New Hampshire Fights Supreme Court Sales-Tax Ruling
Source: The Wall Street Journal.
New Hampshire Fights Supreme Court Sales-Tax Ruling
Retailers in five states without a sales tax face new burdens
By Richard Rubin and Jennifer Levitz
https://twitter.com/RichardRubinDC
richard.rubin@wsj.com
https://twitter.com/jenniferlevitz
Jennifer.Levitz@wsj.com
July 24, 2018 5:30 a.m. ET
Jeffrey Bart, the third-generation owner of Granite State Candy Shoppe in Concord, N.H., has never collected sales taxes. That is probably about to change. ... New Hampshire is one of five states without a broad-based statewide sales tax, a status that had insulated Mr. Bart and other retailers from a task familiar to businesses elsewhere. That cushion lasted until the U.S. Supreme Courts June decision in South Dakota v. Wayfair, which lets states require retailers to collect sales taxes even if those businesses lack a physical presence in the state.
That decision was a huge mistake, says New Hampshire Gov. Chris Sununu, who expects to sign legislation this week to make it harder for other states to impose collection requirements on New Hampshire retailers. ... Were not saying states cant do it. Were just putting up a lot of hurdles that states have to jump over, Mr. Sununu said. Were not going down without a fight.
The Supreme Court cast its ruling as a reflection of changing business models, where physical presence of a retailer isnt the bright line between state tax systems that it once was. Indeed, Mr. Bart, unlike his predecessors running the 91-year-old shop, does 20% to 30% of his business online. That now opens him up to tax-collection demands from outside New Hampshire. He hasnt heard from out-of-state authorities yet, but hes worried about compliance costs. ... We are not set up to collect a sales tax at all, period, he said. Theyre introducing a new element and one that Im fairly nervous about.
....
It doesnt feel like fairness to Bruce Farenwald, chief financial officer at Duncraft Inc. of Concord, N.H., which sells its wild-bird feeding products throughout the country and has been fielding pitches from software companies with tax-compliance products. ... To make a company like Duncraft keep track of all the various taxing authorities is an incredible burden, so its not fairness anymore. Youre creating a greater burden, he said. Ultimately, the customers are the ones who are going to pay the price.
Write to Richard Rubin at richard.rubin@wsj.com and Jennifer Levitz at jennifer.levitz@wsj.com
Read more: https://www.wsj.com/articles/new-hampshire-fights-supreme-court-sales-tax-ruling-1532424600
Jacob Bunge Retweeted
https://twitter.com/jacobbunge
Truffle Kerfuffle!
New Hampshire candy store owner braces for sales-tax-collection demands, from @JenniferLevitz and me:
https://www.wsj.com/articles/new-hampshire-fights-supreme-court-sales-tax-ruling-1532424600 via @WSJ
Link to tweet
bucolic_frolic
(43,026 posts)got that right.
Left-over
(234 posts)in the usa are at a severe disadvantage because they have to compete against online presences that are not charging sales tax. What is fair for the goose is fair for the gander.
bucolic_frolic
(43,026 posts)winners and losers in the sales taxing game. But it can be said that online presences have to pay shipping, an increasing cost over the years. Most small items, for example, sold on eBay are either not profitable or have been priced out of the market by shipping costs. Shipping small items via USPS is about 2.4 times the 2002 cost, and much more than that on Priority Mail or heavy packages. USPS has used flat rate gimmicks to retain business over the years but reduce the size of the boxes so much as to make them not very useful at all.
What has become really expensive is coast to coast. Over 2 pounds or so to California is $12 to 16 if it's not eligible for Regional Rate or Flat Rate. So merchandise is not moving like it did.
And that sales tax idea of unfair is not true here in Pennsylvania. We have to pay sales tax on items and on shipping! Yes, we pay tax on USPS postal rates for items bought out of state. It's a charge on income tax forms at the end of the year.
Shrike47
(6,913 posts)Of course, states differ so wont that be fun!
virgogal
(10,178 posts)Many companies do it already.
WhoWoodaKnew
(847 posts)Last edited Wed Jul 25, 2018, 11:42 AM - Edit history (1)
So, for example in QuickBooks, you have to create an item and a group for every sales tax in every area (and those rates change a lot). Here's a small example so people can understand (I'll just make this up using North Carolina and ONE county)...
Items to create...
NC Sales Tax: 4.5%
NC Mecklenburg County Sales Tax: 2.0%
NC & Mecklenburg (Group): 6.5%
Mecklenburg Transit Tax: 0.5%
So, that's one county in one state. NC has 100 counties so you would create around 301 sales tax items for North Carolina only. You must do that for every county in every state and I think some states go one layer further (city/town sales taxes).
Then you have to file the sales tax report (usually online for small businesses) for each state (so 50 state returns each month).
I know this because I decided to stop selling any products outside our state because the volume wasn't great enough and I was killing our accounting department just filing returns (which you have to do even if you don't sell anything).
I have no idea how many items programmers/users have to create to be ready to sell products in any state at any moment. Or how they even keep up with the rate changes (although they do mail rate changes. sometimes only days in advance).
KWR65
(1,098 posts)I'm tried of business crying wolf when it comes to taxes. In my county they want to add a 1% to the sales taxes and business are crying that people won't shop in their stores any more. People are not going to drive 50 miles to avoid a 1 cent per dollar additional sales tax.
JCMach1
(27,553 posts)a month...
So yeah, not feasible...
Maybe a national online VAT with funds shelled out to states by population would be a simple solution... The farther we get into the 21st Century, the more arbitrary and painful the Federal System seems...
KWR65
(1,098 posts)It was a small business with 12 employees. Computers do wonders if you know how to use them.
JCMach1
(27,553 posts)you already have to have computers to deal with that...
But, why not a national VAT for online sales that kicks money to the states and a certain % to take care of the national infrastructure that feeds those businesses. Ear mark it ONLY for infrastructure.
Scruffy1
(3,252 posts)I've watched the sales taces in my state nearly triple in my lifetime. It's the old "it's only a penny" routine. The real reason I'm against them is that they are regressive taxes. Luckily, in my state groceries and clothing are exempt, which helps a little. Therer is something plain weird about paying nearly seven per cent sales tax on a used car.. States and municalities like them because it's an easier sale than income taxes in our political environment and they revenue is more predictable than income tax. Ditto with property tax. I hope we never ee a national value added tax. It's another regressive tax.
dingosatemyusername
(98 posts)when, in North Carolina, there wasn't a sales tax on used cars, the reasoning being that the state had already collected taxes on the original sale.