New Law Regarding Collecting Sales Tax By On Line Retailers

[PGB1]

From Jake: "...all of whom thought they were doing the right thing for their small businesses by forcing Amazon to collect sales taxes."
Once again, the government acted without considering ALL of the consequences. Sometimes this can't be avoided, but this one was in the "Plain Sight" category.
If "we the people" act without considering the consequences, we pay the penalties. What about government actions? Real people, like your wife, pay the penalties for their mistakes.

From Jake: "It is that governments are made up of people who have no clue how the real world actually works."
So Very True!
PS: Are the black helicopters circling your house yet? They can come to mine, because I 100% agree with what you said.

I believe this is primarily a fine country in which to live. Heck, my parents, along with many thousands of others over centuries, fought for the chance to escape their homes and live here. But I think it's time for a total political "Do Over". Let's real people think on our own and elect real people next time around. Can't hurt! (Sorry- Preaching again! And way off topic!)

 

[Slydude]

@Jak and PGB1 You're both right that decisions made by leaders often have unintended consequences and this is a great example. I have no doubt that the attorneys in question had two objectives in mind:

1. Protect whatever sales tax revenue which wan't already being collected. and
2. Protect small businesses in their loyalties.

The order I put those in is no accident.

I suspect that neither objective will be achieved to the extent they expect. Some of the projected revenue increases will never materialize due to the number of business which will choose to close rather than tackle the regulatory burdens this decision creates. Sadly I think you can point to situations where members of either party have taken actions with negative unintended (and sometimes intended) consequences.

 

[harryb2448]

Can't work out why the U.S. Federal Government does not do what happens here. Federal Government collects a 10% Goods and Services Tax on all sales, goods and services by tradies etc., then pays back to the States where sale/service took place less a small amount to compensate the smaller populated states.

Charitable bodies, churches, schools etc can claim the GST back quarterly.

 

[MacInWin]

@harryb2448, the difference is that our founding process was that 13 at-the-time-independent states, each of whom though of themselves as a "nation," bonded together for mutual defense and support, but did not opt for a strong federal central government because each of the independent states wanted to be free to do what they wanted to do. Hence, the "United States" was considered plural, as in, "The United States are sending a representative to the United Kingdom to discuss...." However, the American civil war changed the nature of the role of the Federal Government to a more central controller. When Lincoln decided that the union of the states was more important than the sovereignty of the states and invaded Virginia to enforce that, the die was cast that the individual states surrendered that independence to the central government and the "United States" became singular, as in "The United States is sending a representative..." And the Constitution says that Congress is to be made up of people who represent the people (House of Representatives) and the states (Senate). Although today the Senators are elected by popular vote, originally as representatives of the state, the Constitution says:

The Senate of the United States shall be composed of two Senators from each State, chosen by the Legislature thereof, for six Years; and each Senator shall have one Vote.

Amendment seventeen changed the process to popular vote, leaving the States no direct representation in the government at all.

Amendment 10 to the Constitution says:

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

Since the only reference to taxation in the Constitution is in Article 1, Section 8.1

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

the state of affairs is that each individual state is free to tax its people as it wishes, with the only central taxation by the Federal Government being that approved in Amendment 16, namely, Income Tax. So, no national sales tax exists. The states are all independent. And most states allow local governments autonomy in taxes as well, so you can have a locale where both State and Local taxes are collected on sales.

So, unlike Australia, which started with a strong Federal government and weak state authority, the US started the other way. And today I think most states would fight hard against the Federal Government trying to impose a national sales tax, even if it was to be shared with the states. To make a national sales tax would require a constitutional amendment, which requires two thirds of both houses of Congress to approve and then two thirds of all states to approve, all of which makes it highly unlikely to happen.

 

[chscag]

Hi Harry:

A national sales tax has been proposed before by various politicians over the years. However, it seems the idea was always shot down for one reason or another. With 50 states here in the US all with different tax laws, it gets to be a real mess. Lucky for me I live in a state that has no state income tax but does impose a sales tax. Some states like Alaska have no taxes at all; neither sales or income.

Hope the wildfire situation gets under control soon and you guys down below get some cooler and wetter weather.

Regards.

 

[MacInWin]

From Jake: "...all of whom thought they were doing the right thing for their small businesses by forcing Amazon to collect sales taxes."
Once again, the government acted without considering ALL of the consequences. Sometimes this can't be avoided, but this one was in the "Plain Sight" category.
If "we the people" act without considering the consequences, we pay the penalties. What about government actions? Real people, like your wife, pay the penalties for their mistakes.

From Jake: "It is that governments are made up of people who have no clue how the real world actually works."
So Very True!
PS: Are the black helicopters circling your house yet? They can come to mine, because I 100% agree with what you said.

I believe this is primarily a fine country in which to live. Heck, my parents, along with many thousands of others over centuries, fought for the chance to escape their homes and live here. But I think it's time for a total political "Do Over". Let's real people think on our own and elect real people next time around. Can't hurt! (Sorry- Preaching again! And way off topic!)

Let me be clear. The issue is not that some law was written to create this mess. It was a Supreme Court decision that changed the way the previous court decisions about taxing other states' citizens had set up regulation of cross-state boundary taxation. A newspaper article from when the suit was brought said this:

The states are asking the court to hear the case of South Dakota vs. Wayfair, Overstock and Newegg and to reconsider another case from 1992 that forbids states from collecting sales tax from customers outside their states. A 25-year-old decision in Quill Corp. vs. North Dakota gave internet-only retailers a pass on collecting sales taxes from customers in states where the seller didn't have a physical presence.

Today the Internet allows Amazon, Wayfair, Overstock, Newegg and others (Pinterest, eBay, Mercari, Etsy, etc) to sell billions of dollars across state boundaries. By law, the liability for paying the taxes is actually up to the citizen, not the seller, but the states find it hard to enforce as they don't know what any individual citizen purchased from outside the state. Given that they cannot chase down (or choose not to do so) their own citizens, they chose to attack the business doing the selling, thus making the seller a de facto arm of the state tax collector. The lawsuit challenged the previous court decisions that relieved cross boundary sellers from being drafted involuntarily into the process for collecting the taxes from the taxpayer. The Supreme Court reversed itself and ruled in favor of the states. But that decision swept up all the small businesses as well. That sweeping is the unintended consequence of what the Justices decided. Given that the Justices cannot make regulations, only decisions, it is not up to them to set any boundaries on what the states do. I don't think anybody in the entire process thought about the small sellers. The defendants, Wayfair, Overstock, etc., didn't really care because they are not paying themselves, only collecting it to pass along, and as long as the burden equally hits everyone who is selling, it doesn't hamper their ability to make money, or their bottom line. So not much defense was raised. If the small businesses had any representation on the defense team, they didn't make much noise. I think everybody just assumed the Supreme Court was going to sustain the previous decision in the matter. When it overturned the previous decision it was a shock. Maybe when the reality settles in the individual states will change their laws to give small businesses a break, but I'm not counting on it. All the states have to do is sit and let it happen. Money will flow in and life will be happy. If a few mom and pop businesses go out of business, well, that's not that bad, someone will pick up the slack. And any given store owner who is impacted can't really afford to bring a lawsuit to take all the way to the Supreme Court again, so the likelihood of a change is pretty small.

 

[harryb2448]

Thanks Charlie.

Spent Christmas New Year with my youngest son and his family at Katoomba, right in the middle of the Blue Mountains fires. On four days the Rural Fire Serbice had us on standby for evacuation which never eventuated fortunately. Pleased to be home on the coast at the beach.

 

[MacInWin]

Harry, it's good to hear that you and your family are all well. The fires sound horrible.