4 ms·

From an outsider point of view, this looks insane. If one of your costumers is in another jurisdiction, you have to comply with its rules? Shouldn't the juris

From an outsider point of view, this looks insane. If one of your costumers is in another jurisdiction, you have to comply with its rules? Shouldn't the jurisdiction impose its rules on its inhabitants, rather than everyone else?

alexeisadeski3 13y ago
The US doesn't work that way... We pay US federal taxes even if we live and earn money solely in Abu Dhabi. So of course the rest of the tax code will be insane as well.
- hga 13y ago
  I don't think it's quite that bad. The key here, that the CEO utterly failed in, was creating a nexus in 35 states. That doesn't sound like an example of the I assume special cases listed. But IANAAccountant, am not subject to any of this craziness, so don't take my guess for much of anything, but I'll bet this was a relatively white line mistake.
  - _delirium 13y ago
    Some of them are pretty traditional rules as well, not some kind of new internet-driven surprise. Say that the year is 1935 and you're a Maytag refrigerator repairman based in eastern Iowa. A customer in western Illinois calls you out; you drive over the Mississippi River, service the customer's refrigerator on-site, and then drive back home. You have clearly engaged in a the sale of services in Illinois. You can't really argue this service call legally took place in Iowa, since neither the refrigerator nor the customer nor the physical location of the activity was in Iowa (not even if the customer mails you a check to your Iowa address rather than paying cash in Illinois). If Illinois has regulations on servicing refrigerators, or taxes related to this occupation, you're responsible for following them. If you want to follow only Iowa law, you need to service only refrigerators within Iowa's borders! That follows from the principle that Iowa has no authority to dictate the rules that govern servicing Illinois refrigerators. Similarly, if you're a computer consultant who lives in Iowa and you drive to Illinois to service a customer's mainframe or install a software package on their workstations, or whatever else it is you do, you're engaged in the service business in Illinois. Some software consultants seem not to realize this. One difference is that it's easier for a small-time consultant to do on-site business in more than 2 or 3 states nowadays, thanks to cheap flights, which would've taken a lot of driving in 1935 to pull off. One solution is to decide that there's so much cross-border commerce going on that the U.S. is basically a national market, and federalize/harmonize the tax and business-regulation laws. That'd simplify compliance for multi-state businesses by removing the legal distinction between doing business within your state vs. across state lines. On the other hand it'd remove some local choice which is fairly popular in the US. So far the piecemeal solution seems to be that the federal government has harmonized a few regulations, e.g. car-safety standards (see https://en.wikipedia.org/wiki/Geier_v._American_Honda_Motor_Company https://en.wikipedia.org/wiki/Geier_v._American_Honda_Motor_...), to let a few industries avoid the complexities of balkanized 50-state regulations, but hasn't done anything general.
    - hga 13y ago
      That was one of the "special cases" in the article I was referring to, but it strikes me as pretty white line. If you physically move to another state and do work, however temporary, you've obviously subjected yourself to that state's laws while you're there. Now, if that created a nexus for all your business in that state, like sales tax on the entire thing installed---say you work for the Maytag dealer from whom the refrigerator was bought, across state lines---I'd call that a special case, but I'd expect it to come up when checking to see if service was covered.
shiftpgdn 13y ago
That IS the way it is as far as sales tax code is concerned. The article is completely wrong: http://taxfoundation.org/article/amazon-tax-unconstitutional-and-unwise http://taxfoundation.org/article/amazon-tax-unconstitutional... http://netchoice.org/library/sales-tax-collection-myth-vs-reality/ http://netchoice.org/library/sales-tax-collection-myth-vs-re... http://salestaxguy.blogspot.com/2010/06/golden-rule-there-is-no-sales-tax-on.html http://salestaxguy.blogspot.com/2010/06/golden-rule-there-is... http://law2.umkc.edu/faculty/projects/ftrials/conlaw/interstatetax.htm http://law2.umkc.edu/faculty/projects/ftrials/conlaw/interst...
- gamblor956 13y ago
  Stop citing outdated articles. Sales tax law has changed in the 4-5 years since these articles were written. Several states already do levy sales taxes on online stores selling to their residents, and lawsuits challenging those taxes were dropped or settled because it became clear that they would either lose or instigate the passage of a federal law allowing states to tax internet commerce.
deleted 13y ago
[deleted]

alexeisadeski3 13y ago

The US doesn't work that way... We pay US federal taxes even if we live and earn money solely in Abu Dhabi. So of course the rest of the tax code will be insane as well.

hga 13y ago
I don't think it's quite that bad. The key here, that the CEO utterly failed in, was creating a nexus in 35 states. That doesn't sound like an example of the I assume special cases listed. But IANAAccountant, am not subject to any of this craziness, so don't take my guess for much of anything, but I'll bet this was a relatively white line mistake.
- _delirium 13y ago
  Some of them are pretty traditional rules as well, not some kind of new internet-driven surprise. Say that the year is 1935 and you're a Maytag refrigerator repairman based in eastern Iowa. A customer in western Illinois calls you out; you drive over the Mississippi River, service the customer's refrigerator on-site, and then drive back home. You have clearly engaged in a the sale of services in Illinois. You can't really argue this service call legally took place in Iowa, since neither the refrigerator nor the customer nor the physical location of the activity was in Iowa (not even if the customer mails you a check to your Iowa address rather than paying cash in Illinois). If Illinois has regulations on servicing refrigerators, or taxes related to this occupation, you're responsible for following them. If you want to follow only Iowa law, you need to service only refrigerators within Iowa's borders! That follows from the principle that Iowa has no authority to dictate the rules that govern servicing Illinois refrigerators. Similarly, if you're a computer consultant who lives in Iowa and you drive to Illinois to service a customer's mainframe or install a software package on their workstations, or whatever else it is you do, you're engaged in the service business in Illinois. Some software consultants seem not to realize this. One difference is that it's easier for a small-time consultant to do on-site business in more than 2 or 3 states nowadays, thanks to cheap flights, which would've taken a lot of driving in 1935 to pull off. One solution is to decide that there's so much cross-border commerce going on that the U.S. is basically a national market, and federalize/harmonize the tax and business-regulation laws. That'd simplify compliance for multi-state businesses by removing the legal distinction between doing business within your state vs. across state lines. On the other hand it'd remove some local choice which is fairly popular in the US. So far the piecemeal solution seems to be that the federal government has harmonized a few regulations, e.g. car-safety standards (see https://en.wikipedia.org/wiki/Geier_v._American_Honda_Motor_Company https://en.wikipedia.org/wiki/Geier_v._American_Honda_Motor_...), to let a few industries avoid the complexities of balkanized 50-state regulations, but hasn't done anything general.
  - hga 13y ago
    That was one of the "special cases" in the article I was referring to, but it strikes me as pretty white line. If you physically move to another state and do work, however temporary, you've obviously subjected yourself to that state's laws while you're there. Now, if that created a nexus for all your business in that state, like sales tax on the entire thing installed---say you work for the Maytag dealer from whom the refrigerator was bought, across state lines---I'd call that a special case, but I'd expect it to come up when checking to see if service was covered.

shiftpgdn 13y ago

That IS the way it is as far as sales tax code is concerned. The article is completely wrong: http://taxfoundation.org/article/amazon-tax-unconstitutional-and-unwise http://taxfoundation.org/article/amazon-tax-unconstitutional... http://netchoice.org/library/sales-tax-collection-myth-vs-reality/ http://netchoice.org/library/sales-tax-collection-myth-vs-re... http://salestaxguy.blogspot.com/2010/06/golden-rule-there-is-no-sales-tax-on.html http://salestaxguy.blogspot.com/2010/06/golden-rule-there-is... http://law2.umkc.edu/faculty/projects/ftrials/conlaw/interstatetax.htm http://law2.umkc.edu/faculty/projects/ftrials/conlaw/interst...

gamblor956 13y ago
Stop citing outdated articles. Sales tax law has changed in the 4-5 years since these articles were written. Several states already do levy sales taxes on online stores selling to their residents, and lawsuits challenging those taxes were dropped or settled because it became clear that they would either lose or instigate the passage of a federal law allowing states to tax internet commerce.

deleted 13y ago

[deleted]