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> But compliance was basically non-existent; most people didn't even know that they owed use tax on such sales As a business owner, I would ask myself “how is

> But compliance was basically non-existent; most people didn't even know that they owed use tax on such sales As a business owner, I would ask myself “how is this my problem?” If a stare has a problem with residents not complying with a tax, I am not sure why a business in another state should care. If I buy a product from China, are they required to collect sales taxes for Montana? Of course not. So not sure why a business located in a sovereign US state has any obligation to follow laws of some other state in which they don’t operate. It’s the purchaser that has the relationship with their local state, not the seller. The Wayfair decision was ridiculous. The Quill decision it overturned was the correct answer in terms of interpreting the Interstate Commerce Clause. Interestingly, Amazon and other large e-commerce companies don’t have a problem with collecting sales taxes everywhere because their compliance costs are trivial as a proportion of revenue.

codehawke 5y ago
Luckily, my home state of Virginia has exclusions. From what I understand, until congress acts, more lawsuits need to happen from companies challenging states to pay these bullshit taxes. VAT is also a terrible burden.
- gamblor956 5y ago
  The trend in courts and legislatures, both in the US and in Europe and the ROW, is toward customer-based tax sourcing and away from seller-based sourcing. You can thank Amazon for abusing seller-based sourcing for this shift, though it has actually been a decades-long process that began before most people on this forum were born. Amazon simply accelerated the transition.
R0b0t1 5y ago
This is my point. It happens with brick and mortar stores, too. The MO/KS border has a large population buildup. It's totally normal to shop in the state that has the best tax rate for your goods. If you apply the ecommerce logic to this, you need to have people show ID at stores so the store can apply the right tax rate. It seems to me the seller's state has just as much claim to sales tax as the buyer's. The seller is potentially making use of business development credits etc, etc, originating in their state. This is an issue that falls under the federal government.
- gamblor956 5y ago
  No, you guys are both misunderstanding how the sales sourcing works: it's the address where the sale is deemed to have taken place. For brick-and-mortar sales, that is the physical location of the store: you will be taxed the appropriate rate for the address of the store. Note that this includes includes online orders picked up from a store location, and in-person orders even if the goods are not actually physically located at the store, such as if they are shipped from a separate warehouse to the store. However, delivery orders might be subject to different rules, depending on the state; some states use the address provided by the customer as the location of the sale, so that in-person sales delivered to out-of-state addresses might not be subject to sales tax. For online sales, the sale is (now) treated to have occurred at the address provided by the buyer for delivery, because that is the most expedient way to determine address. The EU has made waves about using IP addresses or geolocation to determine the actual location of the buyer at the time the order is submitted, but AFAIK both proposals are DOA due to infeasibility. It seems to me the seller's state has just as much claim to sales tax as the buyer's. The seller is potentially making use of business development credits etc, etc, originating in their state. No, the seller's state doesn't have a claim to the sales tax, because sales tax is a tax on the customer not the seller. It is simply collected by the seller because the compliance is easier to enforce. (Caveat: in Hawaii, the GET is a tax on the seller that can be passed on to the customer.)
  - R0b0t1 5y ago
    I understand the current rulings. I am saying they are erroneous. We (who I replied to and myself) understand what is going on. It is not consistent.
    - gamblor956 5y ago
      You are fundamentally misunderstanding that a sales tax is a tax on the customer not on the seller. This is because sales taxes are fundamentally use taxes with the compliance burden shifted from the customer to the seller. You can argue against reality all you want, but it won't change decades of history, nor will it change how the world actually works.
iudqnolq 5y ago
> If I buy a product from China, are they required to collect sales taxes for Montana? Of course not. So not sure why a business located in a sovereign US state has any obligation to follow laws of some other state in which they don’t operate. Actually the same rules apply to both. See https://blog.taxjar.com/international-sellers-deal-sales-tax-u-s/ https://blog.taxjar.com/international-sellers-deal-sales-tax...
sokoloff 5y ago
My purchases on AliExpress have been being charged my state sales tax for quite some time.

codehawke 5y ago

Luckily, my home state of Virginia has exclusions. From what I understand, until congress acts, more lawsuits need to happen from companies challenging states to pay these bullshit taxes. VAT is also a terrible burden.

gamblor956 5y ago
The trend in courts and legislatures, both in the US and in Europe and the ROW, is toward customer-based tax sourcing and away from seller-based sourcing. You can thank Amazon for abusing seller-based sourcing for this shift, though it has actually been a decades-long process that began before most people on this forum were born. Amazon simply accelerated the transition.

R0b0t1 5y ago

This is my point. It happens with brick and mortar stores, too. The MO/KS border has a large population buildup. It's totally normal to shop in the state that has the best tax rate for your goods. If you apply the ecommerce logic to this, you need to have people show ID at stores so the store can apply the right tax rate. It seems to me the seller's state has just as much claim to sales tax as the buyer's. The seller is potentially making use of business development credits etc, etc, originating in their state. This is an issue that falls under the federal government.

gamblor956 5y ago
No, you guys are both misunderstanding how the sales sourcing works: it's the address where the sale is deemed to have taken place. For brick-and-mortar sales, that is the physical location of the store: you will be taxed the appropriate rate for the address of the store. Note that this includes includes online orders picked up from a store location, and in-person orders even if the goods are not actually physically located at the store, such as if they are shipped from a separate warehouse to the store. However, delivery orders might be subject to different rules, depending on the state; some states use the address provided by the customer as the location of the sale, so that in-person sales delivered to out-of-state addresses might not be subject to sales tax. For online sales, the sale is (now) treated to have occurred at the address provided by the buyer for delivery, because that is the most expedient way to determine address. The EU has made waves about using IP addresses or geolocation to determine the actual location of the buyer at the time the order is submitted, but AFAIK both proposals are DOA due to infeasibility. It seems to me the seller's state has just as much claim to sales tax as the buyer's. The seller is potentially making use of business development credits etc, etc, originating in their state. No, the seller's state doesn't have a claim to the sales tax, because sales tax is a tax on the customer not the seller. It is simply collected by the seller because the compliance is easier to enforce. (Caveat: in Hawaii, the GET is a tax on the seller that can be passed on to the customer.)
- R0b0t1 5y ago
  I understand the current rulings. I am saying they are erroneous. We (who I replied to and myself) understand what is going on. It is not consistent.
  - gamblor956 5y ago
    You are fundamentally misunderstanding that a sales tax is a tax on the customer not on the seller. This is because sales taxes are fundamentally use taxes with the compliance burden shifted from the customer to the seller. You can argue against reality all you want, but it won't change decades of history, nor will it change how the world actually works.

iudqnolq 5y ago

> If I buy a product from China, are they required to collect sales taxes for Montana? Of course not. So not sure why a business located in a sovereign US state has any obligation to follow laws of some other state in which they don’t operate. Actually the same rules apply to both. See https://blog.taxjar.com/international-sellers-deal-sales-tax-u-s/ https://blog.taxjar.com/international-sellers-deal-sales-tax...

sokoloff 5y ago

My purchases on AliExpress have been being charged my state sales tax for quite some time.