Re: Tax Moratorium Expiring
This WebDNA talk-list message is from 2001
It keeps the original formatting.
numero = 39504
interpreted = N
texte = Glenn Busbin wrote: > > Despite predictions to the contrary, the wonderful folks in the US Congress failed to pass an extension to the moratorium on sales taxes for ecommerce.
> > It looks like we're going to have to use a sales tax rate for each of the hundreds of tax districts in the US and probably can't determine which to use without cross referencing that with a customer's zip code. > > How are you guys handling this? > IANAL (but I play one on TV ;~) http://www.antionline.com/jargon/IANAL.phpThere are two U.S. Supreme Court cases dealing with interstate commerce which pretty much rule this arena (though they are old enough to not directly cover Internet commerce). They basically boil down to the following: 1. Interstate commerce is regulated at the federal level 2. States have a legitimate right to collect taxes on sales made to companies with a significant presence in that state 3. States can legally charge a use-tax on consumers for sales made to out of state companies 4. Congress can permit States to force out of state vendors to remit sales tax for in state customersHowever, since Congress has NOT done #4, and pretty much all states HAVE done #3, unless you have a significant presence in a state, the state has no way to force you to remit sales tax for any transactions dealing with citizens of their state. And only sales to customers in states where you have a presence are currently covered by sales tax.What the definition of significant presence is requires a lawyer. If you have a web server in TX and offices in LA, do you need to pay taxes? I don't know; I don't know that anyone does. If it is a co-location arrangement or a managed server (i.e. do you own the server) can make a difference.We have a warehouse in PA, our home office is in MD, and we have satellite offices in CO, CA, IL, TN, NY. We charge sales tax in those seven states for all of our mail or phone orders (which includes any sales made on our web sites). If you want to be completely covered, have a page suggesting that any customer purchasing something from your site may owe a use tax to their state of residence. I am not currently worrying about this (I am just outside the DC beltway; I have other worries). Expect one or more state to go after someone very big (Amazon comes to mind ;~) and test the water. It is unlikely to affect anyone smaller for some years to come.The only thing that will happen immediately (IMHO) is that states will try to start taxing Internet accounts. This is a completely seperate issue from the e-commerce aspect. See the third section titles Net Tax Confusion of the above link for more details.My 2 centsJohn-- John Peacock Director of Information Research and Technology Rowman & Littlefield Publishing Group 4720 Boston Way Lanham, MD 20706 301-459-3366 x.5010 fax 301-429-5747------------------------------------------------------------- This message is sent to you because you are subscribed to the mailing list . To unsubscribe, E-mail to: To switch to the DIGEST mode, E-mail to Web Archive of this list is at: http://search.smithmicro.com/
Associated Messages, from the most recent to the oldest:
Glenn Busbin wrote: > > Despite predictions to the contrary, the wonderful folks in the US Congress failed to pass an extension to the moratorium on sales taxes for ecommerce. > > It looks like we're going to have to use a sales tax rate for each of the hundreds of tax districts in the US and probably can't determine which to use without cross referencing that with a customer's zip code. > > How are you guys handling this? > IANAL (but I play one on TV ;~) http://www.antionline.com/jargon/IANAL.phpThere are two U.S. Supreme Court cases dealing with interstate commerce which pretty much rule this arena (though they are old enough to not directly cover Internet commerce). They basically boil down to the following: 1. Interstate commerce is regulated at the federal level 2. States have a legitimate right to collect taxes on sales made to companies with a significant presence in that state 3. States can legally charge a use-tax on consumers for sales made to out of state companies 4. Congress can permit States to force out of state vendors to remit sales tax for in state customersHowever, since Congress has NOT done #4, and pretty much all states HAVE done #3, unless you have a significant presence in a state, the state has no way to force you to remit sales tax for any transactions dealing with citizens of their state. And only sales to customers in states where you have a presence are currently covered by sales tax.What the definition of significant presence is requires a lawyer. If you have a web server in TX and offices in LA, do you need to pay taxes? I don't know; I don't know that anyone does. If it is a co-location arrangement or a managed server (i.e. do you own the server) can make a difference.We have a warehouse in PA, our home office is in MD, and we have satellite offices in CO, CA, IL, TN, NY. We charge sales tax in those seven states for all of our mail or phone orders (which includes any sales made on our web sites). If you want to be completely covered, have a page suggesting that any customer purchasing something from your site may owe a use tax to their state of residence. I am not currently worrying about this (I am just outside the DC beltway; I have other worries). Expect one or more state to go after someone very big (Amazon comes to mind ;~) and test the water. It is unlikely to affect anyone smaller for some years to come.The only thing that will happen immediately (IMHO) is that states will try to start taxing Internet accounts. This is a completely seperate issue from the e-commerce aspect. See the third section titles Net Tax Confusion of the above link for more details.My 2 centsJohn-- John Peacock Director of Information Research and Technology Rowman & Littlefield Publishing Group 4720 Boston Way Lanham, MD 20706 301-459-3366 x.5010 fax 301-429-5747------------------------------------------------------------- This message is sent to you because you are subscribed to the mailing list . To unsubscribe, E-mail to: To switch to the DIGEST mode, E-mail to Web Archive of this list is at: http://search.smithmicro.com/
John Peacock
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