Taxing Online Ammo Sales

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BBYC
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Taxing Online Ammo Sales

#1

Post by BBYC » Fri Jun 22, 2018 12:58 pm

Supreme Court rules that states can force online shoppers to pay sales tax

I wonder if that means the states where the sellers are located can now collect sales tax too. A business located in Texas with customers in multiple states has a locus in Texas if they have one anywhere.
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Re: Taxing Online Ammo Sales

#2

Post by The Annoyed Man » Sat Jun 23, 2018 4:36 pm

BBYC wrote:
Fri Jun 22, 2018 12:58 pm
Supreme Court rules that states can force online shoppers to pay sales tax

I wonder if that means the states where the sellers are located can now collect sales tax too. A business located in Texas with customers in multiple states has a locus in Texas if they have one anywhere.
It means that the buyer must now pay sales tax to the state from which the seller is shipping. For example, if I buy Freedom Munitions ammo and it ships from Texas, I have to pay Texas sales tax. But it it ships from their Lewiston, Idaho location, then I have to pay Idaho’s sales tax .....but not Texas’.

Technically, buyers always were required to pay sales taxes to the state from which the product shipped, but the shipper wasn’t obligated to collect it, and most wouldn’t because it gave them a competitive advantage not to do it. Buyers were actually supposed to square it with the relevant state on their own, after making the purchase. Of course, nobody did that.

What I’m predicting is that the money-grubbing looter states like California will require Californians to pay both California’s sales tax as well as the sales tax for the state from which their product ships. It’s just a matter of time.
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Re: Taxing Online Ammo Sales

#3

Post by Scott Farkus » Sat Jun 23, 2018 5:16 pm

I thought the idea was that the Idaho business would have to collect sales tax on behalf of the state of Texas when it sold to Texas customers, which is going to be an accounting nightmare for small on-line retailers.

(assuming the Idaho business does not have a presence in Texas - it sounds like the one in your example does)

I think the Supreme Court got this one wrong, even though my heroes were on the affirmative side. Regulation of interstate commerce is a legitimate constitutional function of Congress. They can choose to or not, but the judicial branch shouldn't be stepping in and giving states the green light. In that sense I don't particularly care that states want the revenue or that the use tax is hard to collect; take it up with Congress like the Constitution says.

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Re: Taxing Online Ammo Sales

#4

Post by ScottDLS » Sat Jun 23, 2018 5:18 pm

The Annoyed Man wrote:
Sat Jun 23, 2018 4:36 pm
BBYC wrote:
Fri Jun 22, 2018 12:58 pm
Supreme Court rules that states can force online shoppers to pay sales tax

I wonder if that means the states where the sellers are located can now collect sales tax too. A business located in Texas with customers in multiple states has a locus in Texas if they have one anywhere.
It means that the buyer must now pay sales tax to the state from which the seller is shipping. For example, if I buy Freedom Munitions ammo and it ships from Texas, I have to pay Texas sales tax. But it it ships from their Lewiston, Idaho location, then I have to pay Idaho’s sales tax .....but not Texas’.

Technically, buyers always were required to pay sales taxes to the state from which the product shipped, but the shipper wasn’t obligated to collect it, and most wouldn’t because it gave them a competitive advantage not to do it. Buyers were actually supposed to square it with the relevant state on their own, after making the purchase. Of course, nobody did that.

What I’m predicting is that the money-grubbing looter states like California will require Californians to pay both California’s sales tax as well as the sales tax for the state from which their product ships. It’s just a matter of time.
I don't think it will work that way. The state where the product is shipped will be able to compel the out of state vendor to collect sales tax.
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Re: Taxing Online Ammo Sales

#5

Post by rotor » Sat Jun 23, 2018 9:00 pm

The bad news 1) this will cost us all more money buying from outside of Texas dealers ( like Bud's), 2) This will cost Bud's and others a ton of money buying and maintaining the software to handle sales tax in multiple locations and don't forget the sales tax holidays, etc. I predict that small on line retailers will either go out of business or have to link up with an Amazon or Ebay to do their tax collections.
The good news is that your local dealer may be on a more even footing. I don't think the states will do a better job spending this windfall tax money.

This would be an ideal time for a really sharp software genius to put together a service or software to do this tax accounting.

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Re: Taxing Online Ammo Sales

#6

Post by der Teufel » Sat Jun 23, 2018 9:24 pm

ScottDLS wrote:
Sat Jun 23, 2018 5:18 pm
I don't think it will work that way. The state where the product is shipped will be able to compel the out of state vendor to collect sales tax.
I think this is correct. The buyer will be forced to pay sales tax in his or her local taxing jurisdiction. The seller will be required to collect it and (I assume) forward it appropriately in due time. Sounds like an accounting nightmare!
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Re: Taxing Online Ammo Sales

#7

Post by Pawpaw » Sat Jun 23, 2018 9:46 pm

I don't think this is really going to be a major problem. Someone will establish a service that will interface with a vendor's e-commerce site, calculate the tax, and feed it back to the e-commerce site. Periodically, this new service will send the appropriate info back to the vendor so they can distribute the taxes they collected.

Done right, this new service can probably work on a 1% commission. That cost will be passed on to the buyer, but the vendor will still have a much lower overhead that a brick and mortar store.
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Re: Taxing Online Ammo Sales

#8

Post by apostate » Sat Jun 23, 2018 10:26 pm

Here's where I disagree with the decision. My LLC is registered in Texas. It has no physical presence outside Texas. How can South Dakota claim taxing jurisdiction over a Texas business?

It's a service business but it could potentially sell related products to clients in the future. If so, sales terms would be carriage paid to (CPT) and ownership transfers to the buyer at the point where the goods are taken by the carrier. That would be in Texas so it seems I'd be obligated to collect Texas sales tax, but not foreign sales tax.

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Re: Taxing Online Ammo Sales

#9

Post by Jago668 » Sat Jun 23, 2018 10:29 pm

I wonder if they are going to use where you are at when you buy something online, where it is shipping to, or where you legal residence is for purposes of determining tax.
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Re: Taxing Online Ammo Sales

#10

Post by ScottDLS » Sat Jun 23, 2018 10:34 pm

Jago668 wrote:
Sat Jun 23, 2018 10:29 pm
I wonder if they are going to use where you are at when you buy something online, where it is shipping to, or where you legal residence is for purposes of determining tax.
My guess is ship-to. Only realistic option. The others are essentially impossible to calculate.
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Re: Taxing Online Ammo Sales

#11

Post by Liberty » Sun Jun 24, 2018 5:53 am

From a constitutional point of view the ruling is terrible. However, I thought it stunk that a tax policy encouraged us to buy from out of state vendors who contribute nothing to our economy. So many times we end up supporting the economys in states that are enemies of our 2nd amendment. This new tax policy might help keep Texan money in Texas.

We all hate taxes, but like death itself there is no avoiding it. All taxes screw some people more than others, fair taxes are really just a dream
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Re: Taxing Online Ammo Sales

#12

Post by spectre » Sun Jun 24, 2018 5:17 pm

If South Dakota can collect sales tax from out of state sellers, how soon before California tries to collect income tax from out of state workers? If a telecommuting worker in Texas provides services to a California business, should the Texas resident have to pay California income tax? What about offshore workers? What about offshore sellers? Do Chinese sellers on eBay or other sites have to collect South Dakota sales tax? South Dakota has as much legitimate authority over a company in Beijing as a company in Boston.
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Re: Taxing Online Ammo Sales

#13

Post by AF-Odin » Sun Jun 24, 2018 5:35 pm

California tried to collect property tax from me for the Air Force "On-Base" quarters I lived in. Didn't work! Years later, they came after me for state income tax for the time I was stationed in California. Didn't work either, but still did not stop them from trying.
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Re: Taxing Online Ammo Sales

#14

Post by spectre » Sun Jun 24, 2018 5:45 pm

Another thing is how does South Dakota expect to enforce this? If they can't get their own residents to remit the tax, how do they expect to get non-residents to remit the tax?
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over the course of time they create for themselves a legal system that authorizes it
and a moral code that glorifies it. - Frédéric Bastiat

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Re: Taxing Online Ammo Sales

#15

Post by Allons » Sun Jun 24, 2018 8:35 pm

AF-Odin wrote:
Sun Jun 24, 2018 5:35 pm
California tried to collect property tax from me for the Air Force "On-Base" quarters I lived in. Didn't work! Years later, they came after me for state income tax for the time I was stationed in California. Didn't work either, but still did not stop them from trying.
Sounds familiar: I was a contractor in Kuwait for the government working for a company that had the Headquarters at the time in California and they did the same thing to me. They tried to get me to pay income tax for working for that company, even though I was a Texas resident, and I had never even visited California before. Didn't work with me either. :lol::
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