See [1]. Sales tax as a service is available from seven different providers. Shopping cart integration is available. You pay one bill, they handle the rest.
Governments need to fund their operations, and allowing some businesses to dodge taxes because of arbitrary geographical differences is unfair and distorts markets.
One should note that its not the businesses that are dodging taxes, but rather citizens of the state that are dodging taxes (and not reporting them). From The Tax You Probably Forgot To Report ( https://www.forbes.com/sites/ashleaebeling/2013/04/15/the-ta... )
> Think you got a great deal not paying sales tax on your online purchases last year? In most states, there’s a pesky tax called “use tax” that you are supposed to pay in lieu of sales tax if you buy stuff out of state or online--and bring it in state. Theoretically, you’re supposed to root through all your receipts and credit card statements, calculate what you owe and report it on your state income tax return.
> Use tax is a tax imposed on the use of taxable items and services in a state when the sales tax has not been paid. For example, use tax would be due if taxable property is purchased from a seller located outside of New York, the property is used in New York, and sales tax was not paid on the purchase. With online platforms and sales being increasingly popular currently, this concept is significant. Remote retailers that make sales into a state but do not have any presence there (i.e. an office, store, storage, employees) may not be registered to collect sales tax in that state because of the lack of presence there. However, the use tax reporting requirement that has been recently implemented by a number of states requires remote retailers to notify their customers that they may owe use tax on their purchases.
The problem is not the general idea of paying sales tax. It's the complication of having ten thousand different sales tax jurisdictions. Complying with the law should not be such a nightmare you need to hire a middleman.
It is way more complicated than just 10,000 jurisdictions:
- mapping an address to one or more jurisdictions
- digital deliveries might not have a shipping address
- tax rates often depend on the type of product
- product types have different definitions in different jurisdictions
- some taxes are time dependent (back to school tax holidays)
- some buyers are exempt in some jurisdictions for some products
Yeah, and it makes a barrier to entry, so a lot of potential economic activity does not take place, or it takes place off the records, and generates no tax revenue.
If you don't start a business because of having to pay a SaaS provider to setup tax payment, then you weren't really serious at all. Note this is only required at over 100k in revenue...
I don't think the proper solution to that is to just declare that you don't have to pay taxes at all when you sell to someone far enough away. Simplify things if needed, but don't give a nonsensical advantage to certain businesses.
The proper solution is to put the onus on the payment networks. They're large enough to build out support for this issue without it being overly burdensome. Internet retailers should only be required to report what customers bought and whether taxes were collected. Then payment networks can report to the states who can send taxpayers a report of the use taxes they owe.
How about putting the onus on the party that wants to collect money off transactions between other parties. If a government wants a cut, they can make it reasonably easy to comply or they can get ignored.
Some state sales tax rates are destination-based and others are origin-based. Since sales tax was not designed to consider the internet, things get complicated fast.
I think its a rent seeker when uncle sam either dictates you give them money or buries you in shit you have to pay acme shovel co to dig yourself out of.
I think its more tenable for governments to provide an optional sales tax as a service and remit the money to the states. One singular report to file one party to pay.
If the service they're providing is only necessary because of artificial barriers, then basically yes. The banking cartel that controls the payment system is a huge fan of collecting economic rents, yes.
Not moral, but some would say being a single country imposes a certain practical requirement that the taxes not be too complicated, if we agree commerce is a good thing and waste is a bad thing.
The United States of America is, in the terms of other countries, 50 states that have given up certain powers and responsibilities to a federal government but retain their own powers, including the ability to set tax policy inside their own borders.
The Commerce Clause gives Congress the power: "To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes." This has been widely construed as meaning that states cannot make taxes that affect other states' citizens unless they are doing business in that state.
The Supreme Court has just ruled that their earlier ruling (that Store A had to have some physical presence in State S in order for S to require A to charge sales tax) is wrong, and no such physical presence is required.
More importantly, it is now clear that American States can tax non-residents, even FOREIGN non-residents who have no connection with the U.S. whatsoever. There will be collateral consequences to this decision. For example, why should I have to pay out-of-state university tuition if I became a state taxpayer due to the sales--and soon to come other--taxes? Drive a car into my state? You have to pay a roads tax. It will be interesting to see how far this goes. Long-arm jurisdiction will become more robust, at the least; another rationale for diversity jurisdiction is removed.
Congress has the ability to nationalize sales tax collection and remittance for online purchases. In fact, there have been bills introduced in the past that proposed to do just that.
We might actually see some movement in this direction now.
It looks like people are downvoting @dsr for, I dunno, being a pedant or something, but I think their point is important: Americans really do seem to value the extreme heterogeneity, and even outright waste, of having 50 different jurisdictions to do business in, rather than passing uniform laws at the federal level.
Although I do agree that in this case it's a bit of a disaster and going to be a huge pain, sometimes it is nice having 50 different jurisdictions.
Most things are pretty similar state-by-state, but it can be really nice being able to pick your laws if you have to. Maybe you love weed and you want to pick a state with legal weed. Or maybe you like drones and want to pick a state with fewer drone laws. So many things differ state-to-state, from REAL ID to trans rights to surveillance to taxes to guns to driving age to social aid to public transit. Gay marriage, slavery, and interracial marriage were all issues of the past but they were very important in their day too.
I do think it's an important part of what makes America America, and being able to "pick your laws" is an amazing freedom that most people don't have.
Now, the actual ability to move wherever you want can sometimes be limited. If you're in Vermont and you want New Hampshire laws, well, that's easy. (Differences: weed, guns, advertising, taxes, many more.) But if you're in Maine and you want Hawaii laws, a move like that probably isn't doable. Still, I think it's a valuable freedom.