales tax compliant stores...

Amazon and eBay have been ready for this for years. It will be a boon to their business because they can handle it.

For start-ups, it'll be a giant barrier to entry.

For mom-and-pops, it'll put some out of business and cause 'em all heartburn...until they bite the bullet, give up a big piece of their independence, and start selling through Amazon or eBay

I'm curious about the mid-range aggregators. For example, I wonder if sites like Etsy will survive? There are loads of small accessory and parts suppliers to the shooting sports; how will they cope?

I think the shake-out will be terribly painful.

stdreb27 · Jun 21, 2018

diesel1959 said:
Compliance is going to be a bitch for small vendors on places like etsy or ebay.

I happen to think that the "physical presence" rule was a rule-of-reason, and it just made sense.

Iol it’s going to be enforcement.

Registration is at the local and state level. There isn’t a national registry.

If I was doing a bunch online sales I wouldn’t report it...

diesel1959 · Jun 21, 2018

avvidclif said:
We are a nation now because we were being "Unfairly Taxed" back then

Pssst--that's kinda what he was saying.

outdare · Jun 21, 2018

What about the states that have have income tax. Would you have to file since you sold goods to NJ or CA? It is income derived from that state.

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stdreb27 · Jun 21, 2018

oldag said:
Congress could fix this. If they wanted to do so.

It is an interesting question.

No they can’t. There is no constitutional amendment allowing them to do anything with sales tax.

I’m not a lawyer but I’m hard pressed to imagine why they ever had standing to rule on the matter.

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diesel1959 · Jun 21, 2018

stdreb27 said:
No they can’t. There is no constitutional amendment allowing them to do anything with sales tax.

I’m not a lawyer but I’m hard pressed to imagine why they ever had standing to rule on the matter.

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It involves "Interstate Commerce", so it's part of the body of the actual Constitution. It doesn't need to be part of an amendment.

Given that the matter involves interstate commerce, the Court clearly had subject matter jurisdiction on this question. I just don't happen to agree with the decision.

TheMailMan · Jun 21, 2018

There are more than 10,000 sales tax jurisdictions across the US. How is any but the largest businesses going to keep track of this?

It's a complete can of worms.

busykngt · Jun 21, 2018

I see a friggin nightmare coming for online retailers; especially the little guys. I can’t help but wonder if this is going to fundamentally change the market we’ve all adjusted to, over the last couple of decades. It will certainly go a long way in equalizing the playing field between the lower overheard online retailers and the local retail shops.

I would imagine this will create a whole new “audit industry” that states can hire to insure they’re getting what’s supposed to be coming to them. Woe be to the retailer found guilty of not paying up!

And I suppose this will create a Quicken “subscription service” that online retailers will be motivated to subscribe to, in order to stay current with how much sales tax they should be collecting for a certain location.

F350-6 · Jun 21, 2018

Lunyfringe said:
Agreed, and Texas has a cap that 8.25% is the max combined sales tax...

But does a retailer pay the 3 entities directly, or just pay it to TX Comptroller who pays it out to the county and city?

It's paid to the comptroller, but you have to fill out the sales amount for each jurisdiction, city, county, crime control district, fire control district, transit authority, library district, etc. Depends on what the location of the sale requires.

stdreb27 said:
I have NO clue how you’d manage that across 50 states.
I predict clearing houses... like everyone run their sale through eBay or Amazon....

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Opens the door for an intuit / turbo tax type software to step in and take care of all that for you. Downside is it will likely take a few years, and some cooperation from the states before it becomes seamless.

Good point about the ebay/amazon thing. End result is still the same as it ends up raising prices to the consumer now that the seller has to pay a commission.

seeker_two · Jun 21, 2018

Questions:

1. Who will be the enforcing authority on this? Will refusal to pay be a civil or criminal matter?

2. Who believes that the governments in question will spend this new revenue wisely?

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Bozz10mm · Jun 21, 2018

If I buy a case of ammo from Sportsman's Guide, how does the State of Texas know what I bought and how much I paid?

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