Supreme Court decision on Sales tax and it's effect on jewelry/diamond sales

[Rockdiamond]

I'm sure a lot of readers have purchased diamonds/ jewelry tax free. We did not have to collect sales tax on goods shipped over our home state's line.
It's been a boon to smaller independent companies.....
The Supreme Court ruled today the states have the right to collect/charge sales tax on interstate sales.
What're everyone's thoughts?

 

[whitewave]

Well, even though you didn’t have to collect it, we were still supposed to claim the purchases on state income tax.

Louisiana went back and found a $1,000 furniture purchase I made and a $12,000 atv purchased DH made in Mississippi and sent us sales tax bill for it.

My state is in a budget shortfall that has been staggering, so I am getting old enough to understand that states need to collect it (side discussion on legality of taxes and corrupt states inserted here).

 

[Gussie]

We don't have to claim it here in Texas because we don't have a state income tax so I really benefit from out of state/online purchases. When I read that this morning, I got a bit sick, lol. Will there be rules for how large a purchase or company is before they have to charge sales tax? Will small businesses in other states have to pay Texas (or other state) the tax they collect? This seems like it could be quite a burden on small businesses. And me!!!!

 

[baby monster]

As whitewave points out, consumers have the obligation to report and pay sales tax for outof state purchases. States can't enforce it well because it's a lot of work to trace the purchases. So they are pushing this out to retailers.

This is going to be an expensive headache for sellers because municipalities, parishes and every other local tax jurisdiction is going to jump on this bandwagon. I actually read through the argument summaries and the number of US tax jurisdictions collecting sales tax was cited as appx 30 thousand.

 

[Rockdiamond]

whitewave

totally get your point! We've always told people that we are not able to collect the tax, but they may need to declare the sale locally. Of course very few ( no one) ever did that.
Your story is eye opening!
I had not heard of a state going after folks like that- understandable why they would....

ceg

- although you don't have state income tax....is there state sales tax in Texas?

 

[BlingDreams]

I think it will definitely hurt companies, because a budget is a budget. Whether you have 5k or 50k to spend on a ring, that’s what you have. And so now, instead of it all going to the company, some may/will have to go to taxes. So the consumer will get a smaller or lower quality ring than previously, the company will get less money than previously, and the state gets money for doing nothing more than they did before.

Bad for business.

 

[Gussie]

totally get your point! We've always told people that we are not able to collect the tax, but they may need to declare the sale locally. Of course very few ( no one) ever did that.
Your story is eye opening!
I had not heard of a state going after folks like that- understandable why they would....
- although you don't have state income tax....is there state sales tax in Texas?

There is a sales tax. I am not sure if it's state or local or a combination. It is not required to pay any tax on out of state purchases.

 

[Rockdiamond]

It is not required to pay any tax on out of state purchases.

THIS is precisely the part that the Supreme's changes

 

[Gussie]

THIS is precisely the part that the Supreme's changes

Just clicked "dislike".

 

[Rockdiamond]

Just clicked "dislike".

you ain't alone

 

[Gussie]

Thinking I should go on a shopping spree before the state laws are written to collect the taxes. How long do you think I have? A few months? Lol,

 

[OoohShiny]

What's that I hear?

The sound of large wads of cash being withdrawn over the counter prior to a nice weekend away in another state?

 

[rocks]

On the ny state tax return there is this pesky question about out of state internet and other purchases. They ask you whether you paid ny state and local tax on the purchase. If you answer honestly and say, "yes you did make purchases" and "no, you did not pay tax" they simply add it to your tax bill. They impute the tax from your income. Call me crazy, but I always answer honestly even though giving ny state more tax money is no better than flushing it down the toilet.

 

[whitewave]

Yea, we were young when that happened, so that is when we found out that we were supposed to be paying it anyway. Around that time, we got a CPA and he makes all of his clients pay sales tax for online purchases, so we have been paying state taxes on online purchases for about 8 years now, I guess. Aren’t I a model citizen?

 

[rocks]

Yea, we were young when that happened, so that is when we found out that we were supposed to be paying it anyway. Around that time, we got a CPA and he makes all of his clients pay sales tax for online purchases, so we have been paying state taxes on online purchases for about 8 years now, I guess. Aren’t I a model citizen?

Much as I believe the government is not a responsible steward of our tax money, someone has to pay for all the excessive spending. My worry is that the cost of collecting the sales tax will outweigh its value.

 

[MissGotRocks]

It was just a matter of time. Part of the allure of online shopping - particularly for big ticket items - was not paying sales tax. Even though folks are supposed to, they obviously don't. Lots of lost revenue for states so you knew they would fight for it at some point. On one hand you would think that it would change the face of online shopping but on the other hand, if you are going to pay sales tax in your state or online, what's the difference? Might as well purchase from whomever you choose.

 

[Matata]

My worry is that the cost of collecting the sales tax will outweigh its value.

Bingo.

The Supreme Court ruled today the states have the right to collect/charge sales tax on interstate sales.
What're everyone's thoughts?

Between this and the end of net neutrality, I'd say the good times are over.

 

[redwood66]

While the decision sucks for buyers, I can see the point of the states that have a sales tax. Before the internet and online buying things were different and states made their $ from sales within the state. I think it has hurt state coffers. This really came to the forefront with Amazon. I have recently been paying tax sometimes but not all the time with Amazon depending on the state the product is shipped from. Some people who have to make a big purchase like appliances go to Montana because they have no sales tax. We did the same when living in NoCal by going across the border to Oregon.

 

[the_mother_thing]

How will it be enforced, or how will states collect? Will they force non-resident businesses to collect it on their behalf? Or will they require non-resident businesses to report sales to each state for the state to collect it?

 

[HDer]

I think overall this is a positive development. This will eliminate the unfair advantage of online retailers vs. B&M and also increase state revenues and probably help head off other taxes or cuts in services. Technologically this is also not that hard any more. There are many companies that will be happy to offer services to help collect and remit the proper taxes based on shipping address.

Online jewelry retailers will very likely see a lot of "customers" whose addresses are at UPS stores in Oregon or New Hampshire.

 

[redwood66]

I will probably not change my buying habits much. Though I have decided to buy as much locally as possible to keep my money here. And since I am on a self imposed bling buying restriction there won't be any of those anyway.

 

[Rockdiamond]

I’m torn. On the one hand, I can totally understand the need for localities to collect revenue.
From my perspective, it seems sure to remove part of the incentive to buy online.
I wish it would at least help local jewelry stores, who have suffered.
But I do feel that in the scheme of things, every indicator is pointing to a few large companies dominating markets - so I don’t feel it’s going to help small sellers online or in town.
EBay just started a new policy where they dictate how the merchant offers returns. Basically, now if you want to sell on eBay, you have to offer 30 day returns. There is no option for seven or 14 days – so the only option is 30 day returns, or no returns. If you don’t like it, we’ll there’s a complaint button. That should help
And of course, eBay and many other companies are doubly screwing us by sending 90% of customer service jobs offshore.
I love India, the people, the food, etc. But at this point, when I call any American company and get transferred to someone in a foreign country, I demand to speak to someone in America. Not that it’s going to help that much, but at least I feel like I’m doing something

 

[Dancing Fire]

When are they going to start collecting from out of state purchases?

 

[YadaYadaYada]

At least flea markets and tag sales are still tax free right @stracci2000

 

[MollyMalone]

There is a sales tax. I am not sure if it's state or local or a combination. It is not required to pay any tax on out of state purchases.

psst... Texas has been exempting retailers from collecting sales taxes if they did not have a physical presence in the state. TX residents, however, are supposed to have been paying use tax on out-of-state purchases delivered to them in TX, if the retailer did not charge the TX sales tax. That's been true since at least 2006 (see the date at the bottom of this web page)
https://comptroller.texas.gov/taxes/publications/94-171.php
and the Comptroller's Office has this handy Use Tax form posted on its website
https://comptroller.texas.gov/forms/01-156.pdf
But enforcing the use tax law vs. consumers obviously hasn't been a priority for the State of Texas -- and that's true most anywhere.

When are they going to start collecting from out of state purchases?

Tough to say. Only a few other states have a tax law on the books like the South Dakota one that gave rise to this week's Supreme Court decision, South Dakota v Wayfair. And even the SD law isn't immune from litigation on other grounds; the Supreme Court majority opinion didn't give an open-ended blessing. But it seems likely that other state legislatures will now seek to enact a tax law that closely resembles the SD one since it survived Wayfair's specific constitutional challenge. There's also been speculation in some circles that Congress will enact federal legislation to provide for nationwide uniformity in the rate of sales tax on Internet purchases, but I've seen no concrete proposals yet, so am clueless as to how anyone thinks that might be implemented.

Here are the Wayfair opinions if you'd like to read them:
https://www.supremecourt.gov/opinions/17pdf/17-494_j4el.pdf

 

[Gussie]

psst... Texas has been exempting retailers from collecting sales taxes if they did not have a physical presence in the state. TX residents, however, are supposed to have been paying use tax on out-of-state purchases delivered to them in TX, if the retailer did not charge the TX sales tax. That's been true since at least 2006 (see the date at the bottom of this web page)
https://comptroller.texas.gov/taxes/publications/94-171.php
and the Comptroller's Office has this handy Use Tax form posted on its website
https://comptroller.texas.gov/forms/01-156.pdf
But enforcing the use tax law vs. consumers obviously hasn't been a priority for the State of Texas -- and that's true most anywhere.

Tough to say. Only a few other states have a tax law on the books like the South Dakota one that gave rise to this week's Supreme Court decision, South Dakota v Wayfair. And even the SD law isn't immune from litigation on other grounds; the Supreme Court majority opinion didn't give an open-ended blessing. But it seems likely that other state legislatures will now seek to enact a tax law that closely resembles the SD one since it survived Wayfair's specific constitutional challenge. There's also been speculation in some circles that Congress will enact federal legislation to provide for nationwide uniformity in the rate of sales tax on Internet purchases, but I've seen no concrete proposals yet, so am clueless as to how anyone thinks that might be implemented.

Here are the Wayfair opinions if you'd like to read them:
https://www.supremecourt.gov/opinions/17pdf/17-494_j4el.pdf

Wow, I didn't know that! Since we don't have a state income tax and don't file anything with the state, I have no idea how you would even pay the sales tax if it wasn't collected by the retailer. Lol, I bet NO ONE has ever paid it because you would have to research how to even do it. Like I said, wow, I never knew this!

 

[Arkteia]

What if it is a big purchase, out-of-state, and it is cheaper to fly to the vendor's state and pay their state taxes as compared to (asinine) ours? They can't make you pay state taxes twice, can they? Or do you need to stay in the above state and use the product there for a few days?

 

[Rockdiamond]

What if it is a big purchase, out-of-state, and it is cheaper to fly to the vendor's state and pay their state taxes as compared to (asinine) ours? They can't make you pay state taxes twice, can they? Or do you need to stay in the above state and use the product there for a few days?

Great point!!!

 

[baby monster]

What if it is a big purchase, out-of-state, and it is cheaper to fly to the vendor's state and pay their state taxes as compared to (asinine) ours? They can't make you pay state taxes twice, can they? Or do you need to stay in the above state and use the product there for a few days?

Technically, a resident is supposed to declare a purchase on their tax return and pay any difference in sales tax. It's easier for the state to catch this with cars or boats because they have to be registered. But the states do go after people for large purchases like art if they can find them.

 

[Arkteia]

Technically, a resident is supposed to declare a purchase on their tax return and pay any difference in sales tax. It's easier for the state to catch this with cars or boats because they have to be registered. But the states do go after people for large purchases like art if they can find them.

Question is, how long do you have to use the product out-of-state for it to be considered out-of-state?

I don't know what the car situation is nowadays, but in old times, it was 1 mo (I think) - in very old times, someone could travel to Germany, buy a BMW, ride around for a month or two and not pay the tax in the US. Not me, but "I heard a story".