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

[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.

[barrysloate]

What about sales on BST? Hmmm...

[Brian Van Horn]

Originally Posted by barrysloate

What about sales on BST? Hmmm...

Oy!

Well, at least there is one politician chiming in with a viewpoint I support (admittedly a bit of grandstanding):

http://www.4-traders.com/WAYFAIR-INC...fair-26812903/

It should be interesting how this plays out and the way the herding of cats will be resolved.

[TaxMechanick]

It does not appear to me that every small retailer, with limited sales in most jurisdictions, will necessarily be burdened with having to collect and remit sales tax in all jurisdictions. It appears to me that the Wayfair decision serves to support an "economic" nexus standard already employed by many jurisdictions, and potentially now to be employed by many more. This economic standard is often based on a minimal $ amount or based on # of transactions in a given year. For example, North Dakota (Wayfair case) employs a minimal $ amount of $100,000 of economic sales in the state. So, the threshold is and would be measured jurisdiction by jurisdiction.

Prior to this decision, the Quill case had supported the long standing Hess case decision that there must be some sort of "physical presence" in a jurisdiction (state or local) in order for that jurisdiction to force a seller to collect and remit sales tax as a defined "retailer." The Wayfair decision reverses that exclusive requirement of physical nexus, and gives jurisdictions the ability (by Supreme Court "National" applicability) to employ minimal economic nexus standards.

[chalupacollects]

Originally Posted by barrysloate

What about sales on BST? Hmmm...

You mean trades? Lol...

[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.