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

[insidethewrapper]

I can't believe states just don't charge per year for a "sales tax license". In Michigan, the license is free ! Just paperwork for Michigan Sales at the present time. It would be simple to just charge all businesses , for example: $ 100 a year for the license, and high volume stores etc. would need to fill out additional forms.

[BobC]

Originally Posted by insidethewrapper

I can't believe states just don't charge per year for a "sales tax license". In Michigan, the license is free ! Just paperwork for Michigan Sales at the present time. It would be simple to just charge all businesses , for example: $ 100 a year for the license, and high volume stores etc. would need to fill out additional forms.

That sounds great in theory, but wouldn't be realistic in practice. Think about it, if all you had to do was obtain and pay an annual fee of say $100 for having a sales tax license (which is more often called a vendor's license in many states) and that was it, the states would be out so much money it wouldn't be funny. At a 7% sales tax rate a business would only have to have $1,428.57 of taxable sales in an entire year to fully cover the $100 annual license fee you suggested. So under your plan the state loses out on sales tax for any sales over that amount, which would be astronomical. The states couldn't afford to lose that much revenue. So if you decided then to raise the annual fee to generate more revenue, it would end up being a large amount per business. And if you made it a flat fee so everyone seller paid the same, many smaller retailers wouldn't be able to afford it and would argue they're being discriminated against and kept out of starting new businesses or being put out of business because of the ridiculous cost for a license. So if you then try to tie the fee to some measure of the volume of business being done, that is kind of what they are doing now by charging the sales tax, right? So you sort of end up in the same place with additional record keeping and tax filings and payments, just in a different way.

You did mention in your suggestion that larger, high volume stores would have to do additional paperwork, but what exactly does that mean? As I noted above, are you saying that over a certain amount of taxable sales they'd have to start paying in more money towards their sales tax license? If so, how are you going to figure that out and who decides what the threshold is for such additional payments, and on and on? And what you are suggesting is already in practice. For example, in Ohio there is a state sales tax in force that requires seller's to apply for a one-time vendor's license at a cast of just $25. After that they are required to file and remit any sales tax they collect, even if they have $0 to report, until they formally cancel their license with the state. In addition, back in 2005 Ohio enacted something called the Commercial Activity Tax, which sounds a little like what you may be proposing. It requires all businesses that sell to anyone in Ohio to record and report their qualifying Ohio based sales and pay in what is termed a Commercial Activity Tax for sales over certain amounts. Annual Ohio based sales from $0 - $150K per year you, don't have to file or pay anything. Annual Ohio based sales of $150K - $1MM a year, you register and pay $150 with a once a year report you then file. Once your annual Ohio based sales go over $1MM though, you then have to pay in $0.0026 per dollar of sales in excess of $1MM. And this is in addition to Ohio sales tax which can be as high as 8% in some counties. When they enacted this Commercial Activity Tax back in 2005 they did away with a state franchise taxes on businesses and business property taxes on assets and inventory owned by businesses. It was an offset of one new type for for two previous types of taxes.

This type of activity tax as Ohio calls it doesn't get charged directly to the buyers, but you can be sure that prices charged to them got increased to cover the additional Commercial Activity Tax cost increase to the sellers. Oh, and unlike sales taxes which often don't get charged for things like food, the Commercial Activity tax in Ohio does cover food sales as well, so those prices go up for everyone as well. There are so many nuances to these taxes, and what is deemed fair and equitable to everyone, it is not easy to simply replace what we already do with something simple.

[insidethewrapper]

You would still have to pay the sales tax + the $100 ( example) fee, not instead of the fee.

[hcv123]

would be - if your company hit that threshold in a preceding lookback period (let's say the prior tax year as one possibility) - you would be required to collect tax in the current year.

[BobC]

Originally Posted by insidethewrapper

You would still have to pay the sales tax + the $100 ( example) fee, not instead of the fee.

OK, but that would really only end up being a drop in the bucket in terms of additional monies collected by the states in regards to sales taxes. And if the sellers still have to go through all the time and effort of collecting and remitting sales tax anyway, how does that make things any easier for them? They just end up paying an additional $100 every year, for nothing? Don't go giving states any more ideas on how to collect more money for virtually doing nothing, they do quite a good job of that already. LOL

[egbeachley]

Originally Posted by insidethewrapper

I can't believe states just don't charge per year for a "sales tax license". In Michigan, the license is free ! Just paperwork for Michigan Sales at the present time. It would be simple to just charge all businesses , for example: $ 100 a year for the license, and high volume stores etc. would need to fill out additional forms.

They usually do. The license is just an annual fee that registers you with the state. Then you get to remit all the sales tax you have collected using your new registration number.

[insidethewrapper]

Michigan to start enforcing sales tax on more online retailers

LANSING » Michigan’s 6 percent sales tax will soon be applied to many companies with no physical location in the state, according to the Michigan Department of Treasury.

The department announced Monday (August 13th, 2018)that sales tax will be collected from online out-of-state retailers that exceed $100,000 in sales or have 200 or more transactions in Michigan within the previous calendar year.

The rule change beginning Oct. 1 will bring in an extra $200 million per year in state revenue, according to the state agency’s estimates.

“We will be working closely with our retail and business partners to ensure a smooth transition to the new rule,” State Treasurer Nick Khouri said.

The move follows a recent U.S. Supreme Court ruling that gave states authority to require online retailers without a physical presence in the state to collect sales tax on their behalf.

Michigan already requires large retailers with a presence in the state, such as Amazon and Overstock, to charge the tax. — The Associated Press

[BobC]

Originally Posted by insidethewrapper

Michigan to start enforcing sales tax on more online retailers

LANSING » Michigan’s 6 percent sales tax will soon be applied to many companies with no physical location in the state, according to the Michigan Department of Treasury.

The department announced Monday (August 13th, 2018)that sales tax will be collected from online out-of-state retailers that exceed $100,000 in sales or have 200 or more transactions in Michigan within the previous calendar year.

The rule change beginning Oct. 1 will bring in an extra $200 million per year in state revenue, according to the state agency’s estimates.

“We will be working closely with our retail and business partners to ensure a smooth transition to the new rule,” State Treasurer Nick Khouri said.

The move follows a recent U.S. Supreme Court ruling that gave states authority to require online retailers without a physical presence in the state to collect sales tax on their behalf.

Michigan already requires large retailers with a presence in the state, such as Amazon and Overstock, to charge the tax. — The Associated Press

Those thresholds, $100,000 of sales or 200 or more transactions are exactly the same ones that South Dakota had in their law that the Supreme Court agreed with. Exactly what being said before, watch the other states start to copy the South Dakota law. And it begins...............!