South Dakota Vs Wayfair - Need Congress Help - Ideas Below
Solutions and Justifications
To provide aide in taxes, ecommerce businesses should be collecting sales tax from every transaction and remitting it to the state that they operate in. The moneys collected from the purchase are the same as a transaction where a person travels across state lines and purchases something at a convenience store. The ecommece transaction is no different, it' s a virtual visit to the business in a remote state to do business. The state where the business is located should benefit from the taxes to support the local road, electric, utilities infrastructure the business uses.
South Dakota is worried that it won't get taxes from ecommerce purchases from residents in it's own state. Did South Dakota actually consider that it likely has residents in it's own state that operate ecommerce businesses? This is where to start.
A business is what supports local economy, a business is what pays local taxes and provides service to it's community either directly or indirectly. A business should be represented where it has to remit taxes to. A customer has the choice of where to buy, a business does not really get the choice of what customers it serves. To choose, is to be out of business.
We need Congress to modify the outcome of South Dakota vs Wayfair to change where the taxation occurs. A business operating an ecommerce business in a state should pay the state to which it operates in sales tax on every eligible goods sale regardless to what other state it will ultimately be delivered.
If you see this, contact your Area Representative and write about this dire situation.
Small Business may be forced to operate on a cash business model sending unaccountable amounts of money through the mail and shipping companies to avoid oppressive taxation (causes a revolution).
Issues that resulted in the case
Ecommerce business via the internet have flourished due to simplified tax rules where customers could purchase items and only be responsible for shipping expenses. These shipping expenses were many times less than paying the taxes on the same item locally. Internet retailers are able to not only offer a tax advantage but also diversity in products not possible at local retail stores due to unique supply chains for goods. The problem is that online retailers due to extreme pressure on the market and tacticts like that of Amazon and Wayfair have led to an abuse on the system. Let's not forget that Walmart has a large part in the affect of local business as well, it's not just ecommerce. Amazon and companies like Wayfair do not pay taxes on items they sell out of the state. These companies use tremenous resources in the states to deliver goods (roads, infrastructure, etc.) without the duties. So we understand an issue, but the results of the case of South Dakota vs. Wayfair designed to combat this problem created a much worse issue for the sake of the US Economy and for all business small and large (especially for small).
I expect to see a sharp decline in the US Economy in just as little as a month after the case's decision to occur. Congress should take action quickly.
Post Case Potential Issues
In the case of Quill vs North Dakota the rule was that a business must have a physical presence in a state to be subjected to collecting taxes.
This was overturned in South Dakota Vs. Wayfair, whereby now a state can tax a transaction for goods coming into the state. This collector and remitter of the taxes will be the business that sold the goods, regardless where the business is located.
This presents extreme over reaching of states into other states that have business selling goods. This exposes the business to enforcing tax code from another state and is vulnerable to tax audits and the negative affects of those activities (such as frozen assets).
The problem gets much worse, since tax rates are different between each state, each jurisdiction in many states also has yet several other rates, some 4800 different tax rates across states and juridictions across the nation.
No small business could account for this nor afford the software necessary to track these transactions.
Another large issue is that if another state is dictating to a business located in another that they must remit taxes and follow their system and rules that is forcing taxation without representation. The remote businesses owner does not get to elect or have any say in the officials overseeing the Treasuries in the state.
Another false action that South Dakota proposed is all the money that the state is missing out on because of internet sales. Did anyone think about the money and resources it's going to take in EACH state to police ecommerce transactions coming into it's state from some remote other 49 states businesses? Costs money for this infrastructure and people, which will take a huge cut out of the incoming funds.
Ecommerce business will also have to discriminate on which states they will allow customers to purchase from.