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by dsr_ 2915 days ago
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.

1 comments

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.
>>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?

Did you pay income tax in the state, which will be what supports the university? Congrats, you get in-state tuition.

>>Drive a car into my state? You have to pay a roads tax.

Two points: 1) you are using the roads in the state, why can't you fund them? 2) that tax already exists, you pay it when you buy gas.