B&H Photo for the win, they figured out a way to comply with the sales tax law, take care of their customers, and stick it to manufacturers with MAP policies all in one genius idea...

They now charge sales tax for your home state on purchases to comply with the SC ruling and remit that tax to your state. *BUT* If you use their “PayBoo” store credit card, you get an instant reward credited to your charge account equal to the sales tax amount.

Effectively, it handles the sales tax dilemma, but it also gets around authorized retailer MAP (Minimum Pricing) requirements by essentially, selling items at a discount equal to your tax rate.

Yes, the APR on the store card is high, but irrelevant if you don’t carry a balance.

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Originally posted by Lt CHEG:
I hope that at some point every mail order and internet seller collects exactly the same sales tax as a local store would charge. I like actually going out to a store to buy something and taking it home with me right now. With the disappearance of many brick and mortar retailers, in large part due to online retailers, that is becoming increasingly difficult. There are many retailers that would kill for 6% margins. Without having to collect sales tax many online retailers can offer items for sale for less than what a local retailer pays for the item because they collect the entire difference of sales taxes as profit. It wouldn’t be so bad if this was legal, but it’s not - despite the difficulty of enforcing these laws.

I’m sorry that a lot of you cheapskates.

Mark me down as a cheapskate and I’ve been purchasing via mail order since I was a kid. I hate walking into stores and I hate paying taxes - especially taxes that get squandered. The more taxes collected the more money wasted by government.

Regarding the B&M business model, I spent 3 hours one day looking for shoelaces in 4 different stores. 3 hours!! Never again. Amazon had what I wanted and the sale was completed in 5 minutes. Same with phone chargers and audio connections. Many B&M stores don’t maintain adequate inventory anymore. Amazon and B&H are what they are because they fill an important need - saving time and money.

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B&H Photo for the win,

No B&H sales tax yet in TN, but our legislature put a $500,000 per year kick off. That means, no sales tax until the sum of all TN sales in preceding 12 months = $500,000.

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There are many retailers that would kill for 6% margins. Without having to collect sales tax many online retailers can offer items for sale for less than what a local retailer pays for the item because they collect the entire difference of sales taxes as profit. It wouldn’t be so bad if this was legal, but it’s not - despite the difficulty of enforcing these laws.

Online retailers have to accumulate & pay sales tax for thousands of jurisdictions. This is a tremendous cost in filing returns. Storefronts usually only have 1 return to file. As an example I file for an on-line client that does about $30,000 a month in Texas, but I have to report sales in 130 jurisdictions. In TX fire depts, police depts & even libraries can levy sales taxes. In Al school districts can levy sales taxes. Advertising costs for on-line can be as high as 20% of the product sales price. Never compare on-line to storefront as costs greatly differ in makeup.

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Online retailers have to accumulate & pay sales tax for thousands of jurisdictions. This is a tremendous cost in filing returns. Storefronts usually only have 1 return to file. As an example I file for an on-line client that does about $30,000 a month in Texas, but I have to report sales in 130 jurisdictions. In TX fire depts, police depts & even libraries can levy sales taxes. In Al school districts can levy sales taxes. Advertising costs for on-line can be as high as 20% of the product sales price. Never compare on-line to storefront as costs greatly differ in makeup.

^^^^^^^^^^^^^
Sounds fun. I did not realize until recently Major League ballplayers have to pay tax in every jurisdiction in which they compete. Lots of work for accountants.

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Originally posted by V-Tail:

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Originally posted by 2000Z-71:

Or the real fun ordering on-line from a state that doesn't have sales tax and their website insists on collecting sales tax anyway.

Sales tax is normally assessed at the rate for the location where the buyer takes possession. For online orders, that should be your delivery address, so in Alaska, if there is no sales tax, there should not be any tax charged by an online seller.

Florida really makes this fun. State sales tax is 6%. Counties have the option of adding a discretionary bump, could be zero, could be 1/2 percent, could be 1%, could be more. This puts a real burden on the seller, and many sellers do not understand how this works. Many Florida online sellers charge sales tax based on where the seller is located, and this is not correct -- it should be based on the actual location where the buyer takes delivery, per the incomprehensible Florida Department of Revenue regulations. That's one reason that I do not do retail sales in my business. Wholesale only. That transfers the burden of dealing with sales tax, to the retail seller.

I can only imagine the burden this places on retailers. Tennessee is the same way, except it's local governments that assess additional tax, not counties. We have 231 different tax jurisdictions.

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Originally posted by Anush:
Online retailers have to accumulate & pay sales tax for thousands of jurisdictions.

Taxfoundation.org says 9,998 sales tax jurisdictions in the US

In the mid to late 80s I did a lot of state and local tax work and went to many national conferences where industry and state tax administrators discussed this issue. More than 30 years ago major national mail order firms said they would collect sales tax if the states provided tax rates by zip code. (Plus 4 zip codes are house specific.) Companies didn't want the burden of updating sales tax charts.

Retailers also imposed two additional conditions. First they wanted one single return. The mail order company would remit the tax to the state (and provide the state detail of collections by zip code). The state would have to distribute the cash to cities, counties, special districts, etc.

Second, states had to agree on whether tax would be imposed based on location of the buyer or where the item was shipped. The mail order companies wanted uniformity.

While the recent Supreme Court case opened the door for states to require companies to collect tax, the technical questions still remain unanswered posing a real problem for many companies.

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Originally posted by SR:

More than 30 years ago major national mail order firms said they would collect sales tax if the states provided tax rates by zip code.

That won't always work here in Florida. There are a few places where a zip code crosses a county line and -- you guessed it! -- the two counties have different tax rates. So, in those specific zip codes, the retailer who sells online needs to have a finer granulation than zip code in order to determine the correct tax rate.

I imagine the "we figure your sales tax for you" business is about to boom. Take 1% as a fee to the retailer and deal with it with software.

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Originally posted by DaBigBR:
I imagine the "we figure your sales tax for you" business is about to boom. Take 1% as a fee to the retailer and deal with it with software.

Done deal. Software was ready way before the court decision came down. It’s not very difficult for an online retailer to collect sales tax.

I know the SCOTUS signed off on this, but it doesn't make sense. Only the federal government is supposed to be able to tax and regulate interstate commerce. This was the basis of the previous precedent that prevented states from taxing what were mail order, and became internet, interstate sales.

^^^Hence the phrase "use tax". Who is responsible for paying sales tax varies by state. Sales tax only applies to intrastate sales. Use tax applies to the use or consumption of goods purchased interstate in the state the use or consumption occurs.

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Done deal. Software was ready way before the court decision came down. It’s not very difficult for an online retailer to collect sales tax.

True for large companies, but very expensive for small companies. The company that I do work for is $4 million per year & the owner was a systems engineer. He is able to integrate the ship to address to TaxJar software & I can download the sales per jurisdiction. It takes me about 10 hrs a month to go on-line & file returns. All states are different with some taking 5 min & some like TX, WA & NC taking an hour each. Most small on-line companies do not have this expertise & a retired CPA like me to file returns for them.

They need a taxing system like IFTA for fuel tax. You file in your base jurisdiction, and each state balances among themselves. Just one return to file.

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Originally posted by RogueJSK:

quote:

Originally posted by smschulz:
Sales Tax online will cause me to cancel the order and look elsewhere.

So that you later have to file and submit your use tax for that purchase separately?


… You've been paying use tax, right? Or are you another one of them tax-evadin' miscreantical reprobates like the OP?

I am a miscreant.

Someone should start pestering Trump and the Republicans to reimpose the ban on states collecting sales tax on interstate sales.

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Someone should start pestering Trump and the Republicans to reimpose the ban on states collecting sales tax on interstate sales

I have never heard of a state that is collecting tax on interstate sales. Which state(s) are doing that?

Rates that vary by location:

My business was commercial cabinet mfg & installation. When the project was in another Florida county with a different discretionary tax rate than my Escambia, I remitted the discretionary use tax at the local rate. I once asked a state tax agent how in the hell they distributed the funds to the proper counties, as there was no county listing on the DR-15? She chuckled and said they didn't; they just sent it to the county where my business was located.

I have zero issues with people using the tax code to get as much of an advantage as possible.

But if you're not paying what the rules say you have to pay, I have no sympathy. That's intentional tax evasion, and I will have no problem with the government begins to enforce it as such. I'd love to see some serious collection efforts to collect back taxes along with huge fines and interest. In extreme cases I'd also like to see some jail time and property seizure.