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Price Increases Possible

Discussion in 'News' started by FractalAudio, Aug 22, 2018.

  1. Fro

    Fro
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    There were a few other states that already had laws in place. Plus a lot of new stats started as of October 1st, and more will be added in the near future. The company I work for has 23 states now that we need to report tax to, with way more than that in actual filings when you count the various counties. The dollar amount in sales that qualifies a business for reporting tax is sort of on the high side, but there is also a number of orders each state has in place as a qualification, which is usually 200 orders in a year. That's just 16 orders a month, far below what I would consider "targeting Amazon". I'm pulling these numbers from memory, so please correct me if I'm off on this.

    Bottom line is, states are losing a lot of money due to the consumers not reporting out of state sales on their personal taxes. The states rightfully should get the money that's owed them. I don't have a problem with that. But, not having a standardized rate, or a simplified way of reporting the tax, is what's going to kill the small business. This is a huge blow for my company with the cost need to manage all of this. I'm not surprised if this is a bigger hit for Fractal than the tariffs. There is no alternatives or workarounds for the state sales tax. It is what it is.

    That's an interesting perspective I hadn't thought of. In my specific case, my small business sells online only. I also do know of other local small business that have supplemented sales with an online presence since walk-in sales have decreased. I don't know if this would bring walk-in traffic back, but I do know it will add extra cost to their online sales.

    A company like Amazon can afford the cost to keep track of these sales and handle all of the filing. It's not like they are actually paying the sales tax. The consumer is covering that cost, like they should have all along. Now business are handling the paperwork for them, at a cost that only the big businesses can afford.
     
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  2. hippietim

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    Sounds like an opportunity for someone to build some sort of state tax clearinghouse service.
     
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  3. Fro

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    Avalara, TaxJar, TaxMagic, and a few others do offer services. The least of which is an always updated database with tax rates and integration with your website. But it's all at a cost that doesn't generate any additional income for you ever. It would be so much easier if we were just able to charge our own states tax rate and report this to the state (or states) we are already registered with anyway.
     
  4. yeky83

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    Interesting, thanks for the insight @Fro
     
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  5. HarrySound

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    This is mighty interesting stuff to read.
     
  6. HarrySound

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    Hello Mike. Start at the beginning ....
     
  7. #127 ETOLKIEN, Oct 11, 2018
    Last edited: Oct 11, 2018
    ETOLKIEN

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    Dont feed the HAL!!

    DPfyY-eVQAAEekq.jpg

    Reported

    EDIT: Robot posts are gone now, thanks moderators!
     
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  8. pauly

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    Well tell me this,
    What the hell do the states do to earn the money they are getting, and where is the benefit to the tax payers?

    Recently, Here in Australia, they have just legislated that gst (tax) be added to all online sales. The justification is that the Chinese eBay sellers aren't paying gst, and therefore are not playing a level field. So - the government add 10% to all the online sales, and go to another tax payer funded orgy. Truth is, that the online goods are 1/10th of the price of locally manufactured goods because we (locally) all have a roof over our heads, and our government doesn't subsidise postage to other countries so it's still waay cheaper to ship something from China than to get it here.
    In other words (in case I'm not being clear) - they have just got 10% of all online sales for absolutely nothing, and will just piss it up against the latest fad problem without addressing infrastructure, healthcare, or education.
    No thanks
    Pauly
     
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  9. hippietim

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    Please spare us the political babbling.
     
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  10. YetAnotherOne

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    Wayfair loosed states to impose sales tax nationwide on online sales but it's important to note why and how SD won: No party argued that the old "physical presence" test was proper for online sales. The decision was 5-4 but the dissent essentially said that Congress should regulate these state tax collections prior to their being allowed, not that states shouldn't be able to levy sales taxes on online sales. And finally SD prevailed for a few specific reasons including but not limited to: a simplified rate structure and single point state-level administration; exclusion of small volume sellers and access to state-provided software along with immunity for mistakes & from audits for those who utilize it; the farther a state strays from these provisions, the more likely it is that their system will be tossed out by the courts (though there's never any money to be made as that sort of litigant).
     
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  11. Fro

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    I would love to know where I could reference this information so I can pass it on to my accountant and lawyer, because we have seen none of that from any of the states that we now have nexus with due to the new ruling.
     
  12. #132 YetAnotherOne, Oct 12, 2018
    Last edited: Oct 12, 2018
    YetAnotherOne

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    Of course, all the relevant discussion is found here.

    You're not hearing about those things from your accountant and lawyer because the court did not announce them as elements of a bright-line test with which states must comply. Rather the majority determined that SD's plan did not impose an undue burden on interstate commerce as prohibited by the Commerce Clause because of those, and other, elements specific to that particular plan. Thus all plans identical to SD's will necessarily pass Constitutional muster. Entirely different plans might but there's no way to know from the Wayfair decision, those plans will have to be tested individually in the lower courts in light of this decision. However they should now be considered presumptively valid until proven otherwise (at least by folks who aren't dying to reprise Don Quixote's role in a modern context). Though there's no way to know a priori where the lines will be drawn it's a good bet that the more a plan differs from SD's the more likely a lower court will be to strike it down in light of Wayfair. Here's hoping you're neither the plaintiff nor the defendant in any of those forthcoming actions.
     
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  13. #133 Mark-B, Oct 15, 2018
    Last edited: Oct 15, 2018
    Mark-B

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    Basically we are all waiting for action from Congress on this. Not getting political, just a fact. For this whole online taxation thing to work, we would absolutely need a centralized database which is updated with jurisdictional tax rates, tax-holidays, exceptions, and simple, nationally recognized waivers for those who qualify for tax free interactions.

    In our State we have a constitutional imperative that states that tax collection, and calculation, cannot be an undue burden on the taxpayer. Keep that in mind that this standard “reasonably” applies everywhere. With no centralized system of nationwide tax collection it would define insanity in tax collection. So the only possible way online sales tax can be legally (that means properly and accurately) collected is by using a single online database and payment portal to distribute those taxes collected.

    There’s no other realistic way of doing it.

    Because, as an online business entity myself, it would be impossible for me to deal with each jurisdiction’s tax laws.. There’s just no way for me to keep on top of that without it all coming down around our ears. Because, not only is there 10,000 + tax jurisdictions, which are forever changing, there has to be about 1,000,000 tax laws to properly calculate a sales tax online including jurisdictional sales tax holidays, degrees of exemptions for business interactions and so forth ..and as everything we do caters to business, we - along with the vast majority, would be soon sued out of business trying to accurately do the ever-shifting math over laws involved in said sales tax collections.

    So we need a centralized tax database, universal shopping cart plugins to handle the real-time calculations and waivers, simple tax exemption waivers for customers who qualify, and a centralized tax depository and distribution system. For the vast majority, there is no other way of efficiently collecting nationwide taxes outside of a system like that, or operating a trillion dollar Amazon type deal.

    .....And as this deals with Interstate and National taxation, that would = federal jurisdiction, which = Congressional action to setup a system.

    And, I, personally, would have no issue whatsoever in standing up in court stating those basic realities.

    Hell, as an example, we were actually threatened with a lawsuit one time because a person thought we had collected sales tax during a sales tax holiday in their jurisdiction, and they believed it was calculated as part of a shipping charge.

    Madness.. and you won’t find a single online retailer who hasn’t run into a jar-full of such nuts.

    ... So if there were any immediate demand to begin nationwide sales tax collection - tomorrow say - ...LOL! ..I can only imagine the nightmare involved on a judicial level, with all the stupid lawsuits due to sales tax miscalculation and collection discrepancies due to current poorly functioning, maintained, and/or integrated databases.

    Collection or not, make no mistake, we as the business do not pay that tax, the customer does. That’s all that will occur here. Business for many might drop off, but, that’s all part of being in business, you overcome and adapt. You keep swimming.

    But I don’t stay-up nights worrying about being sued by some city or state. Firstly, the vast majority of our sales would be exempt. Secondly, a jurisdiction, Setting that precident? ..under current realities? . With all the bigger fish to fry? ...that would be situation best described as laughably slim to nonexistent. And ..In real-realty, I have other things to worry about.

    Eventually they will get off their rear-ends and get something underway. And I don’t have any issue with that. But implemention of National sales tax collection.. can’t broadly happen today.. not realistically, not without real, and centralized, and nationally recognized, and universally available integration and payment systems being made freely available to all businesses online.

    Which means A new IRS. ..for online sales tax collection.. And we ain’t there yet.
     
  14. haffner1

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    Not to shoot a hole in this thread, but I just noticed that the Axe-FX III is $250 cheaper than when I bought mine in June! I have no complaints though.
     
  15. hippietim

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    Black Friday 10% off
     
  16. Jimmytwotimes

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    I live in Oregon - we don't have sales tax here - which is nice...
     
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  17. jonw

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    On the bright side, we might be able to get better prices for our Axe-FX IIs. To go toward a purchase of the III of course. :)
     
  18. Admin M@

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    Hear, hear!
     
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  19. Heavyelement

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    I’m good with it , forces companies to bring the work back here and put Americans to work instead of filling executives pockets with cheap labor in third world countries.
     

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