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Supreme Court Ruling on state taxes


#1

As many of you know the Supreme court in the United States has ruled to allow states to decide whether or not they want taxes collected on online purchases. This is suppose to start effecting the online landscape as early as Nov.

If you’re not aware of the impending changes, look up South Dakota v. Wayfair Inc.

Thoughts?
How do you intend on dealing with it?

I just developed a really cool interactive shopping cart that auto calculates fees, but with all the different tax rates in different multiplicities, I have no idea how I’m going to give it the ability to accurately calculate taxes…


#2

Hi,

There were a number of states / counties already imposing local sales taxes for online purchases. With this decision, we can expect to see more rigor and enforcement around.

The challenge with this is that every state then county their own tax rate, which is unbelievable. Plus, each state/county might have a different interpretation on what qualifies as a “online” purchase. We would have to build a large table with the taxes and understand how they are applied in each region.

A potential alternative is to put in our terms and conditions a “self -assessment” rule, so that the onus is on the customer to remit their sales taxes for the online purchases. I’ve done this before given the complexities in US/Canada sales taxes. However, we’d have to see any of the regions would punt this and expect our companies to collect the sales taxes.

This is a difficult task, but I think it’s worthwhile looking at creating some sort of tax table by state / region / tax alliances.

G


#3

How can it be expected for online business owners to collect and implement this!? It’s surreal!

Imagine the small companies that are already struggling to turn an annual profit who already have a system, including code, already in place that will now have to be changed to such a degree.

This has the potential to turn into a nightmare quick. I think it would make more sense to have to charge sale tax ONLY at the rate in your own region. This way states/counties would compete in the free market system to provide the most tax friendly zone. People would flock to areas offering the best tax rates and it would also make it to where people only have to keep up with a SINGLE tax rate.

…I have no idea how people are going to deal with this


#4

I’ll put something together in bubble and share. While working at blackberry, I had built a reference table by state and province. Note that it won’t be for a while , probably a few months till I can get around to it. It was a lot of work 10 years ago as each region had its own quarks and special rules.


#5

Odds are that billing providers like stripe will automatically handle that, I wouldn’t worry about it for now.


#6

Good point. I haven’t check out Stripe or used it, but that would be great if they can figure it out. I’ve only ever seen Digital River attempt to calculate regional taxes, but they even had challenges.


#7

TaxJar also just launched a checker tool which allows you to connect with Stripe, PayPal, Amazon, Shopify (and more) and see which states where you may be above a nexus threshold as well :slight_smile:
(I’m not affiliated with them, I just wanted to send it along incase it may be helpful)

https://blog.taxjar.com/economic-nexus-sales-transactions-checker/