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In Washington state they solved this problem by allocating the sales tax to the location of the customer for online sales. I remember having to implement it as

by TheTon 3y ago

In Washington state they solved this problem by allocating the sales tax to the location of the customer for online sales. I remember having to implement it as a small business and it was a minor pain, but I assume the legislators mostly had Amazon in mind when they passed the law.

shagie 3y ago
Before that was the case, sales tax only was to be collected if the company had a presence in that state. This was earlier in Amazon's history where they didn't have a warehouse everywhere and so many cases online sellers didn't collect sales tax. In the event that you buy something from somewhere else and no sales tax is collected, a "use tax" is to be collected... and most people weren't reporting this. For example https://www.revenue.wi.gov/Pages/FAQS/ise-usetax.aspx https://www.revenue.wi.gov/Pages/FAQS/ise-usetax.aspx This hits states that have sales tax but no income tax hardest (Washington and Texas being the two that come to mind most readily). This changed in 2018 with South Dakota vs Wayfair - https://www.supremecourt.gov/opinions/17pdf/17-494_j4el.pdf https://www.supremecourt.gov/opinions/17pdf/17-494_j4el.pdf https://en.wikipedia.org/wiki/South_Dakota_v._Wayfair,_Inc https://en.wikipedia.org/wiki/South_Dakota_v._Wayfair,_Inc. Amazon was initially opposed to this previously but as they grew it became apparent that they would have a presence in each state and so were for it... as it adds costs to all the small companies to also properly collect sales tax for wherever they sell. From the Wiki article: > A year from the decision, nearly all states that collected sales tax had modified their laws to include interstate commerce taxes; however, in many of these states, the updated laws did not include any threshold limits on when such taxes can be collected. Small to medium businesses may find the cost of auditing their sales for each state to far outweigh the amount of tax actually owed and forgo the process; and similarly, states looking to collect these taxes may find the cost of prosecuting against the smaller business to outweigh the benefit. It is expected that a raft of lawsuits related to these new tax laws from South Dakota will occur from 2019 through 2023.
- TheTon 3y ago
  My comment was in the context of sales within the state, where both the seller and buyer are in the same state (same situation as the article about Apple in CA). Previously, WA was like CA apparently is today, where the sales tax for in state online sales was determined by the location of the seller. You can see how it actually works here: https://dor.wa.gov/taxes-rates/retail-sales-tax/sales-and-use-tax-tools https://dor.wa.gov/taxes-rates/retail-sales-tax/sales-and-us...
- deleted 3y ago
  [deleted]
Hamuko 3y ago
I think this also happens with VAT in the EU. I pay the Finnish 24% VAT even if I order from Amazon.de (Germany has 19% VAT). Although as far as I understand, this does not apply to small online stores.

by TheTon 3y ago

shagie 3y ago

Before that was the case, sales tax only was to be collected if the company had a presence in that state. This was earlier in Amazon's history where they didn't have a warehouse everywhere and so many cases online sellers didn't collect sales tax. In the event that you buy something from somewhere else and no sales tax is collected, a "use tax" is to be collected... and most people weren't reporting this. For example https://www.revenue.wi.gov/Pages/FAQS/ise-usetax.aspx https://www.revenue.wi.gov/Pages/FAQS/ise-usetax.aspx This hits states that have sales tax but no income tax hardest (Washington and Texas being the two that come to mind most readily). This changed in 2018 with South Dakota vs Wayfair - https://www.supremecourt.gov/opinions/17pdf/17-494_j4el.pdf https://www.supremecourt.gov/opinions/17pdf/17-494_j4el.pdf https://en.wikipedia.org/wiki/South_Dakota_v._Wayfair,_Inc https://en.wikipedia.org/wiki/South_Dakota_v._Wayfair,_Inc. Amazon was initially opposed to this previously but as they grew it became apparent that they would have a presence in each state and so were for it... as it adds costs to all the small companies to also properly collect sales tax for wherever they sell. From the Wiki article: > A year from the decision, nearly all states that collected sales tax had modified their laws to include interstate commerce taxes; however, in many of these states, the updated laws did not include any threshold limits on when such taxes can be collected. Small to medium businesses may find the cost of auditing their sales for each state to far outweigh the amount of tax actually owed and forgo the process; and similarly, states looking to collect these taxes may find the cost of prosecuting against the smaller business to outweigh the benefit. It is expected that a raft of lawsuits related to these new tax laws from South Dakota will occur from 2019 through 2023.

TheTon 3y ago
My comment was in the context of sales within the state, where both the seller and buyer are in the same state (same situation as the article about Apple in CA). Previously, WA was like CA apparently is today, where the sales tax for in state online sales was determined by the location of the seller. You can see how it actually works here: https://dor.wa.gov/taxes-rates/retail-sales-tax/sales-and-use-tax-tools https://dor.wa.gov/taxes-rates/retail-sales-tax/sales-and-us...
deleted 3y ago
[deleted]

Hamuko 3y ago

I think this also happens with VAT in the EU. I pay the Finnish 24% VAT even if I order from Amazon.de (Germany has 19% VAT). Although as far as I understand, this does not apply to small online stores.