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Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.
I just spent the better part of a couple of hours checking sales for South Dakota. In the past 5 years we have had a total of 123 sales. I would hardly think South Dakota is going to be a problem.
I think the real problem is going to be when Ebay inflicts their noses into this and starts collecting the taxes from the buyers and remits them to the states. I for one would never trust Ebay to remit anything to the states. But also think that Ebay will see this as a windfall for the bottom line. I’m willing to bet they will figure out a way to start charging for collecting the taxes. In fact I would think within 90 days Ebay will start with South Dakota. Just another money grab for their bottom line.
Despite a corrupt Supreme Court “ruling”,
It is UNLAWFUL to lay or collect sales tax on articles / items sold over a state line.
US Constitution :
Article 1.
Section 9.
Paragraph 5.
” No Tax or Duty shall be laid on Articles exported from any State.”
There has been NO LAWFUL undertaking to amend the Constitution.
Therefore, there is NO imperative to collect this illegal tax, lest you be imprisoned for willful contempt.
Only unwitting dupes will comply.
https://www.archives.gov/founding-docs/constitution-transcript
Hopefully sites like Shopify, Square Space and Etsy figure out how to collect it and then redistribute it themselves.
Sellers in Washington state have a real nightmare since they must figure out the sales tax for each and every city and collect and remit different tax % for each one.
They’re going about this backwards. Each business online or Brick-and-mortar should collect sales tax on ALL SALES and pay sales tax TO THEIR OWN STATE ONLY.
‘Leveling the playing field’ they way they intend to do it would mean having every brick-and-mortar business check each customer’s ID at checkout and sending sales tax to that person’s state. Then it would be the same.
If someone who lives in southern Indiana shops at a wal-mart across the Ohio river in Louisville KY, the wal-mart does not pay any tax to Indiana even though that person is taking his purchases back to his home. If he buys online from ‘Dave’s Widget Store’ that is NEXT TO that SAME wal-mart in Louisville, why should Dave’s Widget Store have to pay sales tax to Indiana? (Especially if the sale was online, but the customer picks it up himself!) Dave should pay the sales tax to his state of Kentucky like the wal-mart does! THAT WOULD LEVEL THE PLAYING FIELD. In either case, the customer is ‘visiting’ a store in Louisville. Dave’s online store is not ‘visiting’ the customer anymore than wal-mart is.
If each store in the U.S. paid sales tax ON ALL SALES to the STATE IT RESIDES IN, that would be fair.
Then all the states would get lots more sales taxes and the burden on small businesses would be eliminated.
“But then little towns in South Dakota wouldn’t get any sales tax at all, because they don’t have any businesses.” – Too bad. They need to generate local businesses. Each state could divide it’s own sales tax revenue up to all their own towns according to population/size/whatever. Those small towns aren’t getting sales tax from the nearest wal-mart in the next town, why should they get it from a business online from that same town?
If the states want to collect online sales tax, they should do it to the businesses in their state and they should have to do the labor of dividing the loot among their own towns. The easiest way to collect sales tax for everyone is for each online business to collect sales tax on EVERY sale, in or out of state, then pay it to THEIR OWN LOCAL CITY/STATE.
Then if a state like South Dakota isn’t getting enough sales tax, they need to create a better business environment to encourage more local business and not just mooch off other states’ small businesses.
If South Dakota doesn’t have any decent furniture stores, and their residents DRIVE to another state to buy furniture, they don’t expect sales tax in that scenario. Encourage local business. Get good furniture companies to move in.