SCOTUS just ruled that states can collect sales tax on out-of-state purchases. Going to take a while for all of this to settle down but the ruling is really going to shake up the retail world. Don't think this will affect most of us in Texas since the big online guys have a physical presence in the state and we already pay for a ton of our on line stuff BUT it will still affect the bigger picture.
For a while it will be a YUGE nightmare as the Amazons of the world have to develop the system where they comply with the tens of THOUSANDS of local taxing authorities . The small online guys are going to take body blow.
I look for Congress and state governments to step in QUICK to help by possibly some form of tax smoothing where , perhaps, a single tax rate for a state applies much like they do for high ticket item like cars. But short term this is going to be a fun ride for us news junkies.

Will the tax be assessed based on the delivery address?

States have been trying to collect for years - this will give them more teeth.

Back in 2010, when I moved from Alabama to TX, just a few weeks before the moving truck rolled up, I got a letter from the State of Alabama (if lived there fit 6 years and never gotten the letter before). It said that they "knew" I had been making online purchases that did not charge sales tax, and that I owed that money and had an obligation to pay up. I was moving and didn't want anything following me, so I went to my credit card receipts for the last year, added up the purchases that I knew were from vendors that didn't charge sales tax at the time (pretty much all of them do charge it now), and followed the formula on the letter for estimating what I owed. Sent in a check for something <$20 and went on my way. That seemed to satisfy the request, as I never heard anything about it again.

Once I got to TX, I asked my CPA about it, and she said she had never heard of a state ever doing anything like that.

I figured it was a pretty good way for the state to collect some extra revenue (the state was in a major economic crisis at the time). Send out some ominous-sounding letters to everyone in the state and hope that at least a fraction of the people receiving them are honest. Probably most people threw the letters away, but I imagine some people (like me) sent in money that they wouldn't have otherwise collected.

Since I left, they started asking people to report their sales tax liability on their state income tax form, but voluntary participation is, not surprisingly, very low (not even 2%)

The Original AG 76 said:

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SCOTUS just ruled that states can collect sales tax on out-of-state purchases. Going to take a while for all of this to settle down but the ruling is really going to shake up the retail world. Don't think this will affect most of us in Texas since the big online guys have a physical presence in the state and we already pay for a ton of our on line stuff BUT it will still affect the bigger picture.
For a while it will be a YUGE nightmare as the Amazons of the world have to develop the system where they comply with the tens of THOUSANDS of local taxing authorities . The small online guys are going to take body blow.
I look for Congress and state governments to step in QUICK to help by possibly some form of tax smoothing where , perhaps, a single tax rate for a state applies much like they do for high ticket item like cars. But short term this is going to be a fun ride for us news junkies.

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Fee for service tax preparation - yay AMZN!!

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I look for Congress and state governments to step in QUICK

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I'm not holding my breath.

FarmerJohn said:

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I look for Congress and state governments to step in QUICK

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I'm not holding my breath.

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you didn't get the message.... when it comes to a new revenue stream there is NOTHING more determined and focused than a representative body of ANY taxing authority !!!

I actually think this is good for AMZN......they can afford to pay up (sure it'll hurt them a bit) while smaller players trying to take away some of their market share are going to have a tougher time. Not only the sales tax itself, but also the resources that will be required to keep track of how much these companies owe will be a big burden, especially for a smaller company.

Yes, good for Amazon. As of last year, they already pay state tax everywhere that has sales tax. Only last thing is local county/city tax- I don't think this ruling addresses that.

Tax will be based on where the consumer lives. Otherwise a lot of the big players would go to non-sales tax states. Would be a mess.

Ugh, this is going to be no fun at all for my small business. We operate several online stores using a custom e-commerce system. With customers in all 50 states, it's going to be a nightmare sorting out tax rates for taxable customers and handling exemption forms for tax-exempt customers.

Your e-commerce platform will build in the sales tax calculator. Now, paying all those is a different story.

I got to thinking about this yesterday. I am not in e-commerce or retail, so this may be a completely ignorant idea. But thought I'd throw it out there.

Make it the end user's responsibility to pay the local taxes. When signing the "terms of use" for a website transfer the payment of sales tax to the end user. Then it could be treated similar to any tax document one would receive prior to filing taxes. Every company someone purchases an item from would get an annual statement with their total purchase for the year. Then it would be up to the end user to pay the state and local sales tax when filing taxes on April 15th.

Even put a max cumulative total before the selling company would have to collect at the time of sale - say $1,500. So the buyer would be responsible to pay sales tax from $.01 to $1,499.99. Anything over $1500 would have to be paid at the time of sale. Besides Amazon I'm not sure we spend $1,500 at any one site annually.

Yikes.