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Supreme Court Rules States Can Tax Internet Sales

Labeled as legal in Domain Industry News started by mr-x, Jun 21, 2018.

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863

  1. Daniel Owens

    Daniel Owens Upgraded Member Gold Account VIP

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    Yeah, even if they decided to put one because they were getting so many companies physical presence there, if it was like 2.5% and every other state was charging around 8.5% - 10% it would still have a huge impact.
     
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  2. stub

    stub Top Member VIP ★★★★★★★★★★

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    It's also a nice place to live :)
     
  3. WebSolutions.GA

    WebSolutions.GA DrivebyDomains.com

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    Florida state rate (6%), the county rate (0% to 2%). There is no city sale tax for the Florida cities.
    Source: http://www.salestaxstates.com/sales-tax-calculator-florida

    There are 45 states plus the District of Columbia that impose a state sales tax on retirees and other residents. In addition, local sales tax is collected in 38 states. The combined levy can be hefty. In Tennessee, for example, the average combined state and local sales tax is 9.46%.

    Alaska, Delaware, Montana, New Hampshire and Oregon
    . Do not charge a sales tax, however Alaska allows municipalities to charge local sales taxes.
    Source: https://www.kiplinger.com/slideshow/retirement/T055-S001-5-states-with-no-state-sales-tax/index.html

    If you Ban certain states based on the sales tax, you are banning 45 out of 50 states from buying your domains. That's a large chunk of the USA that you are losing.

    Again, we have the issue of: What is considered an online retailer? It is important to note that "Online Retailer" is going to be defined by the law that is in effect at the Buyers location, not the sellers.
    Like you said, SCOTUS has ruled to allow the collection of sales tax, but, I am going to step out of a limb and assume that most of the 45 states collecting sales taxes will require that online retailers collect it. I assume this since it was the states that have made the push to the Supreme Court.
    So far the calculator cited above is the best tool I have found to work with the potential new regulation. Just keep in mind that regardless of what platform you sell on, it is the law in effect at the buyers location that is going to be the law that governs what actions you must take.

    Regardless of the platform you choose to sell on:
    Ultimately, it is the responsibility of the seller to make sure that they are in compliance with all laws, much like it is the responsibility of the buyer to perform their due diligence.

    I hope it is an easy transition, but with the many tax zones that the USA has and with that many changing tax laws, I feel like it is going to end up being more confusing than it has to be.
     
    Last edited: Jun 28, 2018
  4. stub

    stub Top Member VIP ★★★★★★★★★★

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    @WebSolutions.GA - What happens if the sales transaction is operated from an offshore location, to someone living in the US?
     
  5. WebSolutions.GA

    WebSolutions.GA DrivebyDomains.com

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    @stub - It is my belief and opinion that this would not be limited to US based retailers.

    I have found a blog on TaxJar that helps explain some of the information. To date this is the best resource I have found without having to involve legal aid. As of right now, it seems that states are very independent in their definition and interpretation of "Economic Nexus" that said there are still more questions than answers. The blog can be found here: https://blog.taxjar.com/top-30-questions-on-south-dakota-v-wayfair/

    Shortcut to international sellers: https://blog.taxjar.com/sales-tax-for-international-business/
     
    Last edited: Jun 28, 2018
  6. ixex

    ixex Established Member

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    They way it is now, it all depends on the shipping address location (state). If you have nexus in the subject state, then you are required to charge the applicable tax. For instance, I am an Illinois corp. and I only have nexus in IL, so therefore, any ship to sales within IL, I am required to charge the combined tax of state, county (my county's) and municipal (my municipality's).
     
  7. ixex

    ixex Established Member

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    I am wondering how complex the tax module/plug-in im going to need for my sites to calculate the appropriate taxes of each states tax regulations.

    There will be probably such great variances. It is believed that some states still will not charge online retailers that have revenue below a certain about, as an one example. Who knows how this will all pan out.
     
  8. WebSolutions.GA

    WebSolutions.GA DrivebyDomains.com

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    The thing is, now that SD v. Wayfair is complete, and SCOTUS has ruled that the "Physical Presence" requirement is no longer valid. It is up to determination by each state what "Nexus" will be defined as. I have a TN registered Corp. with only TN physical presence, but, the laws (some of which go into effect July, 1) are varied by state and this is something that we are going to have to be very mindful of in order to stay in complete compliance.

    1. What states have a requirement?
    2. What do these states define "economic nexus" as?
    3. Do I meet these requirements? Do I need to register with these states?

    All these are questions that we have never had to ask ourselves, and unfortunately, now we need to be.
    I would like to think that most individuals will be exempted from this, although, that is yet to be determined as well (how is economic nexus defined). However, those of us that trade under our corp. blanket are likely to have to
     

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