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

[markf31]

It is interesting to note, as I just am finding out myself while reading articles on all if this, that several states including my home state of Pennsylvania (also Oklahoma, and Washington at least) have Marketplace Facilitator Laws in place. Pennsylvania's just went into effect April of this year.

The Marketplace Facilitator Law for PA requires facilitator sites such as Etsy, Ebay and Amazon to either collect sales tax on items purchased by PA residents, or in lieu of collecting the tax the facilitator must supply a notice to the purchaser that sales tax was not collected and that a use tax might be due on the sale by the purchaser. If the facilitator elects the 2nd method of notification, the facilitator must submit to the state an annual report by January 31 of each year to the Pennsylvania Department of Revenue that includes the following:

The purchaser’s name, billing address, delivery address and, if different, the purchaser’s last known mailing address.
The total dollar amount of purchases from this marketplace facilitator.
The name and address of the marketplace facilitator that made the sale.

Each failure to comply with the notice and reporting requirements can result in a penalty of $20,000 per violation, per year, or 20 percent of total Pennsylvania sales during the previous 12 months, whichever is less.

Marketplace Facilitators

So Pennsylvania now has a law on the books, but where the state will now know from information provided by Ebay, Etsy, etc.. how much every resident of Pennsylvania paid for items bought through 3rd part facilitators.

[drcy]

What will be interesting is the competitive imbalance and state politics due to differing state sales tax rates. Here in Washington State, there is no state income tax but a high sales tax.

[cardsnstuff]

Originally Posted by markf31

It is interesting to note, as I just am finding out myself while reading articles on all if this, that several states including my home state of Pennsylvania (also Oklahoma, and Washington at least) have Marketplace Facilitator Laws in place. Pennsylvania's just went into effect April of this year.

The Marketplace Facilitator Law for PA requires facilitator sites such as Etsy, Ebay and Amazon to either collect sales tax on items purchased by PA residents, or in lieu of collecting the tax the facilitator must supply a notice to the purchaser that sales tax was not collected and that a use tax might be due on the sale by the purchaser. If the facilitator elects the 2nd method of notification, the facilitator must submit to the state an annual report by January 31 of each year to the Pennsylvania Department of Revenue that includes the following:

The purchaser’s name, billing address, delivery address and, if different, the purchaser’s last known mailing address.
The total dollar amount of purchases from this marketplace facilitator.
The name and address of the marketplace facilitator that made the sale.

Each failure to comply with the notice and reporting requirements can result in a penalty of $20,000 per violation, per year, or 20 percent of total Pennsylvania sales during the previous 12 months, whichever is less.

Marketplace Facilitators

So Pennsylvania now has a law on the books, but where the state will now know from information provided by Ebay, Etsy, etc.. how much every resident of Pennsylvania paid for items bought through 3rd part facilitators.

I'm in PA too; in simple terms, what does this mean for me as an ebay seller?

[BosseFieldBoy]

I’m a very small time seller, so I’m guessing I will be exempt from many states’ sales tax laws. But I’m not really sure what to do at this point. I’m guessing most states have de minimus exemptions, but that’s just an assumption. Does anyone know a quick hit resource of state sales taxes and exemptions?

[Brian Van Horn]

Well, I just got around to scanning through the PDF of the decision and now I am going out to reset my eyeballs to their original positions. My reaction hasn't changed pending loopholes:

[PowderedH2O]

It seems as though it would have to be based upon the seller's location. How much of Wayfair's sales would be in South Dakota? SD would want a piece of the pie for the sales going out of the state I would think.

[cmoore330]

As a collector that solely relies on the internet to find my items, I’m not a fan of the change.

As a person that solely relies on sales tax to pay my local government salary, I’m a big fan of the change.

It’s an enigma wrapped in a paradox and shrouded in a conundrum.

[Brian Van Horn]

I love this part of the ruling which is just going to open a wonderful can of worms:

"(d) In the absence of Quill and Bellas Hess, the first prong of the Complete Auto test simply asks whether the tax applies to an activity with a substantial nexus with the taxing State, 430 U. S., at 279. Here, the nexus is clearly sufficient. The Act applies only to sellers who engage in a significant quantity of business in the State, and respondents are large, national companies that undoubtedly maintain an extensive virtual presence. Any remaining claims regarding the Commerce Clause’s application in the absence of Quill and Bellas Hess may be addressed in the first instance on remand. Pp. 22–23."

This isn't the last word. This is just the commercial break after the first quarter of this football game.

[BobC]

Originally Posted by PowderedH2O

It seems as though it would have to be based upon the seller's location. How much of Wayfair's sales would be in South Dakota? SD would want a piece of the pie for the sales going out of the state I would think.

Sales tax is normally based on where the actual sale takes place. If it is at an actual brick and mortar store, that is the location used for the sale and to determine the sales tax on, even if the person doing the buying is from another state or country. This is exactly why states will work together and police businesses across the borders from one another, so people from one state don't cross the state line to buy something like furniture from a business in the next state that isn't responsible to collect and remit the sales tax from the neighboring state the buyers are from. To get around the sales tax, the people would have the purchase shipped to them in their state and not pick it up at the store location because doing so would make them subject to paying the sales tax in the neighboring state where the store is actually located.

When it comes to sales transacted over the internet and by mail/delivery service, the sale is considered to tax place and be subject to the sales tax at the point where the buyer takes delivery and acquires the goods. In other words, at the house/location the purchased items are shipped to. So sales from Wayfair going to locations outside South Dakota are not generally going to be subject to SD sales tax.