Supreme Court overturns Quill, subjects all internet transactions to sales tax

[JustinD]

I would doubt eBay has any need to change software, I can not see where that line of thinking is coming from. Much like why you do not charge sales tax at a garage sale, future laws should in all cases not affect a occasional seller on eBay.

As was quoted earlier South Dakota brought this forth will a set of guidelines that the seller have 100k in business or a minimum of 200 transactions. To take it lower as was theorized earlier would be a enforcement nightmare, the states see this as some cash cow, but will soon find the costs of an enforcement group for this will outpace easily the rewards against crossstate small sellers.

This is for large internet sellers and companies.

I would assume that if you are an eBay seller that is big enough to be going after as a state agency and have it think there is a reward in it, you are either already collecting it or known this was coming eventually because you have been using this income on your 1040 as a job.

[rats60]

Originally Posted by JustinD

I would doubt eBay has any need to change software, I can not see where that line of thinking is coming from. Much like why you do not charge sales tax at a garage sale, future laws should in all cases not affect a occasional seller on eBay.

As was quoted earlier South Dakota brought this forth will a set of guidelines that the seller have 100k in business or a minimum of 200 transactions. To take it lower as was theorized earlier would be a enforcement nightmare, the states see this as some cash cow, but will soon find the costs of an enforcement group for this will outpace easily the rewards against crossstate small sellers.

This is for large internet sellers and companies.

I would assume that if you are an eBay seller that is big enough to be going after as a state agency and have it think there is a reward in it, you are either already collecting it or known this was coming eventually because you have been using this income on your 1040 as a job.

I don't think you will see states going after small retailers. It took South Dakota's levels to get 5 votes in the Supreme Court. Anthony Kennedy, who was the driver of this case, praised South Dakota for taking a moderate approach. He also pointed out that states may not place undue burden on interstate commerce. Trying to collect sales tax on every online sale with individuals would certainly fit. Probstein and PWCC will be affected. Most eBay sellers will not.

[JustinD]

Originally Posted by rats60

I don't think you will see states going after small retailers. It took South Dakota's levels to get 5 votes in the Supreme Court. Anthony Kennedy, who was the driver of this case, praised South Dakota for taking a moderate approach. He also pointed out that states may not place undue burden on interstate commerce. Trying to collect sales tax on every online sale with individuals would certainly fit. Probstein and PWCC will be affected. Most eBay sellers will not.

Totally agree on the point with small retailers,

The case was pushed because of Wayfair.com. Those are the folks in the crosshairs, retailers that have millions in sales and only charge tax in states of operations.

[Brian Van Horn]

My initial reaction before loopholes:

[ValKehl]

Originally Posted by rats60

I don't think you will see states going after small retailers. It took South Dakota's levels to get 5 votes in the Supreme Court. Anthony Kennedy, who was the driver of this case, praised South Dakota for taking a moderate approach. He also pointed out that states may not place undue burden on interstate commerce. Trying to collect sales tax on every online sale with individuals would certainly fit. Probstein and PWCC will be affected. Most eBay sellers will not.

Sorry to be a contrarian, but unfortunately, I suspect that in the not too distant future, we will see eBay adding sales tax to ALL invoices from ALL sellers, except for purchasers who are exempt because they are resellers. Being a huge organization, it should not be difficult for eBay to do this. eBay would transfer the sales tax info to PayPal so that PayPay can collect the taxes and remit them periodically to all the state and local jurisdictions on behalf of ALL the eBay sellers. Being a huge organization, it should not be difficult for PayPal to accomplish this. While eBay sellers will thus not be burdened, I assume that eBay and/or PayPal will increase their fees to sellers for handling the sales tax collections and remittances.

[Santo10Fan]

Originally Posted by ValKehl

Sorry to be a contrarian, but unfortunately, I suspect that in the not too distant future, we will see eBay adding sales tax to ALL invoices from ALL sellers, except for purchasers who are exempt because they are resellers. Being a huge organization, it should not be difficult for eBay to do this. eBay would transfer the sales tax info to PayPal so that PayPay can collect the taxes and remit them periodically to all the state and local jurisdictions on behalf of ALL the eBay sellers. Being a huge organization, it should not be difficult for PayPal to accomplish this. While eBay sellers will thus not be burdened, I assume that eBay and/or PayPal will increase their fees to sellers for handling the sales tax collections and remittances.

I concur with this sentiment, and I do have some evidence to back it up. On May 31, I received an email from ebay asking me to sign a useless petition-the "last chance" to "make my voice heard". I disregarded it as absurd, since the Supreme Court makes decisions based on reasoned argument-not whining. It got my radar up however, because I forgot the Court was considering it, and I realized ebay had a dog in the fight in the from of seller backlash. Considering how expensive it is do business on ebay, combined with the risks-I firmly believe it is the administrators' responsibility to integrate the new tax initiatives into the site.

[rats60]

Originally Posted by ValKehl

Sorry to be a contrarian, but unfortunately, I suspect that in the not too distant future, we will see eBay adding sales tax to ALL invoices from ALL sellers, except for purchasers who are exempt because they are resellers. Being a huge organization, it should not be difficult for eBay to do this. eBay would transfer the sales tax info to PayPal so that PayPay can collect the taxes and remit them periodically to all the state and local jurisdictions on behalf of ALL the eBay sellers. Being a huge organization, it should not be difficult for PayPal to accomplish this. While eBay sellers will thus not be burdened, I assume that eBay and/or PayPal will increase their fees to sellers for handling the sales tax collections and remittances.

I don't see that ever happening. Why would EBay want to destroy their business? Why would they want to take on an unnecessary burden? If they force all sellers to charge sales tax when 90%+ don't need to, most of those sellers will leave. I collect sales tax on sales within my state and send it to them. In the unlikely event I need to do it for other states I will. I will not charge people sales tax on items they don't need to pay it on.

This decision is aimed at large resellers like Warfare, who hurt small business by not charging sales tax and states who have seen revenue decrease because of large online retailers. It is not aimed at trying to collect on every single sale, even if it is an individual selling an used item that they no longer have need of.

[BobC]

Originally Posted by rats60

I don't see that ever happening. Why would EBay want to destroy their business? Why would they want to take on an unnecessary burden? If they force all sellers to charge sales tax when 90%+ don't need to, most of those sellers will leave. I collect sales tax on sales within my state and send it to them. In the unlikely event I need to do it for other states I will. I will not charge people sales tax on items they don't need to pay it on.

This decision is aimed at large resellers like Warfare, who hurt small business by not charging sales tax and states who have seen revenue decrease because of large online retailers. It is not aimed at trying to collect on every single sale, even if it is an individual selling an used item that they no longer have need of.

This is not technically aimed at Ebay since they are only a platform used by seller's to create a marketplace for selling their goods online. The burden for actual sales tax collection, reporting and remittance is on the actual sellers who own and sell their inventory. Someone like Wayfair is the actual seller themselves so they are charged with having to collect and report the sales tax. What Ebay is likely concerned about is that even if they are not technically responsible for collecting the sales tax, they do have records and data concerning all the sales transactions and buyer and seller data that the various states would come after and start demanding from them to enforce their various state sales tax laws. And as soon as people selling on Ebay realize their information may be getting reported to the states, they may decide to drop off Ebay and look to sell on other sites and venues where the states may not be looking so strongly at yet, or just quit selling altogether as they don't want to deal with the hassle. Because of the added work and such involved, it could end up costing Ebay business down the road, and thus it makes sense that they would try to fight this up front.

Also, I'm not sure that Ebay could specifically force sellers to use software created by them to calculate and collect sales tax. By doing so it may end up looking like they are admitting to the states that they actually are responsible for the sales and collections of sales taxes, which they definitely do not want to do.

[tschock]

Originally Posted by BobC

This is not technically aimed at Ebay since they are only a platform used by seller's to create a marketplace for selling their goods online. The burden for actual sales tax collection, reporting and remittance is on the actual sellers who own and sell their inventory....

First, not disagreeing with anything you are saying. But the other thing to keep in mind is who has the deep pockets. Not you or I, but eBay. While the burden at this time might be on the seller, it might not be in the future. There's a fine line that could be blurred or shifted if there's easier money to be made collected. Auction houses collect taxes, though they are a consignor and don't actually 'own' the goods they 'sell'. Who's to say that burden might not be put on 'marketplaces' in the future. I'm not arguing with what the law currently is here, but speculating as to what it could become.

[BobC]

Originally Posted by tschock

First, not disagreeing with anything you are saying. But the other thing to keep in mind is who has the deep pockets. Not you or I, but eBay. While the burden at this time might be on the seller, it might not be in the future. There's a fine line that could be blurred or shifted if there's easier money to be made collected. Auction houses collect taxes, though they are a consignor and don't actually 'own' the goods they 'sell'. Who's to say that burden might not be put on 'marketplaces' in the future. I'm not arguing with what the law currently is here, but speculating as to what it could become.

Understand exactly what you are saying but, this is the fine line that Ebay is trying to straddle. Whereas an auction house runs an auction on behalf of their consignors who sign an agreement with them to basically act as an agent on the consignor's behalf, Ebay does no such thing, and does not ever take possession of the items being sold on its site, nor become responsible for the shipment of goods and receipt of the payment. in fact, it is because of these latest occurrences that Ebay may have been looking ahead to these types of sales tax law changes that prompted them to make the decision to spin-off and divest themselves of Paypal a few years ago, so they could not be considered as responsible for collecting monies directly from buyers and make it less likely they could ultimately be held responsible for collecting sales tax.

Not sure it is a completely accurate analogy but, Ebay is like the flea market operator who rents spaces to sellers who come to sell their stuff to an audience that shows up because they know all these sellers are going to be there. The flea market operator is not the owner of the goods, does not deliver the goods or collect the money for them, does not act as an agent for the sellers, and definitely is not responsible for any sales taxes.

If the flea market gets big enough that someone at the state level knows about it, they could send an agent down to check on the sellers to see if they are properly collecting sales tax, etc. Now the flea market owner may not be responsible for the sales tax themselves but, say he/she does collect addresses and other info on all the sellers who show up so, the state agent makes a "friendly" request that the flea market operator provide all the pertinent seller info so the state can check up on the sellers. Once word of that gets out, how soon do you think it would be for sellers to stop going to that flea market so they don't get looked at by the state? This is how Ebay could take a hit and another reason why they were likely putting out that petition they were asking all the sellers to sign a couple months or so ago, fighting this recent ruling. Ebay is probably figuring that even if they don't have to directly do anything with this new sales tax enforcement, they still get hit with it because they are so big and already have so much information on everyone that the taxing authorities could simply request all the data and scare away sellers who don't want to get reported to the government.

To use another, maybe poor, analogy, think of the sellers as cockroaches. What do they do when you enter a room they're in and turn on the lights!!!