Supreme Court Wayfair decision

[kathyc2]

Supreme Court clears the way for states to mandate companies collect sales tax even without a physical presence. What a nightmare!

https://taxfoundation.org/supreme-court-decides-wayfair-online-sales-tax-case/

[Twin Turbo Z]

Wonder how Ebay will be effected. I know many "in state" sellers or brick & mortar sellers collect state sales tax now. But most individual sellers do not.

[TAXNJ]

Going to be a good business venture for sales tax firms. On the bright side, might be something for those preparers that may have less individual returns due to new Tax Cut to make additional revenue.

[Jiggers]

I have one client that sells on e-Bay and collects Texas Tax and files the Texas sales tax return. She also sells out of state and doesn't collect sales tax. Boy, what a mess and I wonder what will be done?

[kathyc2]

I have one client that sells on e-Bay and collects Texas Tax and files the Texas sales tax return. She also sells out of state and doesn't collect sales tax. Boy, what a mess and I wonder what will be done?

At this point it will just be watching state legislatures to see which ones change laws to address it.

There are over 10,000 taxing jurisdictions, differences on what items are taxable or not, difference if delivery charges are taxable or not, states that offer "sales tax holiday" at different times on different items... the list goes on and on....

Potential for huge compliance and software costs for small businesses.

[ATSMAN]

CT started send out tax notices to residents who purchased online without paying CT sales tax. I can see this mushrooming to all 50 states and local jurisdiction that have a separate sales tax.

So here is an interesting question. My son frequently buys stuff from online stores in China. No sales tax is charged and stuff arrives a month later by China Mail!

Will this decision have extra territorial reach? Can the Chinese online stores say, buyer it is your problem, you pay sales tax to your state, we are not collecting on behalf of a US state?

[Jiggers]

The client that is selling on e-Bay doesn't sell that much. However, she has a Texas Sales Tax number so that she can buy items without sales tax for her arts & crafts hobby. And does collect sales tax on those sales in Texas. All of this is a hobby and she does report the income.

I wonder what will happen now.

[New York Enrolled Agent]

It might be a good idea to review the South Dakota law before anyone jumps off the cliff.

Some commentators believe it will serve as a model (it has been declared constitutional) for other states. There is a pretty substantial threshold before the sales tax must be collected. It is not designed for a hobbyist in Texas who makes 4 sales in South Dakota.

[kathyc2]

It might be a good idea to review the South Dakota law before anyone jumps off the cliff.

Some commentators believe it will serve as a model (it has been declared constitutional) for other states. There is a pretty substantial threshold before the sales tax must be collected. It is not designed for a hobbyist in Texas who makes 4 sales in South Dakota.

SC removes the physical presence test which gives states much larger latitude to force sellers to collect tax. I agree that most states will allow for some kind of floor. The question is where between a hobbyist and a Wayfair is the floor going to be? I doubt it's going to be a consistent floor for all states, and can see a company with a few million nationwide annual sales being subject to having to collect sales tax in numerous states. Like I said, we'll have to wait and see what states do.

[ATSMAN]

Assuming states adopt a narrow limitation of who is suppose to collect the sales tax, it does offer a business opportunity for sales tax accounting and filing for small business bookkeeping companies. Some of us may be interested in looking at that opportunity.