news Supreme Court Rules States Can Tax Internet Sales

[mr-x]

The justices, in a 5-4 ruling against Wayfair Inc, Overstock.com Inc and Newegg Inc, overturned a 1992 Supreme Court precedent that had barred states from requiring businesses with no “physical presence” in that state, like out-of-state online retailers, to collect sales taxes.

The ruling opens the door to a new revenue stream to fill state coffers – up to $13 billion annually, according to a federal report – while imperiling a competitive advantage that e-commerce companies had over brick-and-mortar rivals that already must collect sales tax.

https://www.redstate.com/streiff/2018/06/21/breaking.-supreme-court-allows-states-tax-internet-sales

 

[DomainWolf]

Should expect to see taxes on everything you buy soon. Tax your domain purchases? Yes we can!

 

[mr-x]

If I understand this correctly, I sell a domain to someone in TX, I could be responsible to pay 7% of my gross to the SOS TX.

.... This requirement no longer applies, potentially saddling remote retailers—many of whom are small businesses—with onerous compliance costs related to the nation’s 12,000 plus taxing jurisdictions, many with their own rates, bases, rules, and regulations.
https://www.dailysignal.com/2018/06...er-of-congress-regulates-interstate-commerce/

 

[WebSolutions.GA]

I had posted about this earlier today here:

https://www.namepros.com/threads/su...uill-ruling-where-do-domainers-stand.1087453/

It is definitely going to be a different experience going forward in my opinion.

 

[Daniel Owens]

Most, people fill out a form on their taxes anyways where they pay sales tax for the items bought off internet. This makes it more official, and I know if you buy too much you get 1099 from stuff off internet. Anyways, this will take at least 2 years to come into effect.

 

[WebSolutions.GA]

Most, people fill out a form on their taxes anyways where they pay sales tax for the items bought off internet. This makes it more official, and I know if you buy too much you get 1099 from stuff off internet. Anyways, this will take at least 2 years to come into effect.

I pay sales tax to my state only right now.

I have never paid another state sales tax if I don't have a physical presence there.

This is opening it up for situations like this Example:
You sell me a domain name, now you have to know that I live in TN which has a tax rate of 7%, but I also live in a county that has a 2.25% sales tax and a city that has a .5% sales tax.

You are now required to pay the state of TN 9.75% for sales tax collection.

But, if I was one county over, which has no sales tax, you are only required to pay the 7%

This is the problem I have with it... Does this mean we are going to have to keep up with every City, County, and State sales tax rates?

It is going to be interesting to see where it goes, but I wonder how it is going to affect us.

 

[Daniel Owens]

I pay sales tax to my state only right now.

I have never paid another state sales tax if I don't have a physical presence there.

This is opening it up for situations like this Example:
You sell me a domain name, now you have to know that I live in TN which has a tax rate of 7%, but I also live in a county that has a 2.25% sales tax and a city that has a .5% sales tax.

You are now required to pay the state of TN 9.75% for sales tax collection.

But, if I was one county over, which has no sales tax, you are only required to pay the 7%

This is the problem I have with it... Does this mean we are going to have to keep up with every City, County, and State sales tax rates?

It is going to be interesting to see where it goes, but I wonder how it is going to affect us.

Will be interesting to see. Although the majority of domainers are paying taxes when they sell domains anyways. I really don't see how this ruling will make any difference when selling domains.

 

[WebSolutions.GA]

Will be interesting to see. Although the majority of domainers are paying taxes when they sell domains anyways. I really don't see how this ruling will make any difference when selling domains.

They are paying Federal Income Taxes. This has nothing to do with that, this is State Sales Tax.

 

[Daniel Owens]

They are paying Federal Income Taxes. This has nothing to do with that, this is State Sales Tax.

All domainers should write a check to the state and be quiet this is no big deal (and county of sale).

 

[mr-x]

Will be interesting to see. Although the majority of domainers are paying taxes when they sell domains anyways. I really don't see how this ruling will make any difference when selling domains.

EU has a single tax for every country. The US has 1200 tax zones. You have to collect tax based on where your buyer is located.

 

[Daniel Owens]

I doubt very many people outside the United States, will want to pay taxes to the state of sale, however paypal could come up with a process that just tacks it on as extra fees.

 

[WebSolutions.GA]

If you can keep up with that many changing sales taxes, good for you... I sure can't... I still find It hard to remember to send in mine on the 19th of every month to TN HAHAHA

Due Dates, Tax Rates, Cities, Counties, Municipalities, all of this is based on where your buyer is located. NOT where you are located.

 

[WebSolutions.GA]

@Daniel Owens
Here is the article I quoted in my post in the Legal Discussion thread.
https://www.bloomberg.com/news/arti...t-tax-collection-supreme-court-rules-jiomtl5c

 

[Dogmains]

I pay sales tax to my state only right now.

I have never paid another state sales tax if I don't have a physical presence there.

This is opening it up for situations like this Example:
You sell me a domain name, now you have to know that I live in TN which has a tax rate of 7%, but I also live in a county that has a 2.25% sales tax and a city that has a .5% sales tax.

You are now required to pay the state of TN 9.75% for sales tax collection.

But, if I was one county over, which has no sales tax, you are only required to pay the 7%

This is the problem I have with it... Does this mean we are going to have to keep up with every City, County, and State sales tax rates?

It is going to be interesting to see where it goes, but I wonder how it is going to affect us.

Or open a PO BOX...

 

[WebSolutions.GA]

Or open a PO BOX...

I'm unsure how opening a PO BOX is going to take the legal obligations away if states begin enforcing this. Care to elaborate?

 

[pokainc]

All domainers should write a check to the state and be quiet this is no big deal (and county of sale).

Are you trying just to be sarcastic or your serious?

- varying tax laws from state to state
- a seller from outside the US is not going to start dealing with the IRS
- why is the buyer's country going to supercede the rules of the seller's country
- what determines the official location of the buyer since not every buyer is a company:
1- the whois address?
2- the address of where the payment is expedited from?
3- their address of residence?
4- what if it's a holding account in Europe but the buyer lives in the US

That's just the tip of the Iceberg.

I seriously hope your comment wasn't meant to be taken seriously

 

[Name Trader]

In most of the world these sales taxes are value added taxes paid by the buyer. If you are an entrepreneur and sell stuff online via a mail order house (say Amazon.. just an example.. I have no experience selling with them). It's your agent (the online mail order company) which adds the value tax to the sales price, because they know where the buyer is located, and therefore the amount of VAT to add. Wouldn't this be how any sane person would follow? And shouldn't GoDaddy, Afternic, Sedo, et al, all be responsible for charging and collecting these sales taxes.

Isn't this how Undeveloped.com works in Nederlands? I have had conversation with them, but I was unclear how it finally turned out. But that was the impression I had. They seemed to take it very seriously. At least. Perhaps someone from @Undeveloped could chime in and add their thoughts.

But it is looking like a minefield for online shopping companies. The domain industry should take their cues from how they handle this. But it shouldn't be deducted from the net selling price of the domain.

 

[Daniel Owens]

In most of the world these sales taxes are value added taxes paid by the buyer. If you are an entrepreneur and sell stuff online via a mail order house (say Amazon.. just an example.. I have no experience selling with them). It's your agent (the online mail order company) which adds the value tax to the sales price, because they know where the buyer is located, and therefore the amount of VAT to add. Wouldn't this be how any sane person would follow? And shouldn't GoDaddy, Afternic, Sedo, et al, all be responsible for charging and collecting these sales taxes.

Isn't this how Undeveloped.com works in Nederlands? I have had conversation with them, but I was unclear how it finally turned out. But that was the impression I had. They seemed to take it very seriously. At least. Perhaps someone from @Undeveloped could chime in and add their thoughts.

But it is looking like a minefield for online shopping companies. The domain industry should take their cues from how they handle this.

It would be much different on a namepros auctions, as you cannot force buyers to pay fees here just results in 10% or whatever less profit for seller.

 

[Daniel Owens]

Are you trying just to be sarcastic or your serious?

- varying tax laws from state to state
- a seller from outside the US is not going to start dealing with the IRS
- why is the buyer's country going to supercede the rules of the seller's country
- what determines the official location of the buyer since not every buyer is a company:
1- the whois address?
2- the address of where the payment is expedited from?
3- their address of residence?
4- what if it's a holding account in Europe but the buyer lives in the US

That's just the tip of the Iceberg.

I seriously hope your comment wasn't meant to be taken seriously

Escrow.com has an office out in USA, so in theory the government could regulate that by making escrow take the percentage of tax out of the sale before surrendering money to seller, that could result in all countries that use that site paying sales tax.

 

[mr-x]

Some transactions are exempt I think.

 

[Name Trader]

It would be much different on a namepros auctions, as you cannot force buyers to pay fees here just results in 10% or whatever less profit for seller.

I hadn't even thought about NP's But wouldn't they be treated like any online classifieds website? However they might be treated.

 

[Daniel Owens]

Another site Flippa could easily tack on sales tax as part of money due to them, which you would be forced to pay.
The gov. if they do this successfully, would for sure go after the websites forcing them to collect from sellers. I would not encourage F&F which would maybe be a way to avoid it, unless they implement a gift tax for that and force paypal to charge you that.

 

[Name Trader]

One solution may be for the seller to add 20% to every sale for sales taxes and then let the sales agent to pay any sales taxes due out of the proceeds. Much like we do now for Aftenic commisions

 

[Daniel Owens]

One possible solution could be since this rule ALLOWS state's to charge sale tax it appears does not require the state to enforce it. What you could do is ban certain states from buying your products possibly. I think it's Florida that doesn't have sales tax, they might not enforce or implement paying internet sales tax.

 

[Name Trader]

One possible solution could be since this rule ALLOWS state's to charge sale tax it appears does not require the state to enforce it. What you could do is ban certain states from buying your products possibly. I think it's Florida that doesn't have sales tax, they might not enforce or implement paying internet sales tax.

That would be a boom business in Florida with all mail order companies moving their operations to Florida.